Environment
Climate Change
Net Zero
In addition to the "2030 Carbon Neutral Declaration"(*1), which aims to reduce greenhouse gas emissions (Scope 1&2) from our business activities to virtually zero by FY2030, we are working to realize a "Net Zero" (*2), which aims to reduce supply chain emissions, including those emitted by business partners (Scope 3), to virtually zero by 2050.
Scope 1: Direct emissions of greenhouse gas by businesses themselves (fuel combustion, industrial processes)
Scope 2: Indirect emissions associated with the use of electricity, heat, and steam supplied by other companies
Scope 3: Indirect emissions other than Scope 1 and Scope 2 (emissions of other companies associated with the activities of the business operator)
*1 Announced the "2030 Carbon Neutral Declaration" in February 2022
*2 Announced "Net Zero" in January 2023
Endorsement of TCFD Recommendations
Endorsement of TCFD
ZOZO Group announced the agreement to "Task Force on Climate-related Financial Disclosures (TCFD)"※ in February 2022. We will continue to disclose climate-related risks and opportunities - "Governance", "Strategy", "Risk Management" and "Indices & Targets" based on TCFD’s recommendations.
- "Task Force on Climate-related Financial Disclosures (TCFD)" is a task force established by The Financial Stability Board, an international body consisting of several central banks, ministries of finance and more. TCFD declared to support companies disclosing climate-related risks and opportunities in June 2017.
Governance
We consider that the drafting and implementation of strategies is effective by dealing with climate change issues at our Board of Directors. Accordingly, the Board of Directors deliberate and resolutes on important environmental matters, including climate change. SDGs Promotion Committee, established as an executive management organization, is chaired by the president and CEO, and acts as a chief executive officer of environmental management responsible to oversee discussions regarding climate-related risk and opportunities, policies and goals, progress of initiatives, and to report to the Board of Directors important matters discussed at the SDGs Promotion Committee.
Our Corporate Governance Structure
Strategy
Scenarios for future climate change were analyzed using FASHION INDUSTRY CHARTER FOR CLIMATE ACTION and A Roadmap to Net-zero Emissions for the Apparel Sector those are based on the Intergovernmental Panel on Climate Change (IPCC) to identify risks and opportunities related to climate change.
| Categorization of risks and opportunities based on TCFD recommendations | Content | ||||
| Risks |
Transition risks |
Policies and Laws |
Burden of taxes on the new environment, such as carbon tax |
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Tightening of regulations on materials (packaging materials and products) |
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Tightening of regulations on delivery (inbound and outbound shipments) |
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Tightening of sales regulations for greenwash |
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Technology |
Cost increase due to change to environmentally-friendly operations |
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Cost increases due to change in environmentally-friendly production methods and materials |
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Market |
Declining demand for products that are not environmentally-friendly due to changes in environmental awareness and consumer behavior |
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Soaring product prices due to the shift to environmentally-friendly products |
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Soaring prices for energy such as electricity and crude oil |
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Reputation |
Declining reputation risk and corporate value due to inadequate response to environmental issues |
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Suspension of trading by suppliers due to inadequate response to environmental issues |
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Declining investor evaluation due to inadequate response to environmental issues |
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Physical risks |
Acute |
Increasing product manufacturing and procurement costs and unit prices due to natural disasters and climate change |
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Damage to business establishments, logistics centers, data centers, and products for sale due to natural disasters |
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Changes in consumer demand due to Infectious diseases risk (Covid-19, etc.) |
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Increasing costs due to capital investment in response to extreme weather |
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Chronic |
Declining demand for heavy winter clothing due to global warming |
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Exhaustion of raw materials due to rising temperatures and sea levels |
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Opportunities |
Resource efficiency |
Efficiency of resources, such as paperless operations |
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Improvement, optimization, and reuse of packaging materials |
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Efficiency of transportation and delivery |
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Energy source |
Reducing energy consumption by building environmentally-friendly operations (e.g., energy-saving) |
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Products / Services |
Acquiring competitive advantage by developing and providing environmentally-friendly services (reuse, custom-order production, etc.) |
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Acquire competitive advantage by building environmentally-friendly logistics operations |
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Improving the operational efficiency of logistics by optimizing the number of products (inventory numbers) through environmentally-friendly movements |
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| Market |
Acquiring new customers and expand the use of existing customers by offering products and services that meet environmental demand |
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Creating new markets by collaborating with stakeholders and developing technologies |
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Expansion of growth opportunities associated with changes in consumer behavior due to an increasing the risk of infectious diseases |
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Because of the importance of shifting to environmentally-friendly services and products and building environmentally-friendly operations in terms of risks and opportunities, we will further address materiality and four key actions: Highlight sustainable fashion choices to improve usersʼ experience; Create a made-to-order platform for zero waste; and Contribute to sustainable community development.
Risk Management
With regard to climate-related risks, the Sustainability Promotion Section in Communication Design Office, which is in charge of sustainability exclusively, identifies climate-related risks and opportunities that affect business, and then discusses them at SDGs Promotion Committee, which is chaired by the Representative Director, President & CEO, and reports to the Board of Directors. In addition, the Risk Management Committee identifies important risks across the entire ZOZO group and implements risk management.
Metrics and Targets
In addition to the "2030 Carbon Neutral Declaration"(*1), which aims to reduce greenhouse gas emissions (Scope 1&2) from our business activities to virtually zero by FY2030, we are working to realize a "Net Zero" (*2), which aims to reduce supply chain emissions, including those emitted by business partners (Scope 3), to virtually zero by 2050.
Scope 1: Direct emissions of greenhouse gas by businesses themselves (fuel combustion, industrial processes)
Scope 2: Indirect emissions associated with the use of electricity, heat, and steam supplied by other companies
Scope 3: Indirect emissions other than Scope 1 and Scope 2 (emissions of other companies associated with the activities of the business operator)
*1 Announced the "2030 Carbon Neutral Declaration" in February 2022
*2 Announced "Net Zero" in January 2023
Emissions of Greenhouse Gas (CO2) Reduction Targets and Performance
| Scope | Base year emissions | Actual emissions | Target annual emissions | ||
| Fiscal 2020 | Fiscal 2021 | Fiscal 2025 | Fiscal 2030 | Fiscal 2050 | |
| Scope 1 | 3,060 | 25 | 612（▲80％） | 0（▲100％） | 0（▲100％） |
| Scope 2 | 8,029 | 9,264 | 1,606（▲80％） | 0（▲100％） | 0（▲100％） |
| Scope 3 | 411,919 | 419,068 | ー | ー | 0（▲100％） |
Third-Party Verification
Together with Softbank Corp., a Group company, we underwent a third-party verification in accordance with "ISO14064-3" and "ISAE3000.” The level of assurance for verification is the Limited Guarantee Level. For fiscal 2021, the verification was conducted with respect to greenhouse gas emissions and energy consumption volumes under Scopes 1, 2, and 3 and water consumption. As a result of the verification, we did not comply with the "Calculation Rules" and did not discover any matters that were not accurately calculated.In the future, we will expand the scope of verification.
Independent Verification Report
Independent Verification Report（Water）
Climate Change Initiatives
We are implementing measures to address climate change through the introduction of renewable energy at our head office and several logistics centers and through services utilizing technologies such as ZOZOMAT, a mat for foot 3D measurement.
Introduction of Renewable Energy to Our Sites
We are introducing 100% renewable energy to our new ZOZO head office, which was relocated in February 2021. We have adopted ENECT RE100 Plan from minnadenryoku Co., Ltd., which provides 100% renewable energy for electricity consumption.
In January 2022, ZOZOBASE Narashino 1 and ZOZOBASE Tsukuba 1, our logistics centers, and ZOZOBASE Tsukuba 2 from June 2022 and ZOZOBASE Narashino 2 from September 2022, respectively, introduced 100% of biomass and solar-derived renewable energy with tracking and FIT-non-fossil certificates.In the future, we will promote the introduction of renewable energy at other sites as well, with the aim of achieving carbon neutrality.
Introduction of 100% Renewable Power to ZOZO Head Office in Nishi-Chiba
Using Renewable Energy in All Data Centers
We use renewable energy in the data centers that store servers and other products to help realize a sustainable society. Among multiple data centers, data centers that consume the largest amount of electricity use 100% of renewable energy, while other sites also use a portion of renewable energy.
Using Renewable Energy in All Data Centers
Special section entitled "Let's Learn Fashion and Sustainability with ZOZOTOWN"
On October 8, 2021, we released a special section titled "Let's Learn Fashion and Sustainability with ZOZOTOWN" on our ZOZOTOWN to learn from customers about sustainability. This special web page incorporates the desire of ZOZOTOWN to learn together from the same perspective as our customers, with the keywords of "friendliness", "friendliness" and "empathy". It presents the environmental initiatives of the brands and discussions on the "Relationship between Fashion and the Global Environment" with the Task Force of the Ministry of the Environment.
Special section entitled "ZOZOTOWN and Learning Fashion and Sustainability"
Measurement Technology
In order to solve the common problem when shopping online, which is that customers have no chance to try out, we have developed and provided services for measurement tools such as ”ZOZOSUIT”※, a bodysuit for body 3D measurement, ”ZOZOMAT”, a mat for foot 3D measurement, and ”ZOZOGLASS”, a skin tone capturing device. We will continue to provide opportunities to enjoy fashion more conveniently through the use of technology. At the same time, we will contribute to reducing environmental impact by reducing delivery for the purpose of returning products, etc.
Reduce Environmental Impact by Lowering the Return Rate of Shoes Compatible with ZOZOMAT
Production Support Service Made by ZOZO For Sales on Order
Made by ZOZO proposes product planning to brands based on the data and know-how we own. In addition, by digitizing work at the factory, which had previously been done by hand, and developing our own system that enables the production of products with multiple different designs at the same time, we produce from at least one unit and ship the product in at least 10 days after the order is received. Before it has been common to produce a fixed quantity of goods in a lump sum for each season, however Made by ZOZO enters the production process after receiving an order for a product on ZOZOTOWN, enabling brands to sell at zero inventory risk (*1), that is zero unsold risk due to excess inventory, and a rich range of product variations.
We also support the brand's in-house inventory risk-reduction by utilizing data obtained through Made by ZOZO in response to brand requests, and proposing an appropriate amount of production (*2) for sales channels other than ZOZOTOWN, such as their stores and their own EC.
※1 Except in the case of appropriate volume production or the occurrence of product returns due to customer's circumstances
※2 Proper amount of production
YOUR BRAND PROJECT
In the D2C business, YOUR BRAND PROJECT Powered by ZOZO, provide individuals a full support for the product planning, production, sales, logistics, customer support, and other processes and funding required to launch a brand as if they unite as one. The initiative also develops a number of products incorporating environmentally and ethical materials.
Sustainable Materials Used in YOUR BRAND PROJECT
Other Initiatives
Installed LED Lightings at All the Logistic Centers, "ZOZOBASE"
Cleanup Activities around ZOZOBASE Tsukuba Logistics Centers
Waste Reduction
In order to realize a sustainable society, we are working to reduce waste by recycling clothing through secondary distribution and reducing paper consumption.
ZOZOUSED
We roll out a "replacement discount" service that allows customers to trade in products previously purchased on ZOZOTOWN and purchase new products at discounted prices when ordering. We reuse clothing by selling the products traded in within the "ZOZOUSED".
ZOZOUSED's Sustainable Framework
Use of Cushioning Materials with 100% Recycled Paper
Since October 2020, we have switched to a 100% recycled paper cushioning material from plastic materials to cushioning materials. Previously, we used a cushioning material of plastic materials to fill a gap between the product and the cardboard so that the product will not be damaged during delivery.※
We will continue to promote environmentally conscious initiatives while complying with the Law for the Promotion of Plastic Resource Recycling, which will go into effect in April 2022.
- In some cases, a cushioning material for plastic materials is also used.
Changed Packaging Materials for Delivery to Environmentally Conscious Materials
Improvement of Operational Efficiency and Reduction of Paper Consumption by Introducing Electronic Contracts
From May 2020, we introduced cloud signage, an electronic contract service, as a way of concluding contracts with the aim of improving operational efficiency and reducing paper consumption. The use of online-based electronic contract service not only reduces personnel costs, but also promotes telework and strengthens compliance by reducing the time required for signing and other operational efficiencies.
Improve Operational Efficiency and Reduce Paper Consumption by Introducing Electronic Contracts
Reduction of Paper Consumption by Digitizing Delivery Slips and Receipts
As of the shipment on Tuesday, July 27, 2021, we computerized the delivery slips and receipts that were simultaneously packaged with the orders of ZOZOTOWN to reduce paper use and reduce CO2 emissions.
ZOZOTOWN Electronic Invoices and Receipts
Other Initiatives
Introduced Pallets with 100% Recycled Materials
Natural Capital
Initiatives to Conserve Water Resources
ZOZO Group does not require a large amount of water or water of a designated quality for its normal business activities. However, regarding the management of water resources as an important challenge in environmental protection, it analyzes risks and manages the quantity of water intake and discharge. The use of water is broadly divided into water for cooling and humidifying at data centers and water for daily use at business sites. The business sites consume only the amount necessary for their workplace lives. With regard to the water resources used in these businesses, we regularly check water stresses at water source sites using Water Risk Atlas of the World Resources Institute (WRI). For data center water source locations, which account for the majority of our own water consumption, risk is Low-Medium and we are aware that water stress and total water risk are not high. We will maintain the monitoring system to continuously watch for changes in water stress, and will take appropriate steps if the water stress is judged to be high risk.
Independent Verification Report（Water）
Biodiversity
In February 2022, ZOZO Group announced the “2030 Carbon Neutrality Declaration,” which aims to achieve virtually zero CO2 emissions by 2030. Reducing CO2 emissions not only mitigates climate change, but also leads to ecosystem conservation and maintains biodiversity. In addition, we consider biodiversity as one of our materiality and reflect into our corporate activities by curbing deforestation and maintaining, strengthening and conserving biodiversity and ecosystems. For example, we have adopted FSC certified (*1) corrugated containers and environmentally-friendly packaging materials, reduction of paper consumption by digitizing delivery slips and receipts, and changing the cushioning material used for delivering products from plastic materials to 100% recycled paper. We will continue to comply with relevant treaties and laws and regulations, and aim to realize a society that coexists with nature.
(*1) FSC certification is an internationally recognized system for "appropriate forest management," which was created with the aim of sustainable forest use and conservation.
Basic Environmental Policy
Changed Packaging for Delivery to Environmentally Conscious Materials