- Seven & i Group Material Issues
- Material Issues 3
- Climate Change Countermeasures
Corporate Profile PDF
Seven & i Group recognizes that the issue of climate change exerts a negative impact on the stable society that is essential for the sustainable development of companies. We would like to contribute in achieving the greenhouse gas reduction targets set forth in the Paris Agreement. In the “GREEN CHALLENGE 2050” environmental declaration formulated in May 2019, we identified the decarbonized society as the ideal that we should be aiming for. We are promoting energy conservation and the expanded use of renewable energy, with the goal of reducing CO2 emissions generated from store operations by 50% compared to FY2013 by 2030 and down to net-zero by 2050.
Seven & i Holdings is affected by various risks related to climate change. These include regulatory risks from tighter regulations in Japan and overseas, physical risks from the occurrence of major disasters as well as changes in customers’ purchasing pattarn, due to the climate change or/and response to weather fluctuations. Furthermore, there are reputation risks, in which companies judged by climate change prevention/mitigation/adaptation managemen t. In particular, the impact from changes in temperature and the occurrence of major natural disasters extends beyond damage to store equipment and distribution networks, restrictions or halts to trading, and sales opportunity loss; it can also affect the Group companies’ product suppliers and raw material prices. Climate change is therefore a risk factor for all aspects of operations, from product development and production to distribution, store operations, and product lineups. Seven & i Holdings therefore recognizes that developing and implementing a business model that can cope with weather and climate change is important for maintaining its growth.
Seven & i Holdings, in order to properly analyze, evaluate, and appropriately respond to risks associated with the Group and each business, it establishes, maintains, and utilizes its comprehensive risk management systems governed by Risk Management Committee, in accordance with its “Basic Rules for Risk Management.” Risks posed by climate change are managed under this comprehensive risk management system as well.
Twice each year, each Group company identifies risks affecting that company based on the shared Group risk categories. Companies quantify risk assessments based on the degree of impact and the likelihood of occurrence of each risk, organize countermeasures for each risk in a risk assessment table, and submit the table to their Risk Department (Risk Management Committee Office). The risk assessment table should include not only quantitative but also qualitative risks, such as CO2 emission regulations, business continuity risks due to recent large-scale typhoons, and changes in growing regions and fishing grounds for product raw materials.
The Risk Management Committee meets twice annually to comprehensively determine the status of Group risks based on the risk assessments and countermeasures submitted by each Group company and monitors implementation of risk management and improvement measures by each company from the perspectives of materiality, urgency of improvements, and so on.
In principle, the status of risk management is reported to the Seven & i Holdings Board of Directors once annually.
Our enduring concern around weather and temperature change is reflected in our daily ordering activities and sales floor formation. In product development and lineups as well, we strive to provide products that meet customers’ needs by establishing a hypothesis based on weather changes over several months. At the same time, we will respond carefully to changes in customers’ purchasing behavior driven by abnormal weather and temperature changes affected by climate change.
The "Seven Farm" environmental recycling‒oriented agriculture initiative of Ito-Yokado buys the entire quantity of harvested produce, including imperfect shape/size items. This enables us to procure and sell vegetables steadily regardless of market trends. In this way, we are also addressing the aspect of stable product procurement. These Seven Farms are located in 12 places throughout Japan, covering approximately 250 ha in total. (As of February 28, 2022).
In addition, Seven & i Holdings is establishing systems to prepare for disasters associated with sudden weather phenomena, such as the numerous incidents of heavy rain and landslides that have occurred recently in Japan. For example, we have distributed booklets to employees summarizing how to respond in an emergency, and we have also been holding regular simulation drills using teleconferencing systems and so forth. Furthermore, Seven & i Holdings is constructing 7VIEW (Seven Visual Information Emergency Web), a system that enables provision, sharing, and joint use of disaster information. The system gathers together information from the Group and through cooperation with business partners.
Measures to mitigate climate change include various initiatives related to reducing our environmental impact, such as energy conservation and use of renewable energy at stores, along with forest maintenance and related activities throughout Japan.
Approximately 90% of the CO2 emissions by each Seven & i Group company are from the energy use for store operations. For this reason, we set a target of reducing CO2 emissions from store operations to net-zero by 2050 so that CO2 emissions may not increase in conjunction with the expansion of business and increases in the number of stores.
To curtail the increase in environmental impact proportionate to the increase and enlargement of stores and the expansion of products and services, each Seven & i Group company is installing energy-saving equipment such as LED lighting and solar panels when opening new stores and refurbishing existing ones. Conserving energy at stores also leads to lower costs for energy use.
For example, at Seven-Eleven Japan stores, we are promoting environment-friendly store development by converting all types of lighting to LED, including store signage, sales area lighting, and sign poles. In 2014, we introduced new specification LED lighting that can further reduce electricity usage by approximately 50%. In addition, we have made progress in installing solar panels, which are now in place at 8,775 stores (as of the end of February 2022).
Other operating companies are also promoting the wider use of renewables. As of the end of February 2022, Ito-Yokado had installed LED lighting at all of its 128 stores and solar panels at 13 stores, York-Benimaru had installed solar panels at 21 stores, and York had installed solar panels at 6 stores.
Main investments in environmental equipment—cost and effect
Projected reduction in expenses
CO2 reduction effect
As part of efforts to reduce CO2 emissions from store operations based on Seven & i Group’s “GREEN CHALLENGE 2050” environmental declaration, a large-scale solar panel generation system went into operation in July 2020 at Ito-Yokado’s Ario Ichihara store. As an effective utilization of Ario Ichihara’s space, solar panels were placed on the roof and are being used to generate some of the electricity consumed by the store. It is now possible to provide about 25% of the total electricity used by Ario Ichihara from the solar panels, as a result of which CO2 emissions from electricity use can be reduced by about 25%. It is one of the largest generation systems of its kind at a commercial facility in Japan.
Large-scale solar panels at Ario Ichihara store
Seven-Eleven Japan has signed a comprehensive agreement with Iwatani Corporation regarding the installation of hydrogen stations at stores. In March 2017, the companies opened a store with a hydrogen station in Sendai, Miyagi Prefecture, bringing the total number of hydrogen-station stores to three with the existing stores in Ikegami, Ota-ku, Tokyo and Kariya City, Aichi Prefecture (as of the end of February 2022). The 7-Eleven stores with hydrogen stations have installed pure hydrogen fuel cells to examine the potential for the using hydrogen at retail stores. The aim is to build sites that can serve as community-based social infrastructure capable of supplying products, services, and clean energy at a single point.
The 7-Eleven store with a hydrogen station at Ikegami 8-chome, Ota-ku, Tokyo
Seven-Eleven Japan opened the Ome Shinmachi 7-Eleven store as a test store for energy saving using state-of-the-art equipment and technology. As part of our efforts to reduce CO2 emissions from store operations based on the Group’s “GREEN CHALLENGE 2050” environmental declaration, this store has introduced various energy-saving structures and equipment and energy-creation and -storage systems, including highly efficient solar panels and architecture with efficient air conditioning. Where possible, we will consider expanding facilities tested and verified at this store to our other stores throughout Japan.
※The store has introduced various energy-saving equipment, including revised LED lighting, changeg walk-in door specifications, an in-store positive-pressure system, improved performance of chilled-case air curtains, and auto clean filters for refrigerators and freezers.
Overview of introduced technologies at Ome Shinmachi 7-Eleven store
In September 2019, as an initiative based on the Agreement on Cooperation and Collaboration in Promoting SDGs between Seven & i Holdings and Kanagawa Prefecture as well as Seven & i Group’s “GREEN CHALLENGE 2050” Environmental Declaration, Seven Eleven Japan started a trial test at 10 7-Eleven stores in Kanagawa Prefecture; all electric energy related to store operation is procured using renewable energy.
4R Energy Corporation’s original batteries—which uses reused batteries from the Nissan LEAF electric vehicle produced by Nissan Motor Corporation—and solar panels with significantly improved electric power generation efficiency made by Kaneka Corporation are installed at stores undergoing the trial. Electric power is used efficiently through in-house power generation. In addition, since November 2019, the procurement of electric power beyond what in-house generation is being supplied by SMART TECH Corporation based on post-FIT※1, which allowed an actual renewable energy rate of 100%※2 when combined with in-house power generation. The electricity generated during the day will be stored and used at night to save energy in stores and strengthen their function as regional infrastructure in the event of a disaster.
In addition to initiatives such as “people- and environment-friendly stores” made thus far, we aim to significantly reduce CO2 emissions through this initiative.
Overview of Initiative
With the aim of realizing 100% renewable energy use in store operations of Seven & i Group, Seven & i Holdings and Nippon Telegraph and Telephone Corporation (NTT) have been steadily introducing electricity procurement based on Japan’s first※1 offsite power purchase agreement (PPA) and electricity from NTT group-owned green power generation plants in some stores, since April 2021. This initiative means that 40 7-Eleven stores of Seven & i Group and the Ario Kameari store now aim to use 100% renewable energy in store operations.
The off-site PPA model refers to power generation facilities that are installed away from demand locations with the power generated being supplied to demand locations. This time, NTT Anode Energy Corporation will set up two solar power generation plants and engage in electricity supply※2 via the transmission and distribution grid. In an offsite PPA, the project developer sets up an offsite renewable energy generation plant specially for companies and local governments who are electricity consumers, and provides long-term supply of electricity. This was Japan’s first offsite PPA. When the electricity from the PPA is insufficient, the rest comes from green electricity generation plants owned by the NTT group, so the electricity used in store operations is 100% renewable energy.
Offsite PPA Diagram
Seven & i Group has installed approximately 2,800 chargers for electric vehicles (EVs) and plug-in hybrid vehicles (PHVs) as of the end of February 2022 in parking lots at about 110 stores in Japan, including 7-Eleven, Ito-Yokado, Ario, Seibu Department Stores, and Sogo to provide a fee-based charging service. The initiative aims to increase the convenience of the commercial facilities and establish a pattern for using EVs and PHVs of charging them while shopping. It also aims to contribute to the realization of a decarbonized society by promoting the spread of environment-friendly, next-generation cars.
Electric Vehicle Chargers
Seven-Eleven Japan Operation Field Counselors (OFCs), who support franchised store management, use leased vehicles to visit franchised stores. Seven-Eleven Japan has been phasing in hybrid vehicles for these leased vehicles. In the fiscal year ended February 28, 2022, we replaced 102 leased vehicles with hybrid models, bringing the total to 3,818 hybrid vehicles in use.
Example of leased vehicle
Since September 2019, Seven Bank has been gradually introducing new ATMs (4th generation ATMs) which consume even less power than conventional ATMs. Fourth-generation ATMs can further reduce power consumption by approximately 40% in comparison to 3rd generation ATMs, which consume 48% less power than 2nd generation ATMs. On completion of the replacement of the approximately 26,000 Seven Bank ATMs nationwide with 4th generation ATMs, CO2 emissions will be reduced by about 10,000 tons※1 annually. As of the end of March 2022, approximately 10,000 4th generation ATMs have been introduced, and we are committed to their continued sequential introduction in the fiscal year ending in February 28, 2023.
Changes in power consumption by ATMs