Takashimaya Company ,Limited

If the company falls behind in addressing ESG management, there is a risk of loss of stakeholder trust, damage to brand value, and reputational decline or business losses due to legal violations (impact: especially high). As countermeasures, the company has established the "Group Environment and Social Contribution Subcommittee" and is implementing a PDCA cycle covering the transition to renewable energy and decarbonization promotion, DE&I promotion, and board of directors effectiveness evaluation. In addition, the "Takashimaya Group CSR Committee" is promoting group-wide compliance management and developing internal whistleblowing contact points.

If a new pandemic occurs, there is a risk of lost business opportunities due to store closures or shortened business hours, as well as changes in consumer behavior and reduced store visit frequency (impact: especially high). As countermeasures, based on experience from the COVID-19 pandemic, the company has reviewed its business portfolio, strengthening the department store business foundation while actively expanding growth areas such as the commercial development business and financial business. In addition, the company is actively introducing non-contact sales mechanisms, such as strengthening and expanding non-store sales channels including EC, and introducing remote customer service systems utilizing digital technology.

There is a risk that unauthorized external access causing system failures, tampering, or destruction will result in lost business opportunities, and that leakage of sensitive information such as personal data will damage social trust (impact: especially high). The scope of information management has expanded to external areas including SaaS applications and internet-based services, and the company recognizes the need for comprehensive measures including external service providers. Based on the NIST Cybersecurity Framework, the company is implementing defensive measures at each level of "Identify," "Protect," "Detect," "Respond," and "Recover," and is working to strengthen resilience by establishing business continuity methods that anticipate scenarios where systems become unavailable.

There is a risk of declining engagement due to discriminatory treatment in customer service or media expression and insufficient measures against workplace harassment, as well as losses from reputational decline or boycotts stemming from human rights issues in the supply chain (such as unfair labor practices and discrimination) (impact: especially high). As countermeasures, the company has established and published a "Human Rights Commitment," is conducting human rights due diligence based on the UN "Guiding Principles on Business and Human Rights," and is identifying human rights risks in each of the group's business areas. The company conducts compliance training for managers and supervisors and education for procurement staff, while requesting business partners' consent and cooperation with the "Takashimaya Group Transaction Guidelines" and confirming the situation through surveys.

There is an ever-present risk of reputational decline across all business areas due to legal violations, information leakage, or accidents causing customer losses related to expansion into new growth areas. As countermeasures, the company has positioned "thorough compliance" as its top priority, with top management demonstrating strong commitment to strengthening group-wide risk management systems, enhancing internal control systems, and strengthening the functions of the board of directors. Multiple internal whistleblowing contact points, including the "Takashimaya Group Compliance Hotline," have been established, and the system accepts anonymous reports to enhance self-cleansing capabilities.

There is a risk of governance breakdown due to sudden changes in political and economic conditions, fluctuations in asset value or delays in investment recovery due to exchange rate movements, failure to respond to changes in local laws and regulations, and differences in culture and religion (impact: high). As countermeasures, the company grants initiative to local subsidiaries and shares information in a timely manner through remote meetings with group headquarters, and is strengthening global governance through reinforcement of the three lines of defense. A new Asia regional headquarters representative office has been opened in Ho Chi Minh, Vietnam, working in collaboration with local specialist consultants.

There is a risk that the market will shrink due to changes in consumer behavior stemming from the declining birthrate, aging population, and young people's move away from department stores, and that securing the human resources necessary for business strategy will become difficult due to the shrinking labor force (impact: high). As countermeasures, the company is working on sales floor restructuring, strengthening sales of proprietary products, improving EC appeal, and expanding trade areas, as well as improving store visit motivation by offering products such as financial services that contribute to overall LTV improvement. On the human resources front, the company has introduced recruitment not limited to new graduates, appointment of specialist personnel, acceptance of foreign workers, and a re-employment extension system up to age 70.

There is a risk that operating assets such as stores will be damaged by natural disasters such as earthquakes, typhoons, and floods, resulting in lost business opportunities alongside the breakdown of transportation and communication networks (impact: high). As countermeasures, the company has established a system that enables prompt establishment of crisis management headquarters in both the Kansai and Kanto regions, and thoroughly implements cloud migration to prevent loss of critical data and BCP measures. In addition, the company is securing space to accommodate stranded commuters and a system for distributing daily necessities during large-scale disasters, and is working to function as a regional disaster prevention hub in collaboration with government authorities.

There is a risk that changes in the international situation, such as Russia's invasion of Ukraine and the risk of a Taiwan contingency, will affect multinational supply chain procurement, price formation, and energy costs, lead to policy changes at overseas bases, worsen fundraising conditions due to financial market turmoil, and reduce consumer sentiment due to a simultaneous global stock market decline (impact: high). As countermeasures, the company is developing domestic business partners, switching procurement sources, and reviewing order plans, while securing sufficient on-hand liquidity through diverse fundraising methods. For the risk of reduced consumer demand due to a simultaneous global stock market decline triggered by reciprocal tariffs, the company plans to implement fundamental risk reduction measures according to the situation.

There is a risk that bankruptcies or business terminations of business partners will disrupt product procurement and reduce the attractiveness of merchandise assortment, that reduced tenant ability to pay rent will decrease rental income, and that labor shortages in production, logistics, and sales stages will affect business operations (impact: high). As countermeasures, based on the "Takashimaya Group Transaction Guidelines," the company shares goals and collaborates with major business partners, and is promoting the development of new business partners, inventory efficiency improvement through OMO, and review of delivery schemes. For tenants facing difficult management conditions, the company provides financial support such as temporarily applying deposits to rent and granting payment grace periods, aiming for mutual coexistence and prosperity.