Climate Change Data

Environmental Metrics

Governance Achievements

• Transitioned to a company with an Audit and Supervisory Committee in June 2016.

Climate Goals & Targets

Environmental Challenges

• One-time expenses occurred as a result of the decision to engage in construction to expand and renew the “SUN TO MOON Kakitagawa” commercial facility, including an increase in depreciation due to the dismantling of certain facilities and the payment of fees to raise development funds through a syndicated loan. This significantly affected results, and operating income, ordinary income, and profit attributable to owners of parent after income taxes each declined year-on-year and fell below targets.

Mitigation Strategies

• Implementing the “Get Ahead of the Future mid-term management policy” to improve corporate value over the medium- to long-term. Prioritizing investment in the commercial facility business, focusing management resources on it to expand business scale and enhance profitability. Strengthening financial management, with an emphasis on securing free cash flow and reducing interest-bearing debt to resume dividend payments. Focusing on reforming the way people work and promoting the creation of an environment where women can actively participate. Maintaining and strengthening governance systems, and promoting responses to social issues through business activities.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Social Contribution
• ESG

Climate Goals & Targets

Environmental Challenges

• Unprofitable textile business
• Rapidly changing management environment

Mitigation Strategies

• Focus on new directions and challenges despite failures
• 4th stage development of SUN TO MOON Kakitagawa
• Mid-term Management Policy: "Get Ahead of the Future"

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Environmental, Social, and Governance (ESG)
• Creating Shared Value (CSV)

Social Achievements

• Promoting efforts for work style reform and creation of environment in which women can play active roles

Governance Achievements

• Transitioned to a company with an Audit and Supervisory Committee in June 2016
• Updated the takeover defense policy as a countermeasure against actions constituting large-scale purchases of the Company shares

Climate Goals & Targets

Environmental Challenges

• Concentration of commercial facilities in Mishima District, Shizuoka Prefecture, posing earthquake risk
• Risk of adverse impact on business performance due to cancellation of lease contracts
• Risk of adverse impact on business performance due to potential increase in market interest rates

Mitigation Strategies

• Continued investments in the commercial property business, including expansion of floor space and renovation of SUN TO MOON Kakitagawa
• Strengthening financial management by managing loans payable for growth investments and securing free cash flows while steadily reducing existing loans payable

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Earthquake risk in Tokai region

Environmental Metrics

ESG Focus Areas

• Not disclosed

Environmental Achievements

• Not disclosed

Social Achievements

• Not disclosed

Governance Achievements

• Transitioned to a company with an Audit and Supervisory Committee in June 2016.

Climate Goals & Targets

Environmental Challenges

• Severe circumstances in the commercial facility business due to rent concessions provided to tenants during the first wave of COVID-19 infections.
• Struggles in the healthcare and textile/apparel businesses due to prolonged effects of COVID-19.

Mitigation Strategies

• Launched “Breakthrough 2024 – PROGRESS IN THE NEW NORMAL mid-term management plan” to achieve sustainable growth and enhance corporate value.
• Reviewing business portfolio and promoting a shift to operations with better profitability and future prospects.
• Scaling down manufacturing and sales in parts of the apparel OEM market and conventional bedding products.
• Promoting a shift to gender-free apparel OEM and sales of highly functional healthcare products.
• Focusing on business development in line with the Sustainable Development Goals (SDGs).

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Governance
• Diversity & Inclusion
• Sustainability
• SDGs

Environmental Achievements

• Not disclosed

Social Achievements

• Increased female employee ratio to 47.8% in 2021 (from 28.2% in 2011)
• Established Gender-Free Promotion Department in the Textile & Apparel Business Division (November 2020)
• Concluded an agreement with Shimizu-cho, Shizuoka Prefecture, on cooperation in promoting SDGs

Governance Achievements

• Transitioned to an Audit Committee Company in June 2016
• Established a Sustainability Promotion Committee
• Implemented stock option system as an incentive for executives

Climate Goals & Targets

Environmental Challenges

• Low percentage of women in management positions (10% at the department head level and above, 8.7% at the manager level and above in 2021)
• Low percentage of employees with overseas experience (6% in 2021)

Mitigation Strategies

• Plans to increase the ratio of women in management positions to 30% or more by 2030 and 20% or more at the department head level and above by 2030
• Investment in training and development for women in management positions
• Aiming for 20% or more of board members with overseas experience

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 8: Decent Work and Economic Growth

The company promotes decent work and technological innovation, and strives to activate global partnerships to achieve the SDGs.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Not disclosed

Environmental Achievements

• Not disclosed

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Continued impact of the COVID-19 pandemic on the food and beverage, entertainment, and retail sectors, leading to sluggish personal consumption.
• Market stagnation due to the prolonged effects of the COVID-19 pandemic impacting the healthcare and textile/apparel businesses.

Mitigation Strategies

• Implementing measures under the "Mid-term Management Plan Breakthrough 2024 ~PROGRESS IN THE NEW NORMAL~", including strengthening infection prevention measures at commercial facilities, holding events like Golden Week sales, and focusing on expanding sales of antibacterial materials.
• Shifting towards more profitable and promising businesses, reallocating resources to the commercial facility business, reducing low-value-added OEM operations, and focusing on gender-free apparel OEM and high-functional healthcare products.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Toyo Audit Corporation

UN Sustainable Development Goals

• Not disclosed

The company mentions contributing to SDGs but doesn't specify which goals.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Governance
• Social
• Environmental

Social Achievements

• Launched a new brand image for the Niigata group factory, focusing on "Japan Quality" and "Takumi's Exquisite Bedding" targeting elderly customers.
• Efforts to promote gender-free apparel OEM and high-functional healthcare product sales, targeting working women.

Governance Achievements

• Established an internal control committee to manage various risks and prevent their manifestation.
• Implemented an internal reporting system that protects whistleblowers from retaliation.
• Strengthened corporate governance by complying with the Corporate Governance Code required for listed companies on the Tokyo Stock Exchange Standard Market and Nagoya Stock Exchange Premier Market.

Climate Goals & Targets

Environmental Challenges

• Market recovery delays in some apparel OEM markets and the manufacturing and sales of conventional low-function bedding due to the COVID-19 pandemic.
• Significant debt accumulation due to active investment in commercial facilities.

Mitigation Strategies

• Shifting business focus to more profitable and promising areas, including commercial facilities, gender-free apparel OEM, and high-functional healthcare products.
• Reducing debt and strengthening cash flow management by setting Net DER targets.
• Developing new business opportunities in the new normal through cross-departmental collaboration and the use of non-face-to-face channels such as the company's EC site.

Supply Chain Management

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• High-functional healthcare products
• Gender-free apparel

Environmental Metrics

ESG Focus Areas

• Governance
• Social
• Environmental

Social Achievements

• Established a new healthcare business unit focusing on health materials, medical devices, and health foods in 2014.
• Capital and business tie-up with Ito Chodanha Co., Ltd. (medical equipment manufacturer) in 2017.
• Acquisition of healthcare business from Wada Tetsu Co., Ltd. in 2019.

Governance Achievements

• Established an Audit Committee in June 2016.
• Implemented a system to ensure that those who report to the Audit Committee do not receive any disadvantageous treatment.
• Established an internal control committee to address various risks and implement countermeasures.

Climate Goals & Targets

Environmental Challenges

• Slow market recovery in some apparel OEM markets and the manufacturing and sales of conventional low-function bedding due to the COVID-19 pandemic.
• Significant debt due to active investment in commercial facilities.

Mitigation Strategies

• Shifting focus to more profitable and promising businesses, including gender-free apparel OEM and high-function healthcare products.
• Strengthening financial management, including reducing debt and improving cash flow management.
• Focusing on human resource development, particularly in commercial facilities and increasing the number of female sales and management personnel.

Supply Chain Management

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• High-function healthcare products

Environmental Metrics

ESG Focus Areas

• Not disclosed

Environmental Achievements

• Not disclosed

Social Achievements

• Not disclosed

Governance Achievements

• Established an internal control committee comprising directors (excluding those serving on the audit committee), full-time directors of the audit committee, and department heads or higher-ranking officials to address various risks and internal control issues.
• Strengthened corporate governance by complying with the Corporate Governance Code required of listed companies on the Tokyo Stock Exchange Standard Market and Nagoya Stock Exchange Premier Market.

Climate Goals & Targets

Environmental Challenges

• Market recovery lagging in some apparel OEM markets and traditional low-function bedding manufacturing and sales due to the COVID-19 pandemic.
• Significant debt accumulation due to active investment in commercial facilities.

Mitigation Strategies

• Shifting focus to more profitable and promising businesses, including gender-free apparel OEM targeting working women and high-function healthcare products.
• Strengthening financial management, including reducing debt and improving cash flow management.
• Focusing on human resource development, particularly for commercial facilities professionals and female sales and management personnel.
• Improving work-life balance through remote work and other initiatives.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• High-function healthcare products
• Gender-free apparel

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Governance
• Diversity & Inclusion
• Sustainability

Environmental Achievements

• Concluded an agreement with Shimizu-cho, Shizuoka Prefecture, regarding cooperation in promoting SDGs
• Participation in eco-network

Social Achievements

• Promoting decent work and technological innovation towards achieving SDGs
• Actively working on personnel development considering diversity, including gender and international aspects

Governance Achievements

• Established a Sustainability Promotion Committee
• Implemented measures to enhance the effectiveness of the Board of Directors
• Introduced a stock option system as an incentive for executives

Climate Goals & Targets

Environmental Challenges

• Low percentage of women in management positions
• Low percentage of employees with overseas experience

Mitigation Strategies

• Setting targets to increase the percentage of women in all employee positions to over 50% by 2027, in management positions to over 30% by 2030, and in executive positions to over 20% by 2030
• Setting targets to increase the percentage of board members with overseas experience to over 20% and the percentage of all employees with overseas experience to over 5%

Supply Chain Management

Climate-Related Risks & Opportunities

UN Sustainable Development Goals

• SDG 8: Decent Work and Economic Growth

Promoting decent work and technological innovation