3rdESG Presentation
Sustainability Management ofJ. Front Retailing Group
November 25, 2020
J. Front Retailing Co., Ltd.

YOSHIMOTO Tatsuya
Director, President and Representative Executive Officer

Create and Bring to Life “New Happiness."

1JFR Group■ Full-scale synergy creation with Parco, which became a wholly
owned subsidiary in March 20202

Surrounding Environment That Drastically Changed Due to COVID-19■ COVID-19 shock substantially changed social structure and consumption structure

Changes inconsumer
behavior andconsumer
valuesCorporatHeightenede Policy
awareness ofsafety/security
Basicand healthPrincipleRapidpenetrationof digitization

Importance ofclimatechange issues

Group Vision(JFRWAY)ECOVISION, SOCIAL VISION, AND
CORPORATE GOVERNANCE
POLICY

It is important for a company to respond to changes andcreate new existence value
3Unshakable Sustainability Management■ Realizing the Group Vision that leads to a sustainable society
Ccorporate
Credo
Basic Mission
Statement

Create and Bring to Life “New Happiness."(JFR WAY)

Sustainability Policy

Eco Vision / Social VisionCorporate Governance Guidelines
JFR Principles of Action"JFR conduct policy" "Procurement policy" "Human rights policy""Anti-corruption policy" "Occupational health and safety policy"

Value creation

Group Vision4

5 Materiality Issues■ Realizing sustainability initiatives unique to JFR
Corporate Policy
BasicPrinciple
Group Vision(JFRWAY)

JFR Principles of Conduct"JFR Action Policy," "Procurement Policy," "Human Rights
Policy," "Anti-Corruption Policy," and "Occupational Health andSafety Policy"

5Climate Actions as Top Priority■ Strengthening responses to climate change risks
Corporat● Approved as SBTe Policy● Rated “A-” by CDP
Basic● Expressed support for TCFD recommendationsPrinciple● Opened main building of Daimaru
Shinsaibashi
that uses 100% renewable energy● Opened Shibuya PARCO that saves CO2 emissions● Obtained third-party assurance for Scope 1 and 2
GHG emissions

Scope
1, 2 and 3
GHG emissions

Scope 1 and 2
GHG emissions

40%reduction(vs. SBT baseyear FY2017)

Zero2050

2030● Formulated Eco Vision● Identified “contribution toa low-carbon society” as amateriality issue● Participated in climatechange initiatives

20182020
2019● Disclosure in line with TCFD recommendations(Securities Report, etc.)● Joined RE100● Obtained third-party assurance for Scope 3
GHG emissions● Opened Shinsaibashi PARCO that uses 100%
renewable energy

6Further Strengthening Corporate Governance■ Continuous promotion of advanced initiatives
Company with Three Committees (Nomination, Audit and Remuneration Committees)(since May 2017)

2018

2019

● Initiative to strengthen group governance● Revised Corporate Governance Guidelines● Dealt with individual companies basedon the policy on exercising voting rights
regarding cross-shareholdings● Established Management Advisory
Board● Appointed Outside Director asChairperson of Audit Committee● Revised criteria for proposals toBoard of Directors● Increased the number of Outside
Directors from 5 to 62020● Revised Officer Remuneration Policy● Expanded disclosure of officer
remuneration

Revised Officer Remuneration Policy in April 2020
● Basic policy for officer remuneration is to achieve purposes to realize and promotesustainability management (= pay for purpose)● Decide ESG-related tasks as important tasks linked to officer bonuses(The status of setting these tasks are reported to Sustainability Committee held during
the fiscal year)● Established Governance Committee in October 2020
7Strengthening the Group Collaboration■ The Group is working as one to strongly promote sustainability management
Board of Directors

Advisory committee directly under
the President and Representative
Executive Officer

Corporate Policy Report
BasicPrinciple Committee
JFR Sustainability
Chairperson: President and Representative Executive Officer
Members: Presidents of operating companies

Daimaru Matsuzakaya
Department Stores

Sustainability Committee
Chairperson: President

Parco
Sustainability Committee
Chairperson: President

JFR Principles of Conduct
Generategroup synergy"JFR Action Policy," "Procurement Policy," "Human Rights
Policy," "Anti-Corruption Policy," and "Occupational Health andSafety Policy"

8Our Existence Value■ Promotion of CSV management mentioned in the Corporate CredoAchieving both social value and economic value together with stakeholders

Economicvalue Group Vision+(JFRWAY)

Sustainability+Resilience

Continue to grow with the aim of achieving inclusive growth anda sustainable society in which everyone can share the benefits of growth

9

3rd

ESG Presentation
ESG Initiatives Report

November 25, 2020
J. Front Retailing Co., Ltd.

HIRANO Hidekazu
Managing Executive Officer
Senior Executive General Manager, Management Strategy Unit
Create and Bring to Life “New Happiness."

Long-term Targets for Each Materiality Issue

2JFR
ESG Initiatives in the Year

Contribution to a Low-carbon Society

Strengthening Green Store Initiatives
Strengthening green store initiatives since FY2019
 Switch to renewable energy● Daimaru Shinsaibashi, Shinsaibashi PARCO,
Ikebukuro PARCO, Chofu PARCO

 Building a highly efficient energy system● Shibuya PARCO

Daimaru Shinsaibashi

Shinsaibashi PARCO

Shibuya PARCO
5

Toward Zero GHG Emissions
Reduced Scope 1 and 2 emissions by 16.3% in FY2019 (vs. FY2017)100
Reduced16.3% in 2019806040Target for 2030
40% reduction(approved as SBT)

Target for 2050
Zeroemissions

200

2017 2019 2020 2025 2030 2035 2040 2045 2050
6

Information Disclosure in Line with “TCFD Recommendations”
Disclosed information in line with “TCFD recommendations” in FY2020

 Expressed support for “TCFD recommendations” in May 2019
● Using them as guidelines for evaluating appropriateness of our climate actions

 Conducted climate-related scenario analysis● Drew up 2 scenarios in 2030: below 1.5 to 2°C and 3°C

 Disclosed in Securities Report● Disclosed based on 4 disclosure items presented in “TCFD recommendations”

7Renewable Energy Initiatives
Joined RE100 (Renewable Energy 100%) in October 2020

Target of the Group

Source 100% renewable energyto power business activities by 2050
(Interim target)
Source 60% renewable energy to power business activities by 2030

8

Management of the Entire Supply Chain

Toward Reduction of Supply Chain Emissions
Scope 3 emissions in FY2019: 3,782,555 t-CO2 **Obtained third-party assurance■ Implement initiatives in phases to achieve SBTCollaborate withcustomers andsuppliers*The size of circles indicates theemissions share of each category.

4. Upstream
transportation
anddistribution

9. Downstream
transportationand distribution

2. Capital goods
13. Leased
assets

12. End-of-life
treatment ofsold products

7. employee
commuting

11. Use ofsoldproducts
5. Waste

6. BusinesstravelWhiteAct solely

3. Fuel- and energyrelated activities(not included in
Scope 1 or 2)

FY2021

1. Procured goods and services

FY2022End of FY2023

10

Toward Sustainable Procurement
Sent Principles of Action to 9,444 suppliersand 530 suppliers attended briefing sessions in FY2019■ Formulated Principles of Action for Suppliers
Formulated together with JFR Principles of Action in June 2019

■ Sent Principles of Action for Suppliers
Sent to 9,444 suppliers with whom we do business directly(As of the end of February 2020, consolidated)■ Held briefing sessions for suppliers
October 2019
Daimaru Matsuzakaya Department Stores held “briefing sessions on JFR Principles of Action for Suppliers”
652 people from 530 companies attended■ Start assessment of shared Principles of Action (FY2021)
11

Strengthening Human Rights Initiatives
Launched human rights due diligence efforts in FY2020
Major initiatives related to human rights
2019

Formulated human rights policy

2020

Launched human rights due diligence
efforts
Identified human rights risks
Expanded human rights policy

2021

Start assessment
12

Job Satisfaction Reform

Realization of “Job Satisfaction Reform”■ Realization of “job satisfaction reform” through promotionof diversity and realization of work-life balance

Realization of innovation

Realization of job
satisfaction reform

Promotion of diversity
Innovation

Realization of productivity
improvement

Realization ofwork-life balance
Productivity improvement

JFR Women's School

Telework
Challenge Card

Working while raisingchildren

14Realization of Work-Life BalanceInitiatives Accelerated by COVID-19■ Promotion of telework70%
teleworking(JFR Head Office)
As of November 2020

Work-life balance
Improved

Working hours / workload
sense of accomplishment
and motivation
Unchanged■ Promotion of health management
Efforts to prevent COVID-19
・ Daily temperature checks and report (including teleworking employees)
・ Information and online interviews provided by industrial doctors
16Male Participation in Childcare and Prevention ofEmployee Turnover due to Childcare and Nursing Care

● Promotion of male participation in childcare

18 male employees took childcare leave in FY2019● Prevention of employee turnover due to childcare and nursing care

Checked reasons for retirement in FY2019■ Efforts to prevent employee turnover due to nursing care
Balancing work and nursing care through flexible work styles that combine various systems

Nursing care
supportsystems

Worksystems

Telework

17

Promotion of Diversity

Promotion of Women’s Empowerment
Ratio of women in management positions in FY2019: 16.6%■ Increased 1.9% compared to FY2018
18180

16.6
1614.31412160

153

12.2
11.1

14.7

143
134

10.4

120

113

10140

100

103

No.
No.ofof Female
women Managersin management positions
93

880

660

4402200

Percentage
of femalemanagerial positions
staff
Ratio of womenin management

0FY2014

FY2015FY2016FY2017FY2018FY201919

Promotion of Senior Empowerment andPromotion of Employment of Disabled People● Promotion of Senior Empowerment
EmpowermentParticipation of Seniors
Extended retirement age to 65 (5 companies) in FY2020● Promotion of employment of disabled people
Employment ratio of disabled people in June 2020: 2.21%
Special subsidiary company JFR Create
Work styles considering the status ofdisabilities

20

Coexistence with Local Communities

Urban Dominant Strategy
Opened main building of Daimaru Shinsaibashi andShibuya PARCO in FY2019

Daimaru Shinsaibashi

Shibuya PARCO■ Opened BINO Sakae and Shinsaibashi PARCO in November 2020

BINO Sakae

Shinsaibashi PARCO

22

Next 3-year Targets

Next 3-year Targets■ 2021-2023 targets
Long-term targets

2018-2020 forecast

2021-2023

Scope 1 and 22050
Zero CO2 emissions2030
40% reduction of CO2 emissions

21% reduction of CO2 emissions(vs. FY2017)30% reduction of CO2 emissions(vs. FY2017)

Scope 32030
40% reduction of CO2 emissions

11% reduction of CO2 emissions(vs. FY2017)

Under consideration linked tothe Medium-term Business Plan

2030
100% penetration of JFR
Principles of Action for Suppliers

Formulated Principles of Action andasked suppliers to support

25% penetration
through monitoring

Main building of Daimaru Shinsaibashi
Shibuya PARCO
Shinsaibashi PARCO
BINO Higashinotoin
BINO Okachimachi
BINO Sakae

Under consideration linked tothe Medium-term Business Plan

2050
Achievement of sustainable andadvanced urban development
through mutual collaboration
between local communities,governments and retailers by
combining urban developmentthat makes use of the area’s
assets, which is the strength ofthe Group, with solutions toenvironmental issues

Progress

Steady-Steady-24

Next 3-year Targets■ 2021-2023 targets
Long-term objectives

2021-2023

2018-2020 forecast

Progress

Ratio of women in management positions
30% in 2025
Aim for 50% in 2030

FY202020%26%

Steady2030
Aim for retirement at 70

Introduced retirement at 65 in 2020
5 companies

Aim to introduce
retirement at 65
in stages in the Group

Steady2030
Employment ratio of disabled people: 3.0%

June 1, 2020
2.21%

June 1, 2023
2.4%

Steady2030
Ratio of men taking childcare leave: 100%2025
Turnover rate due to childcare andnursing care: 0%

SteadyActual number of takers
26 people

Usage rate: 100%

2.1%
(Calculated since 2020)

Less than 1.0%

Steady25

3rd

ESG Presentation
Current Status of JFR Governance Seen by Independent
Outside Director and Expectations for the Future

November 25, 2020
J. Front Retailing Co., Ltd.
UCHIDA Akira, Director
Create and Bring to Life “New Happiness.”Agenda1. Introduction
2. Corporate Governance Reform Efforts
3. Activities of Remuneration Committee
4. Role of Independent Outside Directors
5. Future Expectations and Challenges

2Corporate Governance Reform Efforts
Company with an Audit & Supervisory Board
CG Code was published2015● Started to evaluate
Board of Directors● Started to evaluate
managerial talents● Prior explanation toOutside Directors

2016● Studied optimal organizational structure● Reviewed criteria for proposals toBoard of Directors(Clarified details of each large category,reviewed quantitative criteria)● Started Board retreat

2017● Changed organizational structure (May)● Reviewed criteria for proposals to Boardof Directors(Expanded delegation to the execution side)● Added “matters to be consulted” to Boardagenda● Formulated Officer Remuneration Policy

Company with Three Committees (Nomination, Audit and Remuneration Committees)
2018● Reviewed annual agenda planand strengthened discussions on
strategic PDCA
● Initiative to strengthen groupgovernance2019● Appointed Outside Director asChairperson of Audit Committee● Reviewed criteria for proposals toBoard of Directors(Related to adoption of IFRS 16)● Increased the number of Outside
Directors from 5 to 62020● Revised Officer Remuneration Policy● Expanded disclosure of officer
remuneration● Realized highly effective discussions

3

Major Board Agenda Items■ Top priority agenda for FY2020◇ Clarification of what the Group should be 10 years from now◇ Next Medium-term Business Plan starting in FY2021◇ Business structure reform to survive amid COVID-19

A lot of discussions with full focus on both urgent
issues and management direction / strategic issues

4Composition of the Board of Directors and Statutory Committees
Board of Directors

7 Inside Directors

6 Outside Directors

Woman Chairperson[Outside Directors]
Share information and exchange
opinions in executive sessions

Non-executive

Nomination Committee
Outside Directors

Audit Committee

Inside Directors

President andExecutive Officer

Outside Directors

Inside Directors

Executive

Remuneration Committee

Outside Directors

Inside Directors

President andExecutive Officer

Board Chair

Committee Chair

Committee Chair

President andExecutive Officer

Board Chair

Committee Chair

5Activities of Remuneration Committee
Revised Officer Remuneration Policy (April 2020)◇ Clarified our approach to sustainability management(Explicitly states Corporate Credo, the Group Vision, materiality policy, etc.)◇ Explicitly states that important tasks of individual officers are connected to materiality
issues in the process to determine their bonuses◇ Added statement concerning forfeiture of remuneration, etc. (clawback and malus)Started to disclose individual amounts of remuneration of officers (May 2020)◇ Disclose the amounts of individual remuneration of all officers in Securities
Report, even if the total remuneration does not exceed ¥100 million
6

Activities of Remuneration Committee■ Major agenda items for FY2020◇ Integrated review of officer remuneration system of JFR, Daimaru
Matsuzakaya Department Stores and Parco◇ New remuneration policy linked to next Medium-term Business Plan◇ Examination of remuneration system

・ Ratio of fixed portion to performance-linked portion
・ Ratio of basic remuneration and bonus to stock-based
remuneration

To remaincompetitive

New remuneration policy and revised officer remuneration
system are scheduled to be announced in April 2021

7

Major Roles of Independent Outside Directors
 Providing guidance and advice from a high and broadmedium- to long-term perspective in formulating
management strategies and making importantmanagement decisions
 Judgment on the ideal business portfolio that is notconstrained by the past Appointment of qualified Representative Executive
Officers and involvement in succession planning

8

Future Expectations and Challenges
Expectations for people who execute business◇ To complete business structure reform◇ To speed up execution

Challenges for Board of Directors◇ Subjects that need to be discussed in more depth
・ Roles of JFR Board of Directors and its composition
・ Medium- to long-term growth strategy in anticipation of
post-business structure reform9Thank you for your attention.