Climate Change Data

Environmental Metrics

ESG Focus Areas

• Corporate Governance
• Contribution to a Low-Carbon Society
• Management of the Entire Supply Chain
• Coexistence with Local Communities
• Promotion of Diversity
• Realization of Work-Life Balance

Social Achievements

• Promotion of Diversity (two of thirteen directors are women)

Governance Achievements

• Transitioned to a "Company with Three Committees (Nomination, Audit and Remuneration Committees)" corporate format
• Prepared written "Corporate Governance Guidelines"
• Regular third-party evaluations of the Board of Directors

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Realization of decarbonized society
• Promotion of circular economy
• Management of the entire supply chain
• Promotion of diversity & inclusion
• Realization of work-life integration
• Realization of customers’ healthy/safe/secure life
• Coexistence with local communities

Environmental Achievements

• Reduced Scope 1 and 2 emissions by 36.7% vs. FY2017
• Increased renewable energy share to 20.3% in FY2021 (up 10% from FY2020)
• Reduced Scope 3 emissions by 17.3% vs. FY2017
• Reduced waste disposal volume by 11.9% vs. FY2019
• Collected 1,101 tons of items via ECOFF for recycling in FY2021

Social Achievements

• Launched fashion subscription business AnotherADdress
• Opened healthcare wellness mall Welpa
• Increased share of women in management positions to 21.3% in FY2021
• Increased paternity leave usage rate to 43.6% in FY2021
• Established LGBT-related systems and consultation desk
• Established JFR Create Co., Ltd. to empower disabled people

Governance Achievements

• Revised Officer Remuneration Policy to link executive compensation to ESG performance
• Established Group System Unit to improve information security
• Issued sustainability bonds for the first time in May 2021

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to climate events and COVID-19
• Increased energy costs associated with decarbonization policies
• Maintaining customer loyalty amidst changing consumer behavior
• Attracting and retaining talent in a competitive job market
• Managing risks associated with accelerated digitization

Mitigation Strategies

• Developing alternative sourcing strategies
• Investing in renewable energy and energy efficiency measures
• Creating new customer experiences and services
• Promoting diversity and inclusion, work-life integration
• Strengthening information security and risk management systems

Supply Chain Management

Supplier Audits: 7,415 suppliers assessed in FY2021 (40.6% response rate)

Responsible Procurement

• JFR Principles of Action for Suppliers
• Human rights due diligence

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters causing damage to stores and business sites
• Increased risk of infectious diseases

Transition Risks

• Increased energy costs
• Increased demand for renewable energy
• Market changes related to low-carbon products

Opportunities

• Development of energy-efficient products and services
• Expansion of renewable energy sources
• New growth opportunities in circular economy

Reporting Standards

Frameworks Used: GRI Standard, Guidance for Collaborative Value Creation, TCFD recommendations, SASB Standards, ISO 26000

Third-party Assurance: LRQA Limited

Sustainable Products & Innovation

• AnotherADdress fashion subscription service

Awards & Recognition

• Health & Productivity Management Outstanding Organization 2022
• Good Performance Prize at the 24th Environmental Communication Awards
• Gold Award in PRIDE Index 2021
• Osaka Governor’s Award in the Osaka Climate Action Awards for FY2021
• Gold award in the category of Interior Design of IAUD International Design Award 2021 (Parco)
• Certified by the MHLW as an outstanding small and medium-sized business for its efforts to hire more people with disabilities (MONISU) (JFR Create)

Environmental Metrics

ESG Focus Areas

• Decarbonization
• Circular Economy
• Management of the entire supply chain
• Promotion of diversity & inclusion
• Realization of work-life integration
• Realization of customers’ healthy/safe/secure life
• Coexistence with local communities

Environmental Achievements

• Reduced Scope 1 and 2 emissions by 43.5% vs. FY2017
• Achieved 33.6% renewable energy ratio in FY2022
• Obtained SBT certification for 2050 Net Zero Target for Scope 1, 2, and 3 GHG emissions
• Reduced waste disposal volume (including food waste) by 26.7% vs. FY2019
• Collected 367 tons of unwanted clothing via ECOFF in FY2022 (cumulative total 1,468 tons)

Social Achievements

• Launched fashion subscription business AnotherADdress with over 200 brands and 16,000 members
• Established J. Front City Development to engage in developer business
• Increased share of women in management positions to 22.2% in FY2022
• Implemented Women’s Empowerment Promotion Project
• Increased paternity leave usage rate to 68.0% in FY2022

Governance Achievements

• Incorporated non-financial indicators into executive compensation
• Conducted supplier assessments to check human rights initiatives
• Established LGBT-related systems (Same-Sex Partnership Rules, gender change support leave), and an LGBT Consultation Desk

Climate Goals & Targets

Environmental Challenges

• Achieving net zero for the entire value chain
• Building a recycling-oriented business model
• Addressing climate change risks and opportunities
• Human rights issues in the supply chain
• Reducing Scope 3 GHG emissions

Mitigation Strategies

• Setting ambitious medium- and long-term reduction targets
• Switching to renewable energy and energy saving measures
• Collaborating with suppliers and customers to reduce Scope 3 emissions
• Promoting human rights due diligence
• Sharing JFR Principles of Action for Suppliers with suppliers and conducting supplier assessments

Supply Chain Management

Supplier Audits: Second supplier assessment conducted in autumn 2023

Responsible Procurement

• JFR Principles of Action for Suppliers
• Green procurement initiatives

Climate-Related Risks & Opportunities

Physical Risks

• Disruption of distribution routes due to natural disasters
• Decrease in revenues due to store closures caused by natural disasters
• Increase in procurement costs due to unstable yields of agricultural products

Transition Risks

• Increase in energy costs associated with carbon taxes
• Increase in energy procurement costs due to geopolitical risks
• Increase in costs due to decentralization of renewable energy procurement
• Risk of lost reputation due to delayed response to environmental issues

Opportunities

• Decrease in energy procurement costs due to energy-saving measures
• Decrease in renewable energy procurement cost
• Increase in revenue due to acquisition of new customers by proposing sustainable lifestyles
• Expansion of circular businesses

Reporting Standards

Frameworks Used: GRI, TCFD

Certifications: SBT

Third-party Assurance: LRQA Limited

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• AnotherADdress fashion subscription
• Environmentally friendly packaging materials

Awards & Recognition

• Gold rating in PRIDE index
• Certified Health and Productivity Management Outstanding Organization 2023
• Inclusion in A List in 2022 CDP climate change survey

Environmental Metrics

ESG Focus Areas

• Decarbonization
• Circular Economy
• Biodiversity Conservation
• Respect for Human Rights
• Empowering Diverse Human Resources

Environmental Achievements

• 57.4% reduction in Scope 1 and 2 GHG emissions (vs. FY2017)
• 52.9% renewable energy share in electricity used in business activities (FY2023)
• 30.8% reduction in waste disposal volume (vs. FY2019)
• Cumulative total of 1,845 tons of items collected via ECOFF for recycling (FY2023)

Social Achievements

• Launched fashion subscription business AnotherADdress
• Established LGBT-related systems (Same-Sex Partnership Rules, gender change support leave), creation of LGBT Consultation Desk
• Opened healthcare wellness mall Welpa (Shinsaibashi PARCO)
• Established the Pride Fund to support business successions of local companies

Governance Achievements

• Incorporated non-financial indicators into executive compensation
• Established a Sustainability Committee
• Obtained SBT net zero certification

Climate Goals & Targets

Environmental Challenges

• Climate change
• Biodiversity loss
• Supply chain disruptions
• Competition for human resources
• Technological innovation
• Respect for human rights
• Declining birthrates and aging population
• Diversification of consumer values and behavior
• Increasing presence of overseas consumers
• Expansion of disparities between cities
• Economic instability
• Natural disasters and epidemics
• Geopolitical and geoeconomic crises
• Information security threats

Mitigation Strategies

• Net zero greenhouse gas emissions target by 2050
• Collaboration with suppliers and customers to reduce Scope 3 emissions
• Promotion of resource recycling
• Human rights due diligence
• Investment in human resources
• Business model reform
• Technological adoption
• BCP development
• Crisis management systems
• Security enhancements

Supply Chain Management

Supplier Audits: 1,652 companies responded in 2023 (50.4% response rate)

Responsible Procurement

• JFR Principles of Action for Suppliers
• Human rights assessments

Climate-Related Risks & Opportunities

Physical Risks

• Decrease in revenue due to store closures caused by natural disasters

Transition Risks

• Increase in costs associated with carbon tax
• Increase in renewable energy procurement costs

Opportunities

• Decrease in energy procurement cost due to energy efficiency improvements
• Expansion of earnings by responding to increased demand for environmentally friendly products and services
• Expansion of new growth opportunities through new entry into circular businesses

Reporting Standards

Frameworks Used: GRI Standards, TCFD Recommendations, TNFD Recommendations, SASB Standards, UN Global Compact, Women’s Empowerment Principles, Climate Change Initiative

Certifications: ISO 14064-3:2019, SBT certification (1.5°C target), SBT Net Zero certification, FSC®-CoC

Third-party Assurance: LRQA Limited

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• AnotherADdress
• reADdress

Awards & Recognition

• Gold rating in the PRIDE Index
• Selected as a constituent of FTSE Blossom Japan Index
• Selected as a constituent of S&P/JPX CARBON EFFICIENT INDEX
• Selected as a constituent of Dow Jones Sustainability Asia/Pacific Indexes
• Selected as a constituent of MSCI Japan ESG Select Leaders Index
• Selected for inclusion in S&P/JPX Carbon Efficient Index
• Selected as an Environmentally Sustainable Company at the 5th ESG Finance Awards Japan
• Selected as a constituent of the SNAM Sustainability Index
• Selected as a constituent of FTSE Blossom Japan Sector Relative Index
• Selected as a constituent of FTSE4Good Index Series
• Selected as a constituent of MSCI Japan Empowering Women Index (WIN)