Climate Change Data

Wacoal Holdings Corp.

Climate Impact & Sustainability Data (2023, 2023-05 to 2024-04, 2024)

Reporting Period: 2023

Environmental Metrics

ESG Focus Areas

  • Sustainability
  • Human Resources Diversity
  • Climate Change

Environmental Achievements

  • Reduced environmental burden through management efforts; promoted eco-friendly environmental business; created an environment where people and animals can coexist by animal medical equipment; promoted creating forests for important water and oxygen.

Social Achievements

  • Aims to achieve a healthy and spiritually rich society; identified key issues including providing a lifestyle that stimulates the senses, reducing the burden on the global environment, contributing to a happy society, and building a corporate infrastructure that will last 100 years; actively invests in human resources development; conducted an open-application educational program to nurture future core human resources; respects employees' willingness to learn and offers support for personal development.

Governance Achievements

  • Complies with all principles of the Corporate Governance Code; established a Sustainability Committee; strengthened efforts to fulfill its social responsibilities to stakeholders; majority of the Board of Directors are composed of Outside Directors who are independent and neutral; implemented a share remuneration-type stock option scheme.

Climate Goals & Targets

Medium-term Goals:
  • Net sales of over 140 billion yen, operating profit ratio of 12%, and return on equity (ROE) of 12% in the fiscal year 2027

Environmental Challenges

  • Climate change risks (addressed through scenario analysis and company-wide risk management procedures)
Mitigation Strategies
  • Scenario analysis to develop a strategy for medium- to long-term resilience to climate change; managing identified risks in accordance with company-wide risk management procedures.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: TCFD

Reporting Period: 2023-05 to 2024-04

Environmental Metrics

Total Carbon Emissions:807.7 thousand t-CO2e/year
Scope 1 Emissions:1.3 thousand t-CO2e/year
Scope 2 Emissions:18.9 thousand t-CO2e/year
Scope 3 Emissions:807.7 thousand t-CO2e/year
Carbon Intensity:23.9% (tCO2/million yen net sales)

ESG Focus Areas

  • Human Capital Management
  • Climate Change
  • Governance
  • Supply Chain Responsibility
  • Community Engagement

Environmental Achievements

  • Reduced CO2 emissions by 3.8% (Scope 1+2) compared to the reference year (fiscal 2022)
  • Achieved a B rating in the 2023 CDP climate change survey
  • Implemented energy-saving measures resulting in a reduction of 559,572 kWh and approximately 1,353 t-CO2 in CO2 emissions associated with electricity use

Social Achievements

  • Received Platinum Kurumin certification for exceptional childcare support
  • Received Platinum Eruboshi certification for outstanding support for women’s participation and career advancement
  • Registered as a Sapporo City LGBT-Friendly Company
  • Conducted employee engagement surveys resulting in a 0.8% decrease in employees with high stress levels compared to the previous year

Governance Achievements

  • Increased the number of independent outside directors from 36.4% to 45.5%
  • Changed the chairperson of the Board of Directors to an independent outside director
  • Changed the chairperson of the Nomination and Remuneration Committee to an independent outside director
  • Implemented the AIN Group Compliance Promotion Action Plan to address a past compliance incident

Climate Goals & Targets

Long-term Goals:
  • Achieve carbon neutrality (net-zero CO2 emissions) by 2050
  • Achieve net sales of ¥1 trillion
  • Achieve ROE of 15.0%
Medium-term Goals:
  • Reduce Scope 1 and 2 CO2 emissions by 30% compared to fiscal 2022
  • Achieve a 30% renewable energy share
  • Achieve net sales of ¥700.0 billion
  • Achieve ROE of 13.0%
Short-term Goals:
  • Increase cosmetic and drug store business net sales to ¥200.0 billion and operating profit margin to over 10%

Environmental Challenges

  • Dispensing errors
  • Revisions to dispensing fees and drug prices
  • Shortages of pharmacists
  • Climate change related physical and transition risks (extreme weather, regulatory changes)
  • Supply chain disruptions
  • Information security risks
Mitigation Strategies
  • Continuous improvement of systems for rapidly discovering dispensing errors and contacting patients
  • Investments in digital transformation to improve efficiency and patient services
  • Active recruitment and training of pharmacists
  • BCP formulation and drills to address natural disasters and climate change impacts
  • CSR procurement policy and guidelines to promote responsible sourcing
  • Reinforcement of security governance and employee training

Supply Chain Management

Responsible Procurement
  • AIN Group CSR Procurement Policy and Guidelines

Climate-Related Risks & Opportunities

Physical Risks
  • Increasingly severe abnormal weather events
  • Changes in rainfall and weather patterns
Transition Risks
  • Increased restrictions on GHG emissions

Reporting Standards

Frameworks Used: International Integrated Reporting Framework (IIRC), Guidance for Collaborative Value Creation 2.0 (METI), TCFD Recommendations

Certifications: Platinum Kurumin, Platinum Eruboshi

UN Sustainable Development Goals

  • SDG 3: Good Health and Well-being
  • SDG 8: Decent Work and Economic Growth
  • SDG 9: Industry, Innovation and Infrastructure
  • SDG 10: Reduced Inequalities
  • SDG 11: Sustainable Cities and Communities
  • SDG 13: Climate Action

The report details how various initiatives contribute to these SDGs through improved healthcare access, responsible business practices, environmental protection, and employee well-being.

Awards & Recognition

  • 2024 Certified KENKO Investment for Health Outstanding Organization (Large Enterprise Category - White 500)

Reporting Period: 2024

Environmental Metrics

Total Carbon Emissions:5,880 tCO2e (Scope 1 & 2) + 298,553 tCO2e (Scope 3)
Scope 3 Emissions:298,553 tCO2e

ESG Focus Areas

  • Climate Change
  • Human Rights
  • Human Capital
  • CSR Procurement
  • Diversity & Inclusion
  • Corporate Governance

Environmental Achievements

  • Began calculating GHG emissions for the entire supply chain (Scope 3) of the Wacoal Business (Domestic) in 2021.
  • Sequentially replacing equipment with cost-effective energy-saving devices to reduce greenhouse gas emissions at domestic business sites.
  • Engaging suppliers by holding briefing sessions on environmental policies and initiatives to reduce Scope 3 emissions.
  • Calculated greenhouse gas emissions for garment factories in overseas operations.

Social Achievements

  • Achieved 35.1% women in managerial positions (section manager and higher level) as of May 1, 2024, exceeding the 30% target.
  • Received “Eruboshi Certification” from the Ministry of Health, Labour and Welfare of Japan in February 2021 for efforts to advance women’s participation.
  • Promoting initiatives to increase working productivity through remote work, flexible hours, and a limited work location system.
  • Implementing human rights risk assessments and preparing for human rights due diligence.

Governance Achievements

  • Established the Sustainability Committee in 2022 with four subcommittees.
  • Increased the number of external directors to five, with two being women.
  • Introduced ROIC management to improve capital efficiency.
  • Implemented a performance share unit compensation plan.

Climate Goals & Targets

Long-term Goals:
  • Net zero emissions (Scope 1 & 2) for domestic businesses by 2030.
  • Zero product waste (Wacoal Corp.) by 2030.
  • 50% rate of environment-friendly materials used (Wacoal Corp.) by 2030.
Medium-term Goals:
  • Achieve VISION 2030 goals by FY2031 (details not fully specified in report).
  • Reduce in-house emissions (Scope 1 and 2) by 9% and supply chain emissions (Scope 3) by 11% by 2030 (compared to FY2020).
Short-term Goals:
  • Improve the sales profit ratio by 3 pts to 4 pts and SG&A expenses by 4 pts to 5 pts by FY2026 (compared to FY2023).

Environmental Challenges

  • Sluggish performance and inability to thoroughly implement reforms.
  • Delayed response to changing customer needs.
  • Prioritization of comfort over functionality in innerwear.
  • Declining domestic demand due to population decline.
  • Lack of competitiveness due to slow innovation.
  • Declining corporate attractiveness and a serious shortage of staff.
  • Rising procurement costs due to changes in the external environment.
  • Stagnant personal consumption in China due to a worsening business climate.
Mitigation Strategies
  • Implementing drastic cost structure reform, including brand consolidation and addressing unprofitable businesses.
  • Reforming supply chain management to respond quickly to changes in customer needs and markets.
  • Reviewing brand strategy to develop appealing brands with clear value propositions.
  • Utilizing digital transformation (DX) to build relationships with customers.
  • Introducing ROIC management to improve capital efficiency.
  • Promoting asset reduction by disposing of assets that do not contribute to enhancing corporate value.
  • Implementing human rights due diligence and promoting respect for human rights throughout the Group.
  • Shifting to a business model that emphasizes e-commerce in the US and Europe.
  • Reviewing brand business and product lineup in China, and renewing sales floors.

Supply Chain Management

Responsible Procurement
  • Wacoal Group CSR Procurement Guidelines (2017)
  • Self-assessments of contracted sewing factories, raw material suppliers, and dyeing factories.

Climate-Related Risks & Opportunities

Physical Risks
  • Storms, floods, and other extreme weather
Transition Risks
  • Introduction of carbon taxes
Opportunities
  • Gaining support from environmentally-conscious consumers

Reporting Standards

Frameworks Used: TCFD

Sustainable Products & Innovation

  • Environmentally-friendly products and materials

Awards & Recognition

  • Eruboshi Certification