J. Front Retailing
Q & A summary at the 3rd ESG presentation
Date and time: 15:00 – 16:30 on Wednesday, November 25, 2020

Q: I would like to ask Mr. Uchida. What is the difference in views between Outside Directors andInside Directors?
A: The issue with execution pointed out by Outside Directors is a lack of speed. There were ups and downs
in the business conditions of the department store industry but they have never experienced a drastic
slump before. On the other hand, many of Outside Directors are from manufacturers, which may
experience a sudden loss of demand, and with such a sense of crisis, they have taken prompt actions.
Many customers visit department stores and shop there every day, which hardly causes a sense ofcrisis that the business may decline suddenly. Even if the top management has a sense of crisis, it does
not reach the end of the organization and actual structural reforms and so on lack speed.
That is to say, it became clear amid the COVID-19 pandemic what we should have done earlier.
(Uchida)Q: I would like to ask Mr. Hirano. With regard to a low-carbon society, the government also changes
direction. However, I think it is difficult to address Scope 3 GHG emissions because it depends
on suppliers and it will take more time than Scope 1 and 2. If the world changes, will Scope 3actions also go smoothly? And I would like to know the reasons why you joined RE100 this year,if any.
A: I understand Scope 3 actions require effort. We will proceed with a plan to reduce emissions and weneed to implement it in a focused manner. First, we will work on the reduction of energy consumption
and costs that are possible within the Company, and at the same time, we will work with operatingcompanies to develop a plan to take phased actions with suppliers and customers.
With respect to RE100, as we have umbrella agreements with power companies in the Group’s key
areas including the Tokyo, Kansai and Nagoya areas, we are considering switching to renewableenergy when renewing these agreements. Beyond 2030, renewable energy prices are expected to be
reduced and we would like to continue to implement these actions. (Hirano)
Q: Did you think of joining RE100 this year? Or did you consider joining it because of case studies
such as the Shinsaibashi store and Shibuya PARCO?
A: Power consumption in stores accounts for 80% of the total in our business. In this situation, the rebuildingof the main building of the Daimaru Shinsaibashi store and Shibuya PARCO as ESG model stores
partly led us to switch to renewable energy. We are also planning to switch to renewable energy in otherstores and we thought it was the right time to join. (Hirano)
A: I would like to supplement a little. A sense of speed and a sense of crisis have been pointed out by theBoard of Directors since before COVID-19. Retailers did not worry about cash because they earn cash
income every day. It was COVID-19 that reversed the situation for the first time. Both Daimaru
Matsuzakaya and Parco closed their stores for two months. I strongly feel that this made us share a“sense of crisis” and an “expected sense of speed.” I, as a person responsible for management, think
COVID-19 provides an opportunity to greatly change our mindset. We would like to consider with people
in Daimaru Matsuzakaya and Parco.
As for Scope 3, I know we are swimming upstream. However, I believe we had good discussions at
the briefing sessions for suppliers last year. Going forward, we will have dialogue with tier 1 suppliers
through assessment and I think it is important to connect the chain of responsibilities further upstream.

We have a long way to go but would like to go ahead further. (Yoshimoto)
Q: I would like to ask Mr. Hirano. Concerning Scope 3, you said you would start specific actions
with suppliers next year. And specifically, what feedback did you receive from suppliers at thebriefing sessions? What will suppliers do specifically? In what way will you ask them to reduce
CO2 emissions? Did you share a common understanding?
A: Many people attended the briefing sessions for suppliers held last year and gained their understanding
about the Principles of Action for Suppliers. Their feedback includes: “We who will lead the next
generation should think seriously;” “I expect the Group to take leadership in expanding ESG initiatives
across the department store industry;” and “Synergy is likely to be generated on sales floors and in
events in combination with next generation education.” Meanwhile, our thoughts about cost increase
associated with investment in and resources for ESG actions and about business hours and the numberof business days were asked. The briefing sessions were held for tier 1 suppliers but I think it isimportant to connect the chain of responsibilities to tier 2 suppliers beyond tier 1 suppliers by sharing ourthoughts. Going forward, we would like to move forward together with suppliers through assessmentand dialogue. (Hirano)
Q: I would like to ask Mr. Uchida. One and a half years have passed since you were appointed as
Outside Director. I would like to know what is great about JFR and what you experience there
but do not experience as an outside director of other companies.
A: I think the Urban Dominant strategy is very valuable. The idea of improving the value of the entire area incollaboration with local community is to realize “contribution to local communities,” which is one ofmateriality issues, and close to the concept of CSV. And holding physical stores as assets and artistically
excellent buildings in Kobe and Shinsaibashi is the Group’s strength. Though physical stores have anegative factor due to COVID-19, we need to take advantage of the strength of physical stores in thefuture by combining with digital strategy.
Another good point is to make good use of Outside Directors. The Company takes more time to havediscussions between Outside Directors and officers who execute business. (Uchida)
Q: I would like to ask Mr. Yoshimoto. In terms of governance, apart from COVID-19 spreading fromlast year to this year, what do you need to strengthen in the new management structure? Whatwill you do specifically to increase speed?
A: I assumed the current position in May and became President amid the COVID-19 pandemic. What weneed to do is what we considered doing 10 years later. We are expected to do that right now. In thissituation, making Parco a wholly owned subsidiary this year provided an opportunity for us to stop andthink about the holding company and operating companies, what the holding company should be andwhat operating companies should be in terms of governance. As Parco and Daimaru Matsuzakaya asoperating companies are a former listed company and an integrated company, respectively, we have toconsider the relations between the holding company and operating companies comparing these twocompanies. Given a sense of speed and a sense of crisis as mentioned before, delegation of authority
to the execution side and thereby increasing speed are important in the current era. I strongly feel therole expected of us is to think about these relations. There is no goal of corporate governance but wewould like to think in our own way.
In addition, “structural reform,” “digital transformation” and “full-scale synergy generation with Parco”
are what we should do essentially with a sense of speed. We would like to work hard on them incollaboration with operating companies upon specific consent under the next Medium-term Business
Plan. (Yoshimoto)Q: I would like to know, in particular, the degree of penetration among actually working people
such as employees and workers from suppliers and changes in them, if any, made while you
implement ESG initiatives.
A: We have given importance to internal penetration in our ESG initiatives. 6,000 to 7,000 proposals weresubmitted in our Challenge Card program using internal network. There are many ESG-related
proposals among them. In addition, we have an ESG website and issue leaflets for employees. The
agenda of the monthly manager meetings of department stores always includes ESG issues. By doing
so, we are considering efforts to spread ESG initiatives using every occasion. (Yoshimoto)
Q: I, as an investor analyst, would like to know about economic return from these ESG initiatives;
through what channels economic vale will increase, for example, by strengthening governanceand through ESG initiatives.
A: Last week Shinsaibashi PARCO opened. It serves as a touchstone for revitalizing the local community
under the Urban Dominant Strategy. The Daimaru Shinsaibashi store opened last year. It was wellreceived and performed well. Regrettably, however, it is in a tough situation due to COVID-19. But byoperating PARCO in the north wing, synergy with the Daimaru Shinsaibashi store is dramaticallyimproved. It is just a few days after opening but PARCO itself performs very well. Many customers of thedepartment store also visited PARCO and one thousand and some hundreds of gaisho customers
visited for three days.
Another good thing is the Daimaru Shinsaibashi store also enjoys very good sales. Currently theOsaka area and the Sapporo area are in a fairly severe condition affected by COVID-19. In such asituation, I realize that the strengths of PARCO and Daimaru are combined and that a great synergy has
emerged in the area. This synergy is no doubt great return for us. I think the concept of ESG will beincorporated in it. The head of the Shinsaibashisuji Shopping Arcade said, “We really appreciate theefforts of Daimaru and PARCO to attract crowd again in the Shinsaibashisuji Shopping Arcade and theMidosuji street that have fewer foreign tourists.” We also received an opinion that we would be able tocollaborate more closely with local shopping streets in this situation. It will provide a great opportunity torevitalize the area.
One more is the customer participation recycling campaign ECOFF, as we have always said. Itcombines all actions including recycling, reuse and reducing. This year it was a little downsized to avoid
the three Cs amid the COVID-19 pandemic. But this campaign encourages recycling and leads tospending. Therefore, I think it has a possibility to contribute to companies. We would truly like toimplement more initiatives like this. We are expected to develop products and services that benefit theenvironment with suppliers and would like to do that in the future. (Yoshimoto)End