Climate Change Data

Environmental Metrics

ESG Focus Areas

• Sustainability Transformation (SX)
• Ethical E-commerce
• Digital Transformation (DX)
• Environmental Friendliness
• Social Issues
• Sustainable Development Goals (SDGs)

Environmental Achievements

• Promoting resource-saving packaging
• Reducing CO2 emissions during product deliveries through the use of electric vehicles
• Developing environment-friendly products
• Creating a platform for the recycling of clear plastic folders

Social Achievements

• Launched LOHACO EC Marketing Lab for co-creation activities with manufacturers, focusing on customer value and sustainable product development
• Implementing a unique training program to cultivate digitally savvy human resources
• Supporting the digitalization of SMEs through services that help promote the digitalization of their procurement management and administrative operations.
• Engaging suppliers and customers in sustainability initiatives

Governance Achievements

• Emphasis on ethical and honest corporate activities, including interactions with colleagues, customers, and stakeholders
• Reforming awareness and behavior among employees through communication of corporate philosophy and appreciation of employees taking action on challenging issues

Climate Goals & Targets

Environmental Challenges

• Balancing social sustainability and profit maximization
• Addressing the delay in promoting digitalization at SMEs
• Logistics shortage
• Increasing worker shortages in the logistics field
• Managing multiple package deliveries for the same order increasing delivery costs

Mitigation Strategies

• Optimizing overall supply chain through the use of IT and AI
• Providing services to help promote the digitalization of SMEs procurement management and administrative operations
• Digital transformation (DX) of individual processes, including promotion of product development that gives consideration to logistics efficiency and the installation of robots
• Joint research with the University of Electro-Communications and TIMEINTERMEDIA, Inc. to optimize inventory allocations in distribution centers using AI
• Creating a new logistics model that solves structural issues in e-commerce

Supply Chain Management

Responsible Procurement

• Emphasis on environment-friendly products
• Collaboration with suppliers on sustainable product development

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• Environment-friendly products
• Products with designs fitting into consumers' lifestyles

Environmental Metrics

ESG Focus Areas

• Environment
• Society
• Governance

Environmental Achievements

• Achieved 63.3% renewable energy usage rate at Group business sites and distribution centers by end of May 2023.
• Introduced electric vehicles for last-mile delivery services.
• Established the ASKUL Resource-Recycling Platform.
• Signed a joint agreement to engage in forest maintenance in Tsumagoi Village.

Social Achievements

• Appointed four executive officers, three of whom are women.
• Implemented the East Japan Recovery and Business Support Project.
• Formulated the ASKUL Group Policy on Human Rights.
• Formulated the ASKUL Sustainable Procurement Policy.
• Set a target of achieving a 30% ratio of female managers by 2025.

Governance Achievements

• Introduced ESG-Linked Compensation Scheme in August 2023.
• Established a Special Committee to protect minority shareholder interests.
• Annually evaluates the effectiveness of the Board of Directors.

Climate Goals & Targets

Environmental Challenges

• Turning LOHACO profitable and positioning the B-to-C business moving forward.
• Generating disruptive innovation in a highly competitive market.
• Maintaining a balance between risk-taking and risk control.
• Adapting to rapid expansion of disruptive innovations in generative AI.
• Addressing climate change risks and opportunities.

Mitigation Strategies

• Developing strategies to combine B-to-B and B-to-C operations to enhance corporate value.
• Implementing the Medium-Term Management Plan.
• Acquiring FEED Corporation.
• Strengthening corporate governance.
• Conducting scenario analyses to assess physical and transition risks and identify business opportunities related to climate change.

Supply Chain Management

Responsible Procurement

• Sustainable Procurement Policy
• Supplier compliance issue surveys
• On-site inspections of plants manufacturing private brand products.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather and other events
• Higher electricity costs
• Higher product prices due to forest resource scarcity

Transition Risks

• CO2 emissions tax
• Higher product costs in line with regulatory compliance
• Changing customer orientation

Opportunities

• Increasing demand for low-carbon products
• Expansion of collection services
• Operating cost benefits from EVs

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 14001, ISO 27001, FSC CoC, PEFC CoC

Sustainable Products & Innovation

• Environment-friendly products
• Forest-certified products

Awards & Recognition

• Consumer Affairs Agency Director General Award (Go Ethical)

Environmental Metrics

ESG Focus Areas

• Ethical E-commerce
• Climate Change
• Resource Recycling
• Biodiversity
• Human Rights
• Supply Chain
• Diversity & Inclusion

Environmental Achievements

• Achieved 63.3% renewable energy usage rate across the Group.
• Launched ASKUL Resource-Recycling Platform, collecting 145 metric tons of used clear plastic folders.
• Achieved cumulative waste reduction of 1 million items through Go Ethical initiative.
• Reduced CO2 emissions by 41% in Scottie Flower Pack toilet rolls compared to standard products.

Social Achievements

• Achieved profitability for the full fiscal year in the LOHACO business.
• Increased the ratio of women in management positions to 23.0%.
• Launched Bizraku service to support digital transformation (DX) of SMEs.
• Concluded disaster response agreements with municipalities at each distribution center.

Governance Achievements

• Introduced ESG-Linked Compensation Scheme for managers at the general manager level and above.
• Established the Special Committee to protect minority shareholder interests.
• Appointed four executive officers, three of whom are women.

Climate Goals & Targets

Environmental Challenges

• Labor shortages in the logistics sector.
• Supply chain disruptions due to various factors (natural disasters, geopolitical risks).
• Need to increase profitability and improve gross profit margin.
• Cost of realizing a circular economy.

Mitigation Strategies

• Promoting digital transformation (DX) to improve efficiency and reduce workloads.
• Optimizing inventory placement and volume at distribution centers.
• Implementing initiatives such as Otoku Designated Delivery to level out shipping volume.
• Raising the standard amount per order for free shipping.
• Collaborating with suppliers and manufacturers to develop sustainable products and services.
• Exploring new business models in collaboration with various organizations.

Supply Chain Management

Supplier Audits: CSR surveys and on-site inspections of plants manufacturing private brand products.

Responsible Procurement

• ASKUL Sustainable Procurement Policy
• Green and Forest-Certified product procurement

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Higher electricity costs
• Higher product prices due to forest resource scarcity

Transition Risks

• CO2 emissions tax
• Higher product costs due to regulatory compliance
• Changing customer preferences

Opportunities

• Increasing demand for low-carbon products
• Expansion of collection services
• Operating cost benefits from EVs

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards, TCFD Recommendations

Certifications: ISO 14001, ISO 27001, FSC CoC, PEFC CoC

Sustainable Products & Innovation

• Scottie Flower Pack toilet rolls
• Products made from recycled polypropylene
• LOHACO Water in eco-friendly bottles
• Environment-friendly copy paper

Awards & Recognition

• FTSE Blossom Japan Sector Relative Index constituent
• Commissioner’s Award for Go Ethical initiative
• Eco-First Company
• S&P/JPX Carbon Efficient Index constituent
• CDP Supplier Engagement Leader
• Morningstar Japan ex-REIT Gender Diversity Tilt Index constituent
• Director-General Prize at the Consumer Affairs Agency’s Consumer-Oriented Business Excellence Awards 2022