Direction of Initiatives Toward Net Zero

To achieve net zero^*1 by 2050, our Group will focus on two main initiatives: "Reduction of GHG emissions" and "Promotion of a circular economy."
Specifically, we will reduce Scope 1 and 2 GHG emissions (hereinafter referred to as "Scope 1 and 2 emissions") through energy conservation at our stores and the expanded transition to renewable energy (hereinafter "renewable energy"), among other measures. In addition, we will collaborate with our suppliers and customers to reduce Scope 3 GHG emissions (hereinafter referred to as "Scope 3 emissions"). At the same time, we will promote resource circulation by strengthening the 3Rs^*2 and expanding circular business models.

Establishment of Targets

We believe that setting ambitious medium and long-term reduction targets and developing a roadmap to achieve them is necessary to promote climate change countermeasures across the Group. Based on this approach, we obtained certification through the Science Based Targets (SBT) initiative^*3 in 2019 for our Scope 1, 2, and 3 GHG emission reduction targets. In 2021, we raised our 2030 Scope 1 and 2 emissions reduction target from 40% to 60% (compared with FY2017 levels), and re-obtained SBT certification as aligned with the "1.5°C target." Furthermore, in February 2023, we obtained SBT certification for our overall "net zero target" for Scope 1, 2, and 3 emissions by 2050.

Based on the results of our analysis of climate-related risks and opportunities, as well as changes in the external environment, the Company, under the supervision of the Board of Directors, regularly reviews the appropriateness of its GHG emission reduction targets through the formulation and revision of its medium-term business plans and revises the target levels and target years as necessary.

Furthermore, as we achieved our 2030 target of a "60% reduction" in Scope 1 and 2 emissions ahead of schedule by the end of February 2025, we have raised the target and set a new 2030 goal of "73% reduction." To ensure the steady achievement of this target, the Company will continue to promote initiatives aimed at further reducing Scope 1 and 2 emissions. (Projected to reach a 69.5% reduction by the end of February 2026)

*1. A thorough reduction of GHG emissions, with the remaining emissions being reduced to practically zero after subtracting the amount removed through forest absorption, CCS (CO₂ capture and storage), etc.

*2. 3Rs stand for Reduce, Reuse, and Recycle.

*3. The Science Based Targets initiative was established jointly in 2014 by CDP, the UN Global Compact, the World Resources Institute (WRI), and the World Wide Fund for Nature (WWF) to enable companies to set ambitious emission reduction targets in line with the latest climate science.

JFR Group 2050 Net Zero and Nature Positive Transition Plan

Transition to Renewable Energy

In our Group, whose business centers on retail such as department stores and shopping centers, over 90% of Scope 1 and 2 emissions come from our stores, and approx. 80% of those emissions are attributable to electricity use. Therefore, we recognize the need to both improve energy efficiency and promote energy saving, as well as transition to renewable energy for the electricity used in stores.
Starting with the opening of the Daimaru Shinsaibashi store in 2019, which operates entirely on renewable energy, we have been gradually switching our stores in the Kansai, Kanto, ad Chubu regions to renewable energy. In April 2025, we implemented the transition to renewable energy at the Daimaru Tokyo store. As a result, in FY2025, our renewable energy ratio reached 75.2%, and our Scope 1 and 2 emissions were reduced by 69.5% compared to the base year of FY2017.
We believe that operating stores with renewable electricity enhances the environmental value of our buildings and contributes to gaining support from environmentally conscious suppliers and customers. We will continue to promote the transition to renewable electricity going forward.

Change in ratio of renewable energy usage

Major stores switching to renewable energy (as of 02/28/2026)

Contributing to the spread of renewable energy

Solar panels have been installed on the rooftops of Shibuya PARCO and Kyoto Zero Gate to generate their own electricity. In the future, we will work to introduce additional^* renewable power procurement and improve energy resilience by diversifying our procurement sources.

* Contribute to the spread and expansion of new renewable power sources and be effective in reducing CO₂ emissions

Expansion of Electric Vehicle (EV) Charging Stations

Angel Park, a Group company that operates parking facilities, has installed a total of 10 EV charging stations that customers can use free of charge. Since April 2023, Angel has switched to 100% renewable energy for electricity throughout the building, which will not only improve convenience for customers using electric vehicles but also contribute to the decarbonization of society.

Energy-saving initiatives

Instructions and Responses to Public Regulations

The Group supports laws, regulations such as the "Act on Promotion of Global Warming Countermeasures (Global Warming Act)" and the "Act on Rationalization of Energy Use and Shift to Non-fossil Energy (Energy Conservation Act)", and policies related to climate change and reducing energy consumption. As a result, are working on various energy-saving initiatives.

New Shibuya Parco-an environmentally friendly next-generation building

Shibuya Parco, which opened on November 22, 2019, has been selected for the Ministry of Land, Infrastructure, Transport and Tourism’s "Sustainable Building Leadership Project (CO₂ Leadership Project)" for its efforts to (1) create attractive outdoor spaces including a roof top square and multi-level pathways; (2) actively introduce high-efficiency energy systems including a cogeneration system (CGS)^*; and (3) promote the efficient use of energy through digital communication technology. In addition to installing the latest equipment and fixtures, we also "visualized" energy efficiency for energy management systems to make the building a multi-purpose commercial space showcasing efficient energy use with lower CO₂ emissions.

* Cogeneration system (CGS): System that simultaneously produces and supplies electricity and heat from a single energy source

Introduction of energy-efficient equipment and promotion of LED conversion

The Group adopts various energy-saving measures to reduce CO₂ emissions and prevent global warming. We are gradually introducing energy-efficient equipment when updating or renovating facilities and opening new stores.

Daimaru Matsuzakaya Department Stores and PARCO are striving to reduce electricity consumption and CO₂ emissions by replacing existing lighting with LED units. In FY2025, approximately 740 lighting units were switched to LED, bringing the cumulative total to 205,310 units.

* Reduction of CO₂ emissions in FY2025 from LED conversion: approx. 10,265 t-CO₂ per year.

Electrifying the corporate fleet

At the end of FY2025, Daimaru Matsuzakaya Department Stores operated a total of 174 electric vehicles (EVs), accounting for 47.4% of its entire company vehicle fleet. We will continue to promote the conversion of company vehicles to EVs to reduce CO₂ emissions.

Since 2011, Daimaru-Matsuzakaya has adopted "telematics" (mobile communications) for its fleet of independently operated vehicles. Telematics" is a system that collects data on how employees operate the vehicles, such as excessive speed, sudden acceleration/deceleration, and fuel consumption. The Safety Operation Committee meets once every three months and uses the telematics data to improve fuel efficiency and implement eco-driving and safe driving that produces less low CO₂ emissions.

Scope 3 Reduction Initiatives

Approximately 90% of the Company’s Scope 3 emissions are attributable to Category 1 (Purchased Goods and Services). As a result, reducing these emissions through the Company’s own efforts alone is challenging. Collaborative emission reduction initiatives across the value chain are essential. To address this issue, Daimaru Matsuzakaya Department Stores, the Group’s core operating company, has engaged in dialogue wit business partners based on their specific circumstances. These discussions have focused on calculating GHG emissions, the establishment of reduction targets, and the provision of primary emissions data (Scope 1, Scope 2, and upstream Scope 3 emissions). In 2025, the Company also held a briefing session for our major business partners to explain our environmental initiatives and encourage them to calculate their GHG emissions (Attendance: 233 companies / 336 participants). As a result of these initiatives, Category 1 emissions for FY2025 were calculated using primary data obtained from 50 suppliers, compared with 41 suppliers in FY2024. Consequently, Scope 3 emissions decreased by 23.8% versus the baseline year FY2017

Scope 3 Emissions

FY2025 Scope 3 Emissions by Categoryunit: t-CO₂, %

Category		Emissions	Percentage of emissions (%)
1	Purchased goods and services	1,934,925	86.75
2	Capital goods	64,266	2.88
3	Energy excluding Scope 1 and 2	30,322	1.36
4	Upstream transportation and distribution	3,556	0.16
5	Waste from operations	9,502	0.43
6	Business travel	5,101	0.23
7	Employee commuting	2,169	0.10
8	Upstream leased assets	–	0.00
9	Downstream transportation and distribution	8,604	0.39
10	Processing of products	–	0.00
11	Use of sold products	16,111	0.72
12	End-of-life treatment of sold products	142,304	6.38
13	Downstream leased assets	13,632	0.61
14	Franchising	–	0.00
15	Investments	–	0.00
Total Scope 3		2,230,492	100.00

* Category 8 is excluded from the calculation because it is calculated under Scope 1 and 2
* Categories 10, 14, and 15 are excluded from the calculation because they are not applicable to the JFR Group's business processes

Reduction of Scope 3 GHG Emissions in Collaboration with Suppliers

Creating a society that co-exists with the environment

• Aiming to Achieve Net Zero by 2050

• Environment Management System

• TCFD/TNFD Integrated Disclosure

• The Circular Economy the Group aims to create

• Proposal for Environment-Friendly Lifestyles

• Reduction of Wastes and Water Usage

• Biodiversity Initiatives

• Environmental Data

• Acquisition of Third-Party Assurance