Why did Ryohin Keikaku, with ESG at the core of its business, revisit its material issues?

In March 2026, Ryohin Keikaku reviewed its “material issues (materiality)” in light of changes in the business and management environment. Material issues refer to priority challenges that the company addresses to achieve mid- to long-term business growth, enhance corporate value, and contribute to the realization of a sustainable society. 
At Ryohin Keikaku, material issues are positioned as being directly linked to the company’s growth strategy. At the core of this approach is its corporate philosophy: to contribute to the creation of "a truthful and sustainable life for all through our products, services, stores and business activities; believing in a human society rich in heart, with a balanced relationship between human, nature and objects." 
Grounded in this corporate philosophy, the material issues serve as a kind of “compass” that helps the company confirm how its day-to-day business activities are connected to societal challenges and provides a point of reference to return to when we are unsure how to act. They also serve as a shared language that enables each and every employee to move in the same direction and continue creating value for society through the business. 

Reviewed and refined to ensure clarity and ease of use 

Ryohin Keikaku first established its material issues (materiality) in 2022, and over the subsequent approximately four years, has advanced a wide range of initiatives aligned with these material issues. Amid significant changes in the business and management environment—such as heightened expectations for climate action, the emergence of supply chain risks, and the expansion of global operations—the need to reassess the material issues grew more pronounced. 

First, Ryohin Keikaku broadly identified its material issues by referencing international guidelines on sustainability disclosure, such as the SASB Standards and CSRD topics. The identified issues were then assessed and prioritized from both perspectives, their importance to Ryohin Keikaku and their importance to stakeholders. Furthermore, we organized the issues by considering insights regarding the advancement of ESG management gained through exchanges of views with external experts. Based on the results of these considerations, the appropriateness of the material issues was deliberated and finalized by the Executive Committee and the Board of Directors. 

In this review, the company focused on reorganizing the material issues to be understood clearly, while preserving the direction of its existing initiatives. Through the exchange of views between external experts and internal directors conducted as part of the review process, the company received a certain level of positive assessment for its ESG initiatives to date. At the same time, feedback was also received that the wording of the material issues was distinctive and difficult for both internal and external stakeholders to understand. 

Incorporating the perspectives of external experts, the company held a series of discussions with the President and the Management to review them reflecting actual business conditions and management challenges. Through a consensus-building process that incorporated both internal and external perspectives, the company reorganized its material issues by making them easier for employees to translate into their day-to-day work. 

The Five Material Issues and Specific Initiatives Through Business Activities

 As a result of the reorganization, we have identified five material issues. Under “Material Issue 1. Provide Socially and Environmentally Responsible Products and Services,” the company is advancing product development that utilizes recycled materials and materials with a lower environmental impact. Regarding “Material Issue 2. Address Climate Change and Promote Resource Circulation,” the company is building businesses based on a circular economy approach, including power generation projects using renewable energy (MUJI ENERGY) and reuse and recycling initiatives through “ReMUJI.” With respect to “Material Issue 3. Create Positive Impact in Local Communities,” the company supports community development through store-led local events and collaborative activities carried out in partnership with local communities. In addition, through strengthening supply chain management and advancing human resource initiatives, the company is also working on “Material Issue 4. Ensure Honest and Ethical Business Practices” and “Material Issue 5. Advance a People-Centered Philosophy for the Common Good, Led by Diverse Individuals.”  

Progress Management Using ESG Indicators and Engagement with Stakeholders 

We have set ESG indicators in line with the five material issues to track the status of ESG implementation. For example, under “Material Issue 1. Provide Socially and Environmentally Responsible Products and Services,” one of the indicators tracked is “Procurement rate of textile materials sourced ethically and with consideration for their impact on the environment, society and animal welfare.” In the fiscal year ended August 2025, the sourcing ratio of environmentally and socially responsible cotton reached 99% for products in the Apparel. Under “Material Issue 2. Address Climate Change and Promote Resource Circulation,” we continuously monitor progress in reducing CO₂ emissions associated with our business activities based on CO₂ emissions (Scopes 1 and 2) set as a key indicator. Under “Material Issue 3. Create Positive Impact in Local Communities,” we use indicators such as the number of local events and the number of participants to assess its store-based engagement with local communities and the expansion of store-based initiatives. In addition, under the supply chain related “Material Issue 4. Ensure Honest and Ethical Business Practices,” we confirm the status of initiatives related to human rights, quality, and safety through factory audit results. Regarding “Material Issue 5. Advance a People-Centered Philosophy for the Common Good, Led by Diverse Individuals,” we use the ratio of female managers as one of the key indicators to measure progress in human resource diversity and organizational development, and we also position the number of individual shareholders as an indicator reflecting the spread of empathy for and trust in our corporate activities. 

Ryohin Keikaku’s ESG indicators are not limited to these; these ESG indicators are disclosed in the integrated report “MUJI REPORT” and in the ESG Databook published on our website, where they serve to visualize the progress of initiatives from the perspectives of environment, society, and governance. By presenting results quantitatively, we deepen dialogue with stakeholders and link these outcomes to subsequent improvements and initiatives. 

Each employee’s actions lead to value creation

Material issues are not advanced by specific departments alone. Daily operations such as product development, store operations, and collaboration with suppliers—directly contribute to progress on these material issues. Ryohin Keikaku positions ESG at the core of its business and aims to achieve both the realization of a “truthful and sustainable life for all” and the sustainable growth through its business activities.