Policy and Approach
Skylark Group uses large amounts of water in a series of processes such as washing employees' hands, cooking food, washing tableware, and cleaning equipment at stores and central kitchens nationwide. All employees are working together to conserve water in consideration of the global environment and from the viewpoint of reducing costs.
To control environmental pollution, we have a policy of complying with laws, regulations, and ordinances, not discharging or using hazardous substances, and we ensure proper wastewater treatment and prevention of oil spills in our stores and factories.
We also surveyed our sites located in water risk areas where there is a risk of decline in quantity or quality of water resources using WRI Aqueduct's Water Risk Atlas. As of the end of 2025, no sites were located in “extremely high water risk” or “high water risk” basins. Regarding water-stressed areas, there was one facility in Japan and one facility outside of Japan located in a “highly water-stressed” watershed, and we are working to take appropriate measures. These applicable sites account for approximately 0.06% of our total locations. Furthermore, as a result of risk assessments in these areas, we have confirmed that there are no significant risks affecting business continuity regarding water accessibility (ease of acquisition), availability (usable quantity), or water quality (pollution status, etc.).
Governance
We have established the Group Sustainability Committee to drive sustainability management across the Group. This committee deliberates and oversees policies, targets, initiatives, and progress related to our materiality (key issue) of "Water Resource Conservation," and reports regularly to the Board of Directors.
For KPIs related to "Water Resource Conservation," targets are set for each responsible Executive Officer and Director (department head level). We ensure highly effective governance by employing a system where the level of achievement is directly linked to individual performance evaluations (such as bonus variations and evaluation grade determinations).
Strategy
Because our Group uses large amounts of water in every aspect of store operations—such as cooking, dishwashing, and cleaning—water resource depletion and water pollution could pose significant risks to business continuity. Furthermore, against the backdrop of growing environmental awareness and international trends toward achieving a sustainable society, we believe we have a responsibility to minimize the impact of our business activities on the environment.
Regarding the materiality of "Water Resource Conservation," we have identified the following risks and opportunities:
Risk Management
The Group Sustainability Committee oversees medium- to long-term risks and opportunities related to "Water Resource Conservation," while the Group Risk and Compliance Committee oversees risks in general. The two committees work in collaboration to designate a responsible department for each risk that needs to be addressed, and implement appropriate preventive and responsive measures.
The details of deliberations by both committees are shared with Outside Directors in our effort to ensure the transparency of our risk management system. Furthermore, we have established a structure in which Outside Directors serve as advisors to both committees, allowing us to receive insights and advice from an external perspective. The Board of Directors receives regular reports from the Group Sustainability Committee and oversees the status of risks and the overall management system.
Indicators/KPI
Target Values by Item
Examples of Company-wide Action
Skylark Group recognizes sustainable water resource utilization as a key management issue and is actively committed to its management and conservation.
As part of these efforts, we have consistently responded to the CDP Water security questionnaire, a global framework for water risk management. In 2025, our initiatives were highly regarded internationally, resulting in an "A Score" for the second consecutive year, following our achievement in 2024.
We believe this accomplishment is the result of our Group-wide efforts to reduce water consumption, which include introducing water-saving equipment and improving the efficiency of water use under a unified, company-wide collaborative framework. We will continue to promote ongoing water conservation activities and disclose information in accordance with international standards.
Central Kitchen Initiatives
In addition to setting the amount of water per minute for employees' handwashing points using water-saving faucet inserts and automatically controlling them with a timer, we are also striving to save water at each site by controlling the amount of water and time according to the purpose of use.
Regarding water sources, we are reducing the actual amount of water by utilizing deep-level groundwater, using rainwater for cooling outdoor facilities, and making secondary use of wash water for cleaning equipment in our manufacturing areas. This includes efforts to reuse and utilize water for other purposes.
Furthermore, we have improved the amount of water usage by changing our cleaning methods. Each manager conducts water conservation patrols, and we run the "Mottainai Movement" for employees to limit waste. We also conduct quantitative management so that we can view the results by location on a daily basis, and our headquarters strives to confirm and control the progress.
Store Initiatives
In order to achieve a balance between hygiene management and water conservation at our stores, we have established rules for hand-washing procedures and set standards for the amount of water used in hand-washing areas, while working to instill these practices through employee education. We also aim to raise employee awareness by sharing successful water-saving examples through video distribution to all stores and online training. Furthermore, we are actively adopting water-saving equipment, including faucet inserts, water-saving nozzles, water-saving toilets (experimental), and high-efficiency dishwashers.
As of the end of 2025, the installation of water-saving nozzles has been completed at approximately 91% of our domestic group stores, as part of our efforts to optimize water use efficiency across all business activities. As a result, we achieved an approximately 17% reduction in water withdrawal in 2025 compared to 2018 levels.
For stores with further potential for water savings, we are implementing the "Mottainai Movement," which involves visualizing water usage and setting specific reduction targets. Additionally, some brands are inviting customer cooperation by transitioning to a self-service model for drinking water, providing it only to those who require it.
Investment in water-related risk mitigation
Skylark Group recognizes water-related risks in its business operations—such as the depletion of water sources, tightening regulations, and physical disasters—as a material management priority. We continuously allocate the necessary financial resources (OPEX and CAPEX) to mitigate these risks. These figures represent investments and expenditures specifically dedicated to reducing water risks, aggregated and quantified on a company-wide basis to mitigate potential financial impacts, such as future increases in water stress and rising water prices.
Unit：thousand yen
【Breakdown and Definition】
- Water-related risk management costs (OPEX): These are ongoing costs incurred to appropriately manage and control water risks within daily operations. This includes water utility charges, as well as expenses for the rental, maintenance, and inspection of water-saving valves and water-saving systems.
- Water risk mitigation and R&D investment (CAPEX): This represents research and development (R&D) and capital expenditures aimed at reducing future water risks. This includes the costs of introducing the latest water-saving nozzles and high-efficiency eco-friendly dishwashers, as well as expenses for verification and pilot testing to establish mechanisms for the circulation and secondary reuse of cleaning water. These are strategic expenditures designed to maximize the efficient use of water resources.
Through these investments, Group strives to maximize the efficient use of water resources and mitigate future water-related risks, such as water stress and supply instability associated with climate change.
Wastewater Treatment
Our group utilizes a lot of water for cooking and washing dishes and utensils. For this reason, we also place great importance on improving the quality of our wastewater. Approximately 90% of our wastewater is discharged to third parties, but we also treat our own wastewater with tertiary and secondary treatment in accordance with legal standards.
In addition, wastewater quality and water temperature are inspected at least once a year to ensure proper management, alongside improvements at the source. During normal inspections, wastewater quality is checked by measuring water temperature, transparency, odor, and pH. When the competent government requires voluntary water quality inspections, water samples are collected and requested to an inspection agency for water quality testing, in addition to the water quality checks during normal inspections. As for its water quality testing, most of them are 5 items: pH, BOD, SS, N-hexane, and E. coli, but it varies from 1 to 8 items depending on the instructions of the competent administration. We will continue to strengthen management for the future.