Sustainability

Environment

Environment

Environmental Management

ZOZO Group has achieved ISO 14001 certification at all of our production sites and has built an Environmental Management System based on ISO 14001 standards. In addition to this, we have established Key Performance Indicators (KPIs) for environmental issues that we consider to be particularly important. We also conduct employee training programs to improve their level of environmental awareness.

ISO 14001 Certification

Our company operates a production-on-demand model that only produces goods after receiving customer orders. We have developed the Production support service “Made by ZOZO”, to enable the production of appropriate quantities based on demand. Moreover, our Chinese affiliate factory, which conducts all "Made by ZOZO" production (with a 100% coverage rate since it is the only production site), has also acquired ISO 14001 certification.

Group Company Information Location Year and month of certification
NANTONG ZHUOTENG INFORMATION TECHNOLOGY CO.,LTD China Jiangsu Province March 2023

* We have also obtained ISO 9001 and ISO 45001 certifications.

Basic Environmental Policy

ZOZO Group will contribute to the realization of a sustainable environment by active engagement in maintaining and preserving the environment through our business operations.

1.Realize a Decarbonized Society
We will make continuous efforts to reduce CO2 by conserving energy, conserving resources, reducing waste, reusing, and recycling.

2.Conservation of Natural Capital
We will encourage employee participation in environmental conservation activities, promote green procurement, and take environmental measures.

3.Compliance with Laws and Ordinances
We will comply with all laws, ordinances, international rules and practices related to the environment in Japan and overseas.

4.Cooperate with our Stakeholders
We aim to realize a sustainable environment by working with a diverse range of stakeholders to resolve environmental issues.

5.Enhance Education and Training
We will disseminate this policy and environmental issues to all employees and provide education and training.

6.Disclosure of Environmental Information
We will disclose environmental policies and information and promote transparency.

※Basic Environmental Policy approved by the Board of Directors on October 18, 2021

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

ZOZO, Inc. Announces “2030 Carbon Neutrality Declaration,” Reducing GHG Emissions to Net-Zero by FY2030

TCFD


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.


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

ZOZO, Inc. Announces “2030 Carbon Neutrality Declaration,” Reducing GHG Emissions to Net-Zero by FY2030


Emissions of Greenhouse Gas (CO2) Reduction Targets and Performance

Scope Base year emissions Actual emissionsActual emissionsTarget annual emissions
Fiscal 2020 Fiscal 2021Fiscal 2022Fiscal 2025Fiscal 2030Fiscal 2050
Scope 1 3,060 25 30

612

(▲80%)

0

(▲100%)

0

(▲100%)

Scope 2

(Market-based)

8,029 6,942 589

1,606

(▲80%)

0

(▲100%)

0

(▲100%)

Scope 2

(Location-based)

8,123 8,763 9,439

1,625

(▲80%)

0

(▲100%)

0

(▲100%)

Scope 3 411,919 418,258 396,849

238,913

(▲42%)

0

(▲100%)

SBTi

In March 2023, we submitted a commitment letter to "SBT Initiative (SBTi)," an organization that certifies "Science Based Targets(SBT)" that are scientifically consistent greenhouse gas emissions reduction targets set by the Paris Agreement. In addition, we have set a target to achieve the Paris Agreement's "1.5℃ target" and have applied for SBT certification.

※SBT: Greenhouse gas emission reduction targets set by companies to be 5 to 15 years ahead, consistent with the level required by the Paris Agreement

※SBTi: Initiatives jointly managed by four organizations: the World Wide Fund for Nature (WWF), CDP, World Resources Institute (WRI), and the United Nations Global Compact

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 2022, 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

Initiatives with Industry Associations

JSFA

On April 1, 2022, we became a regular member of the JAPAN SUSTAINABLE FASHION ALLIANCE (JSFA), which aims to promote the transition to a sustainable fashion industry. JSFA is an alliance established in August 2021 with the aim of promoting the transition to a sustainable fashion industry. As of April 2023, a total of 57 fashion and textile companies were members, with the Ministry of Economy, Trade and Industry, the Ministry of the Environment, and the Consumer Affairs Agency as public partners.

Commitment
・In endorsement of the Paris Agreement,we promote the transition to a carbon-free business. (Endeavor to overcome contrary businesses)
・We endeavor to participate in the Net Zero Declaration and RE100, EP100, EV100 by 2050.
・We work to reach suppliers and customers and make the value chain more transparent.
・We promote the proper volume production, appropriate volume purchase, and recycling.
・As a member of the alliance, we endorse and cooperate with policy involvement and collaboration in sustainable fashion.

2050 year target
・"2050 Carbon Neutral"
・"Zero Fashion Loss through Proper Volume Production, Appropriate Volume Purchase, and Recycling"

 JAPAN SUSTAINABLE FASHION ALLIANCE (JSFA)

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 committed to achieving 100% renewable energy use for our facilities by 2030, as part of our “2030 Carbon Neutral Declaration”. As of September 2023, more than 90% of the electricity consumed at our facilities is sourced from renewable energy. 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.
Introduction of 100% Renewable Power to ZOZO Head Office in Nishi-Chiba

Using Renewable Energy in All Data Centers

Our data centers that store our servers, etc. use 100% renewable energy power. We are also promoting energy-saving initiatives using cloud data centers.

Sustainable Content "elove by ZOZO"

In September 2022, we launched "elove by ZOZO," a permanent content that presents sustainable information on the Fashion EC "ZOZOTOWN" used by more than 11 million people per year. Aiming to "Highlight sustainable fashion choices to improve usersʼ experience," we present their efforts to sustainability of fashion brands and sustainable products. We also present TIPS related to fashion, environmental and social issues, and other information that is useful when sustainable shopping.
Permanent Content "elove by ZOZO"

Measurement Technology

In order to resolve concerns about the size of EC purchases, we provide measurement tools such as ZOZOSUIT, 3D measurement bodysuit, ZOZOMAT, 3D foot measuring tool, and ZOZOGLASS, a skin tone capturing device. As a result, we have been able to reduce the amount of CO2 generated by returning and delivering products, thereby reducing the environmental impact. We also confirmed that ZOZOMAT users have a 36.9 percentage (※) lower return rate than non-users. In addition, we have begun offering ZOZOFIT, a body management service that supports workout progress in the United States using ZOZOSUIT, which enables the generation of 3D models for the body. Measuring technologies not only in fashion but also in healthcare and other fields.

※ Compare return rates of ZOZOMAT compatible shoes and non-compatible shoes (Period: February 27, 2020 to October 12, 2020)

Reduce Environmental Impact by Lowering the Return Rate of Shoes Compatible with ZOZOMAT

Production Support Service Made by ZOZO For Sales on Order

As an initiative to solve the issues of the fashion industry-m​ass-produc​tion​ and mass-disposal we have developed production support service Made by ZOZO and provide it to our business partner brands. Since Made by ZOZO manufactures products after receiving orders from customers, it is possible to produce an appropriate amount of products in accordance with demand. As a result, there is no impact on production materials due to over-production of products or waste due to unsold products. In addition, since Made by ZOZO can be delivered from one point to production and from order to delivery within 10 days at the earliest, we are able to deliver products to customers without stress compared to ordinary custom-made production.

YOUR BRAND PROJECT

In our D2C business, YOUR BRAND PROJECT Powered by ZOZO, we fully back up the processes and funding required by individuals to launch the brand. These include product planning, manufacturing, sales, logistics, and customer support. Many of the products sold include sustainable materials that are environmentally and human rights friendly.
Sustainable Materials Used in YOUR BRAND PROJECT

Logistics

Logistics Centers
・Installed LED Lightings at All the Logistic Centers

In logistics centers ZOZOBASE,  100% of the electricity used at all bases is renewable energy, and LED lighting is used for all lighting equipment to conserve energy and reduce CO2 emissions.
Installed LED Lightings at All the Logistic Centers, "ZOZOBASE"

・Introduced "EMS-AI" air conditioning optimum control system

In logistics centers ZOZOBASE, we are working to save energy and reduce CO2 emissions by introducing EMS-AI, which automatically optimizes temperature control in the warehouse.
Introduction of the Air Conditioning Optimization Control System "EMS-AI" at Logistics Center "ZOZOBASE NARASHINO 1"

・Minimize transportation between logistics centers

In logistics centers ZOZOBASE, ZOZO RESEARCH, our R&D organization, are conducting inventory allocation research to minimize inter-site transportation with the aim of achieving sustainable logistics, and reduce CO2 emissions with inter-site transportation.
ZOZO Research Institute receives the Operations Research Society's 42nd "Case Study Award" for its research on inventory placement that minimizes transportation between locations.

・In the logistics centers ZOZOBASE we use pallets made of 100% recycled materials when transporting cargo. In addition, as an initiative to reduce the use of plastic hangers associated with the storage of outerwear and other products, we recommend flat storage to the extent that quality is not compromised, and request our business partners to deliver products that do not use plastic hangers as much as possible, and we are working to reduce the amount of waste.
Introduced Pallets with 100% Recycled Materials

Transportation and delivery
・Improvement of loading efficiency in trunk line transportation

When transporting products from logistics centers ZOZOBASE to distant locations (such as the Hokkaido・Kyushu region), we reduce the amount of CO2 used in transporting products by improving the load-carrying efficiency of trunk transportation by packing them in different regions after trunk transportation, instead of packing them at our each transportation sites.
Utilize YAMATO TRANSPORT's Relation Center to Streamline ZOZOTOWN Product Delivery in the Hokkaido・Kyushu Region

・Introduced EAZY, Supported by YAMATO TRANSPORT into our services

We have introduced EAZY, a service offered by YAMATO TRANSPORT Co., Ltd. that allows customers to choose the way they receive it, such as in front of the entrance, for the first time in Japan, and we recommend it on the order completion screen of our service. As a result, the rate of customer absenteeism at the time of delivery has decreased, and we are working to reduce CO2 emissions with redelivery.
Introduced EAZY, Supported by YAMATO TRANSPORT into our services, and launched a new delivery method to reduce the risk of personal information leaks through our package drop service.

・Introduction of "Order Consolidation" function

We have introduced an "Order Combination" feature that combines multiple orders into a single order for delivery. When multiple orders have not yet been shipped, orders that can be combined will be automatically combined and shipped to the specified destination. This reduces the amount of packaging materials used for product delivery and the number of deliveries, thereby reducing CO2 emissions associated with delivery.

Efficiency Improvement in Product Delivery through the Expansion of Order Consolidation


Packing materials

・Use of environmentally friendly materials

In the logistics centers ZOZOBASE, we use FSC certified cardboards and bags made from biomass materials for packaging materials used in the delivery of products to customers. We also use recycled paper to protect our products, and we strive to be environmentally friendly.
Changed Packaging for Delivery to Environmentally Conscious Materials

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

In the reuse business “ZOZOUSED", which we operate on ZOZOTOWN, we are committed to reduce waste by purchasing and selling fashion-related products that are no longer in use.  Furthermore, we have implemented reusable bags for collecting these items, which can be repeatedly used after being cleaned.
ZOZOUSED's Sustainable Framework
02_en.png

At “ZOZOUSED”, by redistributing items collected from customers, we have been able to prevent CO2 emissions that would occur from the production to disposal and incineration of newly manufactured items. Assuming this, since the start of the service, we have cumulatively reduced CO2 emissions by about 140,000 tons (※1). Furthermore, the amount of CO2 emissions reduced in the fiscal year 2022, when converted to the amount absorbed by Japanese cedar trees, is equivalent to approximately 1.3 million trees (※2).

(※1) From November 2012 to March 2022. This assumes the prevention of CO2 emissions that would occur from the production process to the disposal and incineration of newly produced items. The number of collected items was converted to weight (source: Ministry of the Environment, “Sustainable Fashion – Fashion for the Future”), and the CO2 emissions per kilogram of item were multiplied to calculate this (source: Ministry of the Environment, “Method of Calculation for 3R Unit Value”).
(※2) Assuming that one Japanese cedar tree absorbs about 14 kg of CO2 emissions (source: Kanto Regional Forest Office, Carbon Dioxide Absorption Capacity of Forests).
02_en (1).png

Moreover, the number of ZOZOUSED users (people with reuse experience) has reached approximately 17 million in total (※) since the service started. We continue to aim to establish a circular fashion by increasing the number of users with reuse experience, thereby expanding the cycle of circulation.

(※) From November 2012 to March 2022. The definition of a user with reuse experience includes purchasers of ZOZOUSED service products, users of the trade-in discount service, and users of the regular purchasing service."





Packaging Materials

・Select the right size material for your products

Materials for packaging products ordered by customers are provided in multiple sizes and are packaged according to the size of the product. We are also working to reduce the amount of materials discarded for delivery, such as by introducing a system that allows the selection of appropriate-size materials for the size of products.
Changed Packaging Materials for Delivery to Environmentally Conscious Materials

Paperless operations

・ZOZOTOWN Electronic Invoices and Receipts

All of the invoices and receipts delivered to the customers are digitized when ordered by ZOZOTOWN. When converted into the number of shipments in fiscal 2022, we reduced the number of invoices and receipts (paper) by approximately 64 million per year. As a result, the amount of carbon dioxide emissions from incineration is expected to be reduced by approximately 282 tons.
ZOZOTOWN Electronic Invoices and Receipts

・Improve Operational Efficiency and Reduce Paper Consumption by Introducing Electronic Contracts

In addition, we have introduced an electronic contract service called CloudSign, and are working to reduce waste of paper as a Web completion type, such as contracts.
Improve Operational Efficiency and Reduce Paper Consumption by Introducing Electronic Contracts

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 January 2023, ZOZO Group announced the “Net Zero,” which aims to achieve virtually zero CO2 emissions by 2050. 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 environmen​tally-frie​ndly​ 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