Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced power consumption at each store in the Fashion Business by around 40% compared to fiscal 2009 by switching to LED lighting.
• Launched the world's first wool recycling project in 1996.
• Developing eco-friendly products using recycled materials (e.g., recycled plastic bottles).

Social Achievements

• Introduced the Shift Gears Program to improve work-life balance.
• Established an internal qualification system for part-time employees.
• Promoting various initiatives for diversity and work-life balance.
• Supporting local sports and cultural activities (e.g., Nagano Marathon sponsorship).

Governance Achievements

• Appointing three external directors and two external auditors.
• Established a Nomination and Remuneration Committee.
• Reinforcing the functions of the Board of Directors and the Board of Auditors.

Climate Goals & Targets

Environmental Challenges

• Declining demand for suits due to changes in lifestyles and work styles.
• Shrinking bridal market and intensified competition.
• Impact of COVID-19 on sales and profitability.

Mitigation Strategies

• Developing new Life & Work Style product lines.
• Proposing various wedding styles (e.g., online weddings, small weddings).
• Introducing new services and content in entertainment facilities (e.g., telecommuting support).
• Cost reduction measures in each business.

Supply Chain Management

Responsible Procurement

• Quality improvement meetings with suppliers

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• Washable suits
• Cool biz suits
• Warm biz suits
• Suits with recycled polyester linings
• Dress shirts made with recycled fibers from plastic bottles

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced per-store Scope 1 and Scope 2 CO2 emissions; aiming for 50% reduction by FY2030 compared to FY2017 levels.
• Developed washable suits and other eco-friendly products using recycled materials (ECOPET®, RENU®).
• Continued Japan’s first wool recycling project.

Social Achievements

• Ranked No. 1 in Japan’s largest customer satisfaction survey (JCSI).
• Pajamas Suit® won the Nikkei MJ Award.
• Anniversaire produced its 100,000th wedding.
• Anniversaire staff won second place in the 16th HRS Service Competition.

Governance Achievements

• Established a Sustainability Committee in December 2021.
• Disclosed information in line with TCFD recommendations.
• Board of Directors consists of 12 directors, including five external directors (41.7% external, 16.7% female).

Climate Goals & Targets

Environmental Challenges

• Shrinking market and declining work population in Japan.
• Climate change risks (transition risks, physical risks).
• Need to adapt to changing lifestyles and work styles.
• Securing labor in a declining birthrate environment.

Mitigation Strategies

• Amend business portfolio; redefine and combine existing products and services.
• Reform store operations through digital transformation (DX); introduce franchise system and unmanned, labor-saving system.
• Utilize multi-talented human resources (hybrid human resources).
• Full-fledged implementation of sustainability management; systematically advance risk management measures.

Supply Chain Management

Responsible Procurement

• Quality improvement meetings with suppliers; sharing customer feedback and involvement in product development.

Climate-Related Risks & Opportunities

Physical Risks

• Loss of sales opportunities due to production area and distribution network disorder as well as reduction in store operation as a result of disasters or infectious diseases

Transition Risks

• Decrease in demand for existing products; loss of sales opportunities due to delay in developing products which address global warming; increased store operation costs due to tightened regulations such as a carbon tax or carbon pricing; shift from thermal power generation to renewable energy.

Opportunities

• Development of new, sustainable products and services; cost reductions thanks to expanded use of renewable energy; cost reductions and improved value thanks to raw materials recycling.

Reporting Standards

Frameworks Used: TCFD

Sustainable Products & Innovation

• Washable suits, eco-friendly products using recycled materials (ECOPET®, RENU®), Pajamas Suit®

Awards & Recognition

• Nikkei MJ Award (Pajamas Suit®)
• First place in JCSI survey (2021)

Environmental Metrics

ESG Focus Areas

• Human resources
• Business development / Innovation
• Environment
• Governance
• Local communities

Environmental Achievements

• Reduced per-store Scope 1 and Scope 2 CO2 emissions by 50% compared to FY2017 levels by FY2030 (target)
• Installed solar carports at three AOKI stores, replacing about 30% of annual electricity use per store with renewable energy
• Developed 50 environmentally friendly products (FY2023)

Social Achievements

• Launched the OKAERI Eco Project to collect unwanted clothing at stores for recycling
• Increased percentage of women in management positions to 4.9% (FY2023), aiming for at least 20% by FY2030
• Improved employee engagement score to 55% (FY2023), aiming for at least 65% by FY2030
• Held the 25th AOKI Group Harmony Concert, inviting 2,000 guests and supporting charity activities
• Concluded CSR standards agreements with 101 factories (FY2023)

Governance Achievements

• Established a Compliance Office in November 2022 and implemented compliance training for all employees
• Transitioned to a company with an Audit and Supervisory Committee in June 2023
• Strengthened the authority of the Nomination and Remuneration Committee by ensuring a majority of independent External Directors

Climate Goals & Targets

Environmental Challenges

• Climate change risks (transition risks, physical risks)
• Insufficient female participation in management
• Concerns about career development and communication among employees

Mitigation Strategies

• Implementing various measures to reduce CO2 emissions and transition to renewable energy
• Promoting initiatives to increase the percentage of women in management positions
• Implementing measures to address career development and communication concerns, including 1-on-1 meetings and briefings

Supply Chain Management

Supplier Audits: 101 CSR standards agreements concluded with factories (FY2023)

Responsible Procurement

• Supplier Code of Conduct (established in 2022)
• CSR audits through questionnaires for suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Increased store operation costs due to tightened regulations
• Restrictions on product materials
• Decreased demand for existing products
• Increased costs due to food procurement instability
• Increased utility costs due to higher average temperatures
• Production area and distribution network disruptions due to extreme weather

Transition Risks

• Restrictions on the provision of products and services
• Decreased sales opportunities for environmentally friendly products
• Increased financing costs due to declining investor appreciation
• Loss of sales opportunities due to regulatory changes

Opportunities

• Shift from thermal power generation to renewable energy
• Application of recycling
• Development and expansion of products and services that contribute to carbon reduction
• Access to new markets
• Cost reductions from raw materials recycling
• Development of new, sustainable products and services

Reporting Standards

Frameworks Used: TCFD

Sustainable Products & Innovation

• AOKI ECO FRIENDLY® products (using recycled materials like ECOPET® and RENU®)
• Wool Eco Shoes (made from recycled suit materials)
• Home-washable suits
• Cool Biz and Warm Biz clothing

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced CO2 emissions per store by 10.8% (from 88.3t-CO2 to 79.0t-CO2)
• Developed eco-friendly products using recycled materials (e.g., recycled polyester, Ecopet®)

Social Achievements

• Launched a contact center service to improve customer satisfaction
• Implemented various initiatives to improve employee engagement and work-life balance
• Held the 24th AOKI Group Harmony Concert
• Continued support for sports and next-generation development

Governance Achievements

• Transitioned to a company with an audit and supervisory board in June 2023 to enhance corporate governance
• Established a Compliance Department in November 2022
• Implemented measures to prevent recurrence of bribery incident

Climate Goals & Targets

Environmental Challenges

• Suit sales decline accelerated by the pandemic and remote work
• Increased competition in the entertainment business due to low barriers to entry and declining population
• Climate change related risks (regulatory changes, consumer preferences)
• Bribery incident

Mitigation Strategies

• Promoting casual and women's wear, exploring new opportunities in business formal wear
• Improving efficiency in store operations, implementing dynamic pricing
• Developing eco-friendly products, reducing CO2 emissions
• Strengthening corporate governance and compliance

Supply Chain Management

Supplier Audits: 65 suppliers sent a Supplier Code of Conduct

Responsible Procurement

• Supplier Code of Conduct, CSR questionnaire survey

Climate-Related Risks & Opportunities

Physical Risks

• Disasters, pandemics affecting store operations and supply chains

Transition Risks

• Regulatory changes (carbon tax, carbon pricing), market shifts (demand for existing products)

Opportunities

• Development of climate-friendly products and services, cost reduction through renewable energy

Reporting Standards

Frameworks Used: TCFD

Sustainable Products & Innovation

• Eco-friendly products using recycled materials

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Social Achievements

• Established the stylist system in 2004, offering customers ideas for apparel that best matches their preferences and lifestyles. This is connected to higher customer satisfaction.

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• Pajama Suits ®
• MeWORK project products

Environmental Metrics

ESG Focus Areas

• Human resources
• Business development / Innovation
• Environment
• Governance
• Local communities

Environmental Achievements

• Reduced per-store Scope 1 and Scope 2 CO2 emissions by 50% compared to FY2017 levels by FY2030 (target)
• Installed solar carports at three AOKI stores, replacing about 30% of annual electricity use per store with renewable energy
• Developed 50 environmentally friendly products (FY2023)

Social Achievements

• Launched the OKAERI Eco Project to collect unwanted clothing at stores for recycling
• Increased percentage of women in management positions to 4.9% (FY2023), aiming for at least 20% by FY2030
• Improved employee engagement score to 55% (FY2023), aiming for at least 65% by FY2030
• 25th AOKI Group Harmony Concert with 2,000 guests and charity donation boxes

Governance Achievements

• Transitioned to a company with an Audit and Supervisory Committee in June 2023
• Established a Compliance Office in November 2022 and conducted compliance training for all Group executives and managers
• Increased ratio of External Directors to a majority and of female Directors to at least 25% (target)

Climate Goals & Targets

Environmental Challenges

• Climate change risks (transition risks, physical risks)
• Insufficient female participation in management
• Concerns about career development and future direction of the company among some employees

Mitigation Strategies

• Implementing various measures to reinforce governance, including strengthening risk management and internal control systems
• Promoting initiatives to increase the percentage of women in management positions, including study sessions, dialogue meetings, and promoting paternity leave
• Implementing measures to address career development and communication concerns, including 1-on-1 meetings, briefings, and small meetings with management

Supply Chain Management

Supplier Audits: 101 CSR standards agreements concluded with factories in FY2023

Responsible Procurement

• Supplier Code of Conduct (established in 2022)

Climate-Related Risks & Opportunities

Physical Risks

• Increased store operation costs due to tightened regulations
• Restrictions on the provision of products and services
• Increased costs due to food procurement instability
• Increased utility and other costs associated with higher average temperatures

Transition Risks

• Decrease in demand for existing products
• Increased costs associated with the switchover to environmentally friendly materials
• Increased financing costs due to declining investor appreciation of initiatives

Opportunities

• Shift from thermal power generation to renewable energy
• Application of recycling
• Development and expansion of products and services which can contribute to carbon reduction and decarbonization
• Cost reductions and improved value thanks to raw materials recycling
• Development of new, sustainable products and services

Reporting Standards

Frameworks Used: TCFD

Sustainable Products & Innovation

• AOKI ECO FRIENDLY® products
• Wool Eco Shoes
• Dress shirts and women’s shirts using recycled fiber
• Bags made of recycled fiber