Message from the Officer in Charge of Infrastructure Strategy

We believe the increasing awareness of
environmental issues represents a signicant
business opportunity for the Company, and that
this in turn allows us to generate social value for
achieving carbon neutrality in the home, leading
to improved corporate value.

 

Koichi Yokoyama

Director and Managing Executive Officer

in Charge of Infrastructure Strategy

The Group established the Environmental Principles in 1998.
Since acquiring ISO 14001 certification for our head office building in 2000, we have been reducing our environmental load in business and improving our environmental performance, as core corporate actions, by establishing and operating an environment management system.

Recently, environmental issues such as climate change, resource depletion, and the loss of biodiversity have become increasingly important, highlighting the importance and urgency for addressing these challenges. In response to these new trends, we revised our Environmental Principles and Basic Environmental Policy in 2021 and established the Environmental Action Guidelines and the Joshin Green Smile Challenge 2050.

Addressing climate change is an important initiative for the Group. Climate change aligns closely with one of our seven material issues: “contributing to the creation of an enriching society that is in harmony with the global environment.”

The climate change initiatives (individual strategies) set out in our JT-2025 Management Plan are an action plan for achieving our ideal state in 2030: “a company that supports the growth of local communities and contributes to the future of people and the environment.” These initiatives are also consistent with our roadmap for combatting climate change that we announced last year.

Next, the Group has been tackling environmental issues, particularly climate change, and we believe that these environmental initiatives will distinguish us from others in our industry, and we even aim to be recognized as a leader in the retail industry across other industries.

What is the significance of tackling climate change at a high economic and human cost?

Tackling climate change leads to an improved social reputation of the Company among all stakeholders, including investors and financial institutions. For example, we have been selected for the FTSE Blossom Japan Index, designed for Japanese companies with high ESG (environmental, social, and governance) ratings, adopted by Government Pension Investment Fund (GPIF), which manages one of the world’s largest funds. Moreover, being selected as a constituent of both the FTSE Blossom Japan Sector Relative Index and the S&P/JPX Carbon Efficient Index enhances our appeal as a target for ESG investment, offers significant advantages for fundraising, and enables us to strengthen collaborations with local governments and participate in other initiatives by gaining a positive reputation and trust. Up until now, we have entered into a comprehensive cooperation agreement with Osaka Prefecture, primarily focused on environmental concerns. In the previous fiscal year, we joined a Decarbonization Point System Promotion Platform at the request of Osaka Prefecture.

Further, improvements in our corporate image and strengthening the brand are expected to lead to an increase in the Group’s fan base, which in turn could result in increased recognition and boost sales through purchase incentives. 
This approach aligns with the sales strategy set out in our mediumterm management plan.

Being sensitive to the environment, as well as addressing social concerns and governance, helps us attract talented employees who appreciate and share our concerns. Internally, we believe that we can gain empathy and trust from our employees, leading to improved motivation.

With an eye on the medium to long term, our actions for mitigating climate change will likely become the norm for businesses in the near future, underscoring the significance of being proactive (ahead of others) on this issue.

The Group is a retailer that primarily sells home appliances, and most of our GHG (greenhouse gas) emissions come from using electricity in our stores.

For this reason, we have prioritized converting the sources of power used at business sites to renewable energy (conversion to renewable energy), and have steadily implemented this over the past two years.

As of the end of March 2023, at our business sites where the Company contracts directly with power suppliers, 97.4% have completed the conversion to renewable energy, with only four business sites remaining. The ratio of conversion to renewable energy at all of our business sites, including tenants, is 59.4%, and to achieve our goal of 100% renewable energy before 2040, the target year, we will start full-scale negotiations with lessors for introducing renewable energy.

We have been installing photovoltaic systems (solar panels) at all business sites where installing them is possible, with the aim of improving the Company’s energy self-sufficiency through off-grid power generation and consumption.

As of the end of March 2023, installations were completed at 60 business sites, and we expect to finish at all remaining business sites within the current fiscal year.

From the next fiscal year onward, since there will be no space left to install solar panels at our business sites, we are planning to introduce corporate power purchase agreement (PPAs) where panels are installed off-site.

For carbon neutrality, people tend to focus on national policies and corporate actions, but reducing GHG emissions cannot be achieved without changes in personal behavior.

As individual values are gradually changing toward using electricity from renewable energy sources and switching to electric vehicles, the growing public interest and heightened awareness of the environment are seen by the Group as significant business opportunities. So, through our environmental initiatives we will create the social value of “achieving carbon neutrality in the home,” which we believe will in turn enhance our corporate value.

The Group has always been dedicated to selling environmentally friendly products, and we will further strengthen this commitment to promote products with high levels of performance for generating, storing, and saving energy.

In light of the Japanese government’s initiative to realize carbon neutrality by 2050, automobile manufacturers’ plans to increase the ratio of electric vehicles (EVs) and lightweight EVs have been successful, and with the increasing focus on the spread of EVs and related businesses, the demand for EV charging is definitely expected to grow.

The Group has already been handling the construction of EV chargers, and we officially began handling V2H (vehicle to home) systems from this fiscal year.

We believe that introducing these initiatives now will create opportunities to participate in new EV and environmental businesses.

Further, in addition to pursuing the 3Rs (reduce, reuse, and recycle), we will also encourage a new, circular economy to create a recycling-based society, which we believe leads to “achieving carbon neutrality in the home” through our business and in turn contributes to Japan’s carbon neutrality. We will go after sales with each goal in mind.

The Group achieved a “B” score in fiscal 2022, up two ranks from the “C” score in fiscal 2021, in our response to the CDP Climate Change Program, which evaluates and discloses information on the environmental initiatives of companies at the global level. The average (overall) score for Asian companies in fiscal 2022 was a “C.”

The CDP “B/B-” rating was attained by evaluating management and recognizes our ability to act collaboratively in response to climate change challenges and to take concrete measures to reduce GHG emissions.

As part of our work to reduce GHG emissions, with the aim of obtaining SBT certification, we declared support for the Science Based Targets initiative (SBTi)—an international initiative jointly operated by four organizations: CDP, United Nations Global Compact, WRI (World Resources Institute), and
WWF (World Wildlife Fund)—as well as our intention to formulate Science Based Targets (SBT), GHG-reduction targets based on scientific evidence. We applied to the SBT Secretariat for this reason in March 2023.

SBTs set by individual companies are certified if they meet the SBTi’s standard.

The Group sees following the SBT guidelines as a path to realizing carbon neutrality by 2050, and we will promote more Company-wide initiatives as well as disclose information.

For participation in and initiatives for international and external initiatives, in addition to CDP and SBT, we have endorsed the TCFD recommendations and disclosed information and joined the Japan Climate Initiative (JCI). 
As well, this spring we completed the formal procedures to participate in the GX (green transformation) League that was established based on the GX League Basic Concept announced by the Ministry of Economy, Trade and Industry.

We believe that our participation in initiatives that demonstrate a proactive approach to combatting climate change to all stakeholders are highly effective for improving corporate trust, our corporate image, and branding that in turn improve corporate value.

We also expect that our actions will create opportunities to be featured in the media and for us to establish contacts across other industries, leading to potential new businesses.