Materiality

The AEON delight Group promotes ESG management, which helps solve social issues through our business and enhances our enterprise value. In 2021, we identified 12 Materiality issues in five domains, including ensuring safety and security, resolving labor shortages, and addressing the environment as we set forth in our Management Principles and the AEON delight Vision 2025, as well as using technology and enhancing governance, which we believe are necessary to achieve sustainable growth.
In addition, we have set 2030 targets for each of the five domains.
We will also contribute to achieving the SDGs through group-wide initiatives to solve social issues.

• Materiality

Safety and Security

Providing safe living environments

Opportunities for our Group	Growing need for facilities/equipment resilient against disasters and infrastructure outages Growing demand for high-quality services in Japan and abroad
Risks to our Group	Difficulties in continuing operations due to disaster or infrastructure outage
Related SDGs

Providing hygienic/healthy living environments

Opportunities for our Group	Growing need for hygienic/healthy living environments
Risks to our Group	Decline in corporate image if infectious disease impact is not prevented Growing health risks accompanying increased employment of elderly personnel
Related SDGs

Vision (KGI)	Contribute to improving people's quality of life by providing services that ensure a safe, secure, hygienic, and healthy environment in and around facilities. Provide a facility environment that protects lives by fully preparing for disasters such as windstorms, floods, and major earthquakes, and quickly respond when such disasters occur.
2030 Targets	Expand provision of safe and secure services 20% of sales from BCP and infection control-related services*1
FY2021 Results	3.8％
FY2022 Results	3.7％

*1 BCP services include disaster prevention and countermeasure construction, provision of remote monitoring systems, infection control measures, infection control cleaning (New Standard Cleaning), sales of related materials, and construction work related to droplet and contact infection control measures.

Labor Shortage

Resolving labor shortages

Opportunities for our Group	Promote recruitment of diverse personnel Growing need for improved productivity and operational efficiency
Risks to our Group	Risk of contract non-fulfillment and lost opportunities due to lack of personnel
Related SDGs

Improving productivity through efficient allocation of talent

Opportunities for our Group	Expand AEON delight Economic Zone by strengthening Group management and relationship with partner companies
Risks to our Group	Risk of decline in service quality due to insufficient personnel training
Related SDGs

Promoting diversity and inclusion

Opportunities for our Group	Improve quality and productivity by securing diverse personnel Expanding need for services as women enter the workforce
Risks to our Group	Risk of contract non-fulfillment and lost opportunities due to lack of personnel Decline in corporate power due to inadequate communication skills and multicultural understanding
Related SDGs

Promoting multi-stakeholder engagement

Opportunities for our Group	Develop new services by strengthening relationships with local communities, partner companies, and relevant government agencies
Risks to our Group	Risk of non-compliance, including affiliates and partner companies Risk of not gaining trust/understanding when expanding overseas due to inadequate handling of target country risks (changes in political, economic, and social environments)
Related SDGs

Appropriate labor management

Opportunities for our Group	Improve productivity and job satisfaction by reducing employee morbidity and providing comfortable work environments
Risks to our Group	Risk of difficulties in securing personnel due to inadequate enforcement of proper labor management Employee accident and mental health risks during work
Related SDGs

Vision (KGI)	Offer employees a work environment that improves job satisfaction and makes it easier for them to work by creating a vibrant organizational culture that enables a diverse workforce to fully demonstrate their abilities. Establish strong partnerships by building mutual trust with business partners and striving to ensure legal compliance, fair trade, thorough compliance, and respect for human rights throughout the supply chain. Contribute to resolving labor shortages in society by providing facility management and peripheral services that enable customers to streamline operations and reduce manpower.
2030 Targets	Improve business continuity by resolving labor shortages 30% female managers on a consolidated basis 50% reduction in consolidated annual employee turnover rate (regular employees, contract employees, and temporary employees) compared to FY2021 50% reduction in consolidated annual overtime per person compared to FY2021 30% reduction in number of consolidated annual work-related accidents*2 compared to FY202
FY2021 Results	22.1% 23.7% 268 hours 139 accidents
FY2022 Results	22.4% 21.3% 230.3 hours 72 accidents

*2 Work-related accidents resulting in four or more days of absence from work

Environment

Climate change and global warming countermeasures

Opportunities for our Group	Growing need for energy-saving and renewable energy use
Risks to our Group	Increased cost burden due to environmental measures and soaring energy prices
Related SDGs

Nature conservation and environmental impact reduction

Opportunities for our Group	Growing need for environmentally friendly products and services
Risks to our Group	Decline in corporate image and brand power due to water pollution, increased plastic waste, etc. Stricter laws and regulations related to waste, etc.
Related SDGs

Vision (KGI)	Promote resource recycling, preserve biodiversity, and create a decarbonized society by providing solutions that meet society's expectations Promote initiatives to reduce environmental impact by procuring and operating responsibly and working with stakeholders in the supply chain.
2030 Targets	Expand environmentally-friendly business 10% of sales from GHG emission reduction related services*3 Zero gasoline and diesel vehicles, including hybrid vehicles, for business (consolidated) 50% of sales in the materials business from environmentally friendly products 50% recycling rate (bottle-to-bottle) in vending machine business
FY2021 Results	2.5％ Of 822 total vehicles, 591 gasoline/diesel vehicles, 230 hybrid vehicles, 1 electric vehicle 14.9% 15%
FY2022 Results	3.7％ Of 752 total vehicles, 467 gasoline/diesel vehicles, 284 hybrid vehicles, 1 electric vehicle 18.0% 7.6%

*3 Includes installation of energy management systems, freon management, installation of EV chargers, installation of energy-saving equipment (lighting, air conditioning, refrigeration cases), installation of water-based floor coding agents, etc.

Use of Technology

Use of Technology

Opportunities for our Group	Raise productivity, improve operational efficiency, and develop new services through digital transformation driven by IoT, sensors, AI, etc.
Risks to our Group	Decline in service quality and market share due to lagging digital transformation Risk of information leaks
Related SDGs

Addressing information society risks

Opportunities for our Group	Growing need to strengthen facility information security
Risks to our Group	Risk of cyber-attacks leading to operational shutdown or information leak
Related SDGs

Vision (KGI)	Deliver benefits and new value by incorporating DX to improve productivity and streamline operations in our customers' and our own supply chain.
2030 Targets	Leverage the latest technology to research and develop new services Enable unmanned management through robotization of facilities Reduce facility lifecycle costs by using FM big data and AI to diagnose buildings Develop solutions business leveraging our unique FM data

Corporate Governance

Strengthening Group governance

Opportunities for our Group	Curtail costs with prompt problem detection/resolution through strengthened governance
Risks to our Group	Adverse effect on corporate activities and damage to social reputation due to inadequate governance systems Risk of harm to business performance due to inability to handle target country risks when expanding overseas (changes in political, economic, and social environments)
Related SDGs

Vision (KGI)	Earn the trust of society and enhance enterprise value by complying with various laws and regulations and by building a strong corporate governance system within AEON delight and the AEON delight Group.
2030 Targets	Establish robust Group governance system in Japan and abroad Establish a ‘three lines of defense’ structure Corporate Culture Committee and Group Governance Enhancement Promotion Committee continue to operate

Reference to SDGs, FTSE, Global Risks Report, and other sources, we have identified 59 issues as areas of particular relevance to our Group.We then analyzed the 59 issues. We followed this up by evaluating risks and opportunities for each business and the entire Group, as well as risks and opportunities for stakeholders based on stakeholder interviews, and created a matrix that reflects the significance of these risks and opportunities.

STEP 1 Examine and identify social issues

Drawing on materials including the SDGs, FTSE, and Global Risks Report, we selected 275 issues from environmental, social and economic challenges based on future megatrends. We then identified 59 iussues of particlar relevance to our Group

STEP 2 Assess issue importance

We conducted materiality analysis on the 59 issues, using 5 dimentions to assess the risks and opportunities for all businesses and group companies through interviews with relevant personnel. Also rated the importance of risks and opportunities to stakeholders on a three-point scale.

STEP 3 Create materiality matrix

We created a matrix of highly important issues with importance to stakeholders and importance to the Group as the two axes.

STEP 4 Discussion and identification by top management

Management deliberated and approved the results within management and ESG/KPI review meetings.

STEP 5 Develop materiality KPIs

Developed targets for 2030 based the 12 material issues.

Materiality Matrix