Preserving Natural Capital

To realize a sustainable society, the LY Corporation Group (the "Group") will give consideration to the impact that its business activities have on ecosystems, make efforts for sustainable procurement, waste management, and protection of water resources and biodiversity, and advance initiatives for global environmental protection.

Waste Management

The LY Corporation Group offers services that promote a circular economy through resource recycling. By providing these services, the Group strives to create added value while using resources efficiently, minimize resource consumption, and reduce waste. In addition, the Group promotes the practice of "reduce, reuse, recycle" within its workplace to alleviate the environmental load, including the reduction of greenhouse gas emissions.

Offering Services as a Reuse Platform

Yahoo! JAPAN Auction—one of Japan's largest auction services launched in September 1999—and Yahoo! JAPAN Flea Market—a flea market service launched in October 2019 where anyone can easily buy and sell secondhand goods—aim to become platforms that maximize the value of goods. These services help reduce waste while providing a safe and enjoyable place to reuse items.
Furthermore, ZOZOUSED—a brand-name used clothing zone operated by ZOZO, Inc. ("ZOZO")—is reducing waste by purchasing and selling fashion-related products that are no longer in use. To collect these items, ZOZO has implemented the use of reusable bags that can be cleaned and repeatedly used as part of promoting sustainable fashion.

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A Production-On-Demand Service

Made by ZOZO is a production support platform that was launched to solve the problem of mass waste in the fashion industry. By digitalizing factory operations that were previously done by hand and developing a unique system that enables the simultaneous production of multiple products with different designs, the company can produce a minimum of one garment and ship it in as little as ten days after receiving an order. Since the production process begins after orders are received from customers on ZOZOTOWN, sales can be made with zero risk of unsold items due to excess inventory while offering a wide variety of products.

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Askul Resource-Recycling Platform

In April 2022, ASKUL Corporation ("ASKUL") launched its Askul Resource-Recycling Platform to promote resource recycling initiatives in cooperation with all entities in the value chain throughout the entire product lifecycle, from product design and planning to manufacturing, sales, reuse, and post-use recycling and re-commercialization.

・Resource Circulation (Recycling) of Used Clear Folders
Clear folders are currently thrown away after being used several times, but based on the Ministry of the Environment of Japan's "FY2022 Demonstration Project for a Plastic Resource Circulation System toward a Decarbonized Society," clear folders have proven to be suitable for resource circulation as they are made of a single material and almost identical in shape. In order to make effective use of limited resources, reduce CO₂ emissions, and fulfill ASKUL's responsibility as a distributor, ASKUL will realize resource recycling by collecting clear folders from its providers for recycling and reprocessing into new products.

・Loop Professional for ASKUL (Reuse)
ASKUL, together with Loop Japan, is taking on the challenge of establishing a system for reusing containers of products such as food, beverage, and detergents instead of throwing them away. After purchasing and using products from ASKUL, the containers are collected, cleaned, and refilled for them to be purchased again. Through this initiative, ASKUL aims to reduce waste and disposal costs as well as CO₂ emissions.

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Selling Products That Would Have Been Disposed of for Various Reasons at Outlet Prices

ASKUL launched "Go Ethical," an initiative aimed at reducing product disposal loss, as a service within LOHACO in November 2019. In co-creation with manufacturers who are the product creators, products without any quality issues that were previously discarded by manufacturers for various reasons are now being sold at outlet prices. ASKUL believes that this initiative will reduce product waste and meet the environmentally conscious needs of its customers as a purchasing option amidst the growing interest in sustainable living and ethical consumption. In November 2023, ASKUL also began offering this service to its BtoB customers. Going forward, ASKUL will strengthen its co-creation with manufacturers and suppliers to reduce waste loss throughout the supply chain.

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Sustainability Initiatives With Packaging Materials

ZOZO is also working to reduce waste in the area of shipping materials. The company has introduced a system that allows its staff to select the appropriate size of packing material according to the size of the product, thereby preventing excessive packing. In addition, by replacing plastic cushioning materials with 100% recycled paper, ZOZO is able to give consideration to the environment at the disposal stage.
Note: For some items, such as fragile goods, plastic cushioning materials are also used.

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Renewal and Reuse of End-of-Life IT Assets

In November 2022, LY Corporation (the "Company," former Yahoo Japan Corporation ("Yahoo Japan")) adopted the HPE Asset Upcycling Services (AUS) provided by Hewlett Packard Enterprise to ensure that its end-of-use IT assets get renewed and reused.
Before this, when end-of-use IT equipment was removed and disposed of, storage media such as hard disks were destroyed by an external device instead of being reused. AUS deletes data without destroying the hardware, enabling reuse. Security risks associated with the elimination of destruction are addressed by AUS throughout the entire process, through measures such as lockable cages dedicated to the Company, sealed trucks with GPS tracking, and route reporting.
This solution enables both the reuse of IT assets and implementation of security measures.

Conversion to Paperless Offices

By distributing laptop computers and tablets to its employees, digitizing materials for meetings to be viewed on computers or with projectors, and promoting online work, the LY Corporation Group greatly reduces the volume of printed documents and makes the shift to paperless offices.

Promotion of Reduce, Reuse, Recycle

At the Kioicho office in Tokyo, the LY Corporation Group has reduced energy consumption by switching to LED lighting throughout the entire building, and has promoted reusing and recycling by separating garbage into 15 categories. At the company cafeteria, the Group minimizes food loss by using the same ingredients for different menus that are changed every day.
The Group has also made efforts to conserve forest resources while ensuring confidentiality and recycling with a recycling boxes for used paper.
Uninterruptible power supply (UPS) batteries are also recycled at the data centers operated by the Company.

Recycling Office Devices to Reduce Waste

The way employees work at the Company has significantly changed due to the COVID-19 pandemic. The need for employees to improve their work environment at home increased while the Company optimized its office space. In response, in addition to regular recycling, the Company (former Yahoo Japan) sold some of the office chairs and liquid crystal monitors to its employees. From 2020 to 2022, 1,277 chairs and 374 monitors were provided to employees throughout Japan. Furthermore, from 2020 to 2021, the Company (former Yahoo Japan) donated 34,650 meals to an outside organization from its food reserved for emergencies, which had become excessive due to a decrease in the number of people coming to the office, reducing food loss.

Protection of Biodiversity

As an enterprise that strives to be in harmony with the natural environment, local communities and future society, the LY Corporation Group takes on initiatives to pass on sustainable biodiversity to future generations.

Transactions of All Ivory Products and Red List Species Banned in LY Corporation's E-Commerce Services

Yahoo! JAPAN Auction, the internet auction service operated by the Company, handles a wide variety of products to allow users to enjoy shopping and transactions. At the same time, to comply with laws and regulations, the Company has created guidelines for products that it deems inappropriate, and has operated the service in accordance with these guidelines.
For transactions of ivory, the Company had provided transaction opportunities in Japan in compliance with the Law for the Conservation of Endangered Species of Wild Fauna and Flora. However, the Company confirmed multiple reports in which ivories that were traded in Japan through Yahoo! JAPAN Auction were smuggled abroad and detected by foreign customs authorities. Considering the global situation over ivory trade as well as advice from environmental groups, the Company (former Yahoo Japan) banned the transactions of all ivory products in its e-commerce services from November 1, 2019.
In addition, with regard to living creatures, while gaining the cooperation of relevant ministries and agencies of Japan, the Company has provided services to create a place where lovers of living creatures can carry out transactions. Meanwhile, it has received a variety of opinions regarding the handling of endangered species, and has continued to hold deliberations.

As a result, the Company (former Yahoo Japan) took seriously the possibility that trades in Yahoo! JAPAN Auction may affect the survival of endangered species, and has added those covered by endangered and near-threatened species on the Red List to the list of Yahoo! JAPAN Auction's prohibited items, effective September 29, 2022.

Supporting Carbon Offset Campaigns for National Parks and World Natural Heritage Sites

Since August 2017, the Company (former Yahoo Japan) has supported the initiative for the prevention of global warming, "Carbon Offset Campaigns Targeting Japan's National Parks and World Natural Heritage Sites," a collaborative initiative between the Ministry of Environment and the Ministry of Economy, Trade and Industry, and participates in the conservation activities in national parks and world natural heritage sites.
In this campaign, energy used and carbon dioxide emitted around the national parks will be reduced or offset by introducing energy-efficient/renewable energy equipment and forest management. By informing the public of these activities, the campaign aims to stimulate action to prevent global warming.

The Company (former Yahoo Japan) purchases J-Credits ^(*1) through the campaign secretariat office. Half the purchased amount is used for the preservation of national parks and the World Natural Heritage sites. The rest is credited to project participants ^(*2) and is effectively used.

*1: J-Credit Scheme is a scheme under which the Government of Japan certifies credits for the amount of greenhouse gas emissions reduced through efforts made by introducing energy-saving devices, as well as the amount of such emissions removed and volume absorbed through appropriate forest management.
*2: Organizations and companies that take initiatives to reduce greenhouse gas emissions and increase absorption volume. J-Credit project participants sell J-credits based on calculations made according to emission reduction and absorption volume and these "credits" can be utilized to reduce the running cost of facilities and to make new energy saving investments.

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Donations to Activities Aimed at Biodiversity Conservation

Through Yahoo! JAPAN Internet Fund Raising, LY Corporation accepts donations for activities aimed at biodiversity conservation. In April 2021, it established a donation account with Everlasting Nature of Asia for the conservation of green turtles, which collected over JPY800,000. In July 2021, an account was created with World Wide Fund for Nature Japan (WWF Japan) to conserve forests in eastern Australia, where large fires have killed many wildlife species, including koalas. This account collected more than JPY2 million donations.
Yahoo! JAPAN Internet Fund Raising raises funds for many other biodiversity conservation activities and contributes to the conservation through the donations.

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Efforts to Conserve and Restore Biodiversity by Maintaining Biotope

In an effort to conserve biodiversity and to contribute to local communities, the Company is working on an urban development initiative in Tokyo Garden Terrace Kioicho, where its Tokyo/Kioicho office is located, to form an ecological network (corridor) connecting precious greens in central Tokyo. The Company is working on this initiative to conserve and recover biodiversity through biotope regeneration.
Specifically, since June 2016, the Company (former Yahoo Japan) has built an environment so that fireflies (which have been identified to inhabit the inner moat of the Imperial Palace close to the office) can now live in the Kioicho biotope, to symbolize natural regeneration in the vicinity of its office.
With these initiatives at the core, the Company and SEIBU REALTY SOLUTIONS INC./Tokyo Garden Terrace Kioicho participates in the 30by30 Alliance for Biodiversity.

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ASKUL, TSUMAGOI MEISUI, and Tsumagoi Village Sign "Forest Maintenance Partnership Agreement"

TSUMAGOI MEISUI, an ASKUL group company, produces and sells natural mineral water utilizing the abundant water resources of Mt. Azumaya in Tsumagoi Village, Gunma Prefecture, and the same product is also sold through ASKUL. Recognizing the need to maintain the forests around Tsumagoi Village, where TSUMAGOI MEISUI is located, the three parties concluded a "Forest Maintenance Partnership Agreement" as forest maintenance is considered essential to preserve water resources in the future. The three parties will work together to promote understanding of forest conservation through tree-planting activities and hands-on learning activities, as well as projects to conserve forest resources, thereby contributing to environmental conservation and regional revitalization, including the forests of Tsumagoi Village.

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Cooperating with the Future and Coral Project

The deterioration of the marine environment, which is influenced by climate change, is causing coral reefs to die out. To tackle this issue, LY Corporation's parent company SoftBank Corp. along with Onna Village in Okinawa Prefecture—the village that has seeded the most corals in the world—and many other enterprises and organizations, initiated the Future and Coral Project in order to protect the environment through conservation of the ecosystem and countermeasures against global warming. LY Corporation cooperates by raising donations to plant coral seedings through Yahoo! JAPAN Internet Fund Raising and reporting the issue through "Yahoo! JAPAN SDGs."

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Handling of Environmentally Friendly Products and Packaging Materials

ASKUL has been focusing on the development and handling of forest certified products, having acquired FSC CoC certification in June 2005 and PEFC CoC certification in May 2010. As a seller of paper and wood products, ASKUL is promoting responsible procurement by offering forest certified products in its main wooden furniture series, as well as paper products such as photocopying paper, notebooks, and slips. In addition, with ASKUL's original photocopying paper, it is possible to trace what kind of wood the paper was made from based on the product's lot number.
ZOZO also uses FSC-certified cardboards for its deliveries to customers.

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Communicating With an Environmental NGO

In 2019, LY Corporation received an engagement from the environmental NGO Rainforest Action Network regarding the risk of procuring paper from vendors who do not meet sustainability-conscious procurement standards. Through investigation, it was found that the Company has been making indirect transactions with such vendors and thus changed its procurement to a vendor that meets the Company's supplier evaluation criteria, which are based on the principles of eco-friendliness and ensuring occupational health and safety.

Protection of Water Resources

Recognizing that water resources are an important item for the conservation of natural capital, which also relates to climate change issues and biodiversity conservation, the Group will strive to reduce water consumption in its business activities, conserve water resources, and manage and address water risks.

Analyzing and Responding to Water Risks and Identifying Priority Locations

Water risks were identified for 182 locations of the Group's consolidated companies that provide financial and non-financial reporting. If multiple companies reside in the same site, the site was counted as a single location.

* The survey was conducted in June 2024.

The World Resources Institute's (WRI) Water Risk Atlas tool was used to periodically check the Group's overall water risk, water stress risk, and future risk, among others.

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Overall Water Risk

Of the 182 sites surveyed, approximately 82%, or 149 sites, are located in Japan, and domestic sales account for more than 90% of the total sales in terms of revenue size. With most of the domestic sites having "Low - Medium (1-2)" risk, the Group recognizes that the overall water risk is low and will have little impact on its business. However, many of the domestic sites are located in low-lying areas such as river plains and coastal areas, and the Group recognizes that there are risks associated with climate change, including torrential rains, floods, and storm surges.
A total of seven sites in four overseas countries were identified as having a water stress risk of high (40% risk ratio) or above. These areas have risks such as population concentration, water shortage, and drought, and are considered as areas requiring special attention.

The scale of the risks is as follows:

Future risks in 2050 were also identified at the same time, and areas that fell into the category of High (risk ratio 40%) or above were found. As there are concerns of medium- to long-term submergence/flood risks, water shortage/drought risks, water quality risks, and so forth, the Group will continue to make efforts to conserve water and energy while preparing for the emergence of risks to ensure the continuity of its business.

Water Consumption Reduction Target

The Group is committed to recharging water resources with the target of achieving a 10% reduction of water consumption associated with business expansion from FY2022 levels by 2030.

* Water consumption for FY2022 has been partially recalculated and revised. (May 2024)

Initiatives to Conserve Water Resources

Water use by the Group can be broadly divided into two categories: for cooling and humidification at data centers and for daily use at offices. At offices, efforts are made to conserve water by using only the amount necessary, and by also using rain water through the building system.
At data centers, industrial water with a high reutilization rate is used in accordance with the Group's annual plan, so water used at these sites do not place an excessive burden on the environment that could lead to the depletion of resources. Further, since water is mainly used for cooling and humidification, the water discharged does not cause contamination. Management and supervision of water used at these sites is appropriately conducted in collaboration with responsible authorities to conserve water resources.
The Group will maintain its monitoring system to continuously watch for changes in water-related risks, and will take appropriate steps if the water stress is judged to be high.

* Above are figures for LY Corporation. Total expense = Selling, general and administrative expenses

Initiatives Implemented at Data Centers

The Company installs the latest energy- and water-saving equipment whenever it expands or updates its data centers. For cooling systems that require water, the Company will continue its efforts to conserve water by implementing initiatives such as adopting air conditioning systems that utilize outside air and installing air-cooled chillers that do not require large amounts of cooling water.

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Third-Party Verification

Third-Party Verification of Water and Industrial Waste Disposal

In order to objectively evaluate and ensure high reliability of its reported environmental data, the Group (former Z Holdings Group), underwent third-party verifications by the Japan Quality Assurance Organization along with its parent company SoftBank Corp.
For more information, please refer to the following link.

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