Initiatives related to TCFD Recommendations

Joyful Honda is working on “creation of stores with a lower environmental impact” and “promotion of environmental activities through products” not only by providing products and services in its stores, but also by engaging in a wide range of activities to enrich local communities.
The TCFD~{*1} recommends all companies to make disclosures around “Governance,” “Strategy,” “Risk Management,” and “Metrics & Targets” related to climate change, and we will promote disclosure in line with these recommendations.
Based on our analysis of the impact of climate change on our business (risks and opportunities), we will take countermeasures to mitigate risks and capture opportunities.
In June 2023, Joyful Honda also expressed its endorsement of the TCFD recommendations.

  1. TCFD(Task Force on Climate-related Financial Disclosures) 

Governance

We consider climate-related risks and opportunities to be material management issues, and our Risk and Compliance Committee has been assessing and managing them.
However, in the future, we will establish a new Sustainability Committee chaired by the President to assess and manage climate-related risks and opportunities with the aim of implementing more concrete countermeasures. The chair will report the details of these discussions to the Board of Directors on a quarterly basis.
The Board of Directors will receive reports from the Sustainability Committee on initiatives to address climate-related risks and opportunities, supervise progress and achievement of targets, approve countermeasures, and provide advice as necessary.

Strategy

The TCFD Recommendation recommends in the “Strategy” section that “studies based on various climate-related scenarios, including a 2°C or lower scenario” be conducted.
Based on this recommendation, two scenarios were selected for the scenario analysis: the 2°C or lower (1.5°C/2°C) scenario, which is the goal of the Paris Agreement and has a more pronounced impact on the transitional aspects, and the 4°C scenario, which has a more pronounced impact on the physical aspects. The financial impact in 2050 was qualitatively assessed based on the WEO~{*3} and other data published by the IEA~{*2}.

  1. IEA(International Energy Agency)

  2. WEO(World Energy Outlook)

World in a 2℃ or lower scenario

A scenario in which temperature rise is contained within a sustainable range due to social changes resulting from tighter regulations and radical technological innovation toward a decarbonized society.
(Please refer to 1.5℃ IEA “Net-Zero Emissions by 2050 Scenario”)
(Please refer to 2℃ IEA “Announced Pledges Case”)

World in a 4℃ scenario

Scenario in which no effective countermeasures other than existing policies are taken to achieve a decarbonized society, temperatures continue to rise, and extreme weather events and natural disasters become more severe.
(Please refer to IEA “Stated Policies Scenario”)

Risks and opportunities and assessment of financial impact

2℃ or less scenario

Risks and opportunities

Risk and opportunity classification

Risk and opportunity items

Financial impact assessment

Timeline assessment~{*4}

Transition risks

Policy and legal

Increased costs due to introduction of carbon taxes

Medium

Medium to long term

Increase cost of goods sold to change to recycled plastics and biomass plastics due to plastics regulations

Medium

Medium to long term

Technology

Increased investment costs for converting buildings to ZEB

Medium

Short to long term

Markets

Increased electricity and products procurement costs due to higher electricity prices

Large

Medium to long term

Reputation

Deterioration in brand value due to delayed response to climate change and inadequate information disclosure, etc.

Medium

Medium to long term

Opportunities

Resource efficiency

Decreased costs for waste processing due to a transition to a circular economy

Small

Medium to long term

Energy source

Decreased energy costs due to the conversion to ZEB (introduction of solar power + energy conservation)

Medium

Short to long term

Products and services/Market

Improvement in corporate brand value through environmentally friendly measures ahead of peers

Medium

Medium to long term

Increased sales due to early procurement and sales of environmentally friendly products

Large

Medium to long term

4℃ scenario

Risks and opportunities

Risk and opportunity classification

Risk and opportunity items

Financial impact assessment

Timeline assessment~{*4}

Physical risks

Chronic risks

Increase in air-conditioning costs due to rising temperatures

Medium

Medium to long term

Acute risks

Decrease in sales due to suspension of business operations and incurrence of repair-costs as a result of natural disasters

Small

Medium to long term

Opportunities

Products and services/Market

Increase in sales of disaster-related products due to increasing severity of natural disasters

Medium

Medium to long term

Resilience

Rapid restart of business operations during disasters owing to securing power through the adoption of solar power generation and storage batteries

Small

Short to long term
  1. The timeline is defined as:
    Short term: Around 2025
    Medium term: Around 2030
    Long term: Around 2050

Impact, Countermeasures, and Policies for each Scenario

2℃ or less scenario

Risks and opportunities

Current initiatives

Future countermeasures

Increased costs due to the adoption of carbon taxes associated with policies and regulations aimed at decarbonization
  • Decided to install rooftop solar power generation at all stores where it is possible to do so (some are already in operation)
  • Risk hedging against higher electricity prices and carbon taxes through introduction of CPPA~{*5} and in-house solar power generation, etc.
  • Decrease products procurement costs through increased efficiency in the supply chain

Increased electricity and product procurement costs due to higher electricity prices

Increased cost of goods sold due to regulations on plastics
  • Changed to use of paper straws and wooden stirring sticks at food service outlets
  • Adoption and switchover to plastic alternatives

Increased investment costs for conversion to ZEB
  • Chiba store has been certified as ZEB Ready
  • Yoshioka store is operating as a GX Store~{*6}
  • Promotion of GX stores~{*6}

Improvement in brand value and increased sales due to sales of environmentally friendly products and implementation of environmentally friendly measures
  • Installed EV charging stations
  • Introduced sustainable products and services (617 items as of 2022)
  • Installed recycling stations
  • Information transmission and disclosure measures for Company initiatives through websites, etc.
  • Focus on development trends for environmental products at suppliers and build a structure for rapidly introducing them
  • Introduction of new value-added products and services
  1. CPPA(Corporate Power Purchase Agreement)
  2. GX Store...Next-generation store aiming for carbon negative

4℃ scenario

Risks and opportunities

Current initiatives

Future countermeasures

Increase in air-conditioning costs due to rising temperatures
  • Air-conditioning control systems including some intelligent control systems have been installed in about half of stores
  • Successive upgrading of air-conditioning equipment to the latest high-efficiency units
  • Introduction of intelligent air-conditioning control systems at all stores
  • Installation of air curtains

Increase in demand for disaster-related products due to increasing severity of natural disasters
  • Expanded selling space and items related to disasters
  • Concluded disaster-related agreements with local municipalities
  • Established a system for rapid resumption of business activities in accordance with products needs during times of emergency
  • Building a system to focus on trends in temperature increases and disaster-related product development

Risk Management

Until now, the Risk and Compliance Committee has collected and analyzed a wide range of information on climate change-related risks to understand their impact on our business, but from now on, the Sustainability Committee will conduct this analysis.
Climate-related risks selected and assessed by the Sustainability Committee are considered as holistic risks to the organization in collaboration with the Risk and Compliance Committee and are continuously monitored by both committees.

Metrics & Targets

We are targeting a 43% reduction in greenhouse gas (GHG) emissions by 2025 (versus 2013) and zero GHG emissions by 2050 with respect to Scope 1 and 2.

Metrics

GHG emissions~{*7}

Scope1

9,578t-CO₂

Scope2

41,417t-CO₂

Scope3~{*8}

883,227t-CO₂

Total

934,222t-CO₂
  1. The calculation period is from July 2021 to June 2022.
  2. Scope 3 emissions may increase due to expansion of the scope of calculation.

Targets

Target values

2025　43% reduction versus 2013

2050　Carbon neutral