Roadmap toward a decarbonized society

The Seven & i Group expressed our agreement with the TCFD recommendation in August 2019 and also joined the TCFD Consortium, established so that companies, financial institutions, and others can work together to promote initiatives. In FY2019–21 we implemented a scenario analysis targeting domestic convenience store operations (Seven-Eleven Japan) and disclosed the analysis results, enabling us to gain certain suggestions regarding risks peculiar to the convenience store operations. In the fiscal year ended February 28, 2023, as a domestic operation with the same geographical conditions, we implemented a scenario analysis of the superstore operations (Ito-Yokado, York-Benimaru, York) and disclosed the results. In the fiscal year ending February 28, 2024, judging that we could go ahead with an analysis of our overseas operation more effectively and efficiently by effectively utilizing the results of the scenario analyses in our domestic operations, we are in the process of promoting a scenario analysis of 7-Eleven, Inc.
Furthermore, as an initiative relating to natural capital, we have expressed our agreement with the principles of the Taskforce on Nature-related Financial Disclosures (TNFD), and we participated in the TNFD Forum and the Corporate Engagement Program of the Science Based Targets Network (SBTN) in January and February 2023, respectively. We are promoting preparations for analysis and disclosure based on the TNFD framework.

Below we explain the four disclosure categories recommended by the TCFD in the order of metrics and targets, strategy, governance, and risk management.

In May 2019, the Group formulated its environmental declaration “GREEN CHALLENGE 2050.” In “GREEN CHALLENGE 2050,” we have set the following specific themes: reduction of CO₂ emissions, measures against plastic, measures against food loss/waste and for organic waste recycling, and sustainable procurement. The goals are to achieve decarbonization, circular economy, and society in harmony with nature.
Toward the Paris Agreement’s goal for the world of limiting global warming to 1.5°C compared with pre-industrial levels, we have set the numerical targets of reducing CO₂ emissions stemming from the Group's store operations to 50% compared with the FY2013 level in 2030 and to achieve net zero emissions in 2050. We have also set detailed numerical targets for other themes, and we are promoting initiatives for achieving them and monitoring their progress.
In the scenario analysis for each business entity, the substantial scale of damage due to natural disasters has become clear. Already in Japan as well, abnormal weather conditions are occurring, such as increases in localized torrential rain and typhoon damage, and many local governments have issued climate emergency declarations. In order to curb the risk of natural disasters caused by climate change, once again we renew our determination to collaborate with local communities and other stakeholders to make efforts to limit global warming to 1.5 degrees Celsius compared with pre-industrial levels by achieving the targets of “GREEN CHALLENGE 2050.”

Scenario analyses based on the TCFD recommendations are implemented at the business entities of our Group. The latest analysis results and response measures for each business entity can be viewed at the following websites:

The following is a summary of scenario analysis results until the fiscal year ended February 28, 2023. We publicize the climate-change risks and opportunities that are important for our Group.

In scenario analyses at each business entity, mindful that the 1.5°C target has become the mainstream worldwide, we implemented analyses consistent with this 1.5°C target. Specifically, we set two scenarios, a “decarbonization scenario (1.5°C–2.0°C)” and a “warming scenario (2.7°C–4.0°C),” with reference to reports on future forecasts and other materials issued by governments and international organizations, including STEPS^*1, APS^*2, and NZE2050^*3, indicated in the World Energy Outlook of the International Energy Agency (IEA). We analyzed the impact of climate change taking account also of predicted business growth rates as of 2030.

*1 STEPS: Stated Policies Scenario. It is one of the scenarios shown in the IEA’s World Energy Outlook 2019 and reflects decarbonization policies and targets that had been publicized so far.

*2 APS: Announced Pledges Scenario. This scenario assumes that all climate-related commitments made by governments announcing long-term targets of net zero emissions are fulfilled in full and on time.

*3 NZE2050：Net Zero Emissions by 2050. It is one of the scenarios shown in the IEA’s World Energy Outlook 2020. Surpassing the Paris Agreement target, this scenario aims for net zero CO₂ emissions before 2050 toward achievement of the1.5°C goal.

Transition risks were considered based on the decarbonization scenario in which various regulations and other measures are introduced to achieve the 1.5°C target. Of these, for each business entity we analyzed the impact of the carbon tax through the introduction of carbon pricing, which is projected to have the biggest impact. The following is an explanation of the expected impact on the domestic convenience store operations and superstore operations.

Carbon tax impact (2030)

Assumption: Carbon tax: $135/ton-CO₂ (Maximum amount given in the IEA’s World Energy Outlook 2022)
・Foreign exchange rate: \131.62/$ (Rate used in financial statements for the term ended February 2023)

For our estimate, with reference to the IEA’s World Energy Outlook 2022, we calculated the impact of carbon tax at the maximum amount of $135/ton-CO₂ as of 2030. By putting our shoulders to the wheel to promote initiatives based on the targets outlined in our “GREEN CHALLENGE 2050” environmental declaration, we can substantially reduce the carbon tax burden in 2030. Furthermore, by achieving net zero CO₂ emissions, we expect that eventually the carbon tax burden will be eliminated altogether.

As approximately 90% of the Group’s CO₂ emissions are attributable to electricity use from store operations, the three initiatives of energy savings, energy generation, and procurement of renewable energy are being pursued to reduce emissions. We also aim to reduce emissions throughout the supply chain, including Scope 3 emissions.

(1) Energy savings

　　Reduction of electricity use through employees’ efforts to save energy and the adoption of energy-saving equipment

(2) Energy generation

　　The generation and use of renewable energy through onsite solar panels; solar panels have been installed at more than 8,000 Group stores and will be installed in 11,000 Group stores by 2030.

After reducing CO₂ emissions as much as possible through energy savings and energy generation, we will use procurement of renewable energy from offsite sources to further reduce emissions.

 (3) Procurement of renewable energy

　We are expanding cooperation with various electric power companies, including an offsite power purchase agreement (PPA) with the Hokuriku Electric Power Group.

News releases other information related to countermeasures

For more details of our initiatives, refer to the Seven & i website.

In terms of physical risks, natural disasters caused by extreme weather pose the greatest risk. It is difficult to predict when and where natural disasters will occur, and once they do, they can cause extensive damage. We are basing countermeasures for each business on the premise that weather phenomena such as heavy rainfall will occur with greater frequency and intensity and cause increasingly worse natural disasters such as flooding, so we estimate the impact of losses due to store and merchandise damage, loss of sales due to store closures, restoration costs, etc., to inform those countermeasures.

Assumption: The amount of damage is estimated for flood damage to stores in the Tokyo metropolitan area (assuming flooding of the Arakawa River) as of 2030

　* Estimated based on past flood damage

　* To ascertain the extent of damage, estimates are made without considering insurance coverage

Assumption: The amount of damage as of 2030 is estimated assuming a disaster of similar scale to 2019 (Typhoon No. 19).

　* Estimates are based on actual damage from the 2019 disaster and forecasts of an increased frequency of disasters and floods

　* To ascertain the extent of damage, estimates are made without considering insurance coverage

　Seven & i Holdings will strive to quickly reopen its stores and establishments in the event of a natural disaster as part of enhanced disaster response to continue serving as regional relief bases for local customers offering infrastructure, evacuation locations, etc. The following measures are being taken to address the increasing risk of natural disasters.

・Establish early recovery systems (such as 7VIEW)

・Continue operations in the event of a disaster with “Phase Free (a concept of securing an adequate quality of life, regardless of phases such as daily life and emergencies)” facilities, including improved performance of storage batteries and preparation of fuel reserves for emergency supply delivery

・Create a strategy and stores that anticipates flooding (preventing flood damage by expanding the installation of watertight panels and guard pipes)

・Establish disaster-resilient logistics bases and supply networks

・Develop disaster bases utilizing store infrastructure through disaster management agreements, etc.

7VIEW (system for sharing information in the event of a disaster)

Number of comprehensive alliance agreements with local governments (by operating company)

News releases related to countermeasures, etc.

　Under our environmental declaration “GREEN CHALLENGE 2050,” we set sustainable procurement as a specific theme—ensuring that food ingredients used in our original products are guaranteed sustainable, and we are taking the following measures with our suppliers to work toward a society that is in harmony with nature.

・Expand the lineup of eco-certified marine products (MSC, ASC, MEL, etc.) and eco-certified agricultural products (GAP, etc.)

・Disperse and consolidate production sites of raw materials

・Utilize digital technology and AI

・Ensure stable procurement through the expansion of raw material procurement from weather-resistant sources, such as vegetable factories, land-based aquaculture, etc.

Indoor vegetable factory exclusively for Seven-Eleven Sagamihara Vegetable Plant by Prime Delica Co., Ltd.

In this scenario, we see changes in consumer awareness as a business opportunity. As consumers develop a strong interest in sustainable products and services in line with government policy and trends toward carbon neutrality, we believe that our current efforts will lead to opportunities and further accelerate those efforts. The following initiatives being promoted under our environmental declaration “GREEN CHALLENGE 2050” are good examples.

“Seven Premium,” the private brand for the entire Group, is engaged in developing products that are both high in quality and environmentally friendly. We are actively promoting eco-friendly products at the Group’s stores to generate awareness of such products and create opportunities for customers to consider the environment with us in a way that may lead to action.

As electric vehicles (EVs) become more common on the roads in the decarbonization scenario, we believe that offering EV charging services at a greater number of Seven-Eleven and superstore parking lots will create more customer traffic. The Seven & i Group has installed approximately 2,800 chargers for EVs and plug-in hybrid vehicles (PHVs) as of the end of February 2022, and we plan to further expand this fee-based charging service in the future.

We believe that converting the containers and packaging used for our original products to environmentally friendly materials and promoting PET bottle collection and recycling will attract public attention and create more customer traffic. Taking measures against plastic is one of the initiatives specified in our environmental declaration “GREEN CHALLENGE 2050.” We have set targets to convert the containers and packaging used for our original products (including Seven Premium) to 50% environmentally friendly materials by 2030 and 100% by 2050, thereby reducing the burden on the environment from waste plastic.

For the collection of plastic PET bottles, 3,174 collection machines have been installed at Seven-Eleven convenience stores and superstores as of the end of February 2023, and the equivalent of approximately 470 million PET bottles were collected in the fiscal year ended February 28, 2023. The collected bottles are recycled into new PET bottles and other products in Japan through a “closed-loop” recycling system.

We are expanding our lineup of sustainable products that have acquired official certifications such as MSC, ASC, and MEL certifications for marine products and GAP certification for agricultural products, which we hope will attract public attention and create more customer traffic.

　As part of developing a society in harmony with nature, an ideal stated in our environmental declaration “GREEN CHALLENGE 2050,” we have set targets for sustainable procurement. The Group aims to guarantee the sustainability of the food ingredients used in our original products (including Seven Premium) to a rate of 50% by 2030 and 100% by 2050.

　In addition to promoting the acquisition of GAP certification* in cooperation with producers, for example, Ito-Yokado and York-Benimaru also sell private label vegetables such as “Fresh Foods with Traceability” (Ito-Yokado) and “Mitsuboshi Agricultural Products” (York-Benimaru), which deliver select, domestically-sourced vegetables grown with guaranteed safety, reliability, and deliciousness. These efforts are designed to disclose information about safe, environmentally sound products—who produces them, where, and with what motivations.

* Good Agricultural Practice (GAP) is a certification given to producers who engage in sustainability efforts in agriculture, awarded through third-party inspection.

In this scenario, we see changes in customer preferences and consumer behavior due to rising temperatures as business opportunities in the following ways.

・Consumers’ heightened awareness of disaster mitigation will increase demand for disaster preparedness products

・Increased sales of products that people wish to have in hot weather (cooling products)

・The frequency of outings will decrease caused in hot weather, so e-commerce services such as delivery business and Net Supermarkets will flourish

Ito-Yokado Net Supermarket, Shin-Yokohama Center (opened in August 2023)

●Meetings and roles related to climate change

*1 Group risk management system (excerpt from Risk Factors in the Seven & I website)

*2 PDCA for risk management (excerpt from Risk Factors in the Seven & I website)