Legal Compliance and Fulfillment of Responsibilities in the International Community

This section contains information on our initiatives relating to legal compliance and fulfillment of our responsibilities in the international community, which are pursued in line with the following principles:
・We will place importance on environmental issues and strive to reduce risks.
・We will comply with domestic laws and regulations related to environmental conservation.
・We will support international environmental initiatives and work in collaboration with the international community to combat climate change.

INDEX

TCFD

Endorsement of TCFD Recommendations

The Task Force on Climate-related Financial Disclosures (TCFD), established by the Financial Stability Board (FSB), an international body participated by central banks and financial supervisory agencies of major countries, issued a recommendations report stating to "support companies that disclose information on risks and opportunities relating to climate change" in June 2017. In June 2020, the Z Holdings Group declared that it supports the recommendations, and officially joined the supporters. Referring to these recommendations, the Z Holdings Group also undertook the analysis of possible scenarios and summarized the risks and opportunities identified. Moving on, we will continue to make disclosures on governance, strategies, risk management, and indices and targets relevant to climate-related risks and opportunities.

Process of Our Scenario Analysis

Having predicted how the world might change if global warming accelerates as well as what legislations and rules may be enforced in response to such changes, Yahoo! JAPAN's division in charge of promoting CSR identified potential risks and opportunities for the Z Holdings Group's business with the aim to grasp and disclose risks related to climate change. The risks and opportunities identified were shared for feedback across the company through Yahoo! JAPAN's risk management division and were reflected in the formulation of strategies of each division after the divisions considered the specific risks and opportunities according to the characteristics of their business and services. Along with this, relevant sections in the Z Holdings Group including Yahoo! JAPAN conducted risk analysis associated with climate change and defined climate change as a risk to be prioritized within the group. Moving forward, we will continue to implement necessary measures

Scenario and Methods

We used RCP 2.6 (Low Stabilization Scenario) and IEA 450 as a scenario where the rise in the temperature is within 2°C, and used RCP 4.5 (Intermediate Stabilization Scenario), RCP 6.0 (High Stabilization Scenario), and IEA NPS as a scenario where the rise in the temperature exceeds 2°C.

Risks and Opportunities

Categorization of risks and opportunities based on TCFD recommendations			ZHD's risks and opportunities
Risks	Transition risks	Policy and legal risks	Burden of carbon tax
		Technology risk	Power shortage due to unavailability of thermal power generation Increase in electricity consumption (increase in cost) Necessity of emergency power supply
		Market risk	(Especially ads) Impact of discouraged business, falling consumer confidence (Commerce) Change in hot-sellers Frequent cancellations of events
		Reputation risk	Increase in advertising by environmentally-friendly companies
	Physical risks	Acute risk	Failure or decline in function of data centers (DC) Increased frequency in over-load or concentration of accesses Sinking of low-lying offices and DCs Relocation of DCs to higher places/latitude New construction of DCs that are not dependent on water-cooling Sharp decrease in delivery persons (decline in logistics)
	Physical risks	Chronic risk	Possibility that humans will not be able to work outdoors during daytime Hike in purchase cost of supply chain Dispersion of personnel in major services (e.g. media) Strengthening of disaster BCP Increase in injured or ill persons Discontinuance of business due to restrictions on commute Rise in land price of areas suited for living
Opportunities		Resource efficiency	Cost reduction through energy conservation, water use reduction, waste disposal and other resource efficiency improvements
		Energy source	Business promotion in power generation fields Securing of renewable energy in-house
		Products and services	Big data × Climate change business Proprietary supply chain Securing and sales of water resources Strengthening of disaster-response services Big data × home care service, etc. Decrease in advertising by environmentally-unfriendly companies (Commerce) Change in hot-sellers Revision of regulations on personal information→ improved recommendation accuracy
		Markets	Increase in demand for insurance (life, property & casualty) business Substitution of manual labor to machines Health and productivity management Climate resilient agriculture and sales of these products Promotion of underground development Increase in demand for home delivery in commerce business Importance in connecting with people Flexibility in residence areasVirtual events Regional risk analysis business Activities will be mainly held indoors Virtual events
		Resilience	Business stability by diversified service portfolio

CDP

The Z Holdings Group discloses information on the group's environmental impact to CDP, an international NGO that runs a global information disclosure system for investors, companies, cities, states and regions to manage their environmental impacts.

SBTi

SBTi is a joint initiative of CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF) that calls for companies to set science-based targets (SBTs).

In April 2021, Yahoo! JAPAN declared its commitment to setting SBTs, the greenhouse gas emission reduction targets aligned with the Paris Agreement targets.

ASKUL declared "2030 CO2 Zero Challenge," and its greenhouse gas emission reduction targets were certified by SBTi in August 2018.

RE100

RE100 is a global initiative that aims to procure 100% of the electricity consumed in its business activities from renewable energy sources.

In February 2022, Z Holdings Corporation announced its "2030 Carbon Neutrality Declaration," a commitment to reduce greenhouse gas emissions from the business activities of the entire ZHD Group to net-zero by FY2030. Furthermore, the ZHD Group also aims to join RE100 at the earliest possible stage.

In January 2021, Yahoo! JAPAN declared its commitment to the "FY2023 100% Renewable Energy Challenge," which aims to achieve the shift to 100% renewable energy for electricity used for business operations by FY 2023.

ASKUL joined RE100 in December 2017 and has declared the following two targets to be achieved.

- Medium-term target: Complete a shift to 100% renewable energy at its headquarters and logistics centers by 2025

- Target: Complete a shift to 100% renewable energy across its group including subsidiaries by 2030

The Japan Climate Initiative (JCI)

The Japan Climate Initiative (JCI) is a network bringing together organizations such as companies, local governments, and NGOs that agree to the declaration "Joining the front line of global push for decarbonization from Japan" and actively pursue climate action. It aims to strengthen dissemination of information and exchange of opinions on the climate change agenda.
The Z Holdings Group has been a member since December 2020.

Addressing Laws and Regulations Related to Environment

With regard to the Tokyo Cap-and-Trade Program (scheme for mandatory reduction in overall emissions and trading of emissions) of the Tokyo Metropolitan Government that imposes mandatory reduction of CO2 emissions on large-scale facilities, Yahoo! JAPAN achieved a reduction of 14,565t-CO2 in excess of its reduction target for the 1st period (FY2010-2014) at two of its data centers in Tokyo. The carbon credits from the extra amount reduced were presented to the Tokyo Metropolitan Government as part of our cooperation with the "Zero Emission Tokyo" initiative undertaken by the Metropolitan Government. For the 2nd period (FY 2015-2019), Yahoo! JAPAN achieved a reduction of 26,654 t-CO2 in excess of its reduction target, by pursuing measures such as reducing the use of less energy-efficient data centers and switching to more efficient data centers. In addition, Tokyo Garden Terrace Kioicho (Akasaka, Chiyoda Ward), where Yahoo! JAPAN's head office is located, has been certified by the Tokyo Metropolitan Government's Bureau of Environment as a Top-Level Facility (specified business facilities implementing excellent global warming counter measures), a rating given to facilities that have established an outstanding system for implementing measures against global warming.