Climate Change Data

Environmental Metrics

ESG Focus Areas

• Decarbonization
• Growth in Electronics, Healthcare, and Environment sectors
• Socially Responsible Management

Environmental Achievements

• Reduced energy usage by 253,000 GJ (0.5% of total energy usage)
• Maintained FY2020 energy consumption rate despite COVID-19 disruptions
• Achieved 94.3% effective waste utilization rate and 99.9% zero waste emission rate
• Acquired RSB and GGL certifications for palm kernel shells (PKS) sourced sustainably

Social Achievements

• Achieved all targets in the second Action Plan for the Act on Promotion of Women’s Participation and Advancement in the Workplace
• Elected the company's first female external director
• Established You You Terrace facility for employing people with disabilities
• Concluded a J-PPP ESG/SDGs Project Promotion Partnership Agreement with Renofa Yamaguchi

Governance Achievements

• Established a Carbon Neutral Strategy Division reporting directly to the President
• Established a Sustainability Committee to address climate change and human rights risks
• Announced support for TCFD recommendations
• Revised criteria for determining independence of external directors
• Abolished anti-takeover measures
• Revised “Basic Policy on Establishing the Internal Control System” focusing on Group management

Climate Goals & Targets

Environmental Challenges

• Increased costs due to raw material, fuel, and logistics expenses
• Instability in the business environment (raw material and fuel prices, exchange rates)
• Need to overhaul business portfolio away from energy-intensive businesses
• Insufficient employee willingness to challenge new domains and brave risks
• Accident at Tokuyama Factory in FY2021
• Aging facilities and workforce
• Climate change risks (physical and transition)
• Supply chain disruptions
• Human rights risks

Mitigation Strategies

• Price revisions and cost reductions
• Investment in electronics, healthcare, and environment growth businesses
• Reallocation of management resources to growth businesses
• Mindset reform among employees
• Established Safety Enhancement and Improvement Department
• Implementation of safety precautions and digital transformation (DX)
• Transforming business portfolio to energy-efficient businesses
• Developing alternative sourcing strategies
• Strengthening safeguards to mitigate supply chain risks
• Developing CO₂ utilization technologies
• Converting captive power plants to biomass fuel
• Developing high-efficiency alkaline water electrolyzers

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Promotion of survey and management of supply chains based on CSR procurement guidelines

Climate-Related Risks & Opportunities

Physical Risks

• Damage to production equipment due to flooding or windstorms

Transition Risks

• Increased operating costs associated with carbon pricing
• Impact of changes in customers’ procurement policies
• Impact of changes in policies of financial and investment companies

Opportunities

• Expansion of demand for water electrolysis equipment
• Expansion of demand for lithium batteries
• Expansion of semiconductor demand
• Increase in demand for functional materials
• Expansion of waste treatment and resource utilization industries
• Commercialization of renewable resources and energy

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards, TCFD recommendations

Certifications: RSB, GGL

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• High-efficiency alkaline water electrolyzers
• Silicon nitride
• Boron nitride
• Waste gypsum board recycling technology
• Photovoltaics module recycling technology
• Green products

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced CO2 emissions from store operations by 24.2% compared to FY2013.
• Increased organic waste recycling rate to 58.7% compared to FY2013.
• Increased ratio of eco-friendly materials in containers for original merchandise to 32.5%.

Social Achievements

• Expanded employee engagement survey to approximately 72,000 employees.
• Achieved 51% engagement score and 72% positive ratings for culture-related questions in the employee engagement and culture survey.
• Established the Seven & i Group Human Rights Policy.
• Conducted CSR audits at 846 production facilities in 13 countries.

Governance Achievements

• Established the Strategy Committee, composed solely of independent outside directors.
• Increased the number of members of the Nomination Committee to seven (two internal and five outside directors).
• Implemented a Board of Directors’ evaluation through objective analysis and thorough discussions.

Climate Goals & Targets

Environmental Challenges

• Disparity between the intrinsic value of the Group and shareholder value reflected by market capitalization.
• Cost pressures of inflation driven by rising energy costs and a weaker yen.
• Highly fragmented convenience store market in the United States.
• Supply constraints arising from labor shortages and logistics disruptions in the U.S. market.
• Deteriorating gross profit margins for food products and an increase in utilities expenses in SST operations.

Mitigation Strategies

• Bolstering communication skills and pursuing more thoughtful IR and SR activities.
• Implementing structural reforms in SST operations (store closures, optimized personnel policies, IT enhancement).
• Pursuing strategic M&A and new store openings in the U.S. market.
• Strengthening development and sales of original products with high quality and profitability in the U.S. market.
• Strengthening the 7NOW delivery service.
• Establishing the Cost Leadership Committee to conduct a fundamental review of the cost structure.

Supply Chain Management

Supplier Audits: 846 production facilities in 13 countries in FY2022.

Responsible Procurement

• Seven & i Group Sourcing Principles and Policies
• Seven & i Group Business Partner Sustainable Action Guidelines

Climate-Related Risks & Opportunities

Physical Risks

• Damage from natural disasters
• Increased raw material costs
• Changes in precipitation and weather patterns

Transition Risks

• Imposition of carbon tax
• Increased investment costs for transitioning to electric delivery vehicles

Opportunities

• Increased demand for disaster preparedness products
• Increased demand for delivery and e-commerce services
• Heightened consumer interest in sustainable merchandise

Reporting Standards

Frameworks Used: TCFD, SDGs, GRI

Certifications: MSC, ASC, JGAP

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Seven Premium products
• Traceable Vegetables
• EASE UP frozen food brand
• Sustainable and natural materials for shopping bags
• Eco-friendly containers

Awards & Recognition

• GAP Popularization Award (SEVEN-ELEVEN JAPAN)

Environmental Metrics

ESG Focus Areas

• Resolution of medical issues through innovation
• Improvement in accessibility to healthcare
• Providing responsible products, services, and solutions
• Pursuit of quality and trust
• Strengthening supply chain management
• Creating new value for a healthy society
• Realization of an attractive workplace
• Reduction in environmental burden
• Strengthening of Governance

Environmental Achievements

• 55% reduction in CO2 emissions from business activities (Scopes 1 and 2) compared to Fiscal 2016
• 40% year-on-year increase in renewable energy use in fiscal 2022
• Dry ice-free ultralow-temperature transportation for some products
• Reduced disposal of product parts by using RFID

Social Achievements

• Launched a reagent to test for Alzheimer’s disease markers in blood, reducing patient burden
• Extended insurance coverage for robotic-assisted surgery system to gastroenterology and gynecology
• Increased engagement score to 71%
• Decreased employee turnover rate
• Increased percentage of men taking childcare leave

Governance Achievements

• Appointed outside members of the Managing Board to chair both the Nominating Committee and the Compensation Committee
• Strengthened evaluation indicators for executive compensation to include medium- to long-term plans and sustainability activities
• Systematically organized evaluation criteria for executive compensation

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the spread of COVID-19 and the situation in Ukraine
• Impact of COVID-19 lockdowns and government procurement policies in China
• Geopolitical risks
• Increased costs for raw materials and transportation
• Intensifying competitive environment

Mitigation Strategies

• Established specialized departments for procurement and supply chain management
• Implemented knockdown production methods in China
• Reinforced sales and service structures in emerging markets
• Developed and introduced products that meet market needs
• Improved efficiency and created value-added products and services
• Minimized risks through forward exchange contracts
• Globally diversified reagent production functions
• Established production systems and procured parts and raw materials in accordance with national and regional policies

Supply Chain Management

Supplier Audits: 94% CSR survey response rate for fiscal 2022

Responsible Procurement

• Green procurement
• CSR surveys
• Supplier training sessions

Climate-Related Risks & Opportunities

Physical Risks

• Disruption of raw material procurement and logistics networks due to large-scale wind and flood damage, droughts, and severe impacts on biodiversity

Transition Risks

• Tighter environmental restrictions on import tariffs and bidding conditions

Reporting Standards

Frameworks Used: International Integrated Reporting Council’s International Integrated Reporting Framework, Guidance for Collaborative Value Creation issued by the Ministry of Economy, Trade and Industry, TCFD

UN Sustainable Development Goals

• Good Health and Well-being
• Climate Action
• Decent Work and Economic Growth
• Industry, Innovation and Infrastructure
• Responsible Consumption and Production
• Gender Equality

Sysmex's initiatives contribute to these goals through innovation in diagnostics, improving healthcare access, responsible product development, resource circulation, and promoting diversity and inclusion.

Sustainable Products & Innovation

• Power-saving and compact hematology instruments
• Reagents with extended expiration dates
• Dry ice-free transportation systems
• Reagents to test for Alzheimer’s disease markers

Environmental Metrics

ESG Focus Areas

• Climate Change
• Earthquake Resilience
• Population Decline
• Diversity & Inclusion
• Governance

Environmental Achievements

• Achieved RE100 in 2023 (two years ahead of schedule) by developing its own solar power plants.
• Reduced greenhouse gas emissions (Scope 1+2) by 70% compared to 2019.
• 86% of properties meet Hulic’s earthquake resistance standards (95% excluding those for sale or reconstruction).

Social Achievements

• Established a Diversity Promotion Project Team to improve work-life balance and career development.
• Achieved 30% female representation among directors and Audit & Supervisory Board members.
• Employment ratio of persons with disabilities: 2.74% (consolidated) / 7.05% (non-consolidated).

Governance Achievements

• Appointed an external director as Chairperson of the Board of Directors.
• Established a Nominating Committee and a Remuneration Committee composed entirely of independent external directors.
• No internal compliance breaches or violations of laws in FY2023.

Climate Goals & Targets

Environmental Challenges

• Declining working-age population and labor shortages.
• Earthquake risk in the Tokyo metropolitan area and Nankai Trough.
• Risk of Mt. Fuji eruption.
• Global warming and the need for carbon neutrality.
• Rising construction costs.

Mitigation Strategies

• Reducing the percentage of office properties in the portfolio to below 50%.
• Developing highly earthquake-resistant buildings.
• Implementing measures against ashfall from a potential Mt. Fuji eruption.
• Achieving RE100 and transitioning to 100% renewable energy in company-owned buildings by 2029.
• Investing in senior living facilities and other growth sectors.

Supply Chain Management

Responsible Procurement

• CSR purchasing policy

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters (earthquakes, flooding, typhoons)
• Rising temperatures

Transition Risks

• Increase in costs of responding to climate change policies and regulations
• Carbon pricing

Opportunities

• Increase in valuation of environmentally friendly properties
• Opportunities to enter new markets that help mitigate climate change

Reporting Standards

Frameworks Used: International Integrated Reporting Framework (IFRS Foundation), Guidance for Collaborative Value Creation 2.0 (Ministry of Economy, Trade and Industry), GRI Standards 2021, TCFD recommendations

Certifications: Health & Productivity Management Outstanding Organization, Platinum Kurumin

Third-party Assurance: KPMG AZSA Sustainability Co., Ltd.

Sustainable Products & Innovation

• Natural ventilation and natural lighting systems
• Lightweight solar panels
• Thin-layered wall greening system
• Fireproof wooden buildings

Awards & Recognition

• Four stars in the Nikkei SDGs Management survey (2023)
• Certified Health & Productivity Management Outstanding Organization