Basic Policy

Basic Policy

Sustainability Statement

Fashion Connects and Leads us to a Sustainable Future.

We at ZOZO envision a new era of fashion that will improve
our environment and society.

Harnessing the power of imagination, creativity and innovative technologies,
we will prioritize impact above individual gain.

We are committed to solving the challenges our planet faces
by connecting people, technology and fashion in new ways.

We believe in creating a world where fashion enriches our lives,
now and forever.

※Sustainability Statement is approved by the Board of Directors in April 19, 2021.
※We are committed to achieving the goals outlined in our Sustainability Statement by 2030.

Materiality

Identification of Materiality

We routinely gather expectations, requests and opinions from our important stakeholders. Expectations from our service users and clients, among other things, are gathered through questionnaires and interviews, and expectations from existing shareholders and other investors are also gathered through shareholder meetings, engagement meetings, and evaluation data to us. We also strive to understand the expectations of industry groups and NGOs through meetings and interviews. With reference to the expectations and demands of each of these stakeholders and the demands of society, such as the major ESG evaluation items, we discussed and examined them from the viewpoint of the characteristics of our group and the contribution to the growth of our group, and identified materiality items that are of high importance to both stakeholders and us.

• Materiality is discussed by SDGs Promotion Committee and approved by the Board of Directors in March 14, 2022.

Materiality Map

Sustainability Four Key Actions

We have formulated four key actions to realize our Sustainability Statement, "Fashion Connects and Leads us to a Sustainable Future.," and to solve 19 materiality items.

• 1

  Highlight sustainable fashion choices to improve usersʼ experience

  By sharing information, such as the sustainability criteria and production background of a particular garment, ZOZO will provide its customers with better opportunities to purchase sustainable products and services that are human rights and environmentally friendly.

• 2

  Create a made-to-order platform for zero waste

  ZOZO will build a made-to-order production platform that dramatically reduces waste by avoiding mass production and mass disposal. This manufacturing system will utilize proprietary measurement technologies and various data inputs.

• 3

  Promote diversity, equity & inclusion among everyone involved in fashion

  ZOZO will actively disseminate information and take initiatives that contribute to creating a society where everyone involved in fashion can fulfill their potential. This includes ZOZOʼs own employees, those leading the fashion industry as well as its next-generation, minorities, apparel manufacturers, people affected by pollution, and, of course, its customers.

• 4

  Contribute to sustainable community development

  By combining fashion and technology, ZOZO will work with its stakeholders to solve environmental and social issues in each region and community, and it will contribute to the revitalization and sustainability of various regions.

• We are committed to achieving the goals outlined in our Sustainability Four Key Actions by 2030.

Four Key Actions and Materiality

We have committed to promote four key actions and initiatives to solve materiality items to enhance sustainable growth as a company and to solve environmental and social issues.

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※Goals of Four Key Actions and Materiality are approved by the Board of Directors

Sustainability Management Structure

ZOZO Group has held fourteen committee meetings since its establishment of SDGs Promotion Committee in November 2020 (as of May 31, 2022) chaired by the President and CEO, to promote SDGs management across the Group. In addition, the Communication Design Office, which serves as the secretariat, will work closely with each business division to implement measures, with the aim of achieving four key actions.

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

Basic Human Rights Policy

ZOZO Group strives to maintain a safe working environment and is engaged in initiatives that respect the human rights and individuality of each employee.

1.Commitment to Human Rights
We, all officers and employees of ZOZO, Inc. and its group companies (hereinafter “We”), contribute to sustainable social development by respecting human rights in every aspect of our business activities. We have established our approach as the “Basic Human Rights Policy (Human Rights Policy)” and promise to comply with the policy.

2.Reference and Scope
In accordance with the international principles of human rights*, we appreciate and respect cultures and customs of all countries and regions where we conduct our business activities, and strive to avoid involvement in discrimination and the violation of human rights in all business activities. We also require our suppliers and business partners to respect and refrain from infringing human rights in conformity with the aforementioned policies.

3.Respect for Diversity and Prohibition of Harassment
We respect all people as individuals and do not tolerate discrimination or any disadvantageous treatment on the basis of political beliefs, ideologies, religion, gender, gender identity, sexual orientation, physical features, illnesses, age, nationality, race, ethnicity, etc. We provide equal opportunity in recruitment, evaluation, development, placement, remuneration, promotion, executive appointment, etc., and foster a work environment in which our diverse workforce can play an active role.
In addition, we do not tolerate discrimination or harassment of any kind, and take continued preventive measures, such as through regular employee education.

4.Prohibition of Forced Labor and Child Labor
To protect basic human rights, we forbid the use of any and all forced labor or child labor, and engage in business activities adhering to all compliance requirements.

5.Management of Working Hours and Wages
We stipulate appropriate working hours, break time, overtime hours, late-night work, day offs, and vacation in our rules of employment in accordance with the Labor Standards Act and labor-management agreements. In compliance with legal requirements, we also stipulate minimum wage, legal benefits and deductions, overtime work, etc., in our pay regulations, and make payments directly to our employees.

6.Respect for the Freedom of Association and the Exercise of the Right to Collective Bargaining
We respect the rights of employees to form trade unions based on the employees’ own wills and the right to choose whether or not to participate. We authorize the exercise of collective bargaining right in an effective manner, and shall negotiate in good faith through constructive dialog with labor representatives.

7.Maintenance of Employees’ Safety and Health
We exercise due care to maintain our employees’ physical and mental health and strive to secure safe and healthy workplace environments. We comply with the laws, regulations, and rules related to safety and health, and work to maintain this by adopting appropriate measures to address health risks.

8.Freedom of Expression and Privacy Protection
We recognize freedom of expression and privacy protection in telecommunications and the Internet, and in communications on social media. We take the utmost care not to infringe on such rights. In addition, we serve all our users in a fair and equitable manner and provide safe and convenient services.

9.Initiatives and Structure to Respect Human Rights
We construct mechanisms for effective countermeasures by establishing human rights reporting desks to prevent human rights violations. We conduct human rights due diligence to assess the impact of business activities on human rights, continuously monitor the impact, and report to the stakeholders. In the unlikely event that business activities should have a negative impact on human rights, we shall respond appropriately using fair and equitable remedial actions to mitigate and resolve such effects.

10.Communication
Under the Z Holding’s Risk Management Committee which includes the co-chief executive officers, the Human Rights Working Group is responsible for the promotion of human rights initiatives. The Working Group promotes the Basic Human Rights Policy (HR policy) to all officers, employees and external stakeholders and actively conducts human rights awareness activities.

* "Universal Declaration of Human Rights," "UN Guiding Principles on Business and Human Rights," "Children's Rights and Business Principles," and the "Eight Fundamental Conventions of the ILO"
※Basic Human Rights Policy approved by the Board of Directors on October 18, 2021

Code of Conduct

ZOZO Group Code of Conduct

1. Introduction
ZOZO Group Code of Conduct is a code to be observed by all executives and employees of ZOZO Group.

2. Commitment to compliance and ethical conduct
We abide by all laws and regulations, and practice ethical conduct that lives up to the trust provided by society.

3. Respect for basic human rights
･We respect the rights of individuals and do not tolerate discrimination or disadvantageous treatment on the basis of political beliefs, ideology, religion, gender, gender identity, sexual orientation, physical characteristics, disease, age, nationality, race, ethnicity, etc.
･We understand and respect the culture and customs of the countries and regions in which we operate, and act accordingly.
･We prohibit all forms of forced labor and child labor in accordance with laws and regulations.

4. Ensuring a safe, healthy and harassment-free work environment
･We do not tolerate sexual harassment, abuse of authority, or any other form of workplace harassment.
･We comply with laws and regulations concerning occupational safety and health, give consideration to the physical and mental health of our employees, and strive to ensure a safe and healthy work environment.

5. Responsibility to customers
･We comply with the applicable laws and regulations related to handling personal information in each market, and collect personal information from our customers in an appropriate manner in accordance with our Privacy Policy.
･We use the personal information we obtain within the scope of the purposes specified in our Privacy Policy, and appropriately protect, manage, and dispose of such information. In principle, we do not provide such information to any third party, except when we have obtained the consent of the customer or when permitted by applicable laws.
･We maintain fairness and honesty toward our customers and do not make misleading representations or engage in misleading conduct, so that our customers can use our services safely and comfortably.

6. Fair business practices
･We comply with the business competition laws of each country where we operate, conducting our business activities with a spirit of fair play and on the principles of free and fair competition, and do not impose unfair trading conditions on our business partners or service users.
･We do not obtain, or allow others to bring in, information about our competitors in an unfair manner.
･We comply with laws and regulations regarding imports and exports and other international trading rules.
･We do not engage in prohibited transactions with specified countries, regions, organizations, or individuals that are subject to economic sanctions.

7. Avoidance of conflict of interest
We act with respect for the interests of the company and do not use our position or status in the company to benefit ourselves or a third party.

8. Appropriate use and management of company assets
･We recognize that intellectual property rights are an important asset for the business of the ZOZO Group and appropriately protect those rights, while also respecting the intellectual property rights of third parties.
･We use, manage, and dispose of company assets and trade secrets appropriately, and do not use them for any purposes other than business.

9. Thorough implementation of information security
We strictly protect and manage our information assets, including customer information and l classified information, and do our utmost to protect them from unauthorized access, leakage, falsification, destruction, etc.

10. Accurate, fair, timely, and appropriate information disclosure
･We create accurate and complete accounting records.
･We disclose accurate information to society and the stock market in a fair, timely, and appropriate manner.
･We strictly manage insider information and do not engage in insider trading.

11. Maintenance of appropriate relationships with political entities and administration
We maintain appropriate relationships with political entities and administration, and do not give preferential treatment to any individual or organization that engages in political activities.

12. Prohibition on bribery and corruption
･We do not engage in any form of bribery, corruption, or corrupt practices, whether with public servants or private citizens.
･In order to ensure free and fair trade, we provide and accept business entertainment and gifts only to the extent deemed appropriate.

13. Rejection of relationships with crime
We reject any involvement with anti-social forces, organized crime syndicates, and other organized criminals, as well as criminal activities such as money laundering and terrorist financing.

14. Giving back to society and protecting the environment
We actively contribute to society and protect the environment through our business activities, taking into consideration the social and environmental impact of our business activities. We encourage our officers and employees to take an interest in these activities, and to actively participate in and support them.

15. Consultation and whistleblowing on compliance issues, and prohibition of retaliation
･If we discover any improper acts or suspected compliance violations, we consult or report them to our superiors, the Compliance Consultation Desk, or the Internal Reporting Desk.
･We prohibit any retaliation or disadvantageous treatment towards whistleblowers regarding compliance.

16. Revisions and eliminations
Revisions and eliminations of this policy will be made by our Board of Directors.

※ZOZO Group Code of Conduct is approved by the Board of Directors on April 21, 2023

Communication with Stakeholders

We aim to increase our corporate value through promoting four key actions, by closely communicating with our stakeholders to address issues and reflect them in our business operation.

Stakeholders	Our Relations	Means of communication
Customers	Our Customer Support Center has a central philosophy of "becoming a friend with our customers." We strive daily to support and make our customers smile as if we help out friends.	Social Networking Service Pages Contact Points for Inquiries Website
Shareholders and Investors	Aiming to be a company trusted by the shareholders and investors, we strive to practice corporate management that meets their expectations and to disclose corporate information in a timely and appropriate manner.	General Meeting of Shareholders Financial results briefing Individual interviews in IR activities Website Integrated Report  Sustainability Report
Business partners	Encouraging mutual development by building good and healthy relationships with our business partners through fair and equitable transactions.	Website Communication through Transactions Receipt and shipment of product Sustainability Report
Employees	Creating and offering a workplace where motivates each employee to demonstrate his or her individuality, and demonstrate his or her power of creativitity and imagination.	Training programs Seminar Pulse Survey Internal and external consultation desks Company intranet, the company newsletter
Local communities	Contributing to the vitalization of local communities and the realization of sustainable communities by working to resolve environmental and social issues, mainly in regions where we have bases.	Dialogue and cooperation with local governments Educational collaboration with school organizations and educational boards Cooperation with local facilities Website Sponsored to sporting organizations

Multi Stakeholder Policy

We will strive to appropriately work with multi-stakeholders, in the context in collaborative value creation not only with our shareholders, but also with our employees, business partners, customers, creditors, local communities and other various stakeholders have become important in our business management. On that basis, we will proceed with the following efforts considering the importance of return to our employees, and respect and consideration for our business partners, from the perspective that appropriate distribution of the revenue and the outcome resulting from the collaborative value creation and productivity improvement to multi stakeholders will lead to the maintenance of the momentum for wage increases and the sustainable development of the economy.

1.Return to our Employees
We will focus on maximizing the added value while achieving sustainable growth and productivity improvement through priority allocation of management resources to growth sectors, and enhancement of our employees’ potentials and improvement of their skills. Furthermore, based on the profits and achievements generated, we will raise wages in accordance with the "Major Principles for Determining Wages" and through appropriate methods that take into account the company's situation. We will aim to provide sustainable returns to employees through proactive investment in human resources, which will contribute to enhancing employee engagement and further improving productivity, even in other comprehensive improvements in compensation. Specifically, in determining the amount of bonuses to be paid for the settlement of accounts, the Company considers social conditions and the business environment, such as inflationary conditions. We have reformed our personnel system and decided to abolish the limitation on the scope of payment of housing allowances, which had previously been limited to a certain range of the neighborhood of the workplace, and pay all employees. We are also working to raise wages by expanding the range of allowances, such as the introduction of the "Daily Progress Allowance (allowance to be paid additionally every six months after joining the Company)." Furthermore, we will strive to appropriately distribute and return profits by raising wages through personnel evaluations conducted under the new personnel system. With regard to human resource investment, we are actively working to develop human resources that can respond to changes in the internal and external environment, such as providing opportunities for employees to learn on their own, and providing training and education according to the stage of the employee.  Specifically, we have introduced a subsidy system for cloud training expenses, a doctoral program for working people, etc. We will respect the diversity of each employee and aim to improve employee engagement by building a rewarding and pleasant work environment where everyone working at us can demonstrate their abilities to the fullest and play an active role.

2.Consideration for Our Business Partners
We will continue to comply with the Declaration of Partnership Building.
・Registration Date of the Declaration of Partnership Building: September 26, 2022
With regard to these items, we will proceed steadily while checking the status of initiatives.

March 31, 2023
SAWADA Kotaro
Representative Director, President and CEO
ZOZO, Inc.

Declaration of Partnership Building
【https://corp.zozo.com/en/sustainability/declarationofpartnership_en.pdf】

Editorial Policy

This sustainability page reports ZOZO Group's sustainabi​lity-relat​ed​ information. In order to build better relationships with our stakeholders, we ensure to disclose information, focusing on ESG information.

Issuer	ZOZO, Inc.
Date of publication	October 27, 2021
Target period	Target period October 2021 to June 2022 * Including the programs held before the target period
Contact Information	Please contact us for inquiries.