Climate Change Data

Arealink Co., Ltd.

Climate Impact & Sustainability Data (2022, 2023)

Reporting Period: 2022

Environmental Metrics

ESG Focus Areas

  • Environment
  • Social
  • Governance

Environmental Achievements

  • Implementing the “Container Building 100-Year Utilization Project” to reduce environmental impact through long-term container use and refurbishment.
  • Reducing waste through storage use and responsible disposal methods (3Rs).

Social Achievements

  • Achieved operating income per employee of over ¥52 million in 2022.
  • Developed the “Arealink Master” program for employee training and skill development.
  • Established a work system that includes telecommuting and shorter working hours, promoting work style reform and diversity.
  • Provided free storage units to those affected by the 2016 Kumamoto Earthquake and the 2018 Hokkaido Eastern Iburi Earthquake.

Governance Achievements

  • Introduced an executive officer system alongside its corporate auditor system, ensuring separation and control over business execution and auditing/supervisory functions.
  • Appointed two outside directors and four outside Audit & Supervisory Board members.
  • Established an Internal Audit Office to conduct internal audits.
  • Monthly meetings of the Board of Directors.

Climate Goals & Targets

Long-term Goals:
  • Achieve approximately 200,000 units in operation in fiscal 2029.
Medium-term Goals:
  • Add 4,700 units in 2023 and more than 10,000 units in 2024.
  • Achieve operating income of ¥10 billion by 2029.
  • Achieve a per-head profit of ¥64 million by 2025.
Short-term Goals:
  • Achieve an operating profit margin of 20%.

Environmental Challenges

  • Changes in external operating environment including customer needs and market conditions.
  • Impact of changes in social conditions on self-storage demand.
  • Impact of demand trends and legal regulations in the self-storage industry.
  • Real estate ownership risks (decline in land prices, etc.).
  • Natural disasters.
  • Low barriers to entry (increased competition).
  • Stricter regulations placed on the self-storage business.
Mitigation Strategies
  • Regular monitoring of economic and real estate market conditions.
  • Careful consideration of property selection.
  • Purchase properties based on location conditions that are less susceptible to damage.
  • Business continuity workflow in case of natural disaster.
  • Raising awareness of the Hello Storage brand and differentiating through new products and services.
  • Promoting measures that put the safety of customers and residents first.
  • Enhancing educational activities on container safety and improving patrol and maintenance systems.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks
  • Natural disasters (major earthquake, storm, floods)

Reporting Standards

Frameworks Used: GRI

Sustainable Products & Innovation

  • 100-Year Container Project
  • Self-Storage Mini properties with improved design

Reporting Period: 2023

Environmental Metrics

ESG Focus Areas

  • Environmental
  • Social
  • Governance

Environmental Achievements

  • Container Building 100-Year Utilization Project to extend container life through regular maintenance and using highly durable wood-frame buildings.
  • Reduction of paper waste from offices (paperless operations)

Social Achievements

  • Launched the “Arrangement and Storage Advisor Class 2” certification program for all employees.
  • Hosted the “Self-Storage Photo Contest” to promote organization and storage.
  • Provided free storage units to those affected by the 2016 Kumamoto Earthquake and the 2018 Hokkaido Eastern Iburi Earthquake.
  • Concluded a disaster prevention agreement with Ota Ward in Tokyo to provide free storage units.

Governance Achievements

  • Appointment of two outside directors (of a total of six) and four outside Audit & Supervisory Board members.
  • Establishment of compliance and risk management systems.
  • Increased percentage of management posts held by women to 10.5%.

Climate Goals & Targets

Long-term Goals:
  • Reach 200,000 units in operation in fiscal 2029.
Medium-term Goals:
  • Expand the storage network to 14,000 new storage units in 2025.
  • Achieve an operating income ratio of 20% as soon as possible.
  • Double the current number of units to 200,000 over the next seven years (2023-2029).
  • Secure a domestic market share of 30% or more within ten years.
Short-term Goals:
  • Achieve a per-head profit of 64 million yen by 2025.

Environmental Challenges

  • Significant decrease in demand, decrease in utilization rate, increase in rent arrears due to rapid changes in the external environment.
  • Impact of inflation and yen depreciation on increased container procurement costs.
  • Impact of the decline in land prices due to deterioration in the real estate market.
  • Decline in appetite for investment in real estate, decrease in real estate transactions, stricter loans to individuals, and significant decline in rents due to economic deterioration.
  • Impacts on self-storage operation sites and substantial damage in the value of real estate due to natural disasters.
  • Competition intensifies due to the follow-up entry of other companies.
  • The number of outdoor container-type rental storage spaces is rapidly increasing.
  • Unexpected costs may be incurred if building approval application requires existing containers to comply with building standards.
Mitigation Strategies
  • Conduct regular monitoring of economic and real estate market conditions.
  • Utilize nationwide database of self-storage location openings to improve location opening accuracy and utilization rate.
  • Strengthen investment judgment and leasing capabilities.
  • Carefully consider the selection of properties that meet customer needs.
  • Downscale land-rights consolidation business.
  • Utilize business continuity workflow in the event of a natural disaster.
  • Measures to ensure the continuation or early recovery of important businesses even in the event of a disaster.
  • Further increase market share by securing the superiority of Arealink.
  • Highlight the safety of Arealink’s container-type self-storage.
  • Purchase properties based on location conditions that are less susceptible to damage.
  • Raise awareness of the Hello Storage brand. Strengthen PR activities.
  • Differentiate by developing new products and services and acquire a customer base.
  • Promote measures that put the safety of customers and residents in the surrounding area first.
  • Enhance educational activities on container safety and improve patrol and maintenance systems.

Supply Chain Management

Responsible Procurement
  • Selecting optimal disposal methods from the perspective of the 3Rs (Reduce, Reuse, Recycle).

Climate-Related Risks & Opportunities

Physical Risks
  • Impacts on self-storage operation sites and substantial damage in the value of real estate due to natural disasters.
Opportunities
  • Growing demand for storage units in preparation for disaster

Reporting Standards

Frameworks Used: GRI

Sustainable Products & Innovation

  • Container Building 100-Year Utilization Project