Food supermarkets, the ARCS Group’s main business, are deeply tied to the global environment. Our merchandise relies on natural capital such as agricultural and marine products, and our business activities generate significant environmental impacts including CO2 emissions from procurement, logistics, processing, and store operations, along with food loss and plastic waste. Climate change-related disasters also pose direct risks to supermarkets as location-based businesses. Reducing our environmental footprint and ensuring the sustainability of natural capital are essential to our long-term viability.

The ARCS Group focuses on conserving resources and energy to reduce our environmental footprint. Resource conservation efforts include composting food waste, running food drives, collecting used trays and PET bottles at our stores, and charging for plastic bags with proceeds donated to tree planting. Energy initiatives include switching to LED lighting, upgrading refrigeration systems for efficiency, and expanding the use of renewable energy. Through these efforts in environmental conservation and resource efficiency, we contribute to a sustainable future.

Under its group philosophy—“contributing to affluent lifestyles by providing valuable merchandise and services at low prices as a lifeline for each community”—the ARCS Group aims to realize a sustainable society and strives to reduce environmental impact through the following initiatives:

1. Decarbonization of Energy

• Promotion of energy conservation
• Utilization of renewable energy
• Improvement of logistics efficiency

2. Waste Reduction and Recycling

• Reduction of food waste
• Promotion of recycling of recyclable resources
• Reduction in the use of single-use plastics

3. Environmentally Conscious Procurement

• Promotion of local production for local consumption
• Streamlining distribution through joint procurement
• Cross-group initiatives through product procurement projects

4. Compliance and Adherence to Laws and Regulations

• Compliance with environmental laws and regulations
• Thorough quality control and adherence to quality assurance policies and standards
• Establishment of voluntary standards reflecting societal demands

5. Communication and Collaboration Inside and Outside the Company

• Fostering awareness and encouraging proactive behavior through employee education
• Promotion of environmental initiatives through strengthened collaboration with business partners
• Proactive disclosure of information related to environmental activities

The Sustainability Promotion Committee is chaired by ARCS’s President, COO, and its Secretary General is the General Manager of the Sustainability Promotion Office. The committee oversees sustainability initiatives, including climate change response efforts. The committee also works closely with the Compliance and Risk Management Committee to assess risks and discuss countermeasures, and reports to the Board of Directors as necessary.

First, we envisioned a world in 2050 under two scenarios: “1.5°C” and “4°C” for the global average temperature increase compared to pre-industrial times by the end of this century. Next, we analyzed ARCS’s opportunities and risks in 2030 in terms of the potential impact on our business. Then, we identified specific initiatives to address the most significant opportunities and risks, and are actively implementing them throughout the Group.

In line with our Sustainability Promotion Policy, which aims to realize a sustainable society and the Group’s growth, the ARCS Group has set KPIs for CO2 emissions related to climate change, closely connected to our supermarket operations, and monitors them regularly. The most recent available emission performance and long-term targets are as follows: