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Basic Approach
The Sanrio Group applies its corporate philosophy of "Minna Nakayoku" (Getting Along Together) by seeking to use its business to create social value and sustainably increase its corporate value. We have identified 10 global material issues called Sanrio Materiality and are working to maximize the value of our business activities and contribute to solving social issues.
Addressing climate change is a priority initiative based on our materiality of “Care for the Global Environment.” We are identifying initiatives in our business activities that have a high impact on climate change. We are reducing greenhouse gas (GHG) emissions and pursuing energy efficiency by switching to LED lights, to reduce our impact on GHG emissions and other aspects of climate change, and on energy usage.
We also adhere to the TCFD recommendations to identify risks and opportunities associated with climate change and disclose information to stakeholders.
Strategy
The Group follows TCFD recommendations for conducting scenario analysis and identifying risks and opportunities associated with climate change. In the 2023 scenario analysis, impact assessments were conducted for “transition risks and opportunities toward decarbonization” and “physical risks and opportunities from the progression of climate change” for the year of 2035.
Scenarios used for impact assessment
| Scenario description | References | |
|---|---|---|
| 1.5°C and 2°C scenarios | Scenario in which the global average temperature increase is limited to 1.5°C and 2°C compared to pre-industrial levels. This scenario assumes that strict environmental regulations will be introduced and large-scale investment in environment-related technologies will be made to achieve international goals. |
|
| 4°C scenario | Scenario in which the average global temperature rises by more than 4°C compared to pre-industrial levels. This scenario assumes delayed introduction of environmental regulations, countries unable to curb GHG emissions, and increasing frequency of abnormal weather events, such as heavy rains and floods, as climate change progresses. |
|
Risks and opportunities
Analysis of risk associated with the transition to decarbonization found the risk of higher financial needs for the operations of stores and supply chains owing to the implementation of a carbon tax, stricter regulations on GHG emissions, higher allotted charges on renewable energy resources, and rising energy costs. Analysis of physical risks found risk of more frequent abnormal weather events could increase damage to facilities and stores and increase instances of loss of business opportunities. We are therefore pursuing measures to reduce the impact of transitional and physical risks by considering the introduction of renewable energy and confirming evacuation routes and other emergency response policies according to the rules for each building.
Analysis of opportunities found that indoor theme parks, such as Sanrio Puroland, are less susceptible to impact from an increase in extreme weather events, which may enhance their competitive advantage. We intend to further strengthen our competitive advantages by creating an organization that is highly resilient to social changes, including climate change, by responding to social trends and continuing to develop our shops, products, designs, licensing business, value experience business, and all other aspects of our entertainment business.
Major climate change risks affecting the Group
| Risks/opportunities | Timing of materialization of risks and opportunities (short, medium, or long term) | Impact on business | Estimated long-term financial impact | Calculation method | Countermeasures | |
|---|---|---|---|---|---|---|
| Transition risks | Increased burden from carbon pricing and other measures | Medium and long term (3 years–) |
Possibility of increased financial burden due to the introduction of a carbon tax, the strengthening of GHG emission regulations, and the increased burden of renewable energy surcharges | 156 million yen |
|
|
| Physical risks | Damage to facilities and loss of business opportunities due to intensifying wind and flood damage | Medium and long term (3 years–) |
| 566 million yen |
|
|
Structure and governance
The Sustainability Committee was established to strengthen the Group's sustainability management initiatives. The committee is chaired by the President and CEO and vice-chaired by the director of the Corporate Strategy Division. The committee also regularly discusses specific Group measures, policies, and initiatives relating to addressing climate change in committee meetings (four times a year).
Important matters are deliberated and discussed by the Management Council and reported to the Board of Directors (four times a year). The Board of Directors is responsible for overseeing the setting of targets and the progress of measures.
For more information on the Sustainability Committee, please refer to Structure and Governance under Sustainability
Risk management
The Sanrio Joint Compliance Committee, chaired by the director in charge of internal control and the managing executive officer responsible for the Human Resources Division, was established to strengthen the Group response to business operation risks by providing integrated, group-wide risk management and compliance related to the environment, disasters, quality, information security, and import/export management.
Sanrio recognizes that transition risk and physical risk caused by climate change have potential environmental as well as economic and business impacts. The Sustainability Committee also monitors these and other risks related to sustainability, and if a risk is identified as requiring a response, the committee works with the Sanrio Joint Compliance Committee to examine and implement countermeasures. The Sanrio Joint Compliance Committee and the Sustainability Committee will continue to work together to evaluate and analyze the potential impact on business and to construct a structure to manage such risks.
For more information, please refer to Risk Management under Sanrio Sustainability
Metrics and targets
The Group has set GHG emission reduction targets for FY3/2027. We are working with all of our stakeholders to achieve targets of reducing Scope 1 and 2 emissions by 60% compared to FY3/2019 and Scope 3 emissions per unit of sales by at least 10%.
Environmental data*1
| Details | FY3/2019 | FY3/2023 | FY3/2024 | FY3/2025 | ||
|---|---|---|---|---|---|---|
| GHG emissions (t-CO2eq) *2, 3, 4 |
Scope 1 | 2,764.7 | 1,597.7 | 1,015.2 | 981.2 | |
| Scope 2 | 10,111.6 | 9,056.6 | 8,269.9 | 8,711.7 | ||
| Scope 3 | 95,022.8 | 106,713.8 | 144,379.5 | 188,496.8 | ||
| Upstream | Category 1 Purchased goods and services |
82,459.5 | 92,573.3 | 122,197.6 | 158,291.4 | |
| Category 2 Capital goods |
4,967.0 | 6,141.9 | 13,719.5 | 21,191.0 | ||
| Category 3 Fuel- and energy-related activities not included in Scope 1 or 2 |
2,143.1 | 1,855.1 | 1,561.7 | 1,513.9 | ||
| Category 4 Transportation and distribution (upstream) |
4,591.2 | 5,410.8 | 6,178.0 | 6,775.3 | ||
| Category 5 Waste generated in operations |
453.2 | 337.5 | 308.6 | 264.2 | ||
| Category 6 Business travel |
115.9 | 113.0 | 119.9 | 135.8 | ||
| Category 7 Employee commuting |
289.2 | 281.4 | 292.6 | 324.0 | ||
| Category 8 Leased assets (upstream) |
Outside scope of calculation | Outside scope of calculation | Outside scope of calculation | Outside scope of calculation | ||
| Downstream | Category 9 Transportation and distribution (downstream) |
Outside scope of calculation | Outside scope of calculation | Outside scope of calculation | Outside scope of calculation | |
| Category 10 Processing of sold products |
Outside scope of calculation | Outside scope of calculation | Outside scope of calculation | Outside scope of calculation | ||
| Category 11 Use of sold products |
3.7 | 0.9 | 1.5 | 1.2 | ||
| Category 12 End-of-life treatment of sold products |
Outside scope of calculation | Outside scope of calculation | Outside scope of calculation | Outside scope of calculation | ||
| Category 13 Leased assets (downstream) |
Outside scope of calculation | Outside scope of calculation | Outside scope of calculation | Outside scope of calculation | ||
| Category 14 Franchises |
Outside scope of calculation | Outside scope of calculation | Outside scope of calculation | Outside scope of calculation | ||
| Category 15 Investments |
Outside scope of calculation | Outside scope of calculation | Outside scope of calculation | Outside scope of calculation | ||
| Total of Scopes 1, 2, and 3 | 107,899.1 | 117,368.2 | 153,664.6 | 198,189.7 | ||
| Fuel and energy consumption*4 | Gasoline (kL) | - | - | 61.6 | 64.5 | |
| Kerosene (kL) | - | - | 0.5 | 1.1 | ||
| Light oil (kL) | - | - | 4.0 | 4.6 | ||
| A-type heavy oil (kL) | - | - | 1.0 | 1.0 | ||
| Liquefied petroleum gas (LPG) (t) | - | - | 19.0 | 0.2 | ||
| City gas (Thousand m3) | - | - | 296.0 | 310.6 | ||
| Electricity (kWh) | - | - | 18,490,248.8 | 19,539,300.9 | ||
| Steam (GJ) | - | - | 2,332.0 | 2,597.8 | ||
| Total energy consumption (GJ) | - | - | 85,374.6 | 89,283.0 | ||
| Amount of product waste | Waste value (JPY Millions) | - | 8,762 | 4,024 | 2,180 | |
*1The figures are compiled by Sanrio Company, Ltd., Sanrio Entertainment Co., Ltd., Sanrio Shanghai International Trade Co., Ltd., and Sanrio, Inc.
*2Sanrio Shanghai International Trade Co., Ltd., (location-based in China) and Sanrio, Inc. (location-based in North America) calculate and add only Scope 1 and 2 emissions to the total.
*3When the electric power providers are known, Scope 2 emissions are calculated based on the market standard using the residual mix method. When the providers, usage volume, or usage charges cannot be ascertained, Scope 2 emissions are calculated using the national average coefficient for the location standard and total floor area.
*4Some fuel and electricity consumption estimates are derived from full-year usage charges, and some electricity consumption estimates are calculated based on the total floor area of retail stores.
For more information, please refer to ESG Data
Main initiatives
Initiatives to reduce GHG emissions
At all directly managed stores, we have switched shopping bags from plastic to paper bags made from low-impact recycled paper and other materials. We also use plant-derived plastic for gift bags.
At Sanrio Puroland, we have completed installation of LED lighting and are currently preparing to install solar power generation equipment. In addition, for business trade with overseas companies, we actively use sea freight as much as possible instead of air freight, which has high CO2 emissions.
We believe these measures will both reduce our CO2 emissions and increase our business.
External evaluations related to climate change
For climate change-related external evaluations and initiatives, we responded to CDP Climate Change Report 2024 as required by CDP, an international environmental NPO, and received a score of B at the management level. In the future, the Sanrio Group plans to pursue measures to address climate change and we will strive to improve our score. Sanrio has also been selected for inclusion in the S&P/JPX Carbon Efficient Index since 2018.
For more information, please refer to External Evaluations / Initiative and Organization Participation
Membership in industry organizations addressing climate change issues
Sanrio has been a member of KEIDANREN (Japan Business Federation) since 2022. The Japan Business Federation announced the Keidanren Carbon Neutrality Action Plan in 2021 and has set the goal of reducing GHG emissions substantially on a global scale by pursuing four pillars: 1) Formulation of an industry vision toward carbon neutrality (CN) in 2050 and emission reductions from domestic business operations 2) Strengthening cooperation with other interested groups, 3) Promoting contribution at the international level, and 4) Development of innovative technologies toward CN by 2050.
We periodically check KEIDANREN’s latest initiatives and policies on climate change and consider appropriate responses as needed. We will continue to endeavor to fulfill our responsibilities as a company and work toward realization of a sustainable society.
For more information, please refer to External Evaluations / Initiative and Organization Participation
Adaptation to climate change (heatstroke prevention)
We actively provide merchandise and implement awareness-raising activities for heatstroke prevention as one way to adapt to a changing climate.
At Harmonyland, we have installed mist showers, mist fans, and tents in the park, and are adding more portable coolers and fans for staff at some attractions. We also distribute cooling apparel, hats, and sunglasses to staff, and are taking other initiatives to prevent heatstroke for customers and staff.
At Sanrio’s directly managed stores and online shop, we sell heat mitigation goods and provide licensees with Sanrio character designs for heatstroke prevention awareness initiatives.