Environment

Protecting the environment and reducing environmental impact is one of the AIN Group’s areas of materiality. 
To help realize a sustainable society, the Group is actively implementing initiatives related to protecting the environment and reducing environmental impact with stakeholders.

The AIN Group recognizes protecting the environment and reducing environmental impact as a material issue (materiality), and continues and promotes initiatives such as responding to climate change, conserving energy and resources for preserving biodiversity and water resources, waste reduction, and chemical management. To help realize a sustainable society, the Group is actively implementing initiatives related to protecting the environment and reducing environmental impact with stakeholders.

1. We will continue to implement and promote initiatives to reduce our environmental impact, such as conserving resources, conserving energy, recycling, reusing, and reducing waste at all of our stores and offices, as we strive to protect the global environment.

2. We will consider the impact on the global environment and strive to reduce risks in developing products and providing services.

3. We will regularly review our initiatives and implement continuous improvements.
4. We will take the initiative in activities that lead to environmental improvement both at work and at home, being aware that we ourselves are a party to environmental conservation activities. We also encourage our employees to engage in these activities through education and awareness raising.
5. We will strive to gain understanding from our business partners on protecting the global environment and reducing our impact, as well as promote environmentally friendly procurement.
6. We will strive to protect the global environment while cooperating with all stakeholders including customers, patients, and business partners.

The issue of climate change is growing more serious each year, and we believe that it is a material issue that needs to be addressed to realize a sustainable society. In April 2022, we announced our endorsement of the final report of the TCFD^※1(TCFD recommendations) and joined the TCFD Consortium. We aim to achieve sustainable growth as a company and contribute to the realization of a sustainable society by identifying risks and opportunities related to the issue of climate change, evaluating their impact on our business through scenario analysis, and implementing countermeasures.

* Task Force on Climate-Related Financial Disclosures, established by the Financial Stability Board (FSB) at the request of the G20 finance ministers and central bank governors; the task force published its recommendations in its final report in June 2017.

• Governance
• Risk management
• Strategy
• Indicators and targets

With respect to the climate change issues, to manage risks, formulate strategies, set targets, and deal with other matters related to the issue of climate change, we have established a Climate Change Response Team under the Sustainability Committee. The team’s duties include gathering and tabulating data and formulating drafts. The Sustainability Committee then deliberates and finalizes these drafts. The Sustainability Committee was established with the approval of the Board of Directors to promote sustainability management across all Group companies. The committee consists of the President and Representative Director, who serves as its chair, top management, the presidents of core Group companies, and officers in charge of individual divisions. It reports the contents of its deliberations to the Board of Directors (at least once per year). The Board of Directors decides on material issues and supervises the activities of the committee.

The Climate Change Response Team, which was created as a subsidiary body of the Sustainability Committee, engages in discussions with related divisions and identifies Group-wide risks (risk assessment) (at least once per year). The Climate Change Response Team also coordinates with related divisions to achieve targets by appropriately managing initiatives, KPIs, progress, and other matters (risk management).
The contents of the risk assessment and management led by the Climate Change Response Team are reported to the Sustainability Committee, which engages in further discussion and deliberation, recognizing the report of the team as the shared understanding of the entire Group.

Identified material risks and opportunities

Climate change risks and opportunities may include those classified into transition risks and opportunities arising from the shift to a low-carbon society, and physical risks and opportunities arising from increasingly severe extreme climate change events and increases in their frequency, rising sea levels, and other long-term changes in climate patterns. After all of the risks and opportunities related to the Group were identified, those with particularly significant impacts were categorized as shown below.

Transition risks and opportunities

Physical risks and opportunities

Scenario analysis

Our Group’s business operations include the operation of pharmacies and cosmetic and drug stores, generic drug wholesaling, sales of cosmetics, and operation of retail shops. Of these, all domestic pharmacies in the dispensing pharmacy business which account for 90% of the Group’s overall net sales, and all domestic AINZ & TULPE stores in the cosmetic and drug store business were targeted, and based on multiple scenarios such as those envisioned by the Intergovernmental Panel on Climate Change (IPCC)^※2, a broad range of potential climate change-related transition and physical risks and opportunities were considered. We have begun analyzing the impact of particularly material risks and opportunities.

*2 An organization established by the World Meteorological Organization (WMO) and the United Nations Environment Programme (UNEP). It is comprised of 195 countries and regions. 
The IPCC aims to provide scientific bases to the climate change-related policies of individual countries. It creates reports that summarize the latest scientific findings (published papers) regarding climate change.

Business impact assessment

In the 2030 +2°C scenario, the promotion of low-carbon and decarbonization efforts may increase the transition risks, especially those related to increased restrictions on greenhouse gas emissions (primarily in the form of carbon taxes, emissions trading systems, etc.).

Much of the Group’s CO₂ (GHG) emissions (Scope 1 and 2) are derived from electricity consumption. Therefore, additional costs may be incurred from power usage volume, as well as prices and CO₂ emission coefficient, etc. during procurement. However, we have confirmed that we can prevent such costs from having a major impact on our finances, business strategies, etc., by minimizing the impact of carbon taxes and reducing power usage through energy saving measures and renewable energy usage.

In the 2030 +4°C scenario, increasingly severe abnormal weather conditions and changes in climate patterns (resulting in disasters affecting stores and offices, pandemics, etc.) may create increased physical risks.

We recognize that the role that our Group is expected to and called on is to protect the lives and health of its employees and to serve as part of the community’s infrastructure by providing pharmaceuticals and healthcare services, no matter what the circumstances. To live up to these roles, as part of our disaster response measures, we are enhancing our BCP and making improvements on an ongoing basis, and carrying out climate change adaptation measures such as safety reporting drills for all employees and their family members, evacuation drills and reinforcement of the Group’s logistics. Going forward, we will continue to further analyze regions and stores at high risk, and deliberate what further disaster countermeasures we should take.

If there are epidemics of infectious diseases caused by climate change, they may affect the dispensing pharmacy business in areas such as the prescription volume. As with our natural disaster response measures, we will also enhance our systems for providing healthcare services.

In this manner, we believe that we can thereby prevent such risks from having a major impact on our finances, business strategies, etc., by implementing measures that anticipate increased risks. At the same time, we believe that striving to further strengthen and enhance our resilience will enable us to continuously provide the medical care that is needed by patients, customers, and members of the community. This will contribute significantly to the development of our business.

We have decided to work actively toward the realization of carbon neutrality (net-zero CO₂ (GHG) emissions (Scope 1 and 2) from our own business activities) by 2050. To this end, we have selected CO₂ (GHG) emissions and the rate of conversion of energy consumption to renewable sources as evaluation indicators of our climate change response measures. Furthermore, we have set as our targets for 2030 a 30% reduction in CO₂ (GHG) emissions (Scope 1 and 2) compared to fiscal 2022 and a rate of conversion of energy consumption to renewable sources of 30%. With respect to reducing Scope 3 emissions, the Group is working with pharmaceutical wholesale partners on a trial project to reduce the number of pharmaceutical deliveries to pharmacies.

Going forward, we will continue to enhance our information disclosure based on TCFD recommendations, and formulate business strategies and implement climate change mitigation and adaptation measures to respond to changes such as the formulation of climate change-related policies and legal regulations. We will seek to grow in a sustainable way and practice sustainability management that creates social, environmental and economic value by meeting the expectations and requests of our stakeholders through appropriate responses to climate change issues.

*3 Reduction rate compared to the reference year (fiscal 2022)
*4 Rate of conversion of energy consumption to renewable sources to total power consumed compared to the reference year (fiscal 2022)

To reduce the greenhouse gas emissions of other companies associated with our Group’s business activities (Scope 3), we are collaborating in a project with other companies.

In this trial project, we are leveraging the strengths of our Group to perform optimized inventory control for each individual pharmacy with the aim of improving the operational efficiency of our pharmacies and our pharmaceutical wholesalers, thereby improving labor productivity and motivating employees. In addition, we are giving consideration to the global environment by also significantly reducing CO₂ emissions derived from fuel usage of delivery vehicles.

Going forward, we will continue to carry out initiatives for establishing a new sustainable pharmaceutical distribution model, thereby contributing to the entire healthcare and wholesaling industries.

Outcomes

• Reduce CO₂ emissions by 75% by cutting number of deliveries

Over the four month period from December 1, 2022 to March 31, 2023, the national government and power companies called for cooperation in reducing energy consumption against the backdrop of power supply shortages in Japan. We further reinforced our own energy conservation efforts to actively implement energy-saving and power-saving measures.

Details of the measures

• Lighting power savings (spacing or turning off all lights)
• Air conditioner adjustment (optimizing temperature settings)
• Shortening hours when signs are lit
• Turning off lighting on some product display racks
• Eco-friendly driving of company vehicles
• Posting of posters encouraging employees to conserve power

* The details of the measures varied depending on the office/store

Use of spaced lighting in the Head office