Environment

Materiarity Climate change measures

Environmental Policy

The Qol Group strives to preserve the global environment in all our business activities through the following activities. Enhancement of environmental management Reducing environmental impacts Environmental communication Environmental management that the Qol Group aims for

Enhancement of environmental management

We will care for ecosystems, reuse resources and energy, and strive to manage waste thoroughly.

Thorough management of medical waste
Responding to the Industrial Safety and Health Act
Resource recycling (enforcing use of recycled toner)

Reducing environmental impacts

We are concentrating on promoting stores (hardware) with designs that do not place a burden on the environment, energy conservation, and CO2 reduction facilities and equipment.

Environmental communication

We will strive to cooperate with local communities and improve our employees' awareness of environmental conservation.

Climate change measures

Disclosure based on TCFD

The Group announced its support for the recommendations of Task Force on Climate Related Financial Information Disclosure (TCFD) in December 2022. In line with the TCFD’s goal of ensuring that companies and organizations appropriately disclose information on the risks and opportunities associated with climate change so that investors can make appropriate assessments, the Group is committed to appropriate disclosure according to the TCFD’s framework, and to working toward the goal of a sustainable society and economy. The four frameworks recommended by the TCFD recommendations (governance, risk management, strategy, and metrics & targets) are as follows.

Governance

In order to contribute to the realization of a sustainable society through its business activities, the Group has established a Sustainability Committee, chaired by the President and Representative Director. The Sustainability Committee discusses matters related to sustainability and reports its findings to the Board of Directors. The Board of Directors makes decisions on important matters reported by the Sustainability Committee and supervises the committee.

In addition, we have established the Sustainability Committee Secretariat whose members consist mainly of the heads of relevant divisions of the Group, as a subordinate organization of the committee. The Sustainability Committee Secretariat submits proposals to the Sustainability Committee after deliberation and consideration of measures and KPIs to be implemented by the entire Group. It also manages the progress of measures decided by the Sustainability Committee.

Risk management

At the Group, for risks relating to overall business identified company-wide, the level of importance is identified based on factors including the degree of impact on management and likelihood of occurrence, and the Sustainability Committee manages matters to be addressed by the Group. It also reports the contents of these matters to the Board of Directors as appropriate.

From top to bottom: General Meeting of Shareholders, Board of Directors, and Management Committee. The Sustainability Committee consults with and makes recommendations to the Board of Directors.

Strategies

(i) Identification of significant risks and opportunities

Risks associated with climate change can be categorized into those resulting from the transition to a low-carbon society (transition risk) and those resulting from changes in weather patterns, such as more severe weather disasters (physical risk). Moreover, climate change can be viewed not only as a risk but also as an opportunity due to changes in patient behavior. The following are risks and opportunities associated with climate change that the Group considers to have a significant impact. We will review and carefully examine risks and opportunities as appropriate.

		Risks	Opportunities
Transition	Policies and laws and regulations	Introduction of carbon tax Tightening regulations on CO2, plastics, and other emissions Cost increase of energy procurement due to tighter regulations	Competition through introduction of tax burden Innovation in facilities and equipment due to tighter regulations
	Conversion of markets and technologies	Opportunity loss in responding to customer needs Cost increase for R&D and capital investment Needs expansion for environmentally friendly products and packaging Changes in health concerns and dietary	Business opportunity increase for renewable products, low-carbon, etc. Sales opportunity increase for environmentally friendly products Efficiency improvement of resources, production, and logistics Birth of new markets and accessibility to markets
	Reputation	Changes in customer behavior and preferences Changes in financing and investment conditions from financial institutions and investors, and divestment Impact of delayed climate change-related disclosure on stock prices and investors	Improvement of corporate value through proactive information disclosure Changes in customer behavior and preferences Improvement of internal and external reputation and acquisition of trust through climate change initiatives
Physical	Acute	Aggravating extreme weather Soaring prices and depletion of raw materials due to disasters Increase in infectious diseases caused by climate change Disruption of logistics due to extreme weather	Strengthening of supply systems and customer acquisition by adapting to extreme weather conditions Increase in climate change-related diseases
Physical	Chronic	Soaring prices and depletion of raw materials due to rising temperatures, and increase in management costs Rise of sea level and tsunamis Increase in infectious diseases due to rising temperatures Increase in energy use due to increased air conditioning use Water shortages and droughts due to changes in rain precipitation patterns	Increase in infectious diseases Development of products and services to meet the needs of rising temperatures Limiting damage through systematic measures against climate change

(ii) Scenario analysis

Using the scenario analysis method, the Group has begun analyzing the impact on its business activities of all dispensing pharmacies and convenience stores and shops in the Pharmacy Business, and Fujinaga Pharm Co., Ltd. in the Medical-Related Business.
This analysis is conducted in accordance with multiple scenarios drawn up by the IPCC (Intergovernmental Panel on ClimateChange), IEA (International Energy Agency), and other organizations.

As mentioned earlier, we have organized the risks and opportunities based on the TCFD recommendations and external reports. The secretariat is currently leading the discussion to incorporate various opinions.

We also analyze the impact of each scenario and worldview on financial and business strategies, etc., not only negatively, but also expanding to positive impacts.

Target businesses	Pharmacy Business	Dispensing pharmacies, convenience stores and shops
Target businesses	Pharmaceutical Manufacturing Business	Fujinaga Pharm Co., Ltd.
Scenario	Transition scenario	IEA WEO2019
Scenario	Physical scenario	IPCC AR5
Target period	2030, 2050

Metrics & targets

See “Decarbonization initiatives” below.

Decarbonization initiatives

Certification obtained from SBTi, an international climate change initiative

To further accelerate our decarbonization initiatives, we have set new greenhouse gas (GHG) emission reduction targets. These new targets have been deemed to conform to the Paris Agreement, and we have obtained Science Based Target initiative (SBTi) certification. We will continue to further strengthen our initiatives to address social issues in a group-wide manner in collaboration with various stakeholders, thus helping build a sustainable society.

SCIENCE BASED TARGETS DRIVING AMBITIOUS CORPORATE CLIMATE ACTION

GHG emission reduction targets

FY3/2031 Reduce GHG emissions (Scope 1 + 2*) by 42% from the level in FY3/2024, which is the base year Reduce GHG emissions (Scope 3*) by 25% from the level in FY3/2024, which is the base year FY3/2051 Reduce GHG emissions (Scope 1 + 2*) by 100% from the level in FY3/2024, which is the base year *Scope 1: Direct emissions by a company from its use of fuels and industrial processes Scope 2: Indirect emissions from the use of electricity and heat purchased by a company Scope 3: Indirect emissions from the supply chain excluding Scope 1 and 2 emissions

Scope 1+2 reduction image

FY3/2031 Target: Reduce GHG emissions (Scope 1 + 2) by 42% from the FY3/2024 level, which is the base year. FY3/2051 Target: Achieve net zero GHG emissions (Scope 1 + 2) from the FY3/2024 level, which is the base year.

Main measures

Scope 1+2 Develop a flow to grasp energy usage in each company Grasp electricity usage at own stores Switch existing store lighting to LED Introduce electric vehicles Install solar panels Scope 3 Reduce GHG emissions by reducing container, packaging, and other materials, replacing them with alternative materials, and collaborating with business partners

Group-wide Greening campaign "Green Smile Project"

Qol Group is working on a greening campaign called "Green Smile Project."

Nationwide pharmacies are planting flowers and installing ornamental foliage plant in order to create a pharmacy that is comfortable for patients, contribute to environmental conservation and promote company-wide understanding of SDGs.

To embody "mutually supportive" and "gentle" within the Corporate Slogan "Always there to care.", we are moving forward to become an "environmental- and patient-friendly pharmacy" through the campaign.

Reducing environmental impacts through business activities

Model stores with CO₂ reduction and environmentally friendly facilities

The Qol Group strives for global environment conservation by reducing environmental impacts in all of its business activities. At pharmacies, we focus on store design that does not place a burden on the environment or stores with good energy-saving performance and CO2 reduction facilities. Examples include solar panels on rooftops and highly energy-saving LED lighting.

Solar Panels on roof

Energy-saving LED lighting

Change lighting by time of day

Environmental volunteering activities

While making efforts to increase our involvement in local communities, we are committed to raising environmental conservation awareness of each employee within the Group.

Environment beautification volunteering activities (beautification and cleaning of the surroundings of the pharmacies)
Promote Cool Biz and Warm Biz (wearing cooler clothing during summer and warmer clothing during winter to save energy and reduce CO2 emissions)
Activities for going paperless (Qol)

Promoting use of reusable shopping bags and eco-friendly plastic bags

All stores of the Qol Pharmacy Group are running the Bring Your Own Bag Campaign to reduce the use of plastic bags. When plastic bags are necessary, we use eco-friendly plastic bags containing 30% plant-derived biomass materials.