In order to better incorporate ESG perspectives into management decisions and execution processes, in December 2021, Mercari established an ESG Committee to advise our Senior Executive Committee.
Mercari considers ESG and climate change to be an important management topic. The ESG Committee aims to ensure sufficient time for regular discussions regarding ESG in order to enable better discussions and enhance the quality of decisions made by the Senior Executive Committee. We have also appointed ESG officers for each of our companies. Having these officers offer an ESG perspective in business-related management decisions allows us to balance our businesses and materiality-focused ESG initiatives, and ensures a structure that allows us to swiftly implement and promote these initiatives. Our ESG officers also take part in discussions and decision-making for sustainability strategies across Mercari Group as members of the ESG Committee. An overview of the past three ESG Committee meetings are available on our website.
With Mercari CEO Shintaro Yamada as chairperson, the ESG Committee is composed of the CEOs of each Mercari Group company, as well as ESG officers and other members nominated by the chairperson. They meet four times per year to formulate ESG-related implementation plans and monitor progress on each of the material topics.
We conducted a scenario analysis to identify the climate-related transition risks, physical risks, and opportunities for Mercari Group as a whole.
In this analysis, we set two scenarios ̶ a 1.5℃/2℃ scenario and 4℃ scenario ̶ according to scientific bases provided by organizations like the Intergovernmental Panel on Climate Change (IPCC) and International Energy Agency (IEA). Looking ahead, we are examining how both Mercari Group and the society surrounding us will look in 2030 and beyond. Below are the main climate-related risks and opportunities we found based on the scenario analysis.
1. Our targets fall under category 1, “purchased goods and services”
Category
Impact of climate change on Mercari Group
Business implication
Our plan of action
Risks
Physical risk
Acute
• Data centers, etc., going down due to increasingly volatile natural disasters
• If any data centers or power companies suffer damage from increasingly volatile natural disasters, it will cause the electricity and network to be suspended as well as data centers to go down, and our users (both sellers and buyers) will not be able to sell and buy things online
Medium
- Create a BCP to shorten the length of shutdown period
- Consider disaster recovery plans
Transition risk
Policy and Legal
• Increase in item transport costs due to increased fuel prices following the introduction of carbon pricing
• An increase in item transport costs due to increased fuel prices from the introduction of carbon pricing will impact our users (both sellers and buyers), and also impact the demand for items sold on our marketplace
Low
- Work to strengthen supplier engagement
Transition risk
Reputation
• Damage to reputation among financial institutions/investors due to insufficient efforts to mitigate climate change
• As there are increased demands from investors and financial institutions for information disclosure and actions to mitigate climate change, if companies fail to meet those demands, it will likely impact funding or cause a drop in stock prices
Medium
- Ensure complete and sufficient information disclosure
- Eliminate 100% of Scope 1+2 emissions by 2030
- Reduce emissions related to added value for Scope 3 by 51.6% by 20301
Opportunities
Reputation
• Competitive advantage from changes in consumer preferences due to increased environmental awareness
• We can increase the number of Mercari users in accordance with the spread of a planet-positive way of consumption and create new motives (contributing to the environment) for people to use Mercari
High
- Increase the number of Mercari users in accordance with the spread of a planet-positive way of consumption
Evaluation of business implications/financial impact
Mercari Group has conducted a scenario analysis to understand and assess the impact of climate change on our Group’s business and identify the different climate-related risks and opportunities. We are monitoring the identified risks and opportunities under our structure for promoting sustainability, which includes the ESG Committee. In this structure, there is also a process for reporting and making suggestions to the Board of Directors as necessary, depending on the project.
The Compliance and Risk Committee is also in charge of identifying and managing the key risks for the entire company. This committee takes into account the climate-related risks that may have a significant impact on the business, considers what issues should be handled, determines the priority, and puts together a response policy.
By 2030, we will aim to eliminate 100% of Scope 1+21,2 emissions, and reduce emissions related to added value for Scope 33,4 by 51.6% compared to the amount in 2020. We are planning to obtain SBT certification for these targets by June 2023.
Actual Amount of Emissions in FY2022 (July 2021‒June 2022): In FY2022, Mercri Group as a whole had about 38,000 tons of greenhouse gas emissions (see below). Since last fiscal year, we were able to reduce Scope 1+2 emissions by 75% and the intensity of Scope 3 emissions by 10.5%. We will continue to work on various initiatives to achieve our 2030 targets.
1. Scope 1: Direct emissions from fuel use by our company
2. Scope 2: Indirect emissions accompanying use of electricity/heat provided by another company
3. Scope 3: Supply chain emissions from company activities, excluding those covered in Scope 1 and Scope 2
4. Our targets fall under category 1, “purchased goods and services”