Response to Climate Change

Last Updated: 2020.01.31
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Honoring the goals set in the Paris Agreement on Climate Change for the reduction of greenhouse gases emissions by 2050, Fast Retailing is continuing efforts to reduce the release of greenhouse gases by our stores, throughout the supply chain, and in the use of our products.

Policies Responding to Climate Change

To mitigate our impact on climate change and biodiversity, Fast Retailing identifies and reduces emissions of greenhouse gases across all business activities, from product manufacturing to product disposal. To further these initiatives, we acknowledge the greenhouse gas emission long-range targets set under the United Nations Framework Convention on Climate Change (the Paris Agreement) to reduce greenhouse gas emissions by 2050. Fast Retailing has set targets and engages in measures to achieve these goals.

Targets

Long-term goals

The Paris Agreement, the multi-national agreement to combat climate change, was adopted in COP 21 held in 2015. Its central aim is to strengthen the global response to the threat of climate change by keeping the global temperature rise below 2 degrees Celsius above pre-industrial levels and to further pursue efforts to limit the temperature increase to 1.5 degrees Celsius. In January 2020, Fast Retailing Co., Ltd. signed the Fashion Industry Charter for Climate Action, sponsored by the United Nations Framework Convention on Climate Change (UNFCCC). This charter supports the goals of the Paris Agreement in limiting global temperature rise to well below two degrees Celsius above pre-industrial levels, and specifies measures for the entire fashion industry to help achieve a target of a 30% greenhouse gas (GHG) emissions reduction by 2030, including the supply chain. Fast Retailing will further strengthen such measures as procurement of sustainable materials, reducing the environmental impact in the manufacturing process, and promoting dialogue with consumers to raise awareness, as well as accelerating cooperation within the industry to reduce GHG emissions.

Committed to setting SBT (Science-Based Targets）

In February 2019, Fast Retailing committed to setting science-based targets that are in line with the level of decarbonization required to achieve the Paris Agreement target.

Internal Targets

・Reduce energy consumption at our stores and offices
We are improving operations and introducing new technologies at stores and offices throughout the world to reduce Fast Retailing Group greenhouse gas emissions. We have also changed the way we operate our stores, furthering our goal to reduce energy consumption.
We aim to reduce greenhouse gas emissions at UNIQLO stores in Japan by 10% per unit of floor area by the year 2020, as compared to 2013 emissions. As of 2019, we have already achieved a nearly 31.6%* reduction. We have also started developing stores that make use of renewable energy.
In February 2019, Fast Retailing committed to setting SBTs and will work to establish long-term targets to reduce greenhouse gas emissions.
*Since fiscal 2019, franchise stores are excluded from Scope 1 and 2 based on the GHG Protocol.

Greenhouse Gas Emissions at UNIQLO Stores in Japan

・Promoting greenhouse gas emission reductions in the sourcing of raw materials
From the product planning stage Fast Retailing encourages the use of raw materials produced with lower levels of greenhouse gas emissions. Our goal here is to achieve lower greenhouse gas emissions associated with our products. We are implementing a systematic changeover to materials that potentially reduce greenhouse gases.

Supply Chain

・Reductions in greenhouse gas emissions throughout the supply chain
Fast Retailing assesses emissions of greenhouse gases at partner factories and logistics partners, working with them to reduce the emission of greenhouse gases.
Our core fabric mills set targets and pursue programs to reduce the amount of energy used in the manufacturing process (goal is to reduce energy consumption by 10% of the 2016 levels by the end 2020 - the effort spanning three years from 2018 to 2020). We are working with our distribution partners to reduce emissions of greenhouse gases through consolidated shipments and improve loading efficiencies.
In February 2019, Fast Retailing committed to setting SBTs and will work to establish long-term targets to reduce greenhouse gas emissions, including both direct operations and supply chain in the scope.

Customers

・Reducing greenhouse gases through functional apparel
Fast Retailing considers the possibilities of reducing greenhouse gas emissions through apparel with functional characteristics. For example, HEATTECH functional innerwear is a high selling item by UNIQLO. We count on HEATTECH technology to provide greater warmth, thus potentially reducing the amount of energy needed for heating.
We also encourage reuse and recycling. For example, we conduct activities to recycle all UNIQLO and GU products. Here, we donate collected clothes to refugees, displaced peoples, and disaster victims.

Fast Retailing Initiatives

Stores

・Initiatives to reduce greenhouse gas emissions by installing LED lighting
In 2014, we began saving energy and reducing greenhouse gas emissions by installing LED lighting at UNIQLO stores throughout Japan. As of August 2019, 753 of the 817 UNIQLO stores in Japan (92.2 percent) have LED lighting installed. We are also moving to install LED lighting systems at GU stores in Japan and UNIQLO stores internationally. Going forward, we plan to achieve further reductions in energy consumption and greenhouse gas emissions by installing energy management systems (EMS).

Supply Chain Initiatives

Logistics

・Initiatives to reduce greenhouse gas emissions through greater transportation efficiency
Fast Retailing pursues a number of initiatives designed to reduce greenhouse gas emissions through more efficient logistics.

Initiatives	Area	Description
Buyer Consolidation	Global	By consolidating goods shipped from UNIQLO and GU factories having similar delivery dates, we reduce our global shipping volume by nearly 10,000 containers annually.
Container Round Use	UNIQLO in Japan	Container Round Use (CRU) consists of unloading a container used for import and loading it with items for export, instead of returning the container to the port empty. By reducing the number of empty containers in transit, it becomes possible to reduce greenhouse gas emissions and alleviate congestion at ports. UNIQLO is promoting CRU initiatives, such as using the same container to import products and export store materials.
Improving Truck Shipping Efficiency	UNIQLO and GU in Japan	In March 2016, we began improving truck shipping efficiency by expanding the hours when goods can be delivered to stores and by using the same truck to deliver goods to UNIQLO and GU stores located in close proximity.
Initiatives to Improve Loading Efficiency	UNIQLO and GU in Japan	For UNIQLO and GU, we set minimum orders per item for each store to prevent inefficient small shipments from warehouses to stores. In September 2017, we reduced the number of cardboard box sizes used at UNIQLO to improve loading efficiency. This overcame the inefficiencies of shipping boxes in a wide range of sizes. During slower periods, we improve loading efficiency by further consolidating deliveries.
Initiatives to Improve E-Commerce Shipping Efficiency	UNIQLO in Japan	We improve shipping efficiency at the Ariake warehouse (e-commerce sales) using systems that adjust the height of the carton automatically according to the quantity of products the carton contains to minimize the careon size.

Fabric mills

・Reducing Environment Impacts
Producing fabrics uses a great deal of water and energy. These processes represent a significant environment impact. To reduce environmental impact throughout the supply chain, Fast Retailing uses the Higg Index and other apparel industry indices at our partner fabric mill. We assess environmental impacts and implement programs to conserve water and energy.

Related Links

• Initiatives for the reduction of environmental impacts at fabric mills

Reducing Greenhouse Gas Emissions During Product Use

Nearly 1 billion HEATTECH garments have been sold worldwide

Since being introduced in 2003, UNIQLO has sold 1 billion units of HEATTECH innerwear (as of FY2017).Functional innerwear is a favorite among our customers. By wearing HEATTECH, customers could potentially lower their room temperatures due to the insulating nature of the product. This can translate into reduced energy usage and lower emissions of greenhouse gases. In surveys of HEATTECH users, many reported lower heating bills.

Greenhouse Gas Emissions

Fast Retailing calculates its greenhouse gas emissions according to the GHG Protocol, the standard guidelines used worldwide.

Third-party verification of greenhouse gas emissions

The data on greenhouse gas emissions has been verified by SGS Japan Co., Ltd. The verification scope covers Scope 1* and Scope 2* in the GHG Protocol, which is the emissions derived from energy use in our company's direct operations, and Category 1 of Scope 3, which is the emissions from the supply chain (purchased goods and services: raw material production, fabric production and sewing).
*The verification scope is for direct operations in Japan only.

• Verification Report

Fast Retailing

Units: t-CO2e

Scope	Items		2016 (September 2015 to August 2016)	2017 (September 2016 to August 2017)	2018 (September 2017 to August 2018)	2019 (September 2018 to August 2019)
Scope 1 (Fast Retailing Direct Emissions)	Gas (Stores)		11,436	13,169	12,377	11,182
	Gas (Head Office)		38	40	42	36
	Scope 1 TOTAL		11,474	13,209	12,419	11,218
Scope 2 (Fast Retailing Indirect Emissions)	Electricity (Stores)	Location Base*1	123,932	159,913	130,883	108,231
		Market Base*2	111,714	140,671	127,784	103,237
	Electricity (Head Office)	Location Base*1	2,466	6,158	6,974	9,083
		Market Base*2	-	-	6,937	8,655
	Scope 2 TOTAL	Location Base*1	126,398	166,071	137,857	117,314
		Market Base*2	114,180*3	146,829*3	134,721	111,892
Scope of Data Collection			Head Office: Yamaguchi Headquarters and Roppongi Head Office Stores: UNIQLO in Japan	Head Office: Yamaguchi Headquarters, Roppongi Head Office, and Ariake Head Office Stores: UNIQLO and GU in Japan	Head Office: Yamaguchi Headquarters, Roppongi Head Office, and Ariake Head Office Stores: UNIQLO and GU in Japan	Head Office: Yamaguchi Headquarters, Roppongi Head Office, and Ariake Head Office Stores: UNIQLO and GU in Japan

*1 Location Based: A method of calculation using the average greenhouse gas emission coefficient of the region's electricity grid, regardless of the source of power purchased from the electric company. This calculation method estimates the amount of greenhouse gases emitted according to the amount of electricity used.
*2 Market Based: A method of calculation using the greenhouse gas emission coefficient for each electric company to calculate the quantity of greenhouse gas emissions taking into account the power sources purchased by Fast Retailing. In case that no information on the power supplier can be obtained from the building owner company, the emission intensity of the retail electricity supplier in that region is applied.
*3 Emissions from the headquarter offices are location-based.

Supply chain

・Purchased Goods and Services (Category 1 in Scope 3)

Units: t-CO2e

Items	2017 (January to December 2017)	2018 (January to December 2018)
Raw materials production, fabric production and sewing *4	3,101,016	4,187,302
Scope	UNIQLO and GU production	UNIQLO and GU production

*4 Emissions from raw material production to sewing are calculated by multiplying material usage data and energy usage of sewing factories by coefficients.

Reference: total greenhouse gas emissions from UNIQLO's core fabric mills
As part of UNIQLO Responsible Mill Program, Fast Retailing has calculated the environmental impacts of UNIQLO's core fabric mills through the Higg Index environmental module developed by the Sustainable Apparel Coalition. As the program is aiming to calculate each factory's entire environmental impact, the data covers total emissions without taking into account UNIQLO's share of their production.

Units: t-CO2e

UNIQLO's core fabric mills	2015 (January to December 2015)	2016 (January to December 2016)	2017 (January to December 2017)	2018* (January to December 2018)
	4,634,077	4,388,219	4,359,121	10,953,938

* The figure in 2018 has increased as we have expanded the scope data.

・Upstream Transportation and Distribution (Category 4 in Scope 3)

Units: t-CO2e

Logistics (UNIQLO in Japan)	2016 (April 2015 to March 2016)	2017 (April 2016 to March 2017)	2018 (April 2017 to March 2018)	2019 (April 2018 to March 2019)
	17,707	17,947	19,481	19,467

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