Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Not disclosed

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Human Capital
• Diversity

Environmental Achievements

• Scope 1 and 2 (market basis) GHG emissions down 10% from FY2020 levels (due to COVID-19 impact, expected to increase short-term)
• Aiming for 30% GHG emission reduction by 2030 (compared to 2019), and net zero by 2050
• Aiming for 70% food recycling ratio by FY2031 (2023: 60%)

Social Achievements

• Promoting human resource development programs and various types of support to help each employee realize their career plan
• Promoting diversity initiatives to ensure diverse workforce can realize their full potential
• Setting targets for the proportion of women in management positions by 2030

Governance Achievements

• Established Sustainability Management Promotion Committee directly under the Board of Directors
• Implemented an executive officer system
• Established Group Compliance and Risk Management System with specialized subcommittees

Climate Goals & Targets

Environmental Challenges

• Aging population, polarization of consumption structure, tightening competition
• Impact of COVID-19 on consumer lifestyles and workstyles
• Climate change risks (carbon tax, changes in customer needs, disasters, unstable procurement)
• Natural disasters and accidents
• Risk of infection
• Unusual weather
• Safety of goods sold
• Management of customer information
• Information system disruptions
• Lease agreement non-renewal
• Overseas business risks (China)

Mitigation Strategies

• Utilizing various customer contact points in Kansai area to build new business models
• Refining and strengthening Department Store and Supermarket Businesses
• Investing in energy-saving and renewable energy
• Promoting sustainable product procurement
• Formulating response manuals and taking out property insurance
• Establishing business continuity plans based on COVID-19 response
• Establishing quality control and hygiene control measures
• Establishing specialized subcommittees and employee education for personal information management
• Establishing a system for responding to security incidents
• Developing alternative sourcing strategies (implied)
• Closely observing legislative revision trends

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Disasters and unstable procurement
• Increased risks from heavy rains and strong winds (Hankyu Main Store)

Transition Risks

• Carbon tax payment
• Changes in customer needs in a decarbonized society

Opportunities

• Sustainable product procurement
• Development of sales floors and products/services responding to changes in customer needs

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• GHG Emission Reduction rate (Scope 1 and 2) 2030: 30% reduction (compared to FY2020)
• Food Recycling Rate 2030: 70% (2023: 60%)
• Amount of products using specified plastics provided 2030: 60% reduction in basic unit (compared to FY2022)
• 69% LED conversion rate in department stores (as of March 2023)
• 100% renewable energy at Hankyu Oasis Suita SST store
• Third-party assurance from Deloitte Tohmatsu Sustainability Co., Ltd. for energy consumption and GHG emissions (Scope 1, 2, and Scope 3 Category 1) in FY2023

Social Achievements

• Introduced volunteer leave (FY2023)
• Established the Food Hygiene Quality Control Promotion Subcommittee
• Hankyu Bakery Co., Ltd. Takatsuki Factory acquired FSSC22000 certification
• HANKYU delica i,Inc. Ikeda Plant and Nanko Plant acquired “Osaka Prefecture Food Safety and Security Certification”
• Established H2O Smile Co., Ltd. to expand workplaces for people with disabilities
• Employment rate of people with disabilities is 2.9% (as of June 2023)

Governance Achievements

• Ratio of Independent Outside Directors 44.4%
• Ratio of Female Directors 22.2%
• Introduced Performance-Linked Stock-Based Remuneration Plan
• Established the Compliance and Risk Management Committee
• Established the Sustainability Management Promotion Committee
• Established the IT and Digital Management Committee

Climate Goals & Targets

Environmental Challenges

• Declining population, declining birthrate and aging population
• Accelerating digitalization and online shift
• Excessive competition
• Shrinking workforce
• Changes in customer lifestyles and a shift to digital
• Rapid changes to physical stores
• Climate change risks (transition and physical risks)

Mitigation Strategies

• Strategy for market dominance in the Kansai region
• Communication Retailer business model
• Centralizing customer data
• Developing new online services for “food” and “health”
• Developing app services at department stores
• Re-skilling employees and improving IT literacy
• Training data analysts
• Mid-career recruitment
• Developing internal DX promotion system
• Energy conservation and switching to renewable energy
• Reducing single-use plastics
• Recycling waste
• Reducing food waste
• Establishing a human rights due diligence (DD) promotion system
• Promoting CSR procurement
• Promoting work-life balance, advancement of women and seniors, employment of people with disabilities, and support for the LGBTQ community
• Building a consolidated group customer database
• Digitizing work styles and operations
• Renewing core systems, POS, and MD systems
• Developing group-wide HR system and talent database

Supply Chain Management

Responsible Procurement

• H2O RETAILING Group CSR Procurement Policy

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters

Transition Risks

• Increased costs associated with energy consumption
• Increased carbon tax payments

Opportunities

• Increased profit from providing non-storefront purchasing means
• Creation of a market as a local sustainability communication center
• Increase in sales of products and services related to the circular economy
• Reduction of carbon tax payment costs by switching to renewable energy

Reporting Standards

Frameworks Used: GRI Standards, TCFD

Certifications: FSSC22000, Osaka Prefecture Food Safety and Security Certification, Eco Action 21

Third-party Assurance: Deloitte Tohmatsu Sustainability Co., Ltd.

Sustainable Products & Innovation

• Food recycling loop rice
• Environmentally friendly toothbrushes
• Products made from sustainable materials

Awards & Recognition

• 2021 HANKYU KODOMO (Children's) College Judging Committee Excellence Award

Environmental Metrics

ESG Focus Areas

• Deepening local community bonds
• Nurturing local children
• Protecting and passing on the richness of local nature
• Responding to the “trust” of customers and stakeholders
• Enhancing employee job satisfaction

Environmental Achievements

• GHG emission reduction rate FY2027: 20% reduction (compared to FY2020), FY2031: 30% reduction (compared to FY2020), FY2051: Net zero
• Food recycling rate FY2027: 60%, FY2031: 70%
• Amount of products using specified plastics provided FY2031: 60% reduction in basic unit (compared to FY2022)

Social Achievements

• Ratio of female managers (FY2031) Hankyu Hanshin Department Stores: 35%, H2O Foods Group: 20%, H2O Shopping Center Development: 35%
• Maintain a level of employment of people with disabilities that exceeds the statutory employment rate.
• Launched the Female Leader Development Program

Governance Achievements

• Established a dedicated sustainability promotion department
• Established the Sustainability Management Promotion Committee
• Established a system for implementing and promoting human rights DD within the group

Climate Goals & Targets

Environmental Challenges

• Greenhouse gas (GHG) emissions
• Food loss
• Plastics
• Declining population in Japan
• Economic downturn in China

Mitigation Strategies

• Energy-saving measures, including the introduction of high-efficiency equipment such as LED lighting and the use of AI smart air conditioning
• Switch to renewable energy
• Promoting the practice of placing orders for proper amounts of products in a timely manner and “Temae-dori.”
• Reducing single-use plastics
• Strengthening operations at Ningbo Hankyu

Supply Chain Management

Responsible Procurement

• H2O RETAILING Group CSR Procurement Policy

Climate-Related Risks & Opportunities

Physical Risks

• Disasters (typhoons, torrential rain, and storm surges)
• Unstable procurement, decrease in sales (agricultural products and seafood, soaring prices of livestock products)

Transition Risks

• Increased expenditures due to carbon tax payments
• Increased commodity procurement and disposal costs
• Increased investment in energy conservation and GHG emission reduction facilities
• Decrease in sales due to products and services that do not meet the needs
• Increase in renewable energy costs

Opportunities

• Reduction of carbon tax payment costs by switching to renewable energy
• Increase in sales of environmentally friendly products and services
• Decreased container and packaging costs
• Increase in sales of products and services related to the circular economy
• Increase customer attraction by expanding electric vehicle charging facilities
• Creation of a market as a local sustainability communication center
• Creating markets to help customers decarbonize their lifestyles
• Increased sales from providing non-storefront purchasing means

Reporting Standards

Frameworks Used: GRI Standards

Third-party Assurance: Deloitte Tohmatsu Sustainability Co., Ltd.