Climate Change Data

Environmental Metrics

ESG Focus Areas

• Customer satisfaction
• Environmental sustainability
• Employee well-being and diverse workforce
• Community contribution
• Governance

Environmental Achievements

• Installed solar power generation systems at 72 locations, reducing CO2 emissions by over 1,500 tons annually.
• Introduced LED lighting and energy-efficient air conditioning in new stores.
• Actively promotes energy-efficient products to customers.
• Small household appliance recycling initiatives through subsidiary (株)イー・アール・ジャパン.

Social Achievements

• Launched EDION Robot Academy and partnered with (株)夢見る to expand robotics programming education, aiming for 10,000 students by 2025.
• Certified as a Health & Wellbeing Management Excellent Company 2020.
• Implemented various programs to support work-life balance, including childcare and parental leave.
• Actively promotes diversity and inclusion, including support for female employees' career development.

Governance Achievements

• 44% of directors are independent outside directors.
• Established a Social Contribution Promotion Department in 2020.
• Implemented a robust internal control system and risk management framework.

Climate Goals & Targets

Environmental Challenges

• Decreased inbound tourism and customer traffic due to the COVID-19 pandemic.
• Increased logistics costs and sales commissions.
• Labor shortages in the logistics industry.
• Climate change impacts (e.g., extreme weather affecting seasonal appliance sales).

Mitigation Strategies

• Limited impact from COVID-19 due to diversified business and online sales.
• Cost reduction measures, including inventory reduction and real estate sales.
• Strengthened logistics network through acquisitions and partnerships.
• Developed alternative sourcing strategies and new product development.

Supply Chain Management

Responsible Procurement

• Fair and transparent transactions with suppliers
• Compliance with laws and regulations

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events affecting seasonal appliance sales

Opportunities

• Sales of energy-efficient products and renewable energy systems

Reporting Standards

Frameworks Used: IIRC Framework

Sustainable Products & Innovation

• Energy-efficient appliances
• Renewable energy systems
• Private brand products (e angle)

Awards & Recognition

• Health & Wellbeing Management Excellent Company 2020

Environmental Metrics

ESG Focus Areas

• Environmental Initiatives
• Social Issues
• Corporate Governance

Environmental Achievements

• Installed solar power systems at 72 stores and service centers nationwide, contributing to a reduction of over 1,500 tons of CO2 per annum.
• Introduced half-sized business cards to conserve resources.
• Promoting the introduction of energy-saving fixtures such as LED lights in our stores.
• Actively recommend products with high energy efficiency to our customers.
• Actively collect preowned small home electronics to promote recycling of them.

Social Achievements

• Established the Social Contribution Promotion Department.
• Support for victims of natural disasters.
• Actively promoting various sports activities to contribute to local communities.
• Support food bank NPOs by helping to transport food with logistics subsidiary Jtop Co., Ltd.
• Recognized as a Health & Productivity Management Organizations in 2020

Governance Achievements

• Forty-four percent of directors are independent directors.
• Strengthening oversight by appointing independent auditors.
• Established a Risk Management Committee.

Climate Goals & Targets

Environmental Challenges

• Spread of COVID-19 impacting store inbound demand and store visitors.
• Unseasonable weather affecting sales of seasonal home electronics.
• Increase in SG&A expenses (logistics, sales fees, reward points, store opening expenses).
• Technological advances (5G, IoT), rapid expansion of online sales, and Japan’s declining and aging population.
• Personnel shortages and aging of the workforce in logistics.

Mitigation Strategies

• Improving after-sales service system.
• Strengthening business departments focused on enhancing new product development.
• Devising a mechanism that will create cross-selling between online and brick-and-mortar stores.
• Developing new sales promotions and marketing methods.
• Responding to new demand related to telework and the needs of consumers spending more time at home.
• Capturing demand related to emerging technologies such as 5G and IoT.
• Creating new products under the private brand “e angle”.
• Building an intricate logistics network and developing services that leverage it.
• Building an open innovation logistics platform.
• Establishing e-Logi Corporation and adding Jtop Co., Ltd. to the Group.

Supply Chain Management

Responsible Procurement

• Fair and equitable treatment of suppliers

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products
• Sales of solar panels, batteries, water-saving toilets, etc.

Reporting Standards

Frameworks Used: IIRC

Sustainable Products & Innovation

• Energy-saving home electronics
• Products with high energy efficiency
• Solar panels, batteries, water-saving toilets, exterior painting with high heat-cutting properties
• Private brand “e angle” products

Awards & Recognition

• 2020 Certified Health & Productivity Management Award

Environmental Metrics

ESG Focus Areas

• Health management
• Promoting employment of persons with disabilities
• Promoting optimum work safety
• Building comfortable workplaces
• Manpower training and career development
• Promoting diversity & inclusion
• Promoting work/life balance
• Providing attractive products at affordable prices
• Rapid response to changing lifestyles
• Provide outstanding service
• Provide peace of mind
• Undertake environment friendly product sales, logistics, and services
• Rollout of environment friendly stores
• Contribute to a recycling-oriented society
• Promoting sports
• Disaster support activities
• Fostering the next generation
• Contributing to the community
• Strengthening governance
• Enhanced stakeholder communications
• Sustainable logistics
• Fair and impartial transactions with business partners
• Environmental protection activities
• Continuous business activities

Environmental Achievements

• 98.9% of directly operated stores have adopted LED lighting fixtures
• CO2 reductions of more than 1,500t/yr. through solar power systems installed at 72 stores and service centers
• Annual recycling volume: 11,200t or more

Social Achievements

• Recognized as a Health & Productivity Management Organization in 2021
• Actively promotes the employment of persons with disabilities
• Reduced average overtime hours dramatically, by 15% last year compared to the previous year, and by 25% during the current fiscal year
• Increased the overall ratio of outside officers, adding one new independent director and one new independent auditor

Governance Achievements

• Increased the overall ratio of outside officers, adding one new independent director and one new independent auditor
• Established the Sustainability Promotion Section to oversee SDGs and social contributions

Climate Goals & Targets

Environmental Challenges

• Long working hours
• Maintaining and improving customer satisfaction
• Responding to the growing e-commerce market
• Achieving a carbon-free society

Mitigation Strategies

• Workstyle reforms, including reducing overtime by increasing operating efficiency and introducing systems to support efficient work approaches
• Established a Customer Consultation Office to quickly resolve customer issues and requests
• Strengthened collaborations between EDION Net Shop and Koko-de-Cow
• Actively promotes activities aimed at contributing to realizing this carbon-free society, for example by introducing clean energy facilities as well as LED lighting and other energy-efficient facilities, and by installing solar power systems in stores and service centers

Supply Chain Management

Responsible Procurement

• Strictly screen potential collaborators to ensure compliance with all regulations pertaining to outsourcing and information management

Climate-Related Risks & Opportunities

Opportunities

• Sales of solar power systems

Reporting Standards

Frameworks Used: GRI, TCFD

Certifications: Health & Productivity Management

Sustainable Products & Innovation

• Energy-efficient home electronics
• Solar power systems

Awards & Recognition

• 2021 Certified Health & Productivity Management Award

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced CO2 emissions by 48% compared to FY2013 by FY2022. Reduced CO2 emissions by approximately 62 tons per year at Takabarihara Store through a power purchase agreement (PPA).
• Installed solar power systems at 70 stores and service centers, contributing to CO2 reductions of more than 1,600t/yr.

Social Achievements

• Increased employee base salaries by ¥10,000 across the board.
• Reduced average overtime to less than half of what it was five years ago.
• Introduced a system that enables all employees to take four or more consecutive days off once every six months.
• Expanded manpower education programs, including increased external training.
• Established the EDION Academy for employee training and practical experience.
• Achieved a customer satisfaction rate of 90.8% in FY2022.
• Conducted nationwide simultaneous cleanup activities with approximately 10,000 employees.

Governance Achievements

• Established the Sustainability Committee in June 2022.
• Supports TCFD recommendations.
• Established auditing standards and the Board of Auditors’ Regulations.

Climate Goals & Targets

Environmental Challenges

• Declining birthrate and increasing senior population in Japan.
• Changes in consumer lifestyles and sales channels.
• Supply chain disruptions due to the effects of conditions in Ukraine and the lockdown in China.
• Rapid increase in utility costs.
• Low stock price valuation.
• Securing instructors for the education business.
• Low name recognition in eastern Japan.
• Potential shortage of truck drivers in 2024.
• Securing new students for the education business given the declining birthrate.

Mitigation Strategies

• Strengthening e-commerce and logistics reforms.
• Dominance strategy for new store openings.
• Investing in new stores and systems.
• Improving operating efficiency (reducing store hours, increasing employee base salaries).
• Increasing ROE and ROIC.
• Expanding the logistics network nationwide.
• Investing in marketing and brand recognition activities.
• Developing alternative sourcing strategies.
• Refining education programs and increasing student retention in the education business.

Supply Chain Management

Responsible Procurement

• Strictly screen potential collaborators to ensure compliance with all regulations pertaining to outsourcing and information management.

Climate-Related Risks & Opportunities

Physical Risks

• Increase in abnormal weather events such as typhoons and floods
• Changes in precipitation patterns and increased average temperatures

Transition Risks

• Introduction of carbon taxes
• Strengthened regulations related to energy conservation
• Strengthened regulations related to product lifecycles
• Changes in consumer lifestyles

Opportunities

• Increased demand for highly energy-efficient products with low greenhouse gas emissions
• Expand products and services for customers to contribute to alleviating or adapting to climate change

Reporting Standards

Frameworks Used: International Integrated Reporting Council (IIRC)

Certifications: Kurumin certification (for childcare support)

Sustainable Products & Innovation

• Energy-efficient home electronics
• e angle private brand products

Awards & Recognition

• Certified Health & Productivity Management Award (2023)

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced CO₂ emissions by approximately 48% compared to 2013 (Scope 1, 2, and 3).
• Installed solar power generation systems at 70 locations, reducing CO₂ emissions by over 1,600 tons annually.
• Introduced a PPA model for solar power generation at the Takanehara store, reducing CO₂ emissions by approximately 62 tons annually.

Social Achievements

• Launched an education business (programming classes) with 5,603 students by the end of March 2023.
• Implemented a 10,000 yen base pay increase and increased annual holidays by one day.
• Achieved a 90.8% customer satisfaction rate.

Governance Achievements

• Established a Sustainability Promotion Committee.
• Endorsed the TCFD recommendations.
• Revised the Audit Committee regulations and Audit Committee rules.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to climate events (4℃ scenario).
• Decreasing domestic population and aging population.
• Maintaining profitability of stores in the face of changing consumer preferences and economic conditions.
• Low PBR despite improving ROE and ROIC.
• Low female management ratio (2.2%).

Mitigation Strategies

• Developing alternative sourcing strategies.
• Strengthening the three pillars of the mid-term vision: infrastructure, business, and customer base.
• Improving operational efficiency and marketing strategies.
• Implementing job rotations and overseas training programs.
• Promoting diversity and inclusion, including increasing the ratio of female employees and managers.

Supply Chain Management

Responsible Procurement

• Fair and equitable treatment of all suppliers.
• Compliance with laws and sound business practices.

Climate-Related Risks & Opportunities

Physical Risks

• Typhoons, heavy rain, and other extreme weather events.

Transition Risks

• Strengthening regulations on energy saving and renewable energy.
• Changes in consumer preferences.
• Carbon tax introduction.

Opportunities

• Increased demand for energy-efficient products and services.

Reporting Standards

Frameworks Used: IIRC

Sustainable Products & Innovation

• Energy-efficient home appliances.
• Solar power generation systems.
• Energy-efficient building materials.

Awards & Recognition

• Health Management Excellent Corporation 2023

Environmental Metrics

ESG Focus Areas

• Climate Change Response
• Health Management Promotion
• Safety and Health
• Community Investment
• Human Rights
• Diversity & Inclusion
• Compliance
• Fair Trade
• Information Disclosure
• Sustainable Logistics
• Recycling-Oriented Society
• Carbon-Free Society

Environmental Achievements

• Reduced Groupwide CO2 emissions 48% compared to FY2013 by FY2022 (estimate)
• Introduced solar power generators at two stores (Takabarihara and Toyota Shigo) under the power purchase agreement (PPA) model, expecting a reduction of about 62 tons per year in CO2 emissions at Takabarihara Store.
• Installed solar power systems at 70 stores and service centers nationwide, contributing to CO2 reductions of more than 1,600t/yr in FY2022.
• Introduced LED lighting at all stores and service centers.
• Actively sell energy-efficient home electronics and promote energy-efficient products and services through home improvement business.

Social Achievements

• Increased annual holidays by one day and reduced regular working hours to improve work-life balance and increase productivity.
• Increased employees’ base salaries by ¥10,000 across the board.
• Implemented a system that enables all employees to take four or more consecutive days off once every six months.
• Established the EDION Academy for employee training and practical experience.
• Actively promote the employment of persons with disabilities (2.39% employment ratio in FY2022).
• Received “Kurumin” certification for support for childcare.
• Introduced a system to allow short working hours for childcare and long-term care.
• Conduct “Nationwide simultaneous cleanup” activities with approximately 10,000 employees participating annually.
• Support for Ukrainian refugees through donation of home electronics products.

Governance Achievements

• Established the Sustainability Committee in June 2022 to promote sustainability management.
• Declared support for TCFD recommendations in July 2021 and enhanced information disclosure based on TCFD.
• Established the EDION Group’s Code of Ethics.
• Created and updated compliance manuals and conduct educational activities to ensure understanding of corporate ethics and risk management.
• Established a contact point for in-house notifications and a notification structure to encourage consultations regarding compliance violations.
• Appointed six independent directors and two independent auditors.

Climate Goals & Targets

Environmental Challenges

• Declining birthrate and increasing senior population in Japan.
• Changes in consumer lifestyles and values.
• Structural changes in the home electronics retail industry.
• Supply chain disruptions.
• Rapid increase in utility costs.
• Difficulty in forecasting demand.
• Low stock price valuation.
• Labor shortage in logistics industry.
• Securing new students for the education business amid declining birthrate.

Mitigation Strategies

• Strengthening e-commerce and logistics networks, aiming for 100% population coverage by FY2025.
• Implementing a dominance strategy in new areas.
• Investing in new stores and systems, including a new POS system.
• Focusing on marketing strategies and improving operating efficiency.
• Increasing ROE and ROIC to approach 10% with the achievement of the Medium-Term Management Vision.
• Positioning the home improvement business as a second pillar of profits.
• Promoting reforms to increase the accuracy of sales figures and demand forecasts.
• Reducing store operating hours and increasing employee base salaries.
• Collaborating with Nitori Holdings Co., Ltd. to develop private brand products and open new stores.
• Strengthening activities aimed at achieving a carbon-free society.
• Expanding the education business by opening new in-store classrooms and securing instructors.
• Improving brand recognition in eastern Japan through marketing activities.

Supply Chain Management

Responsible Procurement

• Fair and impartial dealings with suppliers, affiliate companies, and other business partners; strict adherence to laws and regulations related to commercial transactions.

Climate-Related Risks & Opportunities

Physical Risks

• Increased abnormal weather events such as typhoons and floods
• Changes in precipitation patterns and increased average temperatures

Transition Risks

• Strengthened regulations related to product lifecycles
• Introduction of carbon taxes and strengthened regulations related to energy conservation
• Failure to identify changes in consumer lifestyles
• Damage to reputation

Opportunities

• Increased demand for highly energy-efficient products with low greenhouse gas emissions
• Expand products and services for customers to contribute to alleviating or adapting to climate change

Reporting Standards

Frameworks Used: IIRC

Certifications: Kurumin

Sustainable Products & Innovation

• Energy-efficient home electronics
• Private brand products (e angle)

Awards & Recognition

• Certified Health & Productivity Management Award (Large Enterprise Category) for four consecutive years

Environmental Metrics

ESG Focus Areas

• Climate Change Response
• Health Management Promotion
• Safety and Health
• Disaster Support
• Contributions to the Community
• Information Disclosure
• Human Rights
• Workforce Diversity
• Work/Life Balance
• Employment of Persons with Disabilities
• Governance
• Compliance
• Fair Trade
• Stakeholder Engagement

Environmental Achievements

• Reduced Groupwide CO2 emissions 48% compared to FY2013 by FY2022
• Introduced solar power generators at two stores, expecting a reduction of about 62 tons per year in CO2 emissions at one location.
• Installed solar power systems at 70 stores and service centers nationwide, contributing to CO2 reductions of more than 1,600t/yr.

Social Achievements

• Increased employees’ base salaries by ¥10,000 across the board.
• Reduced regular working hours and increased annual holidays by one day to improve work-life balance.
• Established the EDION Academy for employee training and development.
• Introduced a system that enables all employees to take four or more consecutive days off once every six months.
• Achieved a customer satisfaction rate of 90.8% in FY2022.
• Actively promotes the employment of persons with disabilities (2.39% employment ratio in FY2022).

Governance Achievements

• Established the Sustainability Committee in June 2022 to promote sustainability management.
• Appointed six independent directors and two independent auditors.
• Created auditing standards and the Board of Auditors’ Regulations.

Climate Goals & Targets

Environmental Challenges

• Declining birthrate and increasing senior population in Japan.
• Changes in consumer lifestyles and product demand.
• Supply chain disruptions.
• Rapid increase in utility costs.
• Difficulty in forecasting demand.
• Low stock price valuation.
• Potential impact of carbon taxes (estimated at ¥1.7 billion in 2023).
• Potential damage from natural disasters.
• Labor shortage in the logistics industry.
• Securing new students for the education business.
• Low brand recognition in eastern Japan.

Mitigation Strategies

• Strengthening e-commerce and logistics networks.
• Implementing a dominance strategy for new store openings.
• Investing in new systems and technologies.
• Focusing on marketing strategies and improving operating efficiency.
• Improving the accuracy of sales figures and demand forecasts.
• Increasing ROE and ROIC.
• Diversifying business fields (home improvement, education).
• Conducting scenario analyses to identify and manage climate-related risks and opportunities.
• Implementing risk management regulations and establishing a Risk Management Committee.
• Improving the quality of logistics services through collaboration with partners.
• Refining education programs and enhancing course development.
• Investing in brand recognition activities (TV commercials, flyers, direct mail).

Supply Chain Management

Responsible Procurement

• Fair and impartial dealings with suppliers, abiding by laws and regulations related to commercial transactions.

Climate-Related Risks & Opportunities

Physical Risks

• Increase in abnormal weather events (typhoons, floods)
• Changes in precipitation patterns and increased average temperatures

Transition Risks

• Strengthened regulations related to energy conservation and decarbonization
• Introduction of carbon taxes
• Changes in consumer lifestyles and preferences

Opportunities

• Increased demand for energy-efficient products and services
• Development of products and services that contribute to alleviating or adapting to climate change

Reporting Standards

Frameworks Used: IIRC

Certifications: Kurumin certification

Sustainable Products & Innovation

• Energy-efficient home electronics
• Private brand products (e.g., e angle)
• Solar power systems

Awards & Recognition

• Certified Health & Productivity Management Award (2023)