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Environment

Action on Climate Change

Basic Policy

Duskin positions the risks and opportunities associated with climate change as critical management issues. In order to advance information disclosure based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), we classify and study climate-related risks as risk associated with the transition to a low-carbon economy and risk associated with the physical impacts of climate change.

Governance

We established the Sustainability Committee, which consist of the Outside Directors, the Operating Officers, and the Standing Audit & Supervisory Board Members. This committee, serving as an advisory body to the Board of Directors, studies and deliberates the basic policies and key issues associated with climate change. We also established the Quality Assurance & Environment Committee, which studies and determines agreements concerning environmental conservation and improvement issues, and the Environmental Liaison Committee, which manages the progress of environmental policies, as sub-organizations under the Sustainability Committee. This structure helps the Board of Directors to identify and monitor actual risks and opportunities, and to enhance climate change-related governance.

structure

Strategy

Unusual weather and other effects of climate change are becoming increasingly serious, and how to respond to climate change has become an issue of global concern. To help realize a decarbonized society, which is a target established in the Environmental Policy, we are analyzing multiple scenarios in the near-future time span from 2030 to 2050 concerning physical changes brought about by climate change around the world as well as socioeconomic trends. Based on these analyses, we estimate the financial impact on Duskin's business performance, investigate what kind of measures to take in response and formulate strategy.

Indicators and Targets

To contribute to achieving a decarbonized society, we have established two targets to be met by 2030: shifting 50% of the energy consumed for the Duskin Group's business activities to renewable energy by 2030 and reducing CO2 emissions at company-owned facilities by 46% from their 2013 level. In FY2020, due to the coronavirus pandemic, employee travel and commuting declined, with the result that Scope 3 energy consumption and emissions were lower than the previous year. Also, to ensure accurate and transparent information disclosure, Scopes 1, 2, and 3* energy consumption and CO2 emission figures have been certified as accurate by a third party.

  • * Scope 1: Greenhouse gas emissions directly emitted by the Duskin Group
  • * Scope 2: Indirect emissions from the use of electricity, heat or steam supplied by other companies
  • * Scope 3: Indirect emissions not included in Scope1 and Scope2 (emissions by other companies engaged in activities related to the business)

CO2 emission (t-CO2)

2013
(Base year)
2017 2018 2019 2020 Compared with
base year
Scope 1* 13,155 13,139 12,776 12,325 12,365 -6.0%
Scope 2* 20,381 21,191 20,318 19,555 19,430 -4.7%
Scope 3 536,614 428,916 406,461 424,851 410,666 -23.5%
Total 570,150 463,246 439,556 456,730 442,461 -22.4%
  • *Duskin Group and franchised plants

Risk Management

We conducted a qualitative provisional climate change risk assessment to evaluate the possibility of climate change having a significant impact on the financial performance of our businesses. Through a careful review of the results, we have identified the key drivers that could ultimately have a major impact on the business continuity of the Duskin Corporate Group and franchisees. We will continue to employ scenario analysis to evaluate and assess the risk posed by these key drivers.

Climate change related risks

Category External environmental changes Key drivers Impact on business Financial impact
Transition
risks
Policy, legal regulations
  • ●Stronger GHG (greenhouse gas) emission regulations
  • ●Higher carbon tax rates
  • ●Higher tax costs
  • ●Higher cost of product and service
Technologies
  • ●Progress in energysaving technologies among competitors
  • ●Delayed development of next-generation products (developed through manufacturer tie-ups)
  • ●Lower profits
Markets and reputation
  • ●Higher market sensitivity to climate change
  • ●Divestment (investment withdrawal) from companies that do not reduce GHG emissions
  • ●Higher GHG emission reduction initiative costs
  • ●Higher capital control and adjustment costs
Physical
risks
Acute
  • ●Higher average temperatures
  • ●Larger typhoons
  • ●Higher typhoons frequency
  • ●Higher flooding frequency at plants, shops and offices; higher power outage frequency
  • ●Procurement and logistics channel disruptions
  • ●Increased number of employees standing by at home due to disasters
  • ●Higher recovery costs
  • ●Lower sales until recovery
Chronic
  • ●Higher sea levels
  • ●New rainfall patterns
  • ●Higher average temperatures
  • ●Lower farm product (wheat, coffee, etc.) yields
  • ●Higher raw material costs
  • ●Higher cost of sales

Climate change related opportunities

Category External environmental changes Key drivers Impact on business Financial impact
Opportu-
nities
Resource efficiency
  • ●More common use of next-generation automobiles
  • ●Lower storage battery prices
  • ●Lower total cost of vehicle maintenance
  • ●Lower expenses
Energy sources
  • ●More common use of renewable energy device and technology
  • ●Lower electricity costs
  • ●Lower product and service costs
Markets
  • ●New consumer preferences
  • ●Greater demand for environmentally responsible products
  • ●Greater demand for circular economy (recycling-oriented economy) products and services
  • ●Higher profits

Adopted Scenarios

  • ● IPCC RCP 8.5 Scenario: Global average temperature rise of at least 4℃ from pre-industrial levels
  • ● IPCC SR 1.5 Scenario: Global average temperature rise kept below 1.5℃
TCFD
Duskin is in accord with the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD) established by the Financial Stability Board (FSB) and aims to contribute to a sustainable society by analyzing the risks and opportunities related to climate change and disclosing information proactively.

Basic Policy

Based on our Environmental Philosophy, established in 1998, Duskin has defined our Environmental Policy as "striving to achieve the joint objective of engaging in sound business activities and environmental conservation to provide products and services that are safe, reliable, and environmentally friendly throughout each phase of their lifespan, from production to after-use."

We engage in business activities that reduce negative impacts on the environment whenever possible as part of designing, development and selection of products and services; plant operation; distribution, sales and promotional activities; and offices, facilities and equipment.

Environmental Management System (EMS)

Duskin's Direct Selling Group and Production & Logistics Group are putting environmental management initiatives into action in line with ISO 14001. Its approach is based on the concept Plan-Do-Check-Act (PDCA).

Based on our EMS, we conduct ongoing inspections every year and renewal inspections every three years. During FY2020, Duskin Group complied with environmental regulations.

Initial environmental training sessions are conducted as part of an educational program for our new employees. By raising environmental awareness, we strive to develop employees who work to conserve the environment throughout all their business activities.

Endeavors for a Recycling-Oriented Society

Duskin established a system for renting cleaning tools in Japan. As reflected in this rental system, Duskin operates its business based on the idea of repeated use, shared use, reduction of waste and disposal. To contribute to the creation of a recycling-oriented society, we will make effective use of limited resources while at the same time engaging in the 4Rs (Refuse, Reduce, Reuse and Recycle) throughout the entire product life cycle.

Mister Donut: Reducing food loss, electricity consumption and chlorofluorocarbon emissions

Because we are making use of Earth's resources, we have continuously engaged in endeavors to save them. This year in particular, which marks our 50th anniversary, Mister Donut will further evolve our approach to environmental conservation.

  • ● Free plastic bags service terminated as of April 1, 2020.
  • ● Recycling unsold donuts at certain shops into animal feed; turning methane produced after decomposing and fermenting the donuts, into biogas for use as electric energy
  • ● Used frying oil recycled 100% into fuel for boilers at our laundry plants where mops and mats are washed and reprocessed
  • ● A portion of raw materials provided to food banks
  • ● Reusable ceramic and glass tableware provided since 1974 for customers dining in-store Excluding certain shops
  • ● Emissions reduced by monitoring and managing air conditioners and freezers that use chlorofluorocarbons through thoroughgoing periodic inspections
  • ● Original equipment performance maintained through systematic cleaning and maintenance at each shop. Energy management implemented and reduced the consumption of electric power

Direct Selling Group: Reuse of mop and mat products

All used items are collected from customers, and 97% of the collected items are processed in the laundry plants and reused. The remaining 3% unusable items are utilized as fuels. All products are repeatedly used until their usable life ends. Dust and dirt on mops and mats are also recycled into materials for cement.

Duskin's Reuse and Recycling System
Duskin's Reuse and Recycling System

Conservation and Effective Use of Water Resources

Water shortage is aggregating on a global scale. It also presents the risk of negative impacts on the business continuity, so reducing water use and reusing water is important. Although Japan is not yet faced with chronic water shortage, we see this is not unrelated with Duskin Group.

At Duskin, a Founder's quote of "Return what we borrow from nature to its original state" has been passed down since our founding, and serves as our basic philosophy for conserving water resources.

Water Use Reduction Initiatives

Duskin plants use large amounts of water in the laundry process for mops and mats. Therefore, we apply standards for the volume of water used during the laundry process as a reference value for our plants and strive to manage and reduce water intake volumes.