Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Replacing store lighting with energy-efficient LED lighting
• Streamlining truck delivery routes
• Expanding a circular reuse business model to 318 stores purchasing and 25 stores selling used products
• Reduced monthly CO2 emissions by roughly 12kg per person commuting 3km daily (based on external study)

Social Achievements

• Held 183 safety awareness classes annually
• Conducted programs including practice lessons for children, sports cycling workshops for beginners, and bicycle riding classes for seniors
• Facilitated the participation of people with disabilities, exceeding the legal mandated 2.3% employment rate

Governance Achievements

• Transitioned from a Company with Board of Auditors to a Company with Audit and Supervisory Committee in 2021
• Established a Sustainability Committee in November 2022
• Elected Mr. Makoto Horikawa as a director on the Board of Directors in May 2023

Climate Goals & Targets

Environmental Challenges

• Decreasing bicycle distribution volume in the domestic market
• Rising procurement costs due to higher material and shipping prices and weaker yen
• Growing demand for repairs and maintenance
• Changes in consumer behavior due to rising prices
• Supply chain disruptions due to COVID-19 lockdowns in China
• Aging population and declining birthrate in Japan
• Need to upgrade enterprise system
• Rising store construction costs
• Difficulty securing staff
• Need to increase online sales to offset rising costs and staff shortages
• Gradual year-on-year declines in sales units for the Japanese bicycle industry

Mitigation Strategies

• Implementing a pricing strategy that takes full advantage of Asahi brand pricing
• Presenting clearly defined product concepts and revising product branding system
• Strengthening ENERSYS series of electric-assist bicycles
• Improving ability to maintain a constant supply of products
• Strengthening CRM and OMO strategies
• Systematically organizing product branding
• Optimizing logistics bases
• Developing and offering new value with bicycle products
• Creating customer journey roadmaps
• Providing post-purchase value beyond price
• Developing a proprietary OMO model and data platform
• Improving online store functionality
• Developing a new style of store for more efficient management
• Developing a systems platform for DX
• Replacing core and peripheral systems
• Building a data platform for CRM
• Switching to a digital customer information management system
• Strengthening logistics cost management
• Optimizing inventory levels
• Redesigning inventory management process
• Deploying a demand prediction system and warehouse management system
• Implementing PSI (Production, Sales and Inventory) management
• Relocating logistics facilities
• Streamlining delivery in cities
• Building a network for collecting reused products
• Shortening delivery lead time
• Redefining ASAHI brand scheme
• Clarifying the concept for each brand
• Reorganizing overall brand scheme
• Developing targeted content with “Chiririn”
• Planning bicycle touring events in cooperation with travel companies
• Continuing conducting awareness-raising activities in cooperation with local governments

Supply Chain Management

Responsible Procurement

• Strong pipeline with main domestic suppliers
• Close communication with overseas suppliers and production contractors

Climate-Related Risks & Opportunities

Opportunities

• Increased demand for bicycles as a low-carbon mode of transport

Reporting Standards

Frameworks Used: TCFD

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 11 (Sustainable cities and communities)
• Goal 13 (Climate action)
• Goal 3 (Good health and well-being)

Promoting bicycle use contributes to reduced CO2 emissions, sustainable transportation, healthy lifestyles, and safer communities.

Sustainable Products & Innovation

• ENERSYS electric-assist bicycles
• Office Press Trekking model
• Commuter bicycle with larger basket and optional double kick stand

Awards & Recognition

• All Japan Model Company for Safe Bicycle Usage (2019)
• Declared company of the Bicycle Commuting Promotion Company Declaration Project (2020)

Environmental Metrics

ESG Focus Areas

• Safety
• Health
• Environment
• Supply Chain
• Human Rights
• Corporate Governance
• Employee Well-being
• Community Engagement
• Climate Change
• Circular Economy

Environmental Achievements

• Installed LED lighting in 523 out of 533 stores for interior lighting and 381 stores for exterior lighting.
• Partially uses powder coating for bicycle frames and parts, reducing environmental impact.
• Set a target of reducing GHG emissions (Scope 1 & 2) by 50% by 2030 compared to FY2021/2 levels and achieving carbon neutrality by 2050.
• Collected approximately 340,000 unneeded bicycles, with 80–90% exported for reuse.

Social Achievements

• Established the Basic Policy on Health and Safety and Action Guidelines.
• Formulated the Basic Policy on Respect for Human Rights.
• Introduced the Partner Registration System for same-sex partners.
• Introduced an age 65 post-retirement reemployment system.
• Revised the disaster response manual.
• Increased the number of stores offering bicycle buyback service to 423 (approximately 80% of all stores).
• Expanded the range of bicycles purchased for reuse.
• Started online sales of reused bicycles.
• Conducted traffic safety classes for children and employees.
• Concluded agreements with local governments to promote bicycle usage.
• Received the highest award as a 2023 Osaka City Leading Company in Women’s Participation.

Governance Achievements

• Introduced an executive officer system.
• Established the Sustainability Committee.
• Expressed support for the TCFD recommendations.
• Disclosed information on Governance, Strategy, Risk Management, and Indicators and Targets.
• Conducted effectiveness evaluation of the Board of Directors.
• Established an internal reporting system for violations of laws and regulations.

Climate Goals & Targets

Environmental Challenges

• Shrinking domestic new bicycle sales market.
• Unexpected outbreak of pandemics.
• Difficulty in recruiting human resources.
• Worsening profitability due to lower accuracy in store opening locations.
• Rising construction costs and declining workforce.
• Increased risk of personal information leakage.
• Credit card fraud.
• Occurrence of uncollectible accounts receivable.
• Violation of antitrust laws.
• Deterioration of relationships with business partners.
• Declining purchase of new bicycles amid higher product prices and inflation.
• Declining bicycle market volume due to population decline and low birth rates.
• Decreased bicycle imports.
• Logistics issues.
• Expansion of the e-commerce market.
• Soaring raw material prices.
• Yen's depreciation.
• Labor shortage in the bicycle business in Japan.

Mitigation Strategies

• Promoting appropriate store opening plans based on national population coverage.
• Promoting growth strategies focused on urban bicycle needs.
• Strengthening online-merge-offline (OMO) retailing approach.
• Strengthening SPA system.
• Improving global sourcing structure to reduce procurement costs.
• Optimizing logistics operations to reduce long-distance transportation.
• Maintaining stock levels matched to anticipated demand.
• Increasing employee wage structure.
• Establishing a structure to offer maintenance and repair services.
• Developing digital infrastructure to increase contact with customers.
• Digitalizing customer data for centralized management.
• Improving the integration of planning, manufacturing, logistics, and sales activities.
• Adding models with new functionality and designs at attractive price points.
• Expanding the number of stores offering buyback service and improving the efficiency of the merchandising process.
• Improving the UI for the online store.
• Strengthening sales strategies for products in the online store.
• Reviewing the system to secure more strategic inventory.
• Identifying and implementing OMO measures.
• Reviewing store operations and improving productivity.
• Further strengthening used sales from both physical and online stores.
• Expanding the number of stores offering bicycle buyback services.
• Streamlining overall inventory management.
• Implementing region-specific measures to meet customers’ needs.
• Reorganizing training manuals and store operations.
• Establishing the urban store format as a business model.
• Developing a small local store format that requires low initial investment.
• Streamlining logistics functions and delivering products to bicycle stores nationwide with more flexibility.
• Offering bicycle dealers services and know-how cultivated by Asahi.
• Stepping up efforts to create content that will lead to greater enjoyment and safety of bicycles.
• Conducting awareness-raising activities in cooperation with local governments.

Supply Chain Management

Responsible Procurement

• Evaluating and categorizing suppliers based on cost impact and procurement risk.
• Building and managing relationships with suppliers (SRM).
• Progressively reviewing contract terms.
• Collaborating with suppliers who have cutting-edge technology.

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters (extreme weather, flooding)
• Supply chain disruption due to higher average temperatures

Transition Risks

• Carbon tax
• Decarbonization of logistics
• Development of new types of mobility

Opportunities

• Increased demand for bicycles due to changes in consumer awareness
• Increased reused bicycle market
• Increase in opportunities for bicycle use

Reporting Standards

Frameworks Used: TCFD

Sustainable Products & Innovation

• EnerSys City electric-assist bicycle
• LOG ADVENTURE e outdoor electric-assist bicycle

Awards & Recognition

• 2023 Good Design Award (LOG ADVENTURE e)
• 2023 Osaka City Leading Company in Women’s Participation