By putting our management philosophy, "Creating Enriched Value," into practice, Skylark Group aims to realize a sustainable society through "food" and enhance the Group’s corporate value. Our restaurant business is heavily dependent on the blessings of natural capital—including plants, animals, air, water, and soil—and also has the potential to impact these resources negatively.
We view global environmental issues, including climate change, natural capital, and biodiversity, as a top management priority. Accordingly, we disclose our initiatives in accordance with the TCFD and TNFD recommendations through an integrated approach.
Governance
Under the supervision of the Board of Directors, the Group Sustainability Committee (chaired by the Representative Director, President and COO) deliberates and makes decisions on risks and opportunities related to climate change and natural capital in an integrated manner. The Committee also monitors progress toward targets such as decarbonization and biodiversity conservation. Furthermore, we ensure the effectiveness of these initiatives by linking ESG indicators, such as GHG reduction targets, to executive compensation.
Risk Management
The Group Risk and Compliance Committee oversees risk management for the entire Group. For medium- to long-term sustainability-related risks, such as those pertaining to climate change and natural capital, the Group Sustainability Committee manages strategy, target setting, and the promotion of specific initiatives. Both committees identify "business risks to be addressed," conduct annual reviews, and define "emerging risks," all of which are integrated into our enterprise-wide risk management system.
Strategy
Based on the following assumptions, we have identified and analyzed risks and opportunities related to climate change and natural capital, and examined potential countermeasures.
| Item |
Theme |
Details
|
| Scope of Disclosure |
Climate |
Covers our entire value chain. |
| Nature |
Covers upstream and direct operations within our entire value chain. |
| Scenarios Considered |
Climate |
Based on the IEA "World Energy Outlook 2024" NZE2050 and the IPCC Sixth Assessment Report (AR6), we have assumed two scenarios: the "1.5°C scenario" and the "4°C scenario." |
1.5°C Scenario:
A world where various laws and regulations are introduced to achieve the 1.5°C target, resulting in increased store operating costs and a need for portfolio diversification. |
4°C Scenario:
A world where natural disasters become more frequent and severe, and changes in weather patterns are prominent. We predict impacts on raw material procurement and increased electricity costs due to rising temperatures. |
| Nature |
Based on the scenarios recommended by the TNFD, we have assumed scenarios with high financial risk for the Group. |
Scenario 1:
A world where societal awareness of nature conservation increases, and the loss of natural capital becomes a significant business risk.
|
Scenario 3:
A world where social systems and rulemaking fail to keep pace with the physical risks caused by the direct damage of natural environment degradation. |
| ⇩ |
| Integrated |
We have integrated consistent and correlated scenarios from those considered under TCFD and TNFD. |
1.5°C Transition Scenario:
A world where the destruction of nature is minimal, moving toward "Carbon Neutral" and "Nature Positive." |
4°C Physical Scenario:
A world where global warming and the loss of natural capital progress, leading to a higher impact from physical risks.
|
| Time Horizon |
Climate |
Considers the Short-term (0–2 years), Medium-term (3–5 years), and Long-term (over 5 years). |
| Nature |
Integrated Scenario Analysis for Climate Change and Natural Capital
We recognize that climate change and biodiversity loss are deeply interconnected and influence one another. To evaluate the sustainability of our business operations and the resilience of our supply chain, the Group conducts integrated scenario analysis based on the TCFD and TNFD frameworks. Referring to international scientific knowledge (such as IPCC: SSP/RCP and IEA: WEO), we assess risks and opportunities based on the premise of strong correlations between TCFD’s 1.5°C scenario and TNFD’s Scenario 1, as well as TCFD’s 4°C scenario and TNFD’s Scenario 3.
1.5°C Transition Scenario
The TCFD "1.5°C Scenario" (a world of rapid decarbonization) and the TNFD "Scenario 1" (a world where strong regulations for nature protection are introduced and ecosystems recover) are fully aligned in their socio-economic assumptions. To limit global warming to 1.5°C, it is essential not only to decarbonize energy systems but also to secure carbon sinks through Nature-based Solutions (NbS), such as forest conservation and sustainable agriculture. In other words, there is a clear interdependence: without the conservation and restoration of natural ecosystems (TNFD Scenario 1), achieving climate change mitigation (TCFD 1.5°C Scenario) becomes difficult. In this integrated world view, while "transition risks" such as compliance with environmental regulations and stricter procurement standards will increase, we assess that "physical risks" regarding future food procurement will be kept extremely low due to the stabilization of both climate and nature.
4°C Physical Scenario
Conversely, the TCFD "4°C Scenario" (a world where warming progresses without additional measures) and the TNFD "Scenario 3" (a world where nature protection efforts stagnate and ecosystems suffer irreversible damage) are also logically consistent. If warming progresses by 4°C, ecosystems will suffer fatal damage from extreme heatwaves and droughts. Simultaneously, if uncontrolled deforestation and land degradation are left unaddressed, stored greenhouse gases will be released into the atmosphere, further accelerating climate change. Due to this negative feedback loop, it is highly likely that both scenarios will manifest simultaneously. In this integrated world view, the Group recognizes that while "transition risks" from new regulations may be low in the short term, we will face extremely severe "physical risks" in the medium to long term, such as difficulties in procuring key ingredients and soaring prices due to extreme weather and ecosystem collapse.
Main Identified Risks and Opportunities
|
Main Risks/Opportunities |
Focus Area |
Timing |
Impact Assessment |
| 1.5°C Transition Scenario |
4°C Physical Scenario |
| Physical Risks |
Increased procurement costs due to extreme weather and natural disasters |
Climate |
Short/Medium-term |
Medium |
High |
| Rising electricity prices |
Long-term |
Medium |
High |
| Soaring raw material prices, increased electricity consumption, and decreased employee productivity due to rising temperatures |
Long-term |
Medium |
High |
| Revenue loss due to suspension of factory and logistics operations caused by natural disasters |
Nature |
Short/Medium-term |
Medium |
High |
| Soaring raw material prices due to poor crop growth caused by environmental degradation |
Short/Medium-term |
Medium |
High |
| Transition Risks |
Soaring raw material prices and logistics costs due to the introduction of carbon taxes |
Climate |
Long-term |
High |
Medium |
| Decline in brand image due to delays in addressing environmental issues |
Climate / Nature |
Short/Medium-term |
High |
Medium |
| Increased manufacturing and logistics costs due to stricter regulations on wastewater and waste |
Nature |
Long-term |
High |
Medium |
| Increased raw material procurement costs due to enhanced taxation and traceability requirements |
Short/Medium-term |
High |
Medium |
| Opportunities |
Increased sales through product and service development in response to changes in consumer preferences |
Climate / Nature
|
Short/Medium-term |
Medium |
Low |
| Improved brand image through the promotion of sustainability |
Short/Medium-term |
Medium |
Low |
| Enhanced social trust and reputation through disaster response initiatives |
Short/Medium-term |
Medium |
Low |
| Rise in stock price due to increased stakeholder awareness |
Long-term |
Medium |
Low |
Financial Impact
The financial impact (quantitative assessment) of major risks and opportunities on our business is as follows. We review the countermeasures for these risks and opportunities once a year, update the status of our actions, and explain the resilience of our Group’s strategy. The financial impact is calculated for risks and opportunities where quantitative assessment is possible. Assumptions for electricity prices, carbon taxes, and the frequency/magnitude of floods and storm surges are detailed on our TCFD page.
|
Main Risks / Opportunities |
Financial Impact |
Countermeasures (Examples) |
| Physical Risks |
Suspension of operations due to flooding |
4°C Physical Scenario：-2.54 billion JPY
1.5°C Transition Scenario：-1.44 billion JPY |
Business Continuity Plan (BCP) response
Strengthening resilience and diversification of facilities
Establishment of various regulations, such as emergency response manuals |
| Suspension of operations due to storm surges |
4°C Physical Scenario：-0.42 billion JPY
1.5°C Transition Scenario：-0.41 billion JPY |
| Suspension of operations at MDC due to water shortages |
4°C Physical Scenario：-1.17 billion JPY |
| Transition Risks |
Introduction of carbon taxes |
4°C Physical Scenario：ー
1.5°C Transition Scenario：-4.31 billion JPY |
Energy saving and conservation : Reduction of energy consumption
Use of renewable energy |
| Changes in electricity prices |
4°C Physical Scenario：+0.54 billion JPY
1.5°C Transition Scenario：-1.16 billion JPY |
| Stricter regulations on traceability |
1.5°C Transition Scenario：-0.05 billion JPY |
Strengthening CSR checks and supplier engagement |
| Opportunities |
Reduction of food waste |
1.5°C Transition Scenario：+2.90 billion JPY |
Food waste recycling
"Komamedori Project" : An initiative in collaboration with customers |
Metrics and Targets
We are committed to enhancing our disclosure of metrics by establishing and reporting quantitative KPIs for material issues, including those related to nature. In addition, we disclose a portion of the core global metrics recommended by the TNFD framework—such as GHG emissions, wastewater, and waste—within our Sustainability Report.
⇒ESG Data : https://corp.skylark.co.jp/en/sustainability/data_collection/
Going forward, we will continue to expand our disclosure of metrics while further enhancing the reporting of our targets and the progress made toward achieving them.
References
・Response to TCFD Recommendations :
https://corp.skylark.co.jp/en/sustainability/environment/climate/
・Response to TNFD Recommendations :
https://corp.skylark.co.jp/en/sustainability/environment/tnfd/