In October 2019, the Group participated in the "Project to Support Climate Risk / Opportunity Scenario Analysis in Accordance with TCFD" of the Ministry of the Environment. The analysis covered the domestic store management of Seven-Eleven Japan, which accounts for about 60% of the Group’s operating income (as of 2019). We disclosed the results on our website for the first time in June 2020. In fiscal year ended February 28, 2022, we further deepened our analysis by developing substantive countermeasures and quantified risks and opportunities, in addition to our previous analysis.

　In this scenario analysis, 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 SDS,*2 and NZE2050,*3 indicated in the World Energy Outlook of the International Energy Agency (IEA). We analyzed the impact of climate change as of 2030.

　For this analysis, Seven-Eleven Japan launched an internal project to formulate practical countermeasures and accurately quantify business impact, with its directors bearing that responsibility. 10 departments whose activities are affected by climate change participated. Discussions were held in each department regarding risks and opportunities and countermeasures, enabling analysis that is consistent with actual conditions, which helped to enhance our preparedness for climate change.

　We considered the transition risks and opportunities based on the decarbonization scenario in which various regulations and other measures are introduced to achieve the 1.5°C target. Of these, we estimated the following regarding the impact of the carbon tax system due to the introduction of carbon pricing, which is projected to have the biggest impact.

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)

In the fiscal year ended February 28, 2022, we calculated the estimated maximum amount of impact from a carbon tax using the assumed tax amount as of 2030 at $130/ton-CO2, with reference to the maximum amount in the IEA’s World Energy Outlook 2020. The impact of the carbon tax was estimated at ¥22.1 billion based on a simple calculation, assuming CO2 emissions increase in line with the growth of business activities.
We went on in the fiscal year ended February 28, 2023 to re-estimate the financial impact of the carbon tax based on the IEA World Energy Outlook 2022, with the carbon tax as of 2030 set at $135/ton-CO2. This resulted in an estimate of ¥27.5 billion based on a simple calculation assuming CO2 emissions increase in line with the growth of business activities. However, if we reduce CO2 emissions to 50% in 2030 (compared to FY2013 levels) as per the target defined in our “GREEN CHALLENGE 2050” environmental declaration, this will reduce carbon taxes by ¥14.9 billion to ¥12.6 billion. Furthermore, we expect that the impact of the carbon tax will eventually be eliminated by promoting efforts to achieve our 2050 net zero emission target.

　We will significantly reduce our carbon tax burden and transition risks such as higher electricity fee payments through efforts to achieve reductions in CO2 emissions. 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.

Seven-Eleven Japan is focusing the following main activities.

• 1 Energy savings
  Reduction of electricity use through employees’ efforts to save energy and the adoption of energy-saving equipment
• 2Energy generation
  The generation and use of renewable energy through onsite solar panels (solar panels have been installed at 8,823 stores as of the end of February 2023)

　We are now in the process of testing various types of equipment related to energy savings, energy generation, and energy storage to reduce CO2 emissions at Seven-Eleven stores to determine their suitability and effectiveness for more widespread deployment. In June 2023 we initiated a full-scale demonstration test at the 7-Eleven Misato-Hikonari 2-chome store with the goal of reducing the amount of electricity purchased by approximately 60% and CO2 emissions by approximately 70% compared to FY2013 levels.

　We will continue with this project to minimize CO2 emissions at stores by deploying equipment that saves, generates, and stores energy, and we will procure and utilize renewable energy from offsite sources to even further reduce CO2 emissions.

・(2023.6)Seven-Eleven to start full-scale demonstration test of new energy-efficient stores equipped with advanced facilities to save, generate, and store energy (in Japanese)

• 3 Procurement of renewable energy
  We are expanding cooperation with various electric power companies, including an offsite power purchase agreement (PPA) in three locations.

News releases related to countermeasures, etc.
・(2022.6)Hokuriku Electric Power Group and Seven-Eleven Japan held a ceremony to mark the completion of the Hokuden BEST Technoport Fukui Solar Power Plant, a project for the local production and local consumption of renewable energy (in Japanese)
For more details of Seven-Eleven initiatives, refer to the Seven-Eleven website links.
・Reduced CO2 Emissions

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

In the warming scenario, 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. Currently, the occurrence of extreme weather such as heavy rainfall that cause disasters are increasing due to global warming, and this trend would become even more pronounced under this scenario. Based on the extent of damage caused by past disasters, we have estimated the flood damage to stores in the Tokyo metropolitan area, where the greatest damage would be expected. Based on hazard maps from the Ministry of Land, Infrastructure, Transport and Tourism, if the Arakawa River were to flood by five meters or more, the resulting damages including store damage, merchandise damage, loss of sales due to closures, and restoration cost, would amount to ¥11.2 billion.

　We 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.

7VIEW
・7VIEW refers to our disaster prevention and impact reduction measures for us to “be prepared” to protect our customers, local communities, and employees at franchise stores (in Japanese)

Assumption: Estimated increases in raw material costs as of the fiscal year ending February 28, 2031 due solely to lower yields resulting from climate change

* Yield changes are estimated from data provided by the Ministry of Education, Culture, Sports, Science and Technology; the Ministry of the Environment; the Japan Meteorological Agency; the National Institute for Environmental Studies; the National Agriculture and Food Research Organization, etc.

The increase in raw material cost due to changes in weather patterns, which is expected to have the next largest impact, was estimated. The scope was set based on the composition of purchase amount: rice, laver, and livestock products (beef, pork, chicken, and eggs). Assuming that climate change will lower harvest yields and increase the purchase price accordingly, we estimate that the increase will total ¥5.7 billion. However, this estimate does not include impacts such as those related to imports. Therefore, we assume that the actual amount will be several times larger and are considering countermeasures to address this.

News releases related to countermeasures, etc.
・2023.7“Mirai Deli” products will be launched nationwide on July 14 offering sustainable raw material procurement and new product value (in Japanese)
For more details of Seven-Eleven initiatives, refer to the Seven-Eleven website links.
・Sustainable Procurement

For more details of Seven-Eleven initiatives, refer to the Seven-Eleven website links.
・Development of Eco-Friendly Merchandise
・Reduction of Petroleum-Derived Plastics

News releases related to business opportunities
・2023.7 “Mirai Deli” products will be launched nationwide on July 14 offering sustainable raw material procurement and new product value (Mirai Deli website) (in Japanese)
For more details of Seven-Eleven initiatives, refer to the Seven-Eleven website link. 
・Sustainable Procurement