3Sustainability Management

Core ThemeCore Theme 3

Tracking of Environmental Footprint across the Value Chain

Ecological Inclusion

MARUI GROUP views all of its business assets as being borrowed from society, and is therefore promoting
eco-friendly business activities through means such as combating climate change and preventing pollution ina concerted Groupwide effort. In addition, we recognize our responsibility as a producer to track our environmental footprint across the entire value chain, from the procurement of raw materials and product creation tothe sale and disposal of products.
Scope 3 Emissions Data (Fiscal Year Ended March 31, 2017)MARUI GROUP’s Vision

Raw material
procurement

Integrated Group efforts to reduce environmental footprint

MARUI GROUP views all of its business assets as being borrowed from society. Based on thisbelief, all Group employees practice autonomy in expanding the scope of our socially beneficial
activities and proposing fulfilling lifestyles steeped in the unique characteristics of MARUIGROUP. This objective is to be accomplished while advancing eco-friendly business activities.

Reduction initiatives related to private brandproducts

MARUI GROUP is addressing social issues by expanding its reuse initiatives, which include
allowing customers to trade in products they no longer use for resale, and its reduction
initiatives, which include reducing waste by preventing the creation of products that go unused
due to not meeting customer needs.

Responsible procurement activities withbusiness partners

MARUI GROUP recognizes that it has responsibilities as producer that span the entire value
chain, which encompasses everything from raw material procurement through to productcreation, sales, and disposal. Through co-creation with stakeholders, we strive to contribute to
local communities while also going further to address human rights issues and improve work
environments across the value chain.

Innovative services for reducing
environmental impacts

MARUI GROUP shall utilize its unique platform, which combines its strengths in IT and logistics,
in its Retailing and FinTech businesses to develop innovative services that deliver new forms ofconvenience, addressing social change and customer needs while also reducing environmental
impacts.
www.0101maruigroup.co.jp/en/sustainability/theme03/

Principal Data2013

2014

2015

2016

2017Greenhouse gas emissions (Scope 1) (t-CO2)

10,727

13,044

12,58014,434

14,920

Greenhouse gas emissions (Scope 2) (t-CO2)

76,039106,085

98,637

89,179103,264

Greenhouse gas emissions (Scope 3) (t-CO2)—

550,612530,595

509,070

489,439

Greenhouse gas emissions per unit
(per unit of operating income)

—

24.7

22.9

20.7

19.4

1,998,182

2,525,815

2,350,595

2,305,099

2,341,454

00

78

387

386

Total waste (tons)

13,24013,62013,39012,90015,039Waste recycled (tons)

7,950

7,860

7,840

7,7008,839

Fiscal year ended March 31 or as of March 31

Energy consumption (GJ)
Total amount of renewable energy purchased orgenerated (thousands of kWh)Post-Purchase Emissions
Scope 3: 150,000 t-CO2

Total Greenhouse
Gas Emissions acrossthe Supply Chain
600,000 t-CO2

Major Initiatives

Please refer to the sustainability section of MARUI GROUP’s website for more information.

Emissions by MARUIGROUP Scope 1 & 2:
110,000 t-CO2

Emissions from Procurement to Delivery
Scope 3: 340,000 t-CO2

We will develop eco-friendly businesses that are considerate of natural capital and propose ecologically soundlifestyles that are in harmony with nature and the environment.

Productproduction

Productdelivery

Sales
in stores

Customertransportation

Product use andrecycling

The Company calculates emissions volumes based on the Basic Guidelines on Accounting for Greenhouse Gas Emissions Throughout the Supply Chain,released by the Ministry of the Environment and the Ministry of Economy, Trade and Industry. The results of Scope 3 emissions calculations have been
confirmed by Mizuho Information & Research Institute, Inc.
Scope 3 Emissions Data
www.0101maruigroup.co.jp/en/sustainability/theme03/environment_01.html

Four Consecutive Years of Reductions in CO2
and Other Greenhouse Gas Emissions
The Company has traditionally calculated emissions of CO2
and other greenhouse gases based on Scope 1 and Scope
2 of the Greenhouse Gas Protocol, and it began calculating
emissions under Scope 3 during the fiscal year ended
March 31, 2014. We are thereby able to track environmental impacts across the entire value chain, including direct
and indirect emissions from MARUI GROUP (Scope 1 andScope 2) as well as emissions from raw material procurement, transportation, and products purchased by customers. Through this type of traceability that spans the entire
value chain, we are advancing initiatives for reducing
environmental impacts together with customers, business
partners, communities, and society as a whole. These
initiatives have helped us achieve four consecutive years ofreductions in CO2 and other greenhouse gas emissions.
FY2014660,000 t-CO2

FY2015640,000 t-CO2

FY2016610,000 t-CO2

FY2017600,000 t-CO2

Third-Party Verification for CO2 and Other Greenhouse
Gas Emissions
In order to improve the reliability of the environmental
information it discloses, MARUI GROUP began receiving
third-party verification for its CO2 and other greenhousegas emissions from the Japan Quality Assurance
Organization in the fiscal year ended March 31, 2017.
This verification is received for all 15 categories of emissions applicable under Scope 1, Scope 2, and Scope 3.

Ratio of waste recycled (%)

60

58

59

60

59

Waste sent to landfills (tons)

5,290

5,760

5,550

5,200

6,200

Report Name
Greenhouse Gas Emissions Verification Report

Business partners engaged in
CSR procurement initiatives

Scope 3 490,000 t-CO2 80.5%
Emissions from raw material procurement, transportation, andproducts purchased by customers————20

Scope 2 100,000 t-CO2 17.0%
Emissions from operation of MARUI GROUP’s stores and offices

Product carbon footprint

111

1

8

Third-Party Verification Institution
Japan Quality Assurance Organization (JQA)

Please refer to MARUI GROUP’s ESG DATA BOOKs for more information.

42

Scope 1 10,000 t-CO2 2.5%
Emissions from transportation by MARUI GROUP vehicles

www.0101maruigroup.co.jp/en/sustainability/lib/databook.html

43

Core Theme 3

Incorporating Reduction into Business Activities

Responsible Procurement Activities with Business Partners

MARUI GROUP is addressing social issues through reuse and reduction initiatives. Our reuse initiatives include
allowing customers to trade in products they no longer use, which are then resold. At the same time, we look toreduce waste through the development of private brand products that accurately match customer needs.

MARUI GROUP recognizes that it has responsibilities as producer that span the entire value chain, which
encompasses everything from raw material procurement through to product creation, sales, and disposal.
Through co-creation with stakeholders, we strive to contribute to local communities while also going further toaddress human rights issues and improve work environments across the value chain.

Lineup Offering the Perfect Fit for 100% of Foot Sizes
MARUI GROUP views product creation as the act ofmaking products that match
the physical characteristics ofindividual customers. We
facilitate these efforts bycreating products together with customers and asking
them directly about their concerns and needs. Through thisengagement, it was brought to our attention how many
shoes are thrown away because of comfort or size issues
that become apparent after their purchase. MARUI GROUP
sought to rectify this issue by improving the comfort ofshoes and expanding the range of available sizes to cover
100% of customer foot sizes. We were thus led to create
the Rakuchin Kirei series of shoes, which have sold morethan 3.5 million pairs by bringing joy to all customers. In
this manner, we endeavor to reduce waste by proposing
products that perfectly match every customer.
To quantify the results of our activities in this area, wehave identified the portion of sales accounted for by products that perfectly match customers as a key performanceindicator, and we are currently in the process of formulatinga target for this indicator to be accomplished by 2030. TheCompany plans to disclose more detailed information on thismatter in the fiscal year ending March 31, 2019.

On-site Meetings with Business Partners
In 2016, we established the MARUI GROUP Procurement
Policy. A step ahead of the release of this policy, theCompany held an explanatory forum for roughly 100 business partners related to its private brands. At this explanatory forum, we discussed the importance of addressing
human rights, labor, and other issues across the supply
chain, explaining MARUI GROUP’s policies in this regard
while using actual case studies. Business partners participating in the forum expressed their support for our stance.
In 2017, we began conducting surveys and on-site
audits of business partners to inspect their initiatives inrelation to the supply and procurement of safe andvoi.0101.co.jp/voi/webshop/customer_portal/index.jsp (Japanese only)

Try-on Store Scheme Supporting Reduction Initiatives
Try-on stores represent a new sales floor scheme thatmerges Internet sales with physical stores. In these stores,
customers can try on samples of all sizes of products andthen make purchases via Internet sales. Benefits of try-on
stores include lower investments in store fixtures and fixed
rent fees than would be required for opening a standard
store. In addition, as only samples are displayed, there isno need for inventories, decreasing the risk of losses oninventory disposal. Furthermore, the reduction in customer
returns and inventories contributes to substantially lower

Number of Clothing Items and Shoes Traded in by Customers

Approx.

5.7million

May 2010­–March 2017

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Core Theme 3

environmental impacts. This
scheme is complemented by
the distribution centers
supporting our e-commerce
operations, where we haveintroduced the AutoStore
robotic warehouse system in order to heighten efficiency.
This system allows for around 27,000 specialized storage
containers to be arranged in stacks of 12, eliminating
wasted space and tripling warehouse storage efficiency.
Moreover, the task of retrieving products, which was previously carried out by people, is now conducted by robots,
greatly reducing the amount of work needed to be performed by human hands.

trustworthy products
and to human rights
and labor environments. During on-site
audits, dedicated staff
members from theSustainability
Department holdmeetings with business partners to confirm the environmental initiatives conducted at their domestic and overseas
factories as well as their employee labor agreements andother conditions related to occupational health and safety.
www.0101maruigroup.co.jp/en/sustainability/theme03/valuechain.html

www.0101maruigroup.co.jp/en/sustainability/theme03/reduce.html

Proposal of Ecologically Sound Lifestyles
MARUI GROUP’s co-creation activities
with business partners commenced in
2009, and we have been conducting
carbon footprint initiatives, which entail
tracking CO2 emissions across the value
chain, since then to reduce environmental impacts. In the fiscal year ended
March 31, 2017, these initiatives wereapplied to eight product styles­­—seven styles of Rakuchin
Kirei series shoes and one style of Rakuchin Keikai shoes.
Furthermore, MARUI GROUP employs carbon offset
schemes as an ecological action for offsetting emissions of
CO2 and other greenhouse gases that it is unable to reducein its own operations through reductions or the absorptionof emissions elsewhere. Since 2017, we have been deciding the specific venues for carbon offset utilized based on
votes by customers and employees. These activities will becontinued going forward in order to broaden the range ofenvironmental preservation activities carried out throughco-creation with customers.
www.0101maruigroup.co.jp/en/sustainability/theme03/environment_02.html

Ratio of People Throwing Away Shoes that are No Longer Worn

92%

Based on 2013 survey of EPOS cardholders

Message from a Business PartnerShogo Fujinaga
OfficerSection 2, Department 2, Business Division 1
TAMURAKOMA & Co., Ltd.
Osaka, Japan

Responsible Procurement Activities Helping to Builda Better Society
We recently visited a factory producing MARUI GROUP
private brand apparel products together with staff from theCompany. On this visit, the first of its kind for us, a meeting
was held during which we discussed such matters as work
environments and procurement conditions. In the past, ourfocus has been ensuring that products can be delivered onschedule. I had not stepped inside a factory, whether inJapan or overseas, or thought about the cultural or historical background that shaped a specific factory. Becoming
more involved in factories has given production activities
a greater degree of transparency and enabled us to better
ensure the safety of products. Our initiatives with MARUIGROUP will no doubt help to build a better society andachieve long-term corporate growth. At TAMURAKOMA, wehope to work together with MARUI GROUP to foster relationships with the factories we use that place us on equal
footing and to spread MARUI GROUP’s concept of cocreation with customers.

Message from a Business Partner

Sungwan Chaisongcam
President
S.K.N TRADING COMPANY LIMITED
Bangkok, Thailand

Employee Unity Realized by Revising Factory
Operating ProceduresSome companies focus only on the samples provided to confirm final products or on the ability to receive products withconsistent quality. MARUI GROUP differs from such companies. I was impressed with how involved MARUI GROUP is in
the manufacturing process pertaining to its Rakuchin Keikai
shoes, offering us guidance on how to perform tests on variousmaterials and how and where these materials should be procured and other specific matters. This involvement spans allprocesses from initial planning to ordering. We recently had ameeting with MARUI GROUP centered on the importance ofensuring safety and security for employees, which opened myeyes on the topic of making factories more comfortable workplaces for employees. At factories, we have put an end to thepractice of employees relaying orders verbally, requesting thatshared instructions be presented in written form, and we havealso begun thoroughly investigating the cause of mistakes. Ouremployees are currently united in working toward a common
goal, minimizing production process mistakes.

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