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.

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]

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).

(* Assumes risk around 2050)

[Summary]

[Description]

- 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 damageThe 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.

(* Assumes risk in 2030)

[Summary]

[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 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.

[Summary]

[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 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.

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.

[CO₂ emissions (t-CO₂)]

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 Chuo 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.

　

　
　
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