DyDo Group Holdings

DyDo Group's View on Climate Change

The DyDo Group has been engaged in various initiatives to achieve a sustainable society in line with our corporate spirit, which has been fostered since our founding, “Striving to achieve happiness and prosperity together”.
In January 2019, we set out the Group Mission 2030, “For DyDo Group to create enjoyable, healthy lifestyles for people around the world”.
In January 2022, in order to further incorporate the perspectives of sustainability into our business activities, we identified eight themes, including “Contribution to helping achieve a decarbonizing society and a recycling-oriented society”, as priority issues (materiality) for the Group.

DyDo Group Materiality

The DyDo Group endorses the recommendations of the Financial Stability Board Task Force on Climate-related Financial Disclosures (TCFD).
Climate-related information based on the TCFD framework is disclosed as follows.

Announcement of endorsement of TCFD recommendations

1. Governance

The DyDo Group is strengthening its efforts to address sustainability issues to contribute to solving social issues through our business activities for the achievement of sustainable growth and the enhancement of enterprise value over the medium to long term.

We have established the Group Sustainability Committee, which is chaired by the President and Representative Director and is composed of members appointed by the Chair.

The Group Sustainability Committee examines and approves the overall sustainability management policy of the DyDo Group, examines and approves the specifics of the materiality, decides on sustainability programs, manages progress, and gives instructions for improvement. In addition to being held twice yearly, it is held as needed to enhance the value of our corporate brand. The President and Representative Director assumes the position of chairman of the Group Sustainability Committee as the CEO in the Group's sustainability management.

The Board of Directors supervises the Group’s response policies and action plans on climate risks and opportunities by receiving reports from the Group Sustainability Committee on matters discussed and examined in the committee.

2. Strategy

In accordance with the framework advocated by the TCFD, we predicted and analyzed changes in the external environment for the year 2050 by using scenario analysis.

For this response, we focused our analysis on the "domestic beverage business," the most influential segment of the the DyDo Group business (see table).

In the 1.5℃ scenario, due to the tightening of regulations, such as the introduction of a carbon tax, delivery costs and vending machine operation costs are expected to increase, and the risk of withdrawing vending machines due to the increase in electricity bills is expected at vending machine installed sites; the business operation of vending machine channel, which accounts for approximately 80% of the total sales of the domestic beverage business, will be significantly affected.

In order to mitigate these risks, the DyDo Group will make effort to reduce the number of route vehicles by switching them to EVs and by promoting smart operations, systematically introduce energy-saving vending machines, and incorporate carbon offsets by obtaining a Green Power Certification and so on. Through these efforts, we will promote partnerships with customers and create business opportunities.

In the 4℃ scenario, we recognize that main raw materials, such as coffee beans, for the domestic beverage business, will have a particularly significant impact. In addition, since the vending machine business is a labor-intensive industry, there is a concern that rising average temperatures in summer will affect the working environment for vending machine operations, leading to increased risk of a labor shortage. On the other hand, as a business opportunity, the demand for vending machines is expected to increase due to the needs for appropriate hydration and mineral supplementation to avoid heat stroke.

To handle these risks and opportunities, the DyDo Group strives to collect information on the production areas of coffee beans and other raw materials on a regular basis, build a system for decentralize procurement, and expand attractive product lineups that are not solely dependent on coffee.

We will also work to respond to labor shortages by promoting the diversification of workstyles through the development of a smart operation system and to optimize the product lineups suitable for the location features of vending machines to enhance the attractiveness of vending machines as retailers.

Additionally, due to intensifying natural disasters, vending machines are at increased risk of frequent flooding and other damage; we will continue to diversify the risk by installing vending machines over a wide area nationwide.

3. Risk management

We consider risks to be various factors that obstruct us from achieving our business strategy based on our corporate philosophy. We have therefore established basic matters regarding the group's risk management system based on our Basic Policy Regarding the Building of an Internal Control System, aimed at implementing sound and effective risk management.

The Group Risk Management Committee, which meets twice a year, is a standing committee that evaluates risk management policies and important risks, and approves of risk management provisions. It also verifies the effectiveness of the control situation and provides guidance on remedial measures.

From the second half of 2021, in order to carry out a more in-depth risk assessment of risks related to climate change issues, the Group manages “Responses to the global environment” by dividing them into two categories as group risks: “Climate change issues” and “Others”. We are working to establish a system to assess risks associated with the transition to a low-carbon society and with physical changes due to climate change.