Sustainability

Environment <Initiatives to Address Climate Change>

■ Basic Concept

Extreme weather events and other impacts caused by climate change are becoming increasingly severe, and responding to climate change is now a global challenge. The DAIICHIKOSHO Group has positioned addressing climate change as one of its key issues. We are taking steps to reduce environmental impact while fulfilling the main mission in our Basic Policy on Sustainability – provide fun and happiness to society and contribute to healthy and enriching lives through karaoke.

■ Disclosure Based on TCFD Recommendations

DAIICHIKOSHO analyzes climate change risks and opportunities for the Group, incorporates them into business strategy and risk management, and discloses progress towards its goals in order to generate further growth while contributing to the decarbonization of society.

■ Governance

The Group has established a Sustainability Committee as an advisory body to the Board of Directors to consider and deliberate on basic policies and key matters related to climate change. The committee typically updates the Board of Directors on progress with climate change response measures about twice a year. It has also established a system to identify and monitor actual risks and opportunities as part of broader efforts to strengthen governance related to climate change.

■ Strategy and Risk Management

We have identified risks and opportunities that could affect the Group’s businesses in two categories – (1) transitional risks: policy and regulatory (tighter rules on greenhouse gas [GHG] emissions), market (changes in energy supply and demand), products and services (changes in demand for low-carbon products and the development of next-generation technologies), and reputational (changes in stakeholder views of DAIICHIKOSHO); and (2) physical risks: chronic (assuming 2°C rise in global temperature), resulting in environmental changes due to global warming, and acute (assuming 4°C rise in global temperature), resulting in increasingly severe natural disasters. We then explored measures to address these risks.

Material Risks and Opportunities for the Group

Scenario analysis assumptions

Anticipated business impact

Measures to be implemented

Risks

Opportunities

Transitional

Policy and regulatory

Introduction of carbon tax

Increase in business costs, supplier procurement costs and logistics costs due to the introduction of a carbon tax and carbon pricing

Lower fuel costs from improved fuel efficiency of environmentally friendly vehicles
Cost control through reduction of CO2 emissions, use of public support (tax incentives, etc.)

Reductions in electricity use
in offices and stores
Explore alternative company vehicles and improvements in logistics efficiency

Market

Energy prices

Increase in business costs due to soaring prices for fossil fuels and electricity

-

Progressively switch to renewable energy sources, etc., and save energy

Products/services

Customer needs

Higher purchasing expenses due to increase in new product manufacturing costs (OEM manufacturing)

Changes in customer values, increased demand for energy-efficient products, and potential new areas of demand

Develop products, conduct joint development with OEM partners by anticipating customer needs

Reputation

Stakeholders

Increase in reputational risk from delayed response to climate change

Increase in reputational opportunities through appropriate responses to climate change

Appropriately disclose sustainability initiatives

Physical

Chronic
(2℃)

Rise in average temperature, changes in weather patterns

Higher energy costs for air conditioning, refrigeration, etc. at business sites
Logistics delays or accidents due to increased rainfall and strong winds

Increased use of karaoke facilities by addressing emerging customer needs, such as growth in indoor leisure activity

Reduce GHG (CO2) emissions
Develop products with eco-friendly characteristics and functions

Acute
(4℃)

Increasingly severe abnormal weather

Higher risk of natural disasters at offices and stores in high flood risk areas
Suspension of services due to interruptions to procurement and logistics

-

Coordinate with local communities during disasters
Review business continuity plan (BCP)
Ensure employee safety (disaster emergency stockpiles, wellbeing checks, regular drills , etc.)

■ Indicators and Targets

To achieve carbon neutrality, we aim to reduce the Group's GHG emissions (Scope 1 and Scope 2) to zero in real terms by FY2050.
Specifically, we will help to realize a decarbonized society by saving energy and progressively switching to energy generated from renewable sources.

■ Future Initiatives

CO2 emissions for FY2019 and FY2020 are calculated based on parent operations. From FY2021, we will begin calculating CO2 emissions on a Group basis and disclose this data together with information about initiatives to save energy.
We will also consider adopting the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

■ Initiatives to Reduce Environmental Impact

・Reducing the use of paper

Previously, DAIICHIKOSHO used up to 7,800 tons of paper each year to publish music guides for karaoke customers. Aiming to reduce our impact on the environment, we were the first company in the industry to develop a karaoke machine remote control device with an integrated digital music guide. We started selling the devices in 2002.
The devices have become very popular, with total sales exceeding 1.4 million units as of June 30, 2021. The wide uptake of the devices has seen a steep drop in the volume of paper needed to publish physical music guides from a peak level of around 7,800 tons annually to zero today.
*Publication of the physical music guides ended in March 2020.

Amount of paper used for physical music guides

Physical music guides
Remote control device with integrated digital music guide

■Environmental measures at karaoke rooms and restaurants

▶Waste oil recycling

▶Store uniform recycling and rental

▶Introducing LEDs for store lighting

▶Introduction of biomass straws

▶Use of recycled toilet paper

*BIG ECHO includes sub-brands such as Karaoke Mac

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