Climate Change Data

Environmental Metrics

ESG Focus Areas

• CSR
• Risk Management
• Compliance

Social Achievements

• Donation option for Kumamoto earthquake relief instead of traditional shareholder gifts.

Governance Achievements

• Strengthened group company management system

Climate Goals & Targets

Environmental Challenges

• Increased competition in the cosmetics industry due to new entrants, low pricing, and diversified sales channels.
• Difficulty in acquiring new customers in the communication sales business.
• Need to diversify sales channels.

Mitigation Strategies

• Focus on rebuilding the company's EC site.
• Focus on sales of new products using the 'Cure' brand in the cosmetics wholesale business.
• Strengthening group company management system to address challenges and adapt to market changes and customer needs.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• CSR
• Governance
• Risk Management
• Compliance

Social Achievements

• Donations to the Ashinaga Scholarship Foundation

Governance Achievements

• Rebuilding of the governance system
• Strengthening of subsidiary management and supervisory functions of the management department
• Strengthening of mutual monitoring and supervisory functions of directors
• Strengthening of audit committee audits and internal audits

Climate Goals & Targets

Environmental Challenges

• Delays in the announcement of the second-quarter financial results due to irregularities in a subsidiary's accounts receivable.
• Questions regarding the reality and existence of transactions with some clients of Clayton Dynamics Co., Ltd.

Mitigation Strategies

• Established an external investigation committee to investigate the subsidiary's transactions.
• Strengthened management and supervision functions.
• Rebuilding of the governance system
• Strengthening of subsidiary management and supervisory functions of the management department
• Strengthening of mutual monitoring and supervisory functions of directors
• Strengthening of audit committee audits and internal audits

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Governance
• Social
• Environmental

Environmental Achievements

• Expanded sales channels to address cosmetic waste (cosme-loss); used environmentally friendly containers; planned and developed products that reduce water usage.

Social Achievements

• 100% childcare leave return rate in FY2022 and FY2023; support for employee learning through external training and qualification acquisition; creation of an environment to avoid career interruptions due to life events (telecommuting, flexible working hours, support for childbirth/childcare leave for both men and women).

Governance Achievements

• Implemented internet-based voting for shareholder meetings since the 18th term; established a compliance committee chaired by the president; strengthened governance by reviewing the board of directors and audit committee regulations and utilizing lawyers to prevent violations of laws and regulations; implemented a system for reporting internal violations.

Climate Goals & Targets

Environmental Challenges

• Lack of a unified sustainability policy; need to develop a successor plan; need to clarify the criteria for dismissing the CEO; need to further develop executive compensation to include performance-based elements; need for more detailed disclosure on intellectual property investment, climate change risks and opportunities.

Mitigation Strategies

• Regularly sharing the status of each initiative with management members and reporting to the board of directors as needed; planning to develop a basic policy and further improve effective supervisory functions; actively implementing measures regarding sustainability; planning to develop a concrete system for executive compensation including fixed compensation, performance-based bonuses, and restricted stock compensation; planning to make concrete disclosures on intellectual property investment, climate change risks and opportunities.

Supply Chain Management

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• Environmentally friendly containers; products that reduce water usage

Environmental Metrics

ESG Focus Areas

• Governance
• Social
• Environmental

Environmental Achievements

• Expanded sales channels to address cosmetic waste (cosme-loss)
• Used environmentally friendly containers and upcycled materials in products

Social Achievements

• 100% childcare leave return rate for 2022, 2023, and 2024.
• Support for employee learning through external training and qualification acquisition.
• Creation of an environment to avoid career interruptions due to life events (telework, flexible work hours, childcare leave support).

Governance Achievements

• Implemented internet-based voting for shareholder meetings since the 18th term.
• Established a compliance committee chaired by the president.
• Regularly reviews the Board of Directors and Audit Committee regulations to prevent violations of laws and articles of incorporation.

Climate Goals & Targets

Environmental Challenges

• Lack of a unified sustainability policy.
• No clear succession plan for the CEO.
• Need to further develop disclosure on intellectual property investment and climate-related risks and opportunities.

Mitigation Strategies

• Plans to develop a basic policy and improve effective supervisory functions.
• The board recognizes succession planning as a major issue and will consider it in the future.
• Future consideration of specific disclosure on intellectual property investment and climate-related risks and opportunities.

Supply Chain Management

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• Environmentally friendly containers and upcycled materials in products

Environmental Metrics

ESG Focus Areas

• SDGs
• Environmental considerations (e.g., reducing CO2 emissions, using eco-friendly packaging)
• Social impact (e.g., employee wellbeing, gender equality)
• Governance (e.g., M&A strategy, corporate governance structure)

Environmental Achievements

• Promoting eco-friendly packaging and reducing CO2 emissions through initiatives like promoting mail-only shipping.
• Participating in local government's “Furusato Nozei” (hometown tax) program for sales expansion and SDGs management.

Social Achievements

• High female management ratio (77.8%) and 100% paternity leave rate.
• Implementation of “Fourseasons HD Premium Membership Club” to strengthen communication with shareholders.

Governance Achievements

• Active M&A strategy for business expansion.
• New management system implemented in December 2023 focusing on profitability.

Climate Goals & Targets

Environmental Challenges

• Decreased retail sales due to store closures.
• Challenges in expanding overseas markets due to legal and logistical issues.
• Slow progress in M&A activities in the “enjoy life” sector.

Mitigation Strategies

• Focus on improving profitability of retail business through store closures, rebranding, and product development.
• Strengthening marketing and PR activities to increase brand awareness and sales.
• Adjusting funding allocation to prioritize marketing, human resource development, and existing business expansion.

Supply Chain Management

Responsible Procurement

• Using eco-friendly packaging materials.

Climate-Related Risks & Opportunities

Opportunities

• Entry into the renewable energy business.

UN Sustainable Development Goals

• Goal 3: Good Health and Well-being
• Goal 8: Decent Work and Economic Growth
• Goal 10: Reduced Inequalities
• Goal 12: Responsible Consumption and Production
• Goal 13: Climate Action
• Goal 14: Life Below Water
• Goal 15: Life On Land

The company's initiatives contribute to these goals through various environmental and social programs.

Sustainable Products & Innovation

• Eco-friendly packaging.