Environmental
Reduction of GHG emissions as a measure against climate change
We will take actions to measure our CO₂ emissions and formulate and implement strategies to demonstrate the reduction effects, in order to continuously grow our business value while reducing and controlling CO₂ emissions, which are one of the causes of climate change risks.
[Reduction Target]
The total amount of GHG emissions (Scope 1 + Scope 2) from business activities must be reduced to 50% of 2020 levels by 2030.
Target major logistics Hubs (as of 2024)
- - Ibaraki Prefecture, Kasama Distribution Center (hereafter referred to as Kasama DC)
- - Ibaraki Prefecture, Ibaraki Central Satellite Center (hereafter referred to as Ibaraki Central SC)
- - Hyogo Prefecture, Inagawa Distribution Center (hereafter referred to as Inagawa DC)
・Energy saving
- - Heat-insulating paint was applied to the roof
Heat-insulating paint was applied to the roof of the Kasama DC (2020), and Ibaraki Central SC (2023). This lowered the temperature of areas prone to high temperatures which lead to reduced use of electricity for air conditioning purposes and a better work environment for employees.
*The image compares the roof area of the truck berths of the Ibaraki Central SC before painting and the Kasama DC after painting in July 2021.
- - Reducing lighting brightness
The Inagawa DC utilizes a large number of Auto guided vehicle Robot (AGV) in product storage areas, etc. and human access is restricted for safety reasons in areas where robots carrying shelves come and go. The lighting brightness in this area was equivalent to that of the area where people work. However, the robot area where no people are regularly working is large, and reducing lighting brightness will lead to major energy savings (less electricity consumption).
The Company achieved energy-efficient logistics operations by using LED lighting systems with sensors that enable illumination control via tablets and reduce excess power usage. This system can be used to set lighting brightness and hours of use, acquire hourly usage history data, and set lighting according to individual schedule and group. Prior to implementation, we measured brightness at multiple locations to confirm the impact on safety and workability.
- - Optimized in-house warehouse compressor pressure used for automatic material handling and box sealing equipment, etc. (reduced electricity consumption)
- - As a corporation governed by the Energy Conservation Act, Company started to work by setting a target of reducing energy consumption 1% or more on an annual basis.
- - As a measure to reduce environmental impact through improving transportation efficiency, we launched the “container round use” initiative at our logistics bases in January 2024.
・Implementation of renewable energy
We have switched to substantially renewable energy sources for electricity used at our own properties, through the purchase of non-fossil certificates with tracking information. - Kasama DC and Ibaraki Central SC (As of July 2022) - Inagawa DC (As of June 2023.)
We have switched to substantially renewable energy sources for electricity used at our own properties, through the purchase of non-fossil certificates with tracking information. - Kasama DC and Ibaraki Central SC (As of July 2022) - Inagawa DC (As of June 2023.)
・CO₂ emissions survey.
Calculate 2020 and 2022 emissions (Scope 1-3) and complete third-party assurance.
Calculate 2020 and 2022 emissions (Scope 1-3) and complete third-party assurance.
[CO₂ emissions (t-CO₂)]
Scope |
Category |
2020 |
2021 |
2022 |
2023 |
Scope1 |
mainly Fuel consumption |
10 |
2 |
15 |
32 |
Scope2(Market-base) |
mainly Electric & Heat usage |
2,687 |
3,919 |
3,817 |
718 |
Scope2(Location-base) |
mainly Electric & Heat usage |
3,107 * |
4,042 * |
6,086 * |
7,015 |
Total(Market-base) |
2,697 |
3,921 |
3,832 |
750 |
|
Total(Location-base) |
3,117 * |
4,044 * |
6,101 * |
7,047 |
- * The CO₂ emissions calculation results are independently assured by The Association for NFI-Assurance (ANFIA). Figures marked with an asterisk (*), based on location criteria (Scope2 from 2020 to 2022), are reference verified in-house.
- * The calculation data is based on MonotaRO Co., Ltd. (Japan), which accounts for most of our group's sales.
- * Scope 1 mainly covers direct emissions from fuel consumption at distribution centers,offices and by goods transferring among distribution centers.
- * Scope 2 mainly covers emissions from the use of electric power and air-conditioning heat at distribution centers and offices.
- * In addition to an increase in shipment volume due to business expansion, electricity usage increased with the start of operations at Ibaraki Central SC in 2021, Inagawa DC Phase 1 in 2022, and Inagawa DC Phase 2 in 2023.
- * The use of renewable energy has been applied in Kasama DC and Ibaraki Central SC from July 2022 (changed to a renewable energy plan with tracking). From January 2023, this was also applied in Inagawa DC (by purchasing non-fossil certificates with tracking).
・Business Scenarios for Climate Change.
- - Developing senario addressing business risks and opportunities.
■Future initiatives
- ・CO₂ emissions survey. - Measurement of 2023 emissions for Scope 1,2,3 - Refinement of Scope 3 Calculation Model ・CO₂ emission reduction plan - Considering the introduction of renewable energy at the new DC (scheduled to start operation in 2028).
Realization of a resource-recycling model through recycling activities and waste reductions
Using technology and strength of operations for reducing the consumption of shipping packaging materials and slow moving inventory and then realizing a resource recycling model.
- ・ Completed survey of total amount of internally generated waste.
- - Identification of measures to improve reduction and recycling of cardboard boxes with high total volume and evaluation of measures in progress.
- ・ Completed ascertaining the total amount of cardboard boxes for shipments delivered to customers.
- ・ Sort recyclable products from industrial waste and promote the switch to valuable materials (recycling).
- ・ Started a trial of using damaged products (such as for copying paper) internally within the company to reduce waste.(As November in 2022)
・Continuing
- - Reducing unnecessary purchases by improving the accuracy of demand forecasts.
- - Avoiding inventory disposal through "Limited Stock Sale" pages.
- - Offering toner collection and product repair services.
■Future initiatives
- ・Improvement in the waste volume calculation process and estimation of the total amount ・Formulate and implement a waste reduction promotion plan.・Formulate and implement a recycling promotion plan. ・Formulate and implement a thorough separation plan.
Proposal and development of environment-conscious
Support for our customers' SDGs initiatives. Providing products and services that facilitate their efforts, we create MonotaRO's strength for the next generation.
- ・Actions to help for customers to choose environment-conscious products.
- ・Development of environment-conscious products under our private brand ("MonotaRO" brand)
- ・Investigating information on products manufactured by OEM manufacturers.
- ・Interviews and questionnaires implementation and analysis conducted with customers regarding procurement of environment-conscious products.
[Ecology Product Page]
By making it easier for the customers to be more environmentally conscious with materials procurement, MonotaRO contributes to the development of the whole environmentally conscious industrial society.
Ecology Product Page: https://www.monotaro.com/topic/sdgs/
Environmental certifications the customers can choose in Ecological Products (as of January 2023).
- * "Eco Mark", "Act on Promoting Green Procurement", "PEFC(Programme for the Endorsement of Forest Certification Scheme)", "Green Mark", "R Mark", "RoHS(Restriction of the Use of Certain Hazardous Substances in Electrical Equipment)"
- ・Investigating information on products manufactured by OEM manufacturers.
- ・Interviews and questionnaires implementation and analysis conducted with customers regarding procurement of environment-conscious products.
■Future initiatives
- ・Product proposals utilizing third-party certification.・MonotaRO defines criteria for environment-conscious products.
- ・Analysis of usage of product attribute information and additional proposals.
Disclosure based on TCFD
1. Introduction
The more extreme climate change (global warming) caused by CO₂ and other greenhouse gasses becomes, the more we at MonotaRO are concerned about the impact of adverse effects, such as natural disasters, abnormal weather, and loss of biodiversity, on the lives of humans and other organisms on the Earth, and on economic activities. In addition, international actions to reduce greenhouse gas emissions are expanding to combat climate change, and these actions may also have an impact on economic activities. Based on the TCFD's recommendations, we will disclose the risks and opportunities posed by climate change and continue our efforts to reduce greenhouse gas emissions.
2. Governance
In order to promote measures to address sustainability issues, including CO₂ emission reductions, we have established the Sustainability Committee consisting of the President and CEO and other members, and Task Forces (TFs) under the Sustainability Committee to address each important issue.
The Sustainability Committee reports regularly to the Board of Directors, the organization overseeing the management, and the committee also receives reports from each TF and discusses issues with them.
For each TF, the head of the department related to each important issue is appointed as its head, and practical leaders are appointed in each TF to promote actual initiatives.
[Sustainability Committee]
Sustainability-related Meeting |
Number of Meetings Held |
Main Approval, Deliberation and Report Contents (FYE 2022 to FYE 2023) |
| Sustainability Committee |
8 times in FYE 2022 8 times in FYE 2023 |
● Fiscal Year 2022
|
| The Board of Directors |
2 times in FYE 2022 2 times in FYE 2023 |
● Fiscal Year 2022
|
3. Strategy
We have examined the impact on our business and finances in the “below 2°C scenario”, in which the global average temperature increase at the end of the 21st century is limited to less than 2°C above that in pre-industrial age, and the “4°C scenario”, in which the increase is 4°C or more.
In the below 2°C scenario, it is assumed that more aggressive measures such as the introduction of a carbon tax and drastic tightening of recycling regulations will be taken because it will be difficult to achieve greenhouse gas emission reductions with measures that are merely an extension of the current methods. As a result, the scenario assumes that the price of raw materials and energy related to greenhouse gas emissions will increase rapidly, while renewable energy will become more widespread.
On the other hand, the 4°C scenario assumes that there will be no significant tightening of regulations to restrain greenhouse gas emissions. Therefore, while the popularization of renewable energy and other related measures will be limited, greenhouse gas emissions will not be sufficiently restrained and damage caused by typhoons, floods, and other abnormal weather will increase.
Although MonotaRO has subsidiaries overseas, the Company itself accounts for more than 95% of its sales. Therefore, at this time, we have examined strategies primarily on the basis of MonotaRO Co., Ltd. alone (in Japan).
Physical Risk
(* Assumes risk around 2050)
[Summary]
Risk Assessment |
Strategy |
|
| Chronic risk |
||
| Acute risk |
[Description]
Chronic risk: increase in costs for labor environment improvement measures and management costs for staffing.
As of 2022, we are receiving and shipping products to our customers with the help of more than 2,000 staff members at our distribution facilities. With the rise in average temperatures and the increase in the number of extremely hot days, the cost of labor environment improvement measures, especially in distribution warehouses, is expected to rise as well as the cost of staff management due to increased absenteeism.
Chronic risk: increase in costs for labor environment improvement measures and management costs for staffing.
As of 2022, we are receiving and shipping products to our customers with the help of more than 2,000 staff members at our distribution facilities. With the rise in average temperatures and the increase in the number of extremely hot days, the cost of labor environment improvement measures, especially in distribution warehouses, is expected to rise as well as the cost of staff management due to increased absenteeism.
- - From 2020 to 2022, the actual cost ratio to sales for hourly-waged workers in our distribution warehouses was between 2.81% and 3.12%. Based on this ratio, if, for example, an additional 10% of staff were to be allocated for increased absenteeism, expenses would increase by 0.28~0.31% of sales.
The Company will strive to reduce the risks associated with rising temperatures by automating its logistics operations while preventing the deterioration of the working environment caused by rising temperatures.
Acute risk: suspension of operations at distribution centers due to wind and flood damage.
In the event of an increase in typhoons and other wind and flood damage due to climate change, there is a risk of shutdown of logistics centers and delays in the receipt and delivery of products. However, we have reduced this risk since our main distribution centers are not currently located in areas at risk of flooding.
The Company will seek to reduce risks by sharing knowledge of wind and flood damage and the ensuing facility response while dispersing logistics bases to the Kansai and Kanto regions.
In the event of an increase in typhoons and other wind and flood damage due to climate change, there is a risk of shutdown of logistics centers and delays in the receipt and delivery of products. However, we have reduced this risk since our main distribution centers are not currently located in areas at risk of flooding.
The Company will seek to reduce risks by sharing knowledge of wind and flood damage and the ensuing facility response while dispersing logistics bases to the Kansai and Kanto regions.
Transition risk
(* Assumes risk in 2030)
[Summary]
Risk Assessment |
Strategy |
|
| Policy | ||
| Technology | ||
| Market | ||
| Reputation |
[Description]
- ・Carbon Pricing Mainly in the below 2°C scenario, carbon-pricing schemes such as carbon taxes are expected to be introduced, and there is a risk of incurring additional costs due to carbon-pricing if the Company does not sufficiently advance the conversion of electricity procurement to non-fossil energy sources.
- - The actual ratio of electricity costs to sales for the period from 2020 to 2022 was 0.09~0.15%. If the carbon-pricing system is introduced, the cost may increase by more than 30% in relation to the above electricity costs (the carbon price used in the estimation is 130 USD / t-CO2, the figure that the International Energy Agency (IEA) estimates will be current in 2030, and 1 USD = 135 yen).
The Company will closely monitor customer demand trends and replace product lineups and inventories in response to demand and build a system to limit the risk caused by customers’ avoidance of fossil fuel-derived products.
At the same time, we will promote efforts to decarbonize, while recognizing the possibility that the delays in our decarbonization efforts could lead to customer disengagement and loss of trust from long-term investors.
Opportunity
[Summary]
Opportunity |
Strategy |
|
| Products and services | ||
| Market | ||
| Resources efficiency |
||
| Energy sources |
[Description]
We will properly consider customer demand, develop environmentally conscious products, and supply disaster prevention and disaster recovery products in a timely manner.
We will properly consider customer demand, develop environmentally conscious products, and supply disaster prevention and disaster recovery products in a timely manner.
We will also promote efficient use of resources by utilizing the Order Management System (OMS) to provide optimal transportation (shipping) instructions based on calculations of distances between demand points and bases and costs.
The Company identifies and organizes risks related to climate change through scenario analysis and discussions among management while drawing on the knowledge of outside experts, and reports them to the Board of Directors.
4. Risk management
The Company has appointed an executive officer in charge of risk and established the Risk Management Office to monitor the status of company-wide risk management and provide necessary support.
With regard to risks related to climate change, the status of risk identification and countermeasures are monitored through the sharing of reports to the Sustainability Committee with the Risk Management Office and the Audit Committee.
5. Indicators and Targets
Indicators
Please refer to the CO₂ emissions survey.
Target
Through the following measures, we will promote initiatives with the goal of reducing absolute CO₂ emissions by 50% from the 2020 level by 2030 with respect to Scopes 1 and 2.
As of March 2023, we have switched to substantially renewable energy sources for electricity used at our own properties, Kasama DC and Ibaraki Central SC, through the purchase of non-fossil certificates with tracking information.
We are also considering switching electricity used at Inagawa DC, which we lease as a tenant, to substantially renewable energy through the purchase of non-fossil certificates.
For logistics facilities that we will operate as our own properties in the future, we will examine actions to procure electricity from renewable energy sources, including consideration of our own solar-power generation system.
COP26 (Glasgow Climate Accord) confirmed the need to reduce global CO₂ emissions to "45% below 2010 levels by 2030" and "virtually zero by around 2050" in order to limit the increase in global average temperature to "+1.5°C" at the end of the 21st century. Wanting to participate in achieving this global goal, we recognize that we must not only reduce CO₂ emissions in Scope 1 and 2 but also in Scope 3 (CO₂ emissions upstream and downstream in the value chain). Our Scope 3 emissions are mainly from the use of electric power equipment products we sell, such as factory fans, and from the manufacturing of the products we sell. In order to set targets for CO₂ emission reductions in these areas, we are considering the development of practical CO₂ emission measurement modeling and disclosure methods.
Links to other initiatives
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( As of Nov. 01 2024 )