Climate Change Data

Environmental Metrics

ESG Focus Areas

• Provision of Food That Contributes to Health
• Community-Oriented Store Operation
• Workstyle Reforms
• Reduction of Environmental Impact

Environmental Achievements

• All domestic MOS BURGER and MOS CAFE stores received Eco Mark certification in October 2017.
• Reduced CO2 emissions by 21% compared to the 2013 standard.

Social Achievements

• Launched MOS PLANT-BASED GREEN BURGER.
• Established MOS SHINE, INC. in 2017 to expand the recruitment of people with disabilities.
• Implemented work from home for all employees following the national state of emergency declaration.
• MOS Group head office was recognized under the 2020 Certified Health & Productivity Management Outstanding Organizations Recognition Program.

Governance Achievements

• Established a whistleblower system (MOS Helpline).
• Established the Risk Management and Compliance Committee.

Climate Goals & Targets

Environmental Challenges

• Decreasing operating profit due to increasing cost rates and personnel expenses.
• COVID-19 pandemic impacting business operations and financial results.
• Labor shortages and rising labor costs.
• Declining regional vitality in Japan.

Mitigation Strategies

• Improving the profitability of the MOS BURGER business (domestic).
• Establishing frameworks to accelerate growth in overseas markets.
• Investing proactively in new businesses.
• Implementing workstyle reforms and leveraging digital technologies.
• Strengthening delivery and takeout services.
• Revising store operations and leveraging IT.
• Supporting franchisees during the COVID-19 pandemic.
• Promoting the broad horizontal expansion of successful examples of employees going into business for themselves.

Supply Chain Management

Supplier Audits: Yearly visits to production regions to confirm farm management conditions.

Responsible Procurement

• Using vegetables grown at approximately 2,700 farms under methods relying as little as possible on agrichemicals and chemical fertilizer.
• Adopting the Good Agricultural Practice (GAP) approach.

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• MOS PLANT-BASED GREEN BURGER
• Products using local ingredients

Awards & Recognition

• Eco of the Year at Eco Mark Awards 2018
• Three stars in the Nikkei Smart Work Management Survey
• Two stars in the Nikkei SDGs Management Survey

Environmental Metrics

ESG Focus Areas

• Food and Health
• Stores and Local Communities
• Human Resource Cultivation and Support
• The Environment
• Governance

Environmental Achievements

• Reduced CO2 emissions by 35.7% compared to fiscal 2013 (Scopes 1+2)
• All domestic MOS BURGER stores awarded Eco Mark (restaurant) certification in all six evaluation categories

Social Achievements

• Launched MOS BURGER’s Shokuiku Program for dietary education
• Obtained 3 stars in the “Eruboshi” certification for promoting women’s active participation in the workplace
• Launched “Vietnam Kazoku” program to recruit and cultivate human resources from Vietnam

Governance Achievements

• Established Sustainability Committee to monitor material issues and deliberate company-wide policies related to sustainability
• Published skill matrix of each director for the first time

Climate Goals & Targets

Environmental Challenges

• Sharp rise in purchasing costs
• Rise in SG&A ratio
• Delayed recovery from the impact of COVID-19 on the Overseas Business
• Decreasing birthrate and aging population in Japan
• Shortage of labor
• Sharp rise in ingredient prices
• Climate change
• Food waste
• Plastic waste
• Recycling
• Geopolitical risks
• Fragmentation of the supply chain

Mitigation Strategies

• Securing of gross income through the optimization of selling prices and wholesale prices
• Curtailment of SG&A expenses
• Reviewing the use of expenses in the entire Company
• Improving the cost-effectiveness of promotional activities
• Promoting DX
• Identifying unprofitable stores and focusing management on growth markets
• Dispersion and diversification of producing areas
• Use of domestic foodstuffs as an alternative to imported goods
• Digitalization in kitchen operations and administrative tasks
• Introduction of self-service checkouts
• Expansion of payment methods
• Introduction of renewable power at directly managed stores
• Installation of CFC-free kitchen equipment
• Increase the percentage of environment-friendly products among the disposable products provided to customers

Supply Chain Management

Responsible Procurement

• Collaboration with producers from 112 producing regions and 7 MOS Farms across Japan
• Promotion of multiple supply routes
• Ensuring several months’ worth of inventory for some key food ingredients

Climate-Related Risks & Opportunities

Physical Risks

• Increase in the frequency and severity of abnormal weather

Transition Risks

• Increase in the prices of ingredients due to the introduction of carbon taxes
• Increase in costs due to a switch to plastic alternatives
• Changes in consumer behavior

Opportunities

• Increase in sales of plant-based products with expansion of market for meat alternatives

Reporting Standards

Frameworks Used: International Integrated Reporting Framework, Guidance for Collaborative Value Creation

Certifications: Eruboshi (3 stars), Eco Mark (restaurant) certification

Sustainable Products & Innovation

• Soy Patty series
• GREEN BURGER
• RiceResin® spoons and forks

Awards & Recognition

• Certified Health & Productivity Management Outstanding Organizations (4 years in a row)
• Nikkei SDGs Management Survey (3-star rating)
• NIKKEI Smart Work Management Survey (3-star rating)

Environmental Metrics

ESG Focus Areas

• Food and Health
• Stores and Local Communities
• Human Resource Cultivation and Support
• The Environment
• Governance

Environmental Achievements

• Reduced Scope 1 and 2 emissions by 35.7% compared to fiscal 2013.
• Increased the ratio of eco-friendly disposable products to 83.1%.
• Introduced RiceResin® biomass plastic cutlery using 25% domestic non-edible rice.
• Started using lettuce with over 5% reduced greenhouse gas emissions in Hiroshima stores.

Social Achievements

• Achieved 100% return-to-work rate for employees on childcare leave.
• Implemented community engagement activities in all 20 branches of the MOS BURGER Kyoei-Kai.
• Launched MOS RECORDS, a music label supporting store members' dreams.
• Received a 3-star rating in the Nikkei SDGs Management Survey and a 3-star rating in the 7th Nikkei Smart Work Management Survey.

Governance Achievements

• Linked CO2 emission reduction to executive compensation.
• Established a Sustainability Committee with four meetings per year.
• Improved management supervision and strategy discussions at Board of Directors meetings.
• Implemented a long-term shareholder benefits program.

Climate Goals & Targets

Environmental Challenges

• Staff shortages due to population decline and rising prices.
• Rising raw material, logistics, and energy costs.
• Increased competition for labor and property.
• Slower recovery of the Overseas Business after the pandemic.
• Climate change risks (increased ingredient prices, costs of plastic alternatives, changing consumer behavior, and more frequent extreme weather events).

Mitigation Strategies

• Upgrading store operations to improve customer service and efficiency.
• Implementing a two-pronged price and product strategy to address consumer polarization.
• Accelerating digital transformation (DX) with self-service kiosks and table ordering systems.
• Improving logistics efficiency with early morning unattended deliveries.
• Enhancing recruitment competitiveness through salary increases and improved work conditions.
• Closing unprofitable stores and controlling management costs in overseas markets.
• Diversifying supply routes and optimizing logistics to enhance supply chain resilience.

Supply Chain Management

Responsible Procurement

• Sourcing fresh vegetables from farmers committed to reducing agrochemicals and chemical fertilizers.
• Using FSC®-certified paper for packaging.

Climate-Related Risks & Opportunities

Physical Risks

• Increased frequency and severity of abnormal weather events.

Transition Risks

• Introduction of carbon taxes, increasing ingredient and logistics costs.
• Increased costs due to switching to plastic alternatives.

Opportunities

• Promotion of resource recycling to decrease costs.

Reporting Standards

Frameworks Used: Value Reporting Foundation (VRF): The International Framework, Guidance for Collaborative Value Creation (Ministry of Economy, Trade and Industry), TCFD

Certifications: Eco Mark (restaurant), Eruboshi (3 stars)

UN Sustainable Development Goals

• 1
• 2
• 3
• 4
• 5
• 6
• 7
• 8
• 9
• 10
• 11
• 12
• 13
• 14
• 15
• 16
• 17

Initiatives align with various SDGs, as detailed in the report.

Sustainable Products & Innovation

• GREEN BURGER
• Soy patties
• RiceResin® biomass plastic cutlery

Awards & Recognition

• 24th Green Purchasing Awards (outstanding performance)
• Nikkei xTREND’s customer happiness survey (first place)