J. Front Retailing
Q & A summary at the 4th ESG presentation
Date and time: 15:00 – 16:30 on Thursday, December 2, 2021

Q: I would like to ask Ms. Sato. As an Outside Director of J. Front Retailing,
did you see improvement in the Board of Directors meeting procedures
during the two and a half year period after your appointment?
A: When I was appointed as an Outside Director, the Board mainly discussed thedetails of individual agenda items. However, our discussions have changed
to the ones from a broader perspective. For example, they discussed whatthey should do with the retail business in the future and what they would be
able to provide to customers to realize Well-Being Life. In this way, theirdiscussions have changed to the ones from a broader perspective. They
have come to discuss considering how each agenda item is positioned toenhance corporate value in the medium to long term. (Sato)
Q: I would like to ask Ms. Sato. Concerning the Board 3.0, what do you
think it means to be an outside director as a neutral lawyer?
A: As lawyers are trained in “seeing facts,” a lawyer serving as an outside
director provides a benefit in that respect. For various proposals and agenda
items, while executive members provide wishful thinking and projections, alawyer can raise questions in view of facts and the current reality partly
because of his/her expertise of “seeing facts.” And a lawyer who has seen
companies in various industries can give appropriate advice. (Sato)
Q: I would like to ask Mr. Yoshimoto. J. Front Retailing’s view of Well-Being
Life and direction of sustainability were made clearer. On the otherhand, have employees’ understanding of sustainability and specificactions accelerated or changed in the past one or two years? I would
also like to know whether suppliers’ understanding of sustainability
and collaborative actions have advanced or stagnated due to COVID-19
in the past year.
A: For employees including young ones as well as those in management
positions, I created an opportunity to explain in person the Medium-term
Business Plan after announcing it in April 2021. Approximately 1,500

employees attended and I not only explained but also held a Q and A session.
In the session, I told them that sustainability management underlies theCompany, which remains unchanged during the COVID-19 pandemic.
Particularly, while environmental issues are strongly recognized as socialissues, we share a common understanding that the Company addresses
them directly as its top priority. Though we are in a severe businessenvironment due to the COVID-19 pandemic, I feel sustainability initiatives
will become large actions that unite the minds of all employees and help findhope for the future. As a result, I feel all employees and workers fromsuppliers in our stores as one are moving forward.
For suppliers, we held a briefing session in 2019 and conducted anassessment in October 2021. We assessed what they think about and how
they address the JFR Principles of Action for Suppliers. We consider having
dialogue with suppliers who have a problem based on the results of theassessment. We plan to hold the second briefing session for suppliers inApril 2022. In the session, based on the results of this assessment, we will
share the course to be taken and the challenges to be addressed andconvey our intention to repeat assessments, briefing sessions and dialogues
in the future.
Particularly important points are to respond to human rights and to reduce
Scope 3 emissions, which cannot be solved only by the Company.
Concerning human rights, we set relevant questions and asked suppliers toanswer them. I think it is important to make joint efforts with suppliers inorder to perform human rights due diligence. To reduce Scope 3 emissions,
we selected about 500 major suppliers of the Department Store andconducted a survey concerning their current and future environmental efforts.
The results are still being tabulated, but among about 500 suppliers, there
are still few with whom we can collaborate in reducing Scope 3 emissions inparticular. Going forward, we would like to promote assessments, briefing
sessions and dialogues to increase such suppliers. (Yoshimoto)
Q: I would like to ask Ms. Sato. Could you tell me about challenges, if any,other than “to accelerate transformation,” about which you told?
A: I understand J. Front Retailing’s problem is that its Department Store has toomuch succeeded, though it may seem paradoxical. The conventional
department store model has been a traditional and successful businessmodel. Therefore, I am afraid it will be difficult to depart from existing
department store model. The same applies to Parco. It has succeeded as a
cutting-edge fashionable shopping mall. I think how they will create next newmodels from them is the birth pangs.
On the other hand, their advantage is that employees are very sincere andvalue their values of valuing customers because they inherit the company’shistory and tradition. Similarly, Parco’s advantage is that they very sincerely
hope to provide better services and products to customers. (Sato)
Q: I would like to ask Mr. Tabata. I think young human resources will growto the ones that support the future to realize corporate portfoliotransformation by participating in open innovation and gaining
inspiration from connection with external companies. Are employees
like you increasing in the company?
A: I have been given various experiences in training and jobs since I was young.
Many young human resources accumulate experience like me and they are
doing excellent jobs, such as launching new businesses in various fields. In
that sense, I feel young human resources are certainly growing in thecompany. (Tabata)
We invest more in human resources than before, for example, by providing
opportunities to study outside the company. However, I feel we do not haveenough successful experience to use directly for their activities.
AnotherADdress, which built a new business model, is a good example forthe future. We will continue to develop human resources to generate many
practices like this. (Yoshimoto)
Q: Isn’t it important to disclose to the public that human resources whowill take the central role 20 or 30 years from now are growing because
they are given opportunities and empowered?
A：This is the first time that a young employee spoke at the ESG presentation. Ithink it was a good opportunity to provide an understanding of part of ourinitiatives. Going forward, I would like to increase opportunities for humanresources who are responsible for the next generation to have dialogue withpeople outside the Group. (Yoshimoto)Q: Concerning Outside Director’s view that you lack the speed, what do
you think you need to do to speed up?
A: One of the reasons why we lack the speed is that it was difficult to change ourmindset from the scheme we had when we were a Company with an Audit &Supervisory Board. It took time until we adapted to the system in which wespeed up operations by authorizing executive members after making atransition to a Company with Three Committees (Nomination, Audit, andRemuneration Committees). Now our system has changed to the one inwhich we leave what we should leave to operating companies while theBoard of Directors monitor so that we can speed up. I strongly hope that ourlack of speed will not be noted in the future. (Yoshimoto)
Q: Is it right in thinking that AnotherADdress and other initiatives will
become bigger in scale and have an economic impact on theperformance, etc. of J. Front Retailing Group? I would like to know what
you think about the impact of overall ESG initiatives on corporate
value.
A: The business plan of the business model of AnotherADdress has become
solid. Currently it is unprofitable but we will proceed with it seeing KPIs sothat it will earn hundreds of millions of yen five years from now. If we launchmany businesses like this, they will contribute to realizing the Well-Being Lifeof customers and lead to profitability. I would like to create a corporate culture
in which we can grow in that way. I think it will be possible. (Yoshimoto)End