Basic Approach
Oisix ra daichi is actively working to reduce greenhouse gas emissions in order to sustainably develop our business alongside nature.
The Group understands the environmental impact of our business operations as well as proposes and implements activities to reduce this impact. These efforts include reducing CO2> emissions leading to global warming, disposable plastics, and food loss.
Going forward, we will continue to work to improve our environmental performance and to actively disclose information via our website and other channels
Endorsement of TCFD Recommendations and Initiatives
The Group sees efforts to address climate change as a key issue. Since 2022, we have expressed our support for the Task Force on Climate-related Financial Disclosures (TCFD) established by the Financial Stability Board (FSB). Based on its recommendations, we have taken action to tackle climate change and to enhance the level of information disclosure.
Governance
The corporate planning division explores the risks and opportunities related to climate change. These issues are discussed at meetings of the Executive Committee, which are attended by the president and representative director.
Based on recent scenario analyses, risks and opportunities related to climate change and progress with activities to realize sustainable retail, the common goal of Group companies with respect to the environment, are reported to the Executive Committee and the Board of Directors, thus ensuring proper oversight.
In addition, the Risk Management Committee, which examines natural disaster risks, submits quarterly reports to the Executive Committee, which discusses and approves risk-related matters. Matters of note addressed by the Risk Management Committee are reported to the Board of Directors.
Strategy
Based on our corporate philosophy of “Farm for Tomorrow, Table for Tomorrow,” the Group strives to realize a sustainable society by employing business techniques to resolve food-related social issues. Our main business segment is the domestic home delivery business, which comprises Oisix, Radish Boya, and Daichi wo Mamoru Kai. We also own subsidiaries such as Tokushimaru and Purple Carrot. In all our businesses, we believe resolving social issues related to food drives business growth.
Of food-related social issues, climate change has emerged as a growing global risk with each passing year. For us, this poses risks related to changes in crop growth conditions and potential impact on procurement and delivery logistics in the event of increasingly severe natural disasters.
Scenario analysis
The Group performed a scenario analysis based on TCFD recommendations to identify risks and opportunities under different climate change scenarios.
We examined the impact of climate change as of 2030 in terms of risks and opportunities under two scenarios: a 1.5 °C increase (1.5 °C scenario) and a 4 °C increase (4 °C scenario) in temperature from pre-industrial levels in 2100.
To this end, we first identified specific risks and opportunities with representatives from each department, selecting those that would have the greatest impact on the Group and our entire value chain. For each risk and opportunity selected, we performed assessments using qualitative and quantitative methods to ascertain the extent of the financial impact.
◆Impact assessment based on scenario analysis (financial impact assessment)
| Scenarios |
Main referenced scenarios |
|
1.5 ℃ scenario
|
SSP1-1.9 scenario (IPCC, 2021)
Net Zero Emissions by 2050 Scenario (IEA, 2021)
|
|
4 ℃ scenario
|
SSP5-8.5 scenario (IPCC, 2021)
Stated Policy Scenario (IEA, 2021)
|
a. Selected risks and impact as of 2030
Assumed financial impact (large: over 1 billion yen; medium: 100 million to 1 billion yen; small: under 100 million yen)
・Transition risk
| Category |
Time
horizon |
Area of
financial
impact |
Potential business impact |
Extent of
impact |
| 1.5℃ |
4℃ |
Policies
and
laws |
Introduction of carbon taxes |
Medium to long term |
Costs |
- The cost of ingredients and purchases such as agricultural, fishery, and livestock products will increase.
- Energy costs for factories and logistics/delivery will increase.
|
Large |
Small |
| Tightening of plastic regulations |
Medium to long term |
Costs |
- Stricter plastic regulations will necessitate the development and introduction of alternative packaging materials, which will increase costs. |
Medium |
Small |
| Introduction/tightening of other environmental regulations |
Short term |
Costs/
assets |
- Capital investments will rise due to the need to comply with stricter environmental regulations. The cost of complying with food safety standards and other regulations will increase as they are revised. |
Medium |
Small |
Industries/
markets |
Changes in attitude to environment among consumers |
Medium to long term |
Revenue |
- Insufficient disclosure of environmental initiatives and nonfinancial information will weaken consumer support and reduce revenue due to weakening brand strength and loss of customers.
|
Large |
Small |
| Changes in energy supply and demand |
Medium term |
Costs |
- The cost of procuring energy from fossil fuels will increase, as will the cost of producing ingredients and other purchased goods. The cost of deliveries made using gasoline-powered vehicles (current vehicles) will also rise.
- A rise in demand for renewable energy procurement will increase the cost of renewable energy and the operating costs of equipment switched to be compatible with renewable energy.
|
Small |
Small |
| Changes in reputation among investors |
Medium to long term |
Capital |
- Insufficient disclosure of climate change initiatives and nonfinancial information will harm the corporate reputation among investors. |
Small |
Small |
| Technologies |
Production innovations in agriculture and fisheries |
Medium to long term |
Costs/
assets |
- Cost burdens will rise as the agriculture and fisheries industries introduce state-of-the-art equipment to transition to smart agriculture and other decarbonization models.
|
Large |
Small |
| Innovations in logistics and delivery |
Medium term |
Costs/
assets |
- Cost burdens will rise as electric vehicles replace conventional delivery vehicles.
|
Large |
Small |
・Physical risk
| Category |
Time
horizon |
Area of
financial
impact |
Potential business impact |
Extent of
impact |
| 1.5℃ |
4℃ |
| Acute |
Increase in severity of extreme weather |
Short to long term |
Costs |
- Torrential rains and typhoons will cause flood damage in production areas, disrupting logistics networks and making product procurement impossible.
|
Medium |
Medium |
| Chronic |
Impact on procurement and supply systems |
Long term |
Costs/
revenue |
- Yield reductions attributable directly or indirectly to climate change will make it difficult to procure required quantities.
- Adjusting for the supply/demand balance will become difficult, and increases in shortages and waste disposal will become a concern.
- High temperatures will reduce farming efficiency and harvest yields.
|
Small |
Large |
| Impact on quality |
Long term |
Costs/
revenue |
- Ensuring the quality set by the Group will become difficult.
- Ensuring quality, especially for frozen foods, when delivering to customers, will become difficult.
|
Small |
Large |
| Impact on cost structures |
Long term |
Costs |
- The cost of purchasing ingredients and materials will grow.
- Cost burdens will rise due to shortages of human resources, operable equipment, etc.
|
Small |
Large |
| Changes in overall food needs among consumers |
Long term |
Revenue |
-The burden of adapting to climate change in the lives consumers will increase, and food expenditures themselves will decline.
|
Medium |
Large |
b. Responses to risks based on scenario analysis and opportunities arising from the responses
| Category |
Responses |
Opportunities |
| Introduction of carbon taxes |
- Achievement of carbon neutrality |
- Costs can be reduced by proactively conserving energy.
- Carbon tax burdens will be reduced by achieving carbon neutrality.
|
| Tightening of plastic regulations |
- Further greening of product packaging |
- Differentiation can be pursued by introducing new packaging materials made from plastic alternatives, ahead of others.
|
| Introduction/tightening of other environmental regulations |
- Strengthening of food safety standards
- Curtailment of specified CFC emissions
|
- Our superiority can be emphasized following the introduction of stricter carbon footprint disclosure regulations, and financial benefits from subsidies introduced for other environmentally friendly measures can be obtained.
|
| Changes in attitude to environment among consumers |
- Promotion of sales of upcycled products
- Further greening of product packaging
|
- Building and improving relationships with customers by accurately responding to their growing environmental orientation and needs will not just strengthen the brand and relationships with existing customers, but help attract new customers and enhance loyalty among existing customers.
|
| Changes in energy supply and demand |
- Power savings
- Introduction of renewable energy for electricity at offices and all logistics sites
|
- Cost burdens can be reduced through green delivery, early deployment of energy-saving equipment, etc.
|
| Production innovations in agriculture and fisheries |
- Strengthening of sustainable retail
|
- The market for new foods can be stimulated by promoting the use and development of food tech, including the production of food ingredients with low environmental impact.
-Differentiation can be pursued by establishing innovative production and stable supply systems encompassing frozen foods, processing, and edible technologies, ahead of others.
|
| Innovations in logistics and delivery |
- Delivery by energy-efficient vehicles and demonstration testing of EVs for delivery
|
- Automated driving, drone, and other technologies can be deployed to establish a logistics and delivery system less susceptible to the effects of climate change and more convenient for customers, ahead of others.
|
| Increase in severity of extreme weather |
- Strengthening of sustainable retail
- Expansion of high-quality supply
- Improved profitability through low-cost operations and sharing of marketing know-how
|
- A diverse geographic portfolio of production areas will ensure a stable supply of products, even if localized harvests falter. |
| Impact on procurement and supply systems |
- Traceability data can be effectively applied to make fine adjustments with respect to supply and demand conditions and ensure a stable supply.
- Assuming that harvesting possibilities will expand both in Japan and overseas, the establishment of cultivation and production methods that ensure stable production will be encouraged.
|
| Impact on quality |
- New appeal points can be established by increasing opportunities for using ingredients that do not meet previous retail distribution standards (i.e., B-grade products) and by persuading customers to appreciate the value of such ingredients.
|
| Changes in overall food needs among consumers |
- The need for foods that prevent heat stroke and can be stockpiled will rise.
-The need for home delivery itself will rise due to the increasing difficulty of going out.
|
Risk management
The Group has established the Risk Management Committee as an organization for managing risk. The committee reports directly to the president and consists of a chairperson, members representing each department, and an administrative office.
The Risk Management Committee also examines natural disaster risks, including climate change risks. The committee meets monthly to share risk case studies, discuss cross-departmental risk responses, and have individual members report their activities. The committee submits quarterly reports to the Executive Committee, which discusses and approves risk-related matters.
