ＴＳＩホールディングス（3608） – SUSTAINABILITY Story Book

S U S T A I N A B I L I T YStory BookCreating a sustainable future with the power of fashion2022/4/13C o n t e n t sAgendaChallenges in the apparel industryOur PurposeSustainability statement Corporate info Materiality Global environment (Local community) CSR Corporate governance Toward tomorrow’s world(climate change, raw materials, waste, water resources) Our commitment to people and our main goals & initiatives (diversity, health & safety, employee wellbeing, fair labor conditions) 16-24Our commitment to society and major goals & main initiatives 23456-89-1525-2728-3031-3233-35IntroductionlGobal Environment People Society CSR Governance Toward the FutureI n d u s t r y C h a l l e n g e sSustainability challenges in the apparel industryIn the apparel industry, there are sustainability-related problems, such as environmental destruction, resource waste and human rights violations, with global warming being a particularly serious one. Apparel industry CO2 emissions are extremely high, approximately 8% of all industries, hence the responsibility for controlling global warming is great.① CO2 emissionsCO2 emissions in the apparel industry are projected to increase by more than 60% between 2015 and 2030 to become 2.08 billion tons, which is the equivalent to the annual CO2 emissions from 230 million family cars, and is a factor propelling global warming, including sea-level rises and climate change.② Water resourcesSome 11 bathtubs of water are used to produce one garment, and a huge volume of water is consumed in the production of cotton, a clothing mainstay, and is a massive factor in the procurement of raw materials for clothing.It is estimated that 20% of freshwater pollution is caused by chemicals used in the dyeing process, and it is said that 60% of the approximately 13 million tons of microplastics flushed into the ocean occur when washing synthetic clothing. ③Mass production & mass disposalSome 92 million tons of fiber are discarded annually, with another 57 million tons expected to be added to that by 2030. Japan’s 3Rs (reuse, recycling, repair) for clothing is about 26%, which is much lower than the 80% for aluminum cans. ④ Human rightsIt is said that forced labor and illegal work conditions are rampant in the value chain – for example, the Uighur forced labor problem related to Xinjiang cotton production.2Environmental load from material procurement to manufacturingCO2 emissionsWater consumptionSome 90,000ktSome 8.3bil㎥Scraps emissionsSome 45,000t+Chemical-induced water contamination服1着当たりの換算CO2 emissionsSome 25.5kgWater consumptionSome 2,300ℓIn terms of 500mlbottles of waterSome255 bottlesfor productionIn terms of bathtubsSome 11 bathtubsSource: Ministry of the Environment homepage3O u r P u r p o s eEnjoyable fashion entertainment directed at planet earth, societies and peopleT s i – G r o u p w i l l c r e a t e w o r l d w i d e s y m p a t h y a n d s o c i a l v a l u e w i t h t h e p o w e r o f f a s h i o n e n t e r t a i n m e n t .S u s t a i n a b i l i t y S t a t e m e n tCreating a sustainable future with fashion entertainmentBeautiful planet earth, radiant society, happy life.IntroductionlGobal Environment People Society CSR Governance Toward the Future*Sustainable fashion: A fashion initiative striving for comprehensive sustainability focused on products that include consideration of background issues such as the global environment and working environment. 4As a designer and entrepreneur, I have been attentively making clothes for more than 30 years. We, the sartorial designers, have dedicated ourselves to the idea of creating clothes that are pleasing and admired by as many customers as possible, and in so doing we have obviously created an oversupply situation. An economy that discounts the idea of thrift has held sway for quite some time, heaping ever greater burdens on the environment, including air pollution, global warming, waste and resource shortages, and now we are beginning to notice the planet’s cry for help. So, how should we live now as intelligent beings?- A future where both the creator and wearer will be happy together -Being a company backed by many, we must seriously take initiatives to provide sustainable fashion* as a business model that reduces the burden on the global environment.We will generate dynamism in society, creating a situation where our customers and all who work with TSI can find happiness both physically and mentally in the joys of daily life while at the same time taking care of planet earth’s environment.I believe that we must all think about what we do individually, and connect those ideas and actions to tomorrow’s world. Because, when all is said and done, our lives move forward in tandem with planet earth.Takeshi ShimojiPresident, TSI HoldingsC o r p o r a t e P r o f i l eCorporate profileIncluding the previous incarnations as Sanei International & Tokyo Style, TSI Holdings has been at the forefront of glittering, joy-giving fashion for more than 70 years. 51-2-3 Aoyama Building Kitaaoyama Minato-ku, TokyoNameLocationEstablishedCapitalTSI Holdings1 June 201115 billion yenRepresentativeTakeshi Shimoji, PresidentNumber of EmployeesEntire Group6,366peopleOf whom 1,194 are tempsNumber of Actual Shops805 in Japan＋41 overseasChn; 22/UK: 11/USA: 5/Fra 2/ Italy 1Number of Brands54brandsAs of F28 February 2022Number of own E-commerce sites29Domestic sitesIntroductionlGobal Environment People Society CSR Governance Toward the FutureIntroductionlGobal Environment People Society CSR Governance Toward the FutureM a t e r i a l i t yIdentifying materialityHaving formed the SDGs Promotion Office in 2021, we gathered the perspectives of our stakeholders and analyzed them to identify the materialities integrally needed as the foundation for the TSI Group to create long-term and sustainable happiness via business activities.Step ①：Extracting and preparing materiality candidatesBased on in-house/outside info and the ideas of competitors, we have chosen materiality candidates that are highly relevant for the TSI Group to bid for sustainable growth from the viewpoints of the global environment, people and society, all value-providing domains. In selecting these candidates, we refer to the sustainability reporting standards of GRI, the sustainability accounting standards of SASB and the universal sustainable society goals of SDGs.Step ②：Evaluating from the perspectives of the company and stakeholdersRegarding the candidates extracted and prepared in Step ①, we laid out the importanceto society and stakeholders (customers & employees, etc.) on the vertical axis, and our current efforts are laid out on the horizontal axis of the adjacent chart. Here, first of all, materiality candidates notably important to society and stakeholders are extracted out.The mapping process is based on info gleaned from the media and competitor publications as well as interviews with outside experts & external board members, relevant department managers and members of the SDGs promotion team.Step ③：Identifying materialityBased on the evaluation results in Step ②, materialities were identified with the approval of management and the board of directors.6Ongoing enhancement of materialities□ D i v e r s i t y□ H e a l t h & s a f e t y□ E m p l o y e e w e l l b e i n gNotably importantImportantImportance for society and stakehoders 1l)Strengthening top priority materialities□ C l i m a t e c h a n g e□ R a w m a t e r i a l s□ W a s t e□ W a t e r r e s o u r c e s□ F a i r l a b o r c o n d i t i o n s□ L o c a l c o m m u n i t yMaterialities that require addressing□Chemical substances□Biodiversity・・・Areas where actionIs comparatively laggingAreas where action is comparatively evolving1) Identify competitor benchmarks and stakeholder opinions on the importance of factors with potential for sustainable growth, which have been pinpointed based on international standards, such as GRI guidelines, 7Introduction lGobal Environment People Society CSR Governance Toward the FutureM a t e r i a l i t yTSI materialityBased on the relevance and sentiment to our business, we have identified nine materialities for three key areas. Moving forward, we will set goals to find materiality solutions. E n v i r o n m e n tGlobal EnvironmentThe fashion industry is burdening the global environment in many ways. To change that, we first need to visualize the global environmental load and then challenge to build a sustainable business model.Global Environment12Climate changeWasteRaw materialsWater resources34P e o p l ePeoplePeople are the source of value created in our business and – therefore – our greatest asset. We will strive to offer physical and mental happiness to all whom work with us. DiversityEmployee wellbeing56Health & safety78Fair laborconditionsPeopleF a s h i o nE n t e r t a i n m e n tS o c i a lSocietySocietyIt does not make sense for our business endeavors to be just for us. We aim to do business that makes everyone “happy”, including our customers and local communities and ourselves, while also taking care of local culture. 9Local communityO u r V a l u e C h a i n & M a t e r i a l i t yThe relationship between our value chain and materiality8All of our value chain activities are closely connected to the global environment. Thus, through our commitment to materiality, we will construct a sustainable business foundation that offers a “happy” outlook to all stakeholders involved in the value chain. Materials(Raw materials & cloth)MakingLogistics(Including transport & sales)Usage(Including customer activities)WasteOther business(Non-fashion fields)Remake/Reuse/RecycleRecoveringClimate changeCO2 emission reductions and renewable energy utilization in Scopes 1, 2 and 3Raw materialsImproving traceabilityWasteReusing resourcesWater resourcesWater usage reductionsDiversityAchieving diversity & inclusionOptimizing production volumeReuse of resourcesHealth & safetyDeveloping a healthy & safe working environmentEmployee wellbeingCeaselessly improving employee satisfactionFair labor conditionsRealizing ethical and responsible production processes that take human rights into accountSocial contributionImplementing activities that contribute to local communitiesResellingWaste reductionIntroduction lGobal Environment People Society CSR Governance Toward the FutureValue chainMateriality123456789E n v i r o n m e n tRealizing a sustainable global environment through fashionCreating planet-friendly entertainment91Achieving carbon neutrality– Achieving carbon neutrality by 2050– Visualizing environmental load in manufacturing processesAchieving zero fashion loss– Using technology and other techniques to update business model – Building a circulation business modelIntroduction lGobal EnvironmentPeople Society CSR Governance Toward the FutureO u r C o m m i t m e n t sCommitment to global environmentOur fashion approach to achieve a sustainable global environment will be a biaxial one, achieving carbon neutrality and achieving zero fashion loss.The fashion industry is burdening the global environment in many ways – namely, we recognize the immense responsibility of the fashion industry in relation to the planet’s environment, and that the fashion-driven TSI Group has a huge responsibility in materiality related to the global environment.Based on this recognition, we will visualize the environmental load in our value chain and then take up the challenge of building a sustainable model to reduce that environmental load. In that way, we aim to realize fashion-driven sustainability for the global environment.Challenging for carbon neutralityIn our challenge to become carbon neutral, we will reduce CO2 emissions across the entire value chain in line with the carbon neutral 2050 vision. To that end, we will also visualize the environmental load in our manufacturing processes.Achieving zero fashion lossTo achieve this, we will utilize, among other things, technology to update our business model in ways that are not bound by tradition. Further, we will simultaneously build a circulation business model that reuses things that would normally be discarded.Introduction lGobal EnvironmentPeople Society CSR Governance Toward the Future101Climate change2Raw materialsAchieve carbon neutrality.Improve traceability of raw materialsand take into consideration the environmental load when selecting materials.3WasteBuild a circulation business model that produces minimal waste.4Water resourcesReduce water usage.Introduction lGobal EnvironmentPeople Society CSR Governance Toward the FutureC a r b o n N e u t r a lChallenging for carbon neutralityWe will reduce CO2 emissions across our value chain to achieve carbon neutrality by 2050.To do that, we will take responsibility for CO2 emissions in the manufacturing process and strive to visualize and reduce environmental impact across the supply chain.111Climate changeSwitching to renewable energy resource electricityLong-term goals: Achieve carbon neutrality & aim for virtually zero GHG emissions by 2050 For high-street shops, workplaces, offices and plants that have the right to choose power contracts, we will switch to contracts offering environmental value and/or carbon neutrality. Additionally, such contracts will be considered when initial contracts are being considered for new shops.Mid-term goals:Implementing measures to strengthen zero-emission fashionWe will contribute to the optimization of production volume, including digitalization of made-to-order production and sample preparation, strengthening of D2C brands and strengthening digital fashion. Building an organizational structure to promote visualization of CO2 emissions in Scope 3We will construct a mechanism for calculating Scope 3 CO2 emissions up to February 2023. Further, for products purchased in category (1), we will visualize them based on the SAC’s Higg Index, taking into account the differences in materials.Scope 1 & 230% CO2 reduction by FY February 2025 (base year FY February 2020) Scope 3CO2 emissions[t-CO2e]Reduction target：-30%Our plants & centersOffices & workplaces12,0978422,83311,2427622,70310,8847762,4678,500Shops (excluding FC)8,4217,7767,641・・・Formulate roadmap for visualizing and reducing CO2 emissionsScope 3 formulation of roadmap for visualizing and reducing CO2 emissions to be achieved by February 2023.FY02/2020FY02/2021(Estimated value 1 in Japan only)FY02/2022FY02/20251) CO2 emissions are estimated values calculated using the emission factors of the “Ministry Ordinance on Calculation of Greenhouse Gas Emissions Associated with Business Activities of Specified Emissions” and the floor areas of shops (business establishments and offices subject to calculation using . the basic emission coefficient of each fiscal year of general power transmission supplied by power companies locally).1224Raw materialsW a t e r r e s o u r c e sIntroduction lGobal EnvironmentPeople Society CSR Governance Toward the FutureC a r b o n N e u t r a lChallenging for carbon neutralityIn the apparel making process, we resolutely acknowledge that the environmental load differs depending on the raw material, so we will visualize the raw materials used in-house and strategically switch to ones with low environmental loads (reduced CO2 emissions and water usage).We will focus on developing new materials to achieve our long-term goal of selecting materials that reduce environmental burden. Moreover, we will not limit this to just ourselves, but also consider partnerships and investments with material manufacturers and startups. C A S ESwitching to materials that are more environmentally friendlyMARGARET HOWELL (UK) initiative to utilize sustainable cotton The MARGARET HOWELL brand is taking the in tracing raw materials and identifying areas for improvement. We too are participating in the BETTER COTTON™️, the world’s largest cotton sustainability program, and work with suppliers to increase the use of organic and recycled yarns in our collection. After achieving 100% traceability of major raw materials, we will set specific goals (like MARGARET HOWELL) and increase the number of brands that are taking measures to reduce the environmental burden.Mid-term goals：Long-term goals：C A S EDeveloping biodegradable materialsRaw materialsAchieve 100% traceability of major raw materialsCompile and publish roadmap for switching to raw materials with a low environmental impact based on status of raw materials used.Water resourcesVisualize water usage in manufacturing processes for entire TSI GroupCompile and publish roadmap for reduction measures based on status of water usage.Reduce environmental load via selection of raw materialsReduce water usage in manufacturing processesToska Banok ECO product developmentToska Banok has developed an environmentally friendly, planet-friendly tag fastener. It uses biodegradable plastic that can be decomposed by microorganisms in the soil. ① Tag loops ((ITO-LOX) combining natural materials and plant-derived resinThese tags are formed from organic cotton, linen threads and biodegradable plastic that decomposes in soil.② Green plastic certification (registration No. 1132)Verified as safe, collected samples show that microorganisms decompose this product into water and carbon dioxide at a speed equal to or faster than that for trees.③ Can be burned as waste without sortingThis product emits less CO2 than petroleum-based plastics and can be disposed of without sorting..④ Please be careful when using over prolonged periodsUnlike ordinary plastic, the connector section weakens due to decomposition, so this product should be used as soon as possible. Also, out of concern for safety, avoid using for long periods of time in situations where a load is constantly applied.Introduction lGobal EnvironmentPeople Society CSR Governance Toward the FutureZ e r o F a s h i o n – L o s sAchieving zero fashion lossWe will update our business model using technology to construct a circulation business model that produces as little waste as possible.Long-term goals： Constructing a circulation business model that does not generate wasteOptimizing production volumeWe will strive to improve the total consumption. Applying our forte in E-commerce infrastructure databases and new technologies, such as AI and 3D CAD, we will review manufacturing processes and make organizational changes to develop production processes to deliver products to customers in the necessary timing cycles, at necessary volumes and at appropriate prices.Mid-term goals：Scope 1 & 2By 2030:Reuse of things that might be discardedWe will continue to strengthen our efforts to improve the reuse rate, recycle rate, upcycle and recycle sales rate.Scope 3By 2030:Minimize waste in manufactured products27Compile roadmap to visualize waste volume in Scope 3 (Achieve during FY02/2023)133WasteReduce amount of waste in manufacturing processes (fiber waste, raw fabric)2519Waste plastics(including clothing)CardboardWood chipsMetal scrapsUsed paper9223211231Our plants (Miyazaki, Yonezawa)external warehouse生地メーカーcloth maker retention保有物流Logistics centerセンターBreakdown of waste volume by our factory and center [t] 1)1) Target is domestic apparel business. Amount of waste owned by fabric manufacturers is an estimated value calculated by multiplying amount of waste in external warehouses by weight (t/m) per unit based on quantity (m) data. About 120 (t) of cuttingwaste of laminated non-woven fabric due to full production of medical isolation gowns was temporarily generated in our plant in 2020. And, as it was a temporary factor, it is excluded from view.V O I C EInnovative practices to prevent disposal of defective productsDefective products occupy a large share of waste, so buying good products at the outset is vital in striving to achieve zero waste. On top of that, we have to prevent the production of defective products. To that end, we have introduced a Dedicated Inspection Center System as well as held quality info expos. As for any defective garments that still get produced, besides selling them to employees, we would like to collaborate with outside sustainable businesses to find new outlets for them, such as upcycling. Hiroshi Seto, Quality Control Section Chief, Production Promotion Department, TSI SCM Division143WasteIntroduction lGobal EnvironmentPeople Society CSR Governance Toward the FutureZ e r o F a s h i o n – L o s sAchieving zero fashion lossWe are beginning to reuse resources as we move toward construction of a circulation business model. Moving forward, we will continue our challenge for a sustainable circulation business model for the entire TSI Group.C A S E Remaking & selling discarded productsO V E R D Y E P R O J E C TIn the OVERDYE PROJECT, we are regenerating clothes that are still usable (only have weaving scratches or uneven dyeing, etc., from manufacturing processes) to give them new life with new value.V O I C EJunji Okamura, Sales, Business Management Section, TSI SI DivisionI want to contribute to SDGs while having fun with customersSince 2019, we have been holding clothing collection events at our brand stores, which is great for raising customer awareness about SDGs and is a great opportunity to hear bygone tales about the clothes brought in for collection. This year, on top of collecting clothes, we plan to resume tree planting via the “Chinju-no-mori-no-project”. Thus, we want to have fun with customers though events that let each of them not only recycle clothes into fiber but also turn that effort into the planting of a tree. C A S E Collecting clothesFive brands participate in the clothing collection project BRINGTMParticipate in the clothing collection project BRINGTM put together by JEPLAN, which connects unwanted clothing and textile products to recycling. By having customers participate in tree planting donations to the “Guardian Forest Project” via coupons that are given to them when clothes are collected, the project is simultaneously helping the shift to zero fashion loss and offsetting carbon while involving customers.C A S E Reducing plastic usageReuse of hangersThe TSI Group uses many hangers in plants, inspection sites and shops, so we are implementing initiatives to reuse them rather than throw them away. In this way, we will focus not only on manufactured products but also on auxiliary materials, as we aim for zero loss during manufacturing processes and shipping.15Introduction lGobal Environment People Society CSR Governance Toward the FutureZ e r o F a s h i o n – L o s sAchieving zero fashion lossWhat is more, we are moving ahead with various efforts to resolve global environmental materiality.I N T E R V I E WYoshihiro YamadaSDGs project member of Logistics Section, Production Promotion Department,TSI SCM Division W o r k i n g o n t h e S D G s p r o j e c t , b a l a n c i n g b e t w e e n m a c r o s t r a t e g i c p e r s p e c t i v e a n d t h e m i c r o o n – s i t e p e r s p e c t i v e .Q. What kind of efforts are being made in the SDGs project?Initiatives already implemented or underwayTo make a quick, small start, we are taking specific measures from the range that can be implemented within the SCM Division. Example: Conversion to environment-friendly auxiliary materials (packaging bags, hanging tags, hanger covers, shopping bags and other such items)Initiatives and plans for the futureMoving forward, we will consider more company-wide actions linked to business strategies and SDGs strategies, not only in the SCM Division, but also hand-in-hand with other business divisions.Example: Collaborate with Logistics Division and shops to switch to cardboard that can be used repeatedlyExample: Collaborate with Planning Division and MD to develop products based on environment-friendly materialsExample; Collaborate with shops and Manufacturing Division to collect clothing and old inventory for remanufacturing of B productsIn conjunction with the establishment of the SDGs Promotion Office of the Group, the segment that can move independently inside the SCM Division is about to start moving quickly, and young employees from each section of the department are heavily involved in the launch of this project. The basic approach of this project is to take advantage of the features of the SCM Division, which likes to traverse all divisions in business without being fettered by turf-minded brands. With that in mind, we are not tied to brands, so project elements look like they can be put together quickly in SCM, hence we have started to switch to environmentally friendly auxiliary materials mostly used in the Logistics Center.Q. Could you tell us what new insights you have gained from your input to this project?Since starting work on it, I have realized how SDGs need to be viewed from both micro and macro angles. SDGs are concepts related to the foundation of business. Hence, when considering the orientation of measures, the essence of TSI and our business strategy need to be considered. Conversely, for instance, the idea for switching in-use auxiliary materials came about because project members went to the logistics center every day to watch actual work with their own eyes. In other words, an on-site perspective is indispensable for extracting issues and incorporating them into specific actions. Thus, I want to continue focusing on the balance between macro strategic perspective and the micro on-site perspective.Q. Could you tell us about your vision for the future? While it is very meaningful to undertake the current efforts because they can be completed quickly, I also appreciate that there are limits to what can be done just in the SCM Division. Moving forward, I would like to see us bolster cooperation with other business divisions to create a big movement. Notably, a policy and system for promoting SDGs throughout the company has been established, so the potential for the spread of SDGs is increasing. And, I hope our activities will lead to changes in the behavior and awareness of many TSI employees. Then, by adeptly blending the on-site perspective of each team with the decision-making skills of the SDGs Promotion Office and the ideas of the business departments, TSI will be able to provide new value to customers.P e o p l eCreating values that brighten up the spiritC r e a t i n g v a l u e s t h a t l e a d s t o h e a l t h a n d h a p p i n e s s162Protect the rights of fellow workers who create value with us – Respect for human rights throughout the supply chainDiverse and flexible work life– Richly diverse activity– Flexible work styles and systems that can adapt to changeA fashion-driven fresh smile– Contribute to solving social issues through the purchase of products and servicesIntroduction lGobal Environment PeopleSociety CSR Governance Toward the FutureIntroduction lGobal Environment PeopleSociety CSR Governance Toward the FutureO u r C o m m i t m e n t sOur commitment to peopleTo create values that brighten up the spirit, we aim to orientate our approach to keep in mind employees, business partners and customers.The underlying intention of our business is the desire to create values that brighten up the spirit of people and share the joy of living together because everyone is the source of happiness. We understand that we must create fashion entertainment that leads to the health and happiness of all who are involved in our business. Based on this recognition, the TSI Group will enable everyone involved in our business to play an active role and enrich their lives, both physically and mentally. EmployeesWe will create a working environment that is diverse and flexible for all. Specifically, we will design a system that welcomes richly diverse activities and a system that allows flexible working styles in line with these changing times.Business partnersWe will do our best to protect the rights of fellow workers who create value with us. We will respect the human rights of everyone in the entire supply chain and protect the rights of all workers involved in our business.CustomersWe will create a fashion-driven fresh smile. We will plan and develop products and services that can contribute to solving customers’ social issues, and make them barrier-free in fashion. 「17５Diversity6Health & safetyWe will create an environment where all richly diverse people can play active roles.We will protect the physical and mental health of our employees, the source creators of value.7Employee wellbeing8Fair labor conditionsWe will create value that leads to financial satisfaction, mental satisfaction, self-actualization and growth of employees.We will respect the human rights of all people in the supply chain who contribute to creating value.Introduction lGobal Environment PeopleSociety CSR Governance Toward the FutureD i v e r s i t yDiverse and flexible work life185DiversityThe TSI Group has and will continue to actively promote initiatives to make a reality of the slogan: “Everyone is like everyone, we should all have diversity and flexibility in our work life,” to build an environment where anyone can thrive diversely.V O I C EImportant KGIs：Important KGIs：2025Examples of initiatives to achieve goalsFemale managerratio 1)73%27%Entire group40%60%Aiming for a female manager ratio of 40% by 2025– Requirements for promotion to managerial positions& skill map compilation– Revision of evaluation system based on managerial – Creation of management training & education requirementsprograms– Visualization & illustration of managerial career paths– Next-generation manager trainingActivity index that does not depend on genderFemale employee ratio1)29%71%FemaleMaleChildcare leave ratio2)98%Activity index that does not depend on life stagePost childcare return to work ratio2)93%Retention ratio due to childcare leave2)84%98%93%84%Aiming to maintain current high level throughout TSI Group– Continuation of generous childbirth/childcare/nursing system that underpins high level of above current indicators– Productive management training regardless of life stageActivity index that makes most of individual diversityDisabled employment ratio3)2.5%(Legal employment ratio of 2.3%))Aiming to maintain and improve legal employment ratio of +0.1%– Expansion of opportunities for disabled– Revision of work regulations/introduce condolence money system that take into consideration LGBTQ/dual surnames/common-law marriage, etc.1) Ratios at TSI Holdings, TSI, Ueno Shokai. And Wander, Laline JAPAN, Urth Caffe JAPAN, HYBES, TSI Social Works, S-Groove and PLAX (as of 1/2/2022) 2) Ratios at TSI Holdings, TSI, Ueno Shokai. And Wander, Laline JAPAN, Urth Caffe JAPAN, HYBES, TSI Social Works, S-Groove and PLAX, but exclude those who retired due to restructuring or leave of absence without returning to workplace. Aggregation period is one year from January to December 2021. 3) Ratios at seven specially certified companies (TSI Holdings, TSI, Alpage, Lalina JAPAN, TSI Sewing, S-Groove and TSI Social Works) (as of 15/11/2021)Mariko Tsujimoto, Personnel Section Expert, Personnel Department,TSI Corporate Division Achieving diversity of workstyles to provide all employees with secure and flexible optionsWe provide detailed support. Since 2021, we have been running a special subsidiary to promote employment of the disabled throughout the Group. ¥e are also building strong ties with local authorities and schools to enable us to offer detailed support to everyone so that they can thrive safely and securely in their jobs with us.Also, out of consideration for the high ratio of women in the TSI Group, from 2007, we have made the targeted period for reduced working hours for childcare up to graduation from elementary school. We carefully inform employees about childbirth and childcare laws and relevant company regulations, and, as a result, many take childcare leave, and the number of those who return to work is also high, as is the number of those who take work leave.. Introduction lGobal Environment PeopleSociety CSR Governance Toward the FutureG o o d H e a l t h a n d W e l l – B e i n gProtecting the physical and mental health of employeesIn addition to establishing a system based on laws and regulations, such as holding occupational safety & health committee meetings and V O I C Econducting stress checks, we are flexibly implementing what we can do to protect the lives of employees due to the recent coronapandemic. Further, as part of our workstyle reform, we pushed for telework in all offices in Japan, and, as a result, we achieved a reduction in working hours. Therefore, we will continue to strive for even better balance between work and private life.196H e a l t h & safetyImportant KGIs：As of February 20222025Examples of initiatives to achieve goals– Health & safety committee PR workLabor-relatedfatalities1)Number of labor-related injuries1)Number of labor-related illnesses1)0150000Aiming to continue at zero across entire groupHealth check ratio1)90%100%Averageovertime1)4.2 hoursAiming to curb overtimeIndicators for creating healthy and safe workplacesIndicators for improving individual mental and physical healthIndicators for achieving work-life balance for individualsAiming to implement for all employees– Stress checks within improvement measuresInitiatives to improve employee health literacy––Initiatives to improve work style flexibility– Development of flextime system & reduction of working hours– Lifting of ban on second jobs1) Figures & ratios at TSI Holdings, TSI, Ueno Shokai. And Wander, Laline JAPAN, Urth Caffe JAPAN, HYBES, TSI Social Works, S-Groove and PLAX. Note that these figures do not include executives, parttime workers and agency staff, nor do they include legal holiday work. Aggregation period is one year from January to December 2021. Hanami Ito, General Affairs Section, TSI Corporate DivisionAlways thinking of employeesFrom the end of June 2021, the new coronavirus antigen test kit “Icheck” is being distributed to stores managed directly by the TSI Group.The kit is used when there is a suspicion of infection among staff while at work. It was especially useful when there were market shortages. Additionally, for employees who have no choice but to look after themselves at home, I think in hindsight we responded beyond the demands of legal regulations, with food-securing efforts such as providing emergency food supplies and supporting online grocery shopping, while also offering special leave to employees who react adversely to vaccination.Status of initiatives to achieve diversity C A S E Creating new value kicking off from inclusionIntroduction lGobal Environment PeopleSociety CSR Governance Toward the FutureD i v e r s i t y & I n c l u s i o nand inclusionTo maximize the individuality of our fellow workers, we will promote initiatives to ensure physical and mental health as well as achieve diversity and inclusion.A numerical overview of diversity, health & safetyChildcare leave ratio98.1%Return from childcare leave ratio93.2%Entrenched childcare leave84.2%Average monthly overtime per person4.2 hoursReduced working hours (up to age 3 by law)Up to graduation from elementary schoolTotal number of days for nursing care leave (up to 93 days by law)365 daysmaximum1)2)3)Ratios at TSI Holdings, TSI, Ueno Shokai. And Wander, Laline JAPAN, Urth Caffe JAPAN, HYBES, TSI Social Works, S-Groove and PLAX (as of 1/2/2022) 1)Aggregation period is one year from January to December 2021.2) Object people are those who return to work after January 2020 and enroll for a year.3) Aggregation period is one year from March to February 2022.205Diversity6Health & safetyDisabled involved in farming at Urth Caffe JAPANIn the TSI Group, disabled employees do various jobs in shops, garment plants, centers and other such places. One such signature job involves growing vegetables on a farm. They grow their favorite vegetables from scratch, doing everything from harvesting, packaging and shipping. We are considering using their produce on the customer menu at Urth Caffe JAPAN. In this way, we aim to create an environment in which the disabled can play active roles in society and create new value. Moreover, we hope that these activities will motivate the disabled to get involved. C A S E Work-life support that brings diversity and flexibilityS y s t e m d e s i g n c r e a t i n g f l e x i b i l i t yTo accommodate the unique individuality within the TSI Group, which brings together companies with different organizational climates and cultures, we will flexibly provide diversity in duties, occupations and careers (freshers and mid-career switchers), such as providing a flextime system, reducing working hours, allowing second jobs and arranging various training systems, while implementing our personnel system appropriately. ManagementGeneral empoyeelJob titleLevel-based trainingSales departmentCommon trainingElective trainingTOPOfficer & executive officer seminars MiddleDepartment manager trainingLowerBasic management trainingShop manager trainingMid-career employeesLeadership trainingSub-training Young employeesTraining for young employees Sales produce trainingRookieJoint training for new employeesFollow-up trainingBusiness workshopisemnarsHD sponsoreddepart mental External semnariIntroduction lGobal Environment PeopleSociety CSR Governance Toward the FutureO u r C o l l e a g u e sComments from fellow workers who share in our work and activities 21I N T E R V I E WAsami Ono, Director Section Manager, TSI Rose Bud DivisionI N T E R V I E WNaoya Nakatsuka, Special Employment Promotion Department,TSI Social WorksAchieving balanced system, communication and willpowerValuing individuality in the workplace to encourage everyone to shine, we positively support lasting employment for the disabledQ. Could you tell us about your career so far?After a part-time job during college, I joined ROSE BUD in 2004. I worked for a while at the Shibuya store and was then transferred to the new Ginza branch in 2007 to become a store manager. While working as store staff at Shibuya, I also worked as the press officer, so my aim was to become a press officer at head office, but the managerial experience I gained at Ginza changed my career ideas, and in 2011 I became an area manager. In 2016, the idea of becoming general manager was floated to me, but I was uncertain because of work-life balance issues such as having a family, but my boss showed understanding of my needs and said that I could build my needs into my work, which was the kind of helpful push I needed.Q. Could you tell us about the role of TSI Social Works?As a special subsidiary of our company, we are in charge of hiring the disabled at group companies. There are 43 disabled employees engaged in various roles at our logistics center, B product management center, EC-dedicated center and farm. My role is to share information with the managers at business sites and troubleshoot for individuals and tasks, so that everyone can focus on work in a relaxed manner. I take particular care about work, health and life issues, as these can have an adverse impact on the ability to work – so, besides managing, I support the disabled by taking care over those three areas.Q. How was it when you took maternity and childcare leave?Q. Could you tell us how you create a relaxed working environment?I gave birth to my first child in 2017 and the second in 2020, taking maternity and childcare leave in both cases. For my first birth, I was worried about the impact on my career, but the company reassured me that my position was safe, which motivated me to do my best upon return. Although taking such leave is written into law, it is reassuring when the setup is one that makes it easy to take leave. Also, as I am allowed to work shorter hours until my children graduate from elementary school, I can flexibly plan for a long-term career. We strive to create an environment where people can work enthusiastically to the best of their abilities. We subdivide work to find out what people can do, might be able to do and what is perhaps too difficult. Moreover, we promote steady development via job rotation to offer various work experience to improve aptitude and motivation. And, although communication can be difficult during the teaching process, we see mutual trust grow through communication, leading to confidence and job satisfaction. Q. Could you tell us about your future plans?Many things only became clear after returning to work, so I felt it was important to communicate how I intended to use the leave/shorter hours system to both company and family. I also think it is essential to avoid being passive and instead express to the company how I can contribute amid a shorter working week. My next step is to develop the workforce, as brand growth has to go hand-in-hand with manpower growth if the company is to be resilient. Hence, I want to nurture a fresh generation of staff for the future while also personally taking steps to move in a new direction myself. Q. Could you tell us about your future plans?The next issue for me is to think about where work can be done – in other words, the diversification of working styles. With the prolonged corona pandemic in mind, we need to develop a system that offers (among other things) telework to provide lasting employment. Many of our disabled employees adore fashion, so – although a pipe dream – it would be great to see TSI developing some garments specifically for the disabled, garments that would expand the image of creativity based on the things we have experienced in our work.227E m p l o y e e w e l l b e i n gIntroduction lGobal Environment PeopleSociety CSR Governance Toward the FutureE m p l o y e e S a t i s f a c t i o nCreating value that leads to employee self-growthWe are surveying employee satisfaction (eNPS) across the entire TSI Group to create an environment in which all employees can work in diverse and flexible manners according to their own desired vision.We are striving to improve the working environment in each business based on the 2021 survey (527 respondents1)) We plan to continue doing this once a year.Long-term goals：Constant improvement of employee satisfaction (eNPS)Conduct regular employee satisfaction surveys (eNPS) and fixed-point observationsEmployee satisfaction monitoring indexImplementation of initiatives based on index resultsOversee constant improvement in eNPSSurvey outline/items are scheduled to be announcedMain survey itemsManagement messageVision, leadership, social contribution, brandCommunicationCommunication opportunities and places, feedback,open cultureOrganizational management systemRules, systems, evaluation, handling, treatment, environmentMutual respectCompany-own relationship, company-team relationship, team-own relationshipIdentifying gap between Aims and results ofsatisfaction surveyObserving fixed–point effects via regularsurveys Task identificationEffectevaluationFactor analysisImprovementimplementationFactor analyzing eNPS by setting detailed survey items1) The target of this survey is TSI Holdings, and the assumption is that all full-time employees of the TSI Group will be targeted in the future.Growth & developmentOpportunities for growth, decision-making, creativityImplementing improvement measures atappropriate layersIntroduction lGobal Environment PeopleSociety CSR Governance Toward the FutureR e s p e c t f o r H u m a n R i g h t sRespecting human rights of all people in supply chainTo achieve fair labor conditions, the TSI Group has revised the code of conduct for business partners and specified the scope of coverage, and is informing suppliers of those changes. We will continue to work to protect the human rights of our partners and plant workers, who create value together with us.V O I C ERespecting human rightsMechanism are needed to eliminate forced labor from the supply chain. Since 2018, we have received confirmation of CSR initiatives from some 200 major suppliers, and we have newly compiled the TSI code of conduct for business partners. We have expanded this to all suppliers, and started signing them up from January 2021. First off, with the understanding of our business partners, we will do our best to operate it as an initiative that covers the entire TSI Group.Sanae Harami,QC Section, Production Promotion Department,TSI SCM Division238Fair labor conditionsLong-term goals： Respect for human rights throughout supply chainMid-term goals： Acquisition of supplier code of conduct signatures and establishment of management and operation system for all suppliers and designated inspection plants with the TSI Group by 2025Business partner code of conductMain tenets• Freedom of choice of employment• Freedom of association and respect for the right to collective bargaining• Safe & hygienic working conditions• Prohibition of child labor• Guarantee of living wages• Compliance with legal working hours• Prohibition of discrimination• Application of regular employment• Prohibition of harsh & inhumane treatment• Environmental protection • Handling of dangerous goods• About ethics, bribery & corruption• Subcontracting & working from homeExecuted1)ScheduledTSI GroupTSI / AndWandercompaniesOther group In-house awarenessOutside awarenessManagement & operation– Raising awareness about code of conduct for business partners(briefings, in-house PR, in-house newsletters, etc.)– Sending code of conduct to business partners and responding to inquiries (only in Japan at present)– Confirmation collection– Manage PLM system– Dissemination and collection for new business partners– Regular update of code – Raising awareness about code of conduct for business partners (briefings, in-house PR, in-house newsletters, etc.)– Sending code of conduct to business partners and responding to inquiriesof conduct– Audit– Confirmation collection1)2022年3月31日時点24S m i l e s !A fashion-driven fresh smile!Beginning with the products and services we create, we will bring fresh smiles to peoples’ faces while sticking close to the various scenes our customers are involved in.C A S EStepping toward the next generation with smiles for kids「DORAEMON × Jack Bunny!! Golf Competition余 剰 在 庫 を 蘇 ら せ る ア ッ プ サ イ ク ル 商 品 の 販 売 もIntroduction lGobal Environment PeopleSociety CSR Governance Toward the FutureC A S EThe fun of fashion in the working sceneProducing nursery school uniforms at Nano UniverseNano Universe has produced a nursery school staff uniform for MemorytreeNursery School (operated by nexus) based on the concept of “fashionable uniform that looks right even after work”. This product is designed to be trendy but practical (incorporating input from on-site nursery teachers) and functional to guarantee ease of use in nursery work. We will continue to plan and develop products and services that convey the joy of fashion across various walks of life.C A S ECollaboration on the theme of sustainabilityStaging Together with EarthThis was staged at Daimaru and Matsuzakaya stores nationwide (9 department stores & 92 shops) as a collaboration campaign undertaken by TSI and World, a first in terms of linking sales sites. With the theme of Together with Earth, Besides marketing this season’s fashions in sustainable materials, both companies held a clothing collection campaign, to show how companies can cross boundaries in a sustainable initiative that covers new clothes, upcycle ones, and recycling. Jack Bunny!! held a customer participation event “DORAEMON x Jack Bunny!! Golf Competition 2021”. There was lots of fun to be had, with Doraemon’s secret tools appearing at holes, attraction holes where Doraemon’s rules apply and other fun things. And, as to golf, well it has a strong adult image, but both kids and grownups could enjoy this event, which put smiles on the faces of the next generation.Sales of upcycle products to revive surplus inventoryThe company human woman remakes in-stock knitwear, upcycling to create new designs that express color schemes in different ways and add charm to the natural splendor of ramie fibers.25S o c i a lCreating value to share lasting happinessRealizing sustainable communities while coexisting with natureCustomers and communities all sharing sustainable happiness with us– Contributing to sustainable communities via a wide variety of activities3Introduction lGobal Environment People SocietyCSR Governance Toward the FutureL o c a l C o m m u n i t y Commitment to communitiesTo become the happiest fashion house in the world, we will not only move ahead with our sartorial acumen, but also develop contents that add color to people’s lifestyles and create new businesses that solve social issues.Looking broadly at society, we see many communities already under siege from serious problems, such as environmental destruction and depopulation. Having turned our attention to such local communities, we are striving to solve their problems and bring about sustainable development by creating new lifestyles and manufacturing from their local areas by fusing our expertise cultivated through the development of a wide variety of brands with local resources.Until now, we have been developing the apparel business as well as contents that illuminate people’s lifestyles in areas such as cosmetics, food & drinks and habitat design.From here on, using our brands to produce products and services, we will shape new ties with local communities and contribute to regional revitalization & related repopulation. Moreover, we will strive to protect nature and culture and generate employment as we step up to the task of realizing sustainable local communities that coexist with nature.Introduction lGobal Environment People SocietyCSR Governance Toward the Future269Local communitiesUtilizing our technologies and know-how, we will contribute to the conservation of local communities and the global environment as well as promote activities that tie into the next generation.Introduction lGobal Environment People SocietyCSR Governance Toward the Future279Social contributionL o c a l C o m m u n i t yC A S E Creating new community-based lifestyles and manufacturingOur mission to solve problems in local communitiesBy developing business in collaboration with various partners in various fields in given regions, we will carry out corporate activities to solve problems and then help revitalize and develop those regions.We will utilize our technology and know-how to think about what we can do to maintain local communities and local environments. And, as a member of society, we will fulfill our mission to responsibly solve social issues. Comprehensive cooperation agreement with Kamikawa in Hokkaido to develop a community that creates new valueIn recent years, the town of Kamikawa in Hokkaido has been actively engaged in various regional revitalization projects, such as tourism promotion and job creation in collaboration with the public and private sectors. Agreeing with the sentiment of these efforts, we concluded a comprehensive cooperation agreement with Kamikawa and are looking to make a sustainable commitment to the town in various ways.V O I C EBeing able to contribute via our businessWe developed and as of last year started selling chainsaw protective trousers that meet EU’s strictest quality standard ENISO 11393-2: 2019. Also, following the agreement with Kamikawa, we will undertake activities to help this thriving forestry town. Listening to what the town needs, we want to put our workplace technologies to good use to help the town.Wataru Nishiuchi,CEO, TSI SewingC A S ELinking local feelings to the next generationSpinning ideas to come up with a remake project concept One collaboration with Kamikawa is the remake project, which involves remaking clothes worn by parents and grandparents into new clothes to be worn by their children and grandchildren – in other words, linking up multiple generations.Yet, as a fashion company – not just a remake business – we will continue to come up with ideas to connect sentiments to contribute to the local community and society. 28C S RTo fulfill our social responsibilitiesW e w i l l c o n t r i b u t e t o t h e c o n s t r u c t i o n o f a s u s t a i n a b l e f u t u r e s o c i e t y .Introduction lGobal Environment People Society CSRGovernance Toward the Future4C S RCSR basic policyThe TSI group bases its management philosophy on the statement: “We create values that brighten up the spirit of people through fashion and share the joy of living with society.” in order to commit with all our stakeholders to business activities that will build a sustainable future society.Introduction lGobal Environment People Society CSRGovernance Toward the Future29Contributing to the realization of a society free of poverty C A S Eand discrimination“Happiness for All” Project from JILL by JILLSTUART× Plan InternationalPlan International is an international NGO working in more than 70 countries to promote children’s rights and create a society free of poverty and discrimination. In support of the “Because I am a Girl” campaign within the “Happiness for All” project developed by this NGO, JILL by JILLSTUART donates to the campaign via sales of target products.“We want to play our part in eliminating poverty and discrimination in the world”Based on our sustainability statement and humanitarian support initiatives & contributions to local communities through our CSR, we will donate to and support this cause.C A S ESwift provision of supplies to places and people in needClothing support for shelters in rain-damaged Atami via Japan Heart Social NetworkThe TSI Group backs Japan Heart Social Network, run by Japan Heart (NPO). Responding to rain damage in Atami, Shizuoka prefecture, in July 2021, we provided T-shirts, tank tops and other clothing to shelters in Atami as disaster support.“Swift provision of supplies to places and people in need”We will continue to cooperate with various outside organizations to contribute in waysthat are close to the essence of a fashion group like TSI.30C S RO u r e f f o r t s i n r e g a r d t o h u m a n i t a r i a n a i d t o U k r a i n eA s a c h a r i t a r i a n e f f o r t s f o r h u m a n i t a r i a n a s s i s t a n c e b a s e d o n p e a c e k e e p i n g , w e d o n a t e d 1 0 m i l l i o n y e n t h r o u g h t h e J a p a n e s e R e d C r o s s S o c i e t y ‘ s ” U k r a i n i a n H u m a n i t a r i a n C r i s i s R e l i e f F u n d . “T h i s d o n a t i o n w i l l b e u s e d f o r h u m a n i t a r i a n a c t i v i t i e s i n U k r a i n e a n d t h e E u r o p e a n r e g i o n .M o r e o v e r , w e p l a n t o d o n a t e a l l o r p a r t o f t h e p r o f i t s e a r n e d f r o m o u r b u s i n e s s a c t i v i t i e s t h r o u g h t h e J a p a n e s e R e d C r o s s S o c i e t y a n d p a r t i c i p a t i n g p r o j e c t s i n o r d e r t o h e l p t h e i r l i f e i n U k r a i n e o r t h e o n e a t t h e s h e l t e r .Introduction lGobal Environment People Society CSRGovernance Toward the FutureC A S EP r o d u c i n g a l i m i t e d e d i t i o n o f t h e c l a s s i c D I N E X m u g“ a n d w a n d e r ” p r o d u c e d a l i m i t e d e d i t i o n o f t h e c l a s s i c D I N E X m u g a n d s t a r t e d o r d e r s a l e s o n A p r i l 8 t h .C A S ET H E L I B R A R Y × E W . P h a r m a c y / e d e n w o r k sI n c o l l a b o r a t i o n w i t h “ E W . P h a r m a c y ” o f e d e n w o r k s ’ s d r i e d f l o w e r s h o p , “ T H E L I B R A R Y ” w i l l s e l l l i m i t e d b o u q u e t a t a l l s t o r e s o n A p r i l 1 5 t h .C A S ET – s h i r t p r o j e c t t o a i d U k r a i n e5 B r a n d s j o i n t l y p r o d u c e d o r i g i n a l T – s h i r t s a n d s t a r t e d o r d e r s a l e s o n M a r c h 3 0 t h .31Introduction lGobal Environment People Society CSR GovernanceToward the FutureC o r p o r a t e G o v e r n a n c eManagement systemBuilding a swift and transparent management system5Introduction lGobal Environment People Society CSR GovernanceToward the FutureC o r p o r a t e G o v e r n a n c eCorrect management“We create values that brighten up the spirit of people through fashion and share the joy of living with society” is the management philosophy we strive to live by.To tailor a business system apt to a global fashion group, we will be sound and transparent, establish a prompt decision-making system and galvanize in-house control, including thorough compliance and risk management.Through these efforts, we will strive to continuously improve corporate value – which is our basic management policy – with the aim of building good relationships with stakeholders and further enhancing corporate governance. Corporate governance systemOverall group business is audited from an expert perspective by outside executives, and – if necessary –outside auditors will collaborate with our in-house audit office to audit our business.While we believe that the current governance system is the optimal system for ensuring appropriate business, we will keep looking at ways to improve it to stay abreast of future scenarios.Strengthening the SDGs promotion systemThe SDGs Promotion Office has been set up to work on this issue, and the office’s members will take the lead in formulating draft response policies and disseminating them to relevant departments.The system is set up in a way that lets the board of directors decide important issues after discussion with the sustainability committee, which is composed of members cored around in-house directors. 32General meeting of shareholdersAppointment/DismissalAppointment/Dismissal（2021年12月20日時点）Board of directorsVarious meetingsAuditBoard of corporate auditorsAppointment/Dismissal/auditAppointment/DismissalCEOReportAuditAccounting auditorCommands/Supervises Commands/SupervisesAdviceHead office administration/Group companiesAdviceLawyers, tax accountants, patent lawyers, social insurance consultantsIn-house Audit OfficeIn-house audit/recommendations/Requests33T o w a r d t h e F u t u r e o f F a s h i o nToward tomorrow’s worldBridging the way to sustainability for the future of fashionIntroduction lGobal Environment People Society CSR Governance Toward the FutureIntroduction lGobal Environment People Society CSR Governance Toward the Future34Global environm