Sustainability Management

MARUI GROUP manages and discloses the progress of initiatives related to its long-term 2050 Vision. In addition, we have defined impact targets regarding sustainability and well-being based on the 2050 Vision. These targets have been set for three co-creation approaches—creating a future for future generations together, creating happiness for individuals, and creating platforms for co-creation—and the medium-term management plan defines key performance indicators for priority initiatives related to these impact targets.

By accomplishing these impact targets, MARUI GROUP aims to achieve earnings per share of ¥200 or more, return on equity of 13% or more, and return on invested capital of 4% or more.

Initiatives for Reinforcing Corporate Governance

2021Nov.Reformed structure of Sustainability Committee
Chaired by environmental and sustainability expert Peter David Pedersen and membered by external specialists and members of younger generations, the Sustainability Committee engages in future-oriented dialogue and proactively advises the Board of Directors.

- 2021Jun.Appointment of Two New External Directors
  
  Evolution of Corporate Governance System by Appointing Stakeholders as External Directors
  
  Mr. Yasunori Nakagami has accumulated a wealth of experience at management consulting firms and investment management companies through which he has amassed exceptional insight regarding corporate management that focuses on capital markets. As an external director, he is contributing to the supervision of overall management from an independent and objective standpoint.
  
  Mr. Peter David Pedersen has accumulated a wealth of experience at environmental and CSR consulting firms through which he has amassed exceptional insight regarding global-level sustainability management. As an external director, he is contributing to the supervision of overall management from an independent and objective standpoint.
  - Resignation of two external directors

MayNon-Financial Key Performance Indicators Described in the New Medium-Term Management Plan
The new medium-term management plan slated to conclude with the fiscal year ending March 31, 2026, has defined impact targets related to sustainability and well-being along with six non-financial key performance indicators and three financial indicator targets to be achieved through the accomplishment of the impact targets.

Medium-Term Management Plan

2020Apr.Revision of Officer Compensation Systems
From the fiscal year ended March 31, 2020, officer compensation systems were revised to increase the portion of performance-linked compensation and employ new performance indicators in response to issues identified in evaluations of the Board of Directors' effectiveness.

Officer Compensation Systems

2019MayEstablished the Sustainability Board
The Sustainability Board was established as an advisory body to the Board of Directors for the purpose of promoting co-creation sustainability management. This board is tasked with examining sustainability strategies and initiatives for the entire Group and providing reports and advice to the Board of Directors on these matters. In addition, the Environment and CSR Committee was established as a part of the Sustainability Board. This committee is responsible for carrying out duties pertaining to the management of relevant risks and other matters based on the instructions of the board. The Sustainability Board is chaired by the president, and its membership comprises executive officers selected by the Board of Directors and other individuals deemed appropriate to serve as members by the Board of Directors based on the goals of the board.
Feb.MARUI GROUP's 2050 Vision
MARUI GROUP's 2050 Vision was established to serve as a roadmap for our efforts to help create a flourishing and inclusive society offering happiness to all.

VISION 2050
Jan.Established the Sustainability Advisory Board
The Advisory Board was established to facilitate the formulation of strategies for accomplishing the targets of the medium-term management plan and improving corporate value over the medium-to-long term. We have expanded the role of this board to include promoting co-creation sustainability management in response to changes in the operating environment over the long term. Three ESG specialists were appointed to the new board, which was renamed the Sustainability Advisory Board.

2018Jun.Appointed third external director
Mr. Yoshitaka Taguchi has accumulated a wealth of experience and insight over his long career as a corporate manager and actively offers opinions and advice from an independent and objective standpoint.
- Resignation of one external director

- 2017Dec.Held Co-Creation Sustainability Explanatory Forum
  
  MARUI IR DAY Materials and Videos
- Nov.Published Co-Creation Sustainability Report 2017, which established and revised policies, including those pertaining to the corporate philosophy
  
  MARUI GROUP's Co-Creation Philosophy
  
  Core Theme 4: Co-Creation Corporate Governance
  
  Co-Creation Sustainability Reports
- Aug.Published Japanese-language version of Co-Creation Management Report 2017 integrated report; English-language version published in October 2017
  
  Co-Creation Management Reports
- Jun.Appointed third external director
  Mr. Masahiro Muroi has accumulated a wealth of experience spearheading corporate governance reforms as a corporate manager, is well versed on cutting-edge and digital technologies, and actively offers opinions and advice from an independent and objective standpoint.
  - Discontinuation of Takeover Defense Measures
    At the Ordinary General Meeting of Shareholders held in June 2008, the Company received approval to implement takeover defense measures. These measures were later discontinued at the Ordinary General Meeting of Shareholders held in June 2017. This decision was made based on trends regarding recent takeover defense measures as well as the results of discussions with institutional investors and other domestic and overseas shareholders. In light of these exchanges, it was judged that the discontinuation of these measures would facilitate efforts to contribute to the common interests of the shareholders of the Company by strengthening corporate governance, advancing the medium-term management plan, and further improving corporate value.
- Apr.Changed name of CSR Promotion Department to Sustainability Department
  In November 2016, MARUI GROUP set forth its new goal of achieving sustainability in light of social trends and a standpoint emphasizing environmental, social, and governance (ESG) concerns. In conjunction with this development, the name of the CSR Promotion Department, which was established in 2005, was changed to the Sustainability Department and its mission was redefined as advancing initiatives to transform our main business into a socially contributing undertaking with eyes to the future.
  
  3 Commencement of future leader development program
  An evaluation of the Board of Directors' effectiveness identified the issue represented by the Company's lack of successor development programs. To address this issue, MARUI GROUP launched the Co-Creation Management Academy management training program to help cultivate future leaders.
  
  Cultivation of Future Leaders
- - Feb.Published ESG DATA BOOK
    
    ESG DATA BOOKs

MARUI IR DAY Materials and Videos

- 2016Nov.Published Japanese-language version of Co-Creation Sustainability Report 2016, which focused on four core themes; English-language version published in January 2017
  
  Co-Creation Sustainability Reports
  - Held explanatory forum on Co-Creation Management Report 2016
    
    MARUI IR DAY Materials and Videos
- Oct.Established ESG Promotion Department
  The ESG Promotion Department coordinates with the IR Department to bolster communication with ESG ratings institutions and enhance the disclosure of ESG information.
- Sep.Published Japanese-language version of Co-Creation Management Report 2016 integrated report; English-language version published in October 2016
  
  Co-Creation Management Reports
- Jul.Establishment of an Advisory Board
  The Advisory Board was established to formulate strategies for accomplishing the goals of the medium-term management plan and for realizing medium-to-long-term improvements to corporate value. The purpose of the Advisory Board is to enable MARUI GROUP to receive multifaceted advice and proposals from external experts with insight into business strategies and various business areas. We anticipate that such advice will be a powerful asset in the Groupwide pursuit of improved corporate value as we seek to address the rapidly changing operating environment and the diversifying society. Regular monthly meetings of the Advisory Board are held, at which representatives from relevant areas attend, and advice is also sought on specific themes.
- Jun.2 Introduced performance-linked, stock-based compensation to serve as a medium-to-long-term incentive for directors and executives of the Company and directors of subsidiaries
  Through the performance-linked, stock-based compensation system, applicable officers receive allocations of Company stock every three years that are adjusted via a coefficient within the range of 0% to 100% based on the KPI defined for that period (ROE, EPS, and ROIC for the first three-year period). The Company has adopted the Board Incentive Plan Trust scheme for this system. Accordingly, director compensation now consists of fixed basic compensation, performance-linked bonuses, and performance-linked, stock-based compensation. In addition, an incentive plan based on the Employee Stock Ownership Plan Trust scheme has been instituted for managers of Group companies to increase their motivation to contribute to medium-to-long-term improvements in performance and corporate value for the Company.
- May1 Established Nominating and Compensation Committee with external directors as its primary members
  Based on a resolution by the Board of Directors, the Nominating and Compensation Committee must consist of at least three members, two of whom must be outside directors. At a meeting of the Board of Directors held on May 12, 2016, three members were appointed: external directors Koichiro Horiuchi and Etsuko Okajima, and President Hiroshi Aoi. We believe that discussing matters related to the nomination and compensation of directors at a committee with external directors as its primary members will help ensure objectivity and transparency and thereby contribute to the enhancement of our corporate governance system.
- Mar.–
  MayConducted evaluation of the Board of Directors' effectiveness
  All directors and Audit & Supervisory Board members completed a self-evaluation survey of the effectiveness of the Board of Directors. Based on these surveys, it was decided that the Board of Directors was functioning sufficiently. Areas applauded and issues identified included the following.
  
  Areas Applauded
  – Active discussion centered on external directors appointed by reducing the total number of directors
  – Respect for opinions of external directors
  – Incorporation of perspectives of shareholders, investors, and other stakeholders
  
  Issues Identified
  – Lack of successor development programs → 1 3
  – Failure to link director compensation to medium-to-long-term performance → 2

- 2015Dec.Held explanatory forum on Co-Creation Management Report 2015
  MARUI GROUP held its first integrated report explanatory forum on Co-Creation Management Report 2015 for institutional investors, analysts, and members of the press to faciliate understanding of the report's contents. In this forum, President Aoi and representatives from each business explained co-creation management policies and examples of specific initiatives.
  
  MARUI IR DAY Materials and Videos

MARUI IR DAY Materials and Videos

Nov.Formulated MARUI GROUP Corporate Governance Guidelines
The MARUI GROUP Corporate Governance Guidelines codify our stance toward corporate governance and our initiative policies, including those for improving corporate value. For example, it is stated that one-third of directors should be external directors (independent directors), that the Company is to conduct appropriate capital measures based on its business structure, and that the Company will not engage in cross-shareholdings except when necessary.

MARUI GROUP Corporate Governance Guidelines
- Published Japanese-language Co-Creation CSR Report 2015, focusing on our connections with local communities and the greater society
  
  Co-Creation Sustainability Reports
Oct.Established dedicated investor relations department
The IR Department was established with seven members. This organization meets with between 200 and 300 institutional investors in Japan and overseas each year.
Aug.Published Japanese-language version of first integrated report, Co-Creation Management Report 2015

Co-Creation Management Reports
Jun.Reduced the number of directors from 10 to 6
We reduced the number of directors by four to reinforce the supervisory functions of the Board of Directors by making it easier for the opinions of the external directors to be incorporated into management practices.
Apr.Established Criteria for Independence of External Directors and Audit & Supervisory Board Members
Mar.Redefined roles of the Board of Directors and the Management Committee to separate management decision making and oversight from operational execution
The Board of Directors was defined as a forum for discussing important issues, and steps were taken to stimulate discussion centered on outside directors in order to enhance the Board's functionality as a venue for creating Groupwide strategies for improving corporate value. The Management Committee was delegated a wider range of decision-making authority from the Board of Directors in order to expedite management decisions.

- 2014Jun.Appointed second external director
  Ms. Etsuko Okajima has accumulated a wealth of management experience and insight at ProNova Inc. as well as a deep understanding of diversity issues and actively offers opinions and advice from an independent and objective standpoint.

- 2008Jun.Began appointing external directors
  - Shortened the term of all directors to one year to clarify management responsibilities

2007Oct.Adopted a holding company system

Sustainability Management System

MARUI GROUP has established the Sustainability Committee as well as the ESG Committee, an organization positioned under the Compliance Promotion Board, for the purpose of promoting co-creation sustainability management.

October 1, 2021–March 31, 2022

Discussion Topics in the Fiscal Year Ended March 31, 2022

October 1, 2021–March 31, 2022Sustainability Committee Discussion Topics
Alternative consumption methods and living innovations that can be implemented as a company deeply involved in material consumption and living issues (December 2021 and January 2022)

October 1, 2021–March 31, 2022ESG Committee Discussion Topics
– Initiatives for reducing the Company’s waste and greenhouse gas emissions
– Impact
– ESG disclosure
– Supply chain management initiatives

April 1, 2019 – September 30, 2021

* Positioned as a subcommittee of the Sustainability Committee over the period from April 1, 2019 to September 30, 2021

Discussion Topics in the Fiscal Year Ended March 31, 2022

April 1–September 30, 2021Sustainability Committee Discussion Topics
Meetings not held due to structural reforms

April 1–September 30, 2021ESG and Disclosure Subcommittee Discussion Topics
– Progress toward impact targets and future initiatives
– ESG disclosure
– Initiatives for realizing MARUI GROUP’s 2050 Vision and accomplishing impact targets

Discussion Topics in the Fiscal Year Ended March 31, 2021

October 1, 2020–March 31, 2021Sustainability Committee Discussion
– Report from Environment and CSR Committee^*
– Distinctly MARUI GROUP green businesses
– Sustainability governance

October 1, 2020–March 31, 2021Environment and CSR Committee^* Discussion Topics
– Progress and directives of green businesses
– ESG initiatives and policies

April 1–September 30, 2020Sustainability Committee Discussion Topics
– Official Groupwide initiative progress report
– Report from Environment and CSR Committee^*

April 1–September 30, 2020Environment and CSR Committee^* Discussion Topics
– Initiative reports (renewable energy, waste, disclosure based on TCFD recommendations, etc.)
– Issues identified in customer surveys and initiatives for the fiscal year ending March 31, 2022
– Reduction of impacts of society on the environment with customers

* Name changed to ESG and Disclosure Subcommittee on April 1, 2022

Discussion Topics in the Fiscal Year Ended March 31, 2020

October 1, 2019–March 31, 2020Sustainability Committee Discussion Topics
– Report from Environment and CSR Committee^*
– Report from Sustainability Progress Monitoring Committee (vision, key performance indicators)

October 1, 2019–March 31, 2020Environment and CSR Committee^* Discussion Topics
– Report from Sustainability Progress Monitoring Committee (green businesses)
– Report on shopping bag initiatives
– Disclosure on physical risks and opportunities based on TCFD recommendations

April 1–September 30, 2019Sustainability Committee Discussion Topics
– Report on green business progress in the fiscal year ended March 31, 2019
– ESG initiatives
– Report from Sustainability Project Team

April 1–September 30, 2019Environment and CSR Committee^* Discussion Topics
– Report on green business progress in the fiscal year ended March 31, 2019
– Waste reduction initiatives

* Name changed to ESG and Disclosure Subcommittee on April 1, 2022

Co-Creation of Corporate Value with Shareholders and Other Investors

MARUI GROUP conducts investor relations activities so that the input gained through engagement with shareholders and investors can be reflected in its co-creation management initiatives.

Engagement activities are arranged based on various themes. In the fiscal year ended March 31, 2021, events were held in which investors were invited to tour tenants practicing co-creation sustainability management at Yurakucho Marui as well as tenants subcontracting the operation of these stores to MARUI GROUP employees. These events were designed to foster understanding of our business activities. Through such initiatives, we are promoting mutual understanding while gaining input on matters such as areas requiring improvement to be incorporated into business activities.

MARUI GROUP remains committed to maintaining high levels of mutually beneficial engagement with investors well into the future.

Relevant Links

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