Risk Management

Committee Membershipwww.0101maruigroup.co.jp/pdf/committee_members_en.pdf

Appointment of New Wellness-Field Advisor

Risk management system

MARUI GROUP appoints external experts with insight into business strategies and various business areas as advisors. We anticipate that

The Group maintains five committees, i.e., the Public Relations IR Committee, Internal Control Committee, Information Security

such advisors will be powerful assets in the establishment of strategies for Groupwide efforts to accomplish the targets of the medium-

Committee, Safety Control Committee, and Insider Trading Prevention Committee to control high-risk areas in business operations andterm management plan and to improve corporate value over the medium-to-long term as we seek to address the rapidly changing operat-

strive for speedy operational improvement and the prevention of accidents. At the same time, the Compliance Promotion Board, chaired

ing environment and an ever-diversifying society. Regular meetings of advisors are held once every two or three months, at which theby the Representative Director, is set up to coordinate the functions of all the committees.

president, pertinent directors, and representatives from relevant areas attend; advice is also sought on specific themes.
In addition, ESG specialists were appointed in January 2019 to strengthen the advisor team and support MARUI GROUP in conducting
co-creation sustainability management while responding to operating environment changes over the long term. One additional advisor

The Group enhances the effectiveness of risk management by holding regular meetings participated by Executive Officers as well as
holding and establishing the meetings of the above committees and subcommittees to realize close coordination, risk information sharing, and speedy decision making and implementation of countermeasures.

with expertise in the wellness field was appointed in July 2020.

Business and other risks

Advisors

Matters stated in the business overview and financial information of our securities report that may affect the judgment of investors are as follows.

Yoshiki Ishikawa

Doctor of Medicine; Preventative Medicine Researcher; Representative Director, Well-being for Planet Earth Foundation
Appointed inJuly 2020

Wellness Specialist

Reason for appointment: Yoshiki Ishikawa possesses a wealth of experience and broad-ranging insight as a preventative medicine researcher. He is
also one of Japan’s foremost researchers of well-being and the representative director of Well-being for Planet Earth Foundation. MARUI GROUP
anticipates that he will offer valuable suggestions and advice pertaining to the Company’s management.

Masakazu Masujima

Partner, Mori Hamada & MatsumotoFintech Specialist

Reason for appointment: Masakazu Masujima is a leading expert in the field of fintech with robust insight and experience. MARUI GROUP anticipates that he will offer proposals of specific growth investment targets, advice and proposals regarding entry into the securities business, and advice
on fintech-related laws and regulations for use in the development of new FinTech businesses.
Appointed inJuly 2016

Meyumi Yamada
Director, istyle Inc.


D2C Specialist

Reason for appointment: MARUI GROUP anticipates that Meyumi Yamada will provide up-to-date information on D2C ecosystems and customer
success strategies and stimulate meaningful discussion in this regard to drive new value creation in the post-digital world.
Appointed inJuly 2017

Yutaka Matsuo

Professor; Department of Technology Management for Innovation;
Artifacts, Center for Engineering; Graduate School of Engineering; Tokyo University
Appointed in
October 2019

AI Specialist

Reason for appointment: Yutaka Matsuo possesses a wealth of insight and experience as a leading authority in AI research. In addition, he has
devoted his efforts promoting the use of AI and the cultivation of human resources in this field. One such effort was the establishment of
the Japan Deep Learning Association, an organization tasked with improving the competitiveness of industry in Japan with deep learning.
MARUI GROUP anticipates that he will offer valuable suggestions and advice for utilizing AI to improve corporate value.

Sustainability Advisors
Peter David Pedersen

Representative Director, Next Leaders’ Initiative for Sustainability; Professor, Shizenkan University
Appointed in
January 2019

Reason for appointment: As a corporate consultant, Peter David Pedersen has provided environmental and CSR consulting through various
projects with leading Japanese companies, universities, economic organizations, and government agencies and has taken part in international
symposiums. MARUI GROUP anticipates that he will offer valuable suggestions and advice for addressing future operating environment changes
and improving corporate value based on his world-leading experience and insight in the environmental and sustainability fields.

Masayoshi Suzuki

Executive Vice President, BORDERLESS JAPAN CORPORATION

Appointed in
January 201986

Environmental Specialist

Social Specialist

Reason for appointment: Masayoshi Suzuki co-founded BORDERLESS JAPAN, one of the few companies in the world that only engages in social
businesses, through which this company has addressed social issues pertaining to poverty, discrimination, prejudice, and the environment.
MARUI GROUP anticipates that he will offer valuable suggestions and advice for resolving social issues to help create a flourishing and inclusive
society.

Forward-looking statements in this document are based on the judgment of the Group at the end of the fiscal year under review.

1. Risks concerning business strategies
1-1. Risks concerning Retailing and FinTech environments• Changes in consumption trends• Occurrence and intensification ofcompetition• Expansion of the e-commercemarket, and diversification of
settlement methods• Revision of the taxation system
and relevant laws

The Group’s operations integrate Retailing and FinTech. The Group conducts operations atsales offices centered on the Tokyo metropolitan area and sales offices located throughout
the country. We anticipate to see a decline in the number of visiting customers andtransactions at stores due to changes in markets causing sluggish consumer spending, such as fluctuations inbusiness conditions, changes in economic conditions, the declining population, intensifying competition, theexpansion of the e-commerce market, and the rise in the sharing economy. In addition, the share of credit card
usage in the market is expected to shrink as a result of the technological advances such as the diversification of
settlement means associated with the transition to cashless payments, or changes in consumer behaviors. If theserisks become apparent, the financial position and business results of the Group may be affected.
In store operations, the Group has been building a stable earnings structure by transitioning to a businessstructure focused on shopping centers and fixed-term rental agreements. However, the financial position andbusiness results of the Group may be affected by cancellation of fixed-term rental agreements with tenants andincreased vacant floor space, both of which will lead to a decline in rental revenue, posting of impairment loss due
to fluctuations in land prices, increased tax burden due to a revision of the taxation system, and other factors.
Furthermore, allowance for doubtful accounts is provided with respect to operating receivables (accounts
receivable–installment and operating loans) of cards that account for a large share of the Group’s total assets,based on the occurrence of receivables in arrears, historical bad debt ratios, etc. However, payments in arrears
and uncollected receivables could increase due to worsening economic conditions, changes in relevant laws, orother factors. The financial position and business results of the Group may be affected by a sharp increase inbad debt expenses or allowance for doubtful accounts, etc. Provision for loss on interest repayment has been
provided to prepare for the repayment of interest on cash advances, by projecting the amount of future repayments based on the past actual repayments. However, if the amount of provision is insufficient for the amount of
future claims for interest repayment, additional costs may be incurred.
ImpactWe are pushing ahead with a marriage of internet and physical venues centered on our
e-commerce site “MARUI web channel.” Marui and Modi stores have been working torealize the co-existence of physical venues with e-commerce and to constantly improve
facility value by working to promote “digital native stores” to accommodate the post-digital era. The Group is
working to diversify touchpoints with customers by having stores also play a complementary role to digital.
Moreover, we endeavor to broaden our customer base and increase the number of customers by advancing“Customer Diversity and Inclusion,” providing products and services that bring joy to all customers, regardless of
their age, physical characteristics, or gender.
Recognizing the promotion of the transition to cashless payments as a big opportunity, the FinTech segment
responds to diversified payment methods by increasing EPOS Gold and Platinum cardholders and encouraging
them to use their EPOS card as their main card by implementing the strategy of maximizing the share of EPOS
card payments among household finances, such as the rent guarantee services business. Moreover, aiming torealize financial inclusion with the goal of providing everyone with the financial services they need when theyneed them, regardless of income or age, we provide initial credit by utilizing big data based on credit expertise
acquired from the time of our founding, as well as credit monitoring under the belief that “creditability should bebuilt together with customers.” We have achieved a low ratio of delinquent debt by increasing credit limits basedon usage frequency and transaction amounts and payment history.
Countermeasures871-2. Risks concerning Co-Creative Investment• Uncertainty of return on
investment• Risk of impairment loss on
investment in unlistedcompanies• Fluctuations in prices of­investment securities

2-3. Risks concerning infectious disease

The Group is promoting “Co-Creative Investment,” investing in growing companies as partof its measures to accelerate investments in intangible assets. We aim to create value
greater than the sum of individual businesses by building a business model integrating
Retailing and FinTech with “Co-Creative Investment.” In executing investments, we conduct a preliminary detailed
review through confirmation of the financial conditions and contracts of prospective investees, etc., and interviews
with their management, to fully examine risks. However, in cases where a problem that cannot be identified throughpreliminary investigation is found, e.g., the occurrence of a contingent liability or the discovery of unrecognized debt,
or depending on future business performance or changes in business policies of the investees, the expected
outcome may not be achieved, leading to the recording of an impairment loss. Furthermore, listed shares held by
the Group may be affected by price fluctuations depending on stock market trends.
Impact• Stagnation of economic activities
and decline in consumption
activities• Refraining from or suspending
business activities at stores dueto the spread of infection• Suspension of business activities
due to infection of employees

The Group conducts operations at sales offices centered on the Tokyo metropolitan areaand sales offices located throughout the country. If an infectious disease is prevalent inareas where sales offices are located or if measures such as voluntary restraints ongoing out are taken to prevent the spread of infection, the financial position and business results of the Groupmay be affected by restrictions on business activities such as suspension of store operations. Furthermore, it
may become difficult to continue business due to the spread of infection among employees. Please refer to“Response to COVID-19” on page 93 for information on MARUI GROUP’s response to the global COVID-19
pandemic.
ImpactIn order to prevent the spread of infectious diseases, employees mainly based at offices
are encouraged to remotely work from home as much as possible, while those in chargeof logistics, such as e-commerce, work in shifts. In addition, we are taking infection
preventative measures for our customers and employees at sales offices, such as installing alcohol antiseptic
solution dispensers, requiring the wearing of masks, and ensuring the adherence to social distancing.
In response to the spread of COVID-19, placing top priority on the health and safety of our customers, business
partners and employees, opening hours of our stores were shortened and urban stores were temporarily closed in
March to prevent the spread of infection. After a state of emergency was declared in April, all stores were closed
except for food corners and certain tenants. Please refer to “Response to COVID-19” on page 93 for information on
MARUI GROUP’s response to the global COVID-19 pandemic.
Countermeasures

In selecting investees, we prepare our own plan based on a business plan obtained fromthe investee, and make investment decisions after checking profitability including not only
financial returns but also cooperative returns to be generated from cooperation with theGroup. Most importantly, in “Co-Creative Investment,” we believe that we can contribute to mitigating investment
risks and increasing returns by realizing “co-creation” by uniting resources of the credit card business, the retailingbusiness, and human resources involved in them, with intangible assets such as investees’ know-how and skills,
and by greatly contributing to the achievement of their business plans and development as a corporation.
In principle, we will not engage in cross-shareholdings except for cases in which such holdings are deemednecessary for maintaining or building upon collaborative or transactional relationships that are strategicallycritical for improving corporate value. At a meeting of the Board of Directors held in February 2016, it wasdetermined that the Company had already established sufficiently strong business relationships with crossshareholding counterparties, and it was therefore decided to undertake a phased reduction in cross-shareholdings out of consideration for asset efficiency and stock price fluctuation risks.
Countermeasures

3. Risks concerning corporate operations
3-1. Risks concerning fund procurement

2. Risks concerning natural disasters, infectious disease, etc.

• Raising fund procurement
interest rates

2-1. Risks concerning large-scale disasters• Stagnation of economic activities
and decline in consumption
activities• Damage to assets held andoccurrence of repair costs• Suspension of business activities
due to damages to offices andsystems, and adverse impact on
employees

The Group conducts operations at sales offices centered on the Tokyo metropolitan areaand sales offices located throughout the country. In the event of a natural disaster suchas a large-scale earthquake or storm/flood, or a terrorist attack in areas where sales
offices are located, the sales offices may be forced to suspend business activities due to the disruption of social
infrastructure, etc., and this may affect the financial position and business results of the Group.
Impact

The Group prepares against various disasters and accidents by taking measures such as
introducing an employee safety confirmation system, formulating a disaster countermeasures manual, implementing earthquake-resistant measures for buildings, facilities,
systems, etc. (including data backup), fire, disaster, and flood prevention drills, and stocking necessities. In theevent of an earthquake, etc., the Group Earthquake Disaster Response Headquarters is established and Group
companies work together to establish systems that enable business continuity.
Countermeasures

2-2. Risks concerning climate change• Damages to stores and facilities
from typhoons, torrential rains,etc.
• Introduction of carbon taxes, etc.,
along with the tightening of
regulations

88

Impact• Constraining fund procurement

The financial position and business results of the Group may be affected by damage tostores from flooding caused by typhoons and torrential rains, and an increase in costs
due to the introduction of carbon taxes, etc.

The FinTech segment is expected to grow, with card shopping transactions increasing
and financial services including rent guarantee expanding. Amid this situation, the Group
expects to see an expansion of cash demand owing to an increase in operating receivables (accounts receivable–installment and operating loans). Accordingly, new funds will be needed in addition
to handling repayments and redemption of funds previously procured. We anticipate that risks concerning fundprocurement will grow as the procurement amount will gradually increase in the future.
In the case of turmoil in the financial market, fund procurement may be constrained. Furthermore, a substantial deterioration of the business results of the Group or a rapid decline in its creditability would make it difficult toborrow from financial institutions and hinder issuance of corporate bonds. If these risks become apparent, they
may materially affect the financing of the Group.
In addition, as fund procurement interest rates fluctuate depending on the market environment or otherfactors, procurement costs may sharply rise depending on such trend, and this may affect the financial position
and business results of the Group.
Impact

The Group seeks to maintain a level of interest-bearing debt to around 90% in order tocontrol the risk arising from an increase in debts.
In raising fund procurement interest rates necessary for operating activities, we will
diversify the procurement methods we use by indirectly procuring funds from financial institutions, directly
procuring funds through issuance of corporate bonds and commercial paper, as well as liquidating operatingreceivables. We also utilize these procurement methods in a balanced manner.
In order to cope with the risk of refinancing, we maintain consistent annual repayment and/or redemption
levels by controlling the years of procurement. We have established a system to ensure procurement even if fundprocurement is restricted, by executing commitment line contracts or establishing overdraft facilities withfinancial institutions for such amounts to ensure liquidity.
As for the procurement interest rate, we minimize the impact of an increase in procurement costs due to thefluctuations in market interest rates by maintaining the procurement methods with fixed interest rates at a rate of
50% to 60%.
Countermeasures

The Group believes it is important to capture opportunities for growth and respond
appropriately to relevant risks resulting from climate change. Please refer to “Initiatives
Related to Climate Change and Endorsing the TCFD” on page 91 for information on
MARUI GROUP’s climate change response measures and initiatives based on the recommendations of the
Task Force on Climate-related Financial Disclosures.
Countermeasures893-2. Risks concerning information security• System failure due to an accident,
defect, etc.
• Unauthorized entries and accessfrom outside, and virus infection• Leakage of customer information

1. System-related
The Group employs a variety of computer systems and communication networks. In theevent of a system error due to a hardware or software defect, or a communication
network failure, a system delay, a service outage or the alteration of a website due to unauthorized access fromoutside, etc., it may affect the financial position and business results of the Group.
Impact

2. Personal information-related
The Group maintains EPOS cardholder information and other personal information of many customers andstakeholders. If, by any chance, customer information is leaked or fraudulent use occurs, the Group may suffer
the risk of losing social credibility and incurring liability for damages, which may affect the business performanceof the Group.
1. System-related
The Group operates systems aiming at stable operation by duplicating computer
systems and communication networks, replacing systems regularly, as well as preventing computer viruses or unauthorized entries. In addition, the Group strives to further strengthen information
security by utilizing risk assessment by outside consultants.
Countermeasures

2. Personal information-related
The Group recognizes the enhancement of Groupwide information security, such as the protection of customer
information and other information assets held by the Group against unauthorized access or cyber attack, as a
top management priority. By establishing the MARUI GROUP Information Security Policy and the MARUI GROUP
Privacy Policy, we are working to properly manage and protect all the personal information obtained.
Specifically, based on the Act on the Protection of Personal Information, other laws and regulations, andrelevant guidelines, standards, etc., we take safety management measures concerning personal information.
At the same time, we continue to properly protect personal information by constant improvement throughimplementation and operation of the personal information protection management system.
Specifically, our Group companies handling large amounts of personal information have acquired the“PrivacyMark” and practice appropriate handling of personal information.

Management Policies
www.0101maruigroup.co.jp/en/sustainability/theme04/risk.html

3-3. Risks concerning human resources• Shortage of management
personnel• Intensified competition for securing human resources

We believe that growth of the Group can be attained by the development and contribution of each employee. If competition intensifies for the securing of human resources, anoutflow of human resources occurs, and a consequent shortage in future management
personnel becomes apparent, these may affect the evolution and continuity of our business.
Impact

The Group emphasizes the importance of human resource investments to accumulate
the intangible assets that are a wellspring of future corporate value, based on the culture
where all of our employees can tackle new challenges. We are currently creating anenvironment where employees can fully realize personal growth and are highly motivated owing to our conducting of systematic human resource investments from a variety of angles. These investments include educationand training programs based on open application, and the Groupwide project teams that engage in discussions
on important topics for Group management. These efforts also include the establishment of the Co-Creation
Management Academy (CMA) future leader development program, which cultivates human resources capableof promoting management reforms, as well as the secondment of employees to start-up companies.
Please refer to “Future Leader Development Program” on page 85 for details.
Countermeasures

90

CASE STUDYMARUI GROUP’s 2050 Vision and Its Three Businesses
www.0101maruigroup.co.jp/en/sustainability/
vision2050/3business_01.html

MARUI GROUP Environmental Policy
www.0101maruigroup.co.jp/en/sustainability/
theme03/environment_01.html#environment1

Initiatives Related to Climate Change and Endorsing the TCFD

Climate change should be considered as a climate crisis today. Recognizing climate change
as one of its most important management priorities, MARUI GROUP aims to “limit the rise in
the global temperature to below 1.5°C above pre-industrial levels,” as presented in the Paris
Agreement. The Group has strengthened its governance system to actively engage in creating a low-carbon society based on thelong-term targets of the Paris Agreement in accordance with the MARUI GROUP Environmental Policy as revised in April 2020. At thesame time, the Group has analyzed the potential impact of climate change on business, and is promoting initiatives in capturing
opportunities for growth and responding appropriately to relevant risks resulting from climate change. The Group endorsed the recommendations of the TCFD, which was established by the Financial Stability Board, and disclosed information in its annual securities
report for the fiscal year ended March 31, 2019, based on these recommendations. We conducted repeated analyses at this time toelaborate on opportunities and physical risks due to climate change. As we continue to focus on enhancing our information disclosurein the future, we will benchmark the appropriateness of the Group’s responses to climate change using the TCFD recommendations topromote co-creation sustainability management.

Governance
The Sustainability Committee was established in May 2019as an advisory body to the Board of Directors, chaired by the
Representative Director, for the purpose of examining anddiscussing the Group’s basic policies and major items
related to climate change. In addition, the Environment andCSR Committee was established as a subordinate of the
Sustainability Committee for carrying out duties pertaining
to the management of relevant risks and other mattersbased on its instructions. In formulating business strategies
and implementing investment and financing, we will
strengthen our governance related to climate change basedon this system by comprehensively discussing and making
decisions with considerations for the MARUI GROUP
Environmental Policy and other major items related toclimate change.
Business strategies(Business risks and opportunities)
Recognizing that a 4°C rise in the global temperature resulting from climate change would have an enormous impact
on society, we believe it is important to work together tocontribute to the movement seeking to limit global warming
to below 1.5°C above pre-industrial levels. In order tostrengthen our ability to respond to scenarios below 2°C(with a target of 1.5°C), we will identify the impact of climate-related risks and opportunities on our business, andproceed to formulate relevant strategies.
The Group aims to create a new business model integrating Retailing and FinTech with “Co-Creative Investment” that
leads to mutual development, by investing in start-ups, etc.,with which we can share our corporate philosophy or
visions. Climate change would pose such risks as damages
to stores, facilities, etc., from floods caused by typhoons
and torrential rains, and an increase in costs due to theintroduction of carbon taxes along with tightened regulations. On the other hand, we view the provision of goods
and services responding to increased consumer environmental awareness and investing in eco-friendly companies
as the Group’s business opportunities.

(Analysis and calculation of financial impacts)
Financial impacts on businesses are analyzed based on our
climate change scenario, etc., and calculated by item as theamount of impact on income anticipated within the period
through 2050. As physical risks, even if a rise in temperatureis held below 1.5°C, we anticipate that flood damage will
abruptly occur due to typhoons, torrential rains, etc. Theserisks are expected to affect rent revenues, etc., due tosuspension of store operations (¥1.9 billion) and cause
building damages (¥3.0 billion). We assessed the transition
risks by estimating increases in future energy-related costs,
which are expected to be renewable power procurement
costs (¥0.8 billion) and the introduction of carbon taxes(¥2.2 billion). The relevant opportunities are expected tohave an impact on store revenue as a result of proposing
lifestyles to highly environmentally conscious consumers(¥1.9 billion), long-term revenue due to an increase in credit
cardholders (¥2.6 billion), and return from investment inenvironmentally friendly companies (¥0.9 billion). We project
long-term revenue owing to an increase in recurring payments due to credit cardholders using electrical power fromrenewable energy, leading to the conversion of cardholders
to Gold cardholders (¥2.0 billion), a reduction of procurement costs resulting from entering the power retailingbusiness (¥0.3 billion), and exemption from carbon taxes(¥2.2 billion). We will conduct analysis regularly based on
various future trends, and continue to review our evaluations and disclose relevant information.
Assumptions
Period covered
Scope

Calculation
requirements

Present to 2050
All businesses of MARUI GROUP• Analyses based on climate change scenarios(IPCC, IEA, etc.)• Calculation of financial impacts assumed
during the period by item• Calculation of risks in the amount of impact if
an event occurs• Calculation of opportunities for lifetime value(LTV), in principle• Not considering infrastructure enhancements
such as public works and technology
advancements, etc.

91

CASE STUDY

Please refer to the following website for information on recent activities (Japanese only).
www.0101maruigroup.co.jp/together/

Risks and opportunities associated with climate change
Changes in society

Physicalrisks

Transition
risks

Risks faced by MARUI GROUP

Description of risks

Approx. ¥1.9 billion

Building damages due to flooding (recovery of
power supply facilities, etc.)

Approx. ¥3.0 billion

Suspension of systemcenters

Groupwide suspension of business activities due todowned systems

Response
completed*2

Increase in demand forrenewable energy

Rise in renewableenergy prices

Increase in energy costs due to renewable energy
procurement

Approx. ¥0.8 billion(Annual)Tightening of government’s
environmental regulations

Introduction ofcarbon taxes

Tax increase due to carbon taxes

Approx. ¥2.2 billion(Annual)Changes in society

Suspension of store
operations

MARUI GROUP’s opportunities

Description of opportunities

Financial impacts

Revenue from bringing in eco-friendly tenants, orother efforts

Approx. ¥1.9 billion*3

Increase in sustainability-minded credit cardholders

Approx. ¥2.6 billion*4

Returns from investments in eco-friendly companies

Approx. ¥0.9 billion

Response to demand fromgeneral households forrenewable energy

Revenue from credit cardholders using electrical powerfrom renewable energy

Approx. ¥2.0 billion*5

Diversification of electricity
procurement

Entry into the power
retailing business

Reduced intermediary costs due to direct procurementof electricity

Approx. ¥0.3 billion(Annual)Tightening of government’s
environmental regulations

Introduction ofcarbon taxes

Exemption from carbon taxes from achieving zero
greenhouse gas emissions

Approx. ¥2.2 billion(Annual)Enhanced environmental
consciousness and change
in lifestyles
Opportunities

Propose sustainable
lifecycles

With stakeholders’ health and safety as a first priority, the Group is taking various measures. We would like to reflect on our
relationships and further strengthen our partnerships in order to overcome the coronavirus crisis.

Financial impacts

Impact on rent revenues, etc., due to businesssuspension

Flood damage due totyphoons, torrential
rains, etc.*1

Response to COVID-19*1 Assuming flooding of a river that will have the most significant effects based on hazard maps (Arakawa River) (three-month effect on two stores in the watershed areas)*2 Assuming no financial impacts as a backup center has been established*3 Increased rent revenues and credit card usage*4 Calculated revenue from credit card admission and usage*5 Calculated revenue from increased Gold cardholders due to recurring payments, etc.

Customers
Marui and Modi stores shortened business hours and someof them temporarily closed for two days in March. After astate of emergency was declared, all stores were closed
except for food corners and certain tenants. In the regions
where the emergency declaration was lifted, stores gradually resumed operations by taking infection prevention
measures, and all of the stores have resumed operations
since June. With regard to EPOS cards, we determine anynecessary changes to payment due dates, as well as informcustomers using the card for rent settlement of the government’s Housing Security Benefit system.
Business partners
Based on our co-creation philosophy aiming to enhance
stakeholders’ interests, the Group implemented measures
for strengthening partnerships such as exemption of rent in
its full amount during the stores’ temporary closings. We
will overcome this unprecedented crisis by strengthening
partnerships with our business partners, and strive toenhance our corporate value over the medium-to-long term.

Shareholders and investors
The global situation is greatly changing and the outlook is
uncertain due to the spread of COVID-19. We will, however,disclose information in a timely and appropriate manner.
We will facilitate management trusted by shareholders andinvestors by securing business continuity and stability.
Employees
Employees placed on standby at home due to the temporary closing of stores were treated as taking special leave.
At departments requiring employees to come to the office,such as call centers and logistics centers, we created anenvironment where staff can work with peace of mind bydecentralizing offices and taking thorough measures toprevent droplet infection. At the head office, the implementation rate of teleworking has risen since laptop computers
had been already introduced as part of work style reforms.
A new work style has become common along with theinfection prevention measures.

Initiatives for Building Stronger Relationships with Business Partners—Efforts to Overcome the Global COVID-19 Pandemic
Risk management
MARUI GROUP performs scenario analyses to track andassess the impacts of climate change on its businessand identify climate change-related risks and opportunities.
The identified risks and opportunities are managed in termsof strategy formulation and individual business operations
through a promotion system centered on the Sustainability
Committee. The content of deliberations by the Environment and CSR Committee, which comprises officers ofGroup companies (retailing, facility management, distribution, building management, etc.), is regularly reported anddiscussed at the Sustainability Committee, and reports andadvice are provided to the Board of Directors as necessary
for specific items. Going forward, strategies and measures
will be examined based on a myriad of factors. External
factors on which information will be shared include climatechange and other trends that may impact corporate strategies as well as legal and regulatory revisions. Internal factors examined will include progress in the measures ofGroup companies and future risks and opportunities.

92

Indicators and targets• The Group has set environmental efficiency (ratio of operating income to CO2 emissions) and the ratio of circularrevenue (ratio of circular sales/transactions to total
Retailing segment transactions) as indicators for green
businesses.
• Our Groupwide greenhouse gas emission reduction targets are as follows: an 80% reduction in emissions attributable to Scope 1 and Scope 2 and a 35% reduction
attributable to Scope 3 from the level in the fiscal year
ended March 31, 2017 by 2030 (a 90% reduction in emissions attributable to Scope 1 and Scope 2 from the level inthe fiscal year ended March 31, 2017 by 2050); and they
were certified as “targeting 1.5°C” by the SBT initiative in
September 2019.
• The Group has set a target of procuring 100% of the electricity used in its business activities from renewable powersources by 2030 (medium-term target: 70% by 2025) andbecame a member of RE100 in July 2018.

10%–15% reductionof fixed rent andcommon area
charges(for March)

Exemption of rent
and common area
charges in fullamount for business partners’
closing period

Removal of minimum guaranteed
sales of business
partners of consignment sales (for aperiod from March
to August)

Return one to twomonths’ worth of
security deposits attheir request (forbusiness partners
who had deposited
for six months or
longer)Postponement of
payments for aperiod from May to
July by six months
at their request

Assist customers infiling an “application
for rent support
grant”

Crowdfunding Support through EPOS Cards
Epos Card Co., Ltd., started accepting donations to help combat the
global COVID-19 pandemic in April 2020. These efforts wereexpanded upon in July 2020 through the establishment of a special
website showcasing crowdfunding projects that customers can
support on an individual basis. Through coordination with three
crowdfunding companies, we allow customers to support crowdfunding through EPOS cards.
www.to-mare.com/recent/2020/-action.html (Japanese only)93