Creating an environmentally friendly society

Leopalace21 recognizes the environmental burden of its operations and aim to realize its housing business as friendly as possible to the environment through overall reduction of burdens.

CO2 emissions (Scope 1, 2 and 3)

Leopalace21 sets its own target of CO2 reduction by 46% in fiscal year 2030 against the actual of fiscal year 2016 for Scope 1 and 2 (from use of electricity, gas and vehicle gasoline)
The Company has been collecting CO2 emission results since fiscal year 2016 and disclosing them on the website and the integrated report. The Company employs an independent third party to certify our way of data aggregation and results with a period of temporary suspension for the purpose of an enhanced reliability.
Going forward each and every employee is engaged in daily jobs considering the environmental impact and aims in unison to preserve the environment by the reduction of number of company vehicles and by respecting CSR Procurement Guidelines in purchasing items necessary for the operations.

CO2 emissions (Scope 1, 2)

The Company believes it is also critical to identify the operational processes for the purpose of preserving environment through the effort of capturing CO2 emission both in upstream and downstream of the operations. The Company has been collecting and disclosing CO2 emission results for Scope 3.

CO2 emissions (Scope 3)

TCFD-based information disclosure


The Leopalace21 Group has established a Sustainability Committee under the Board of Directors, which meets every three months to promote initiatives related to sustainability management that the Board of Directors instructs the whole company as part of its business. The Board of Directors oversees this issue by reviewing and consulting on climate-related issues, which it has positioned as a key sustainability management issue. In the fiscal year ended March 31, 2022, the Board approved the setting of targets to reduce CO2 emissions, among others. The Sustainability Committee, chaired by the Director in charge of sustainability and composed of sustainability representatives from each department, deliberates and examines measures to promote "Attention to the environment," one of the Company's materiality issues.

Promotion Structure

Promotion Structure

Roles and responsibilities in the promotion structure

  • Board of Directors
    The Board of Directors determines basic management strategies and plans, and decides on measures on climate change-related issues based on deliberations by the Sustainability Committee and the Risk Management Committee, and receives reports on the relevant matters. It supervises the activities of these Committees.
  • Director in charge of sustainability
    Leads discussions and plays a central role in advising the Sustainability Committee when the Board of Directors decides on environment-related policies, including climate-related issues.
  • Sustainability Committee
    The status of sustainability promotion shall be shared throughout the Leopalace21 Group through reports on the status of activities related to each materiality in the areas of environment, social, and governance, which are being undertaken by the Committee members representing relevant departments and each group company as part of their business activities. In addition, the Committee shall set numerical targets for environmental activities, including climate change, and manage the status of their achievement, report on important matters to the Board of Directors, and report to the Board of Directors on the risks posed by climate change in cooperation with the Risk Management Committee.


In addition to evaluating financial and business impacts under different scenarios (see table below), the Company conducted scenario analysis according to the following steps in order to examine the resilience of its strategy and response to climate change risks and opportunities, and to link the results to its future business strategies. The scope of the scenario analysis covers the leasing business segment (apartment construction, leasing, and management), as the leasing business accounts for more than 90% of the Company's sales. In addition, since the Company has identified and announced its materiality by 2030 in accordance with the SDGs, the time horizon of the scenario analysis was also conducted assuming the year 2030.

Reference scenario

Scenario Outline of scenario Major reference scenario
1.5°C* A scenario in which policies and regulations are implemented to achieve a decarbonized society and the global temperature increase from pre-industrial times is limited to less than 1.5°C. Transition risk is high, but physical risk is lower than in the 4°C scenario. -IEA World Energy Outlook 2021 Net Zero Emissions by 2050 Scenario
4°C No new policies or regulations will be introduced and global CO2 emissions will continue to increase. Transition risk is low, but physical risk is high. -IEA World Energy Outlook 2021 Stated Policies Scenario
  • * Parameters not specified in the 1.5°C scenario are taken from the 2°C scenario.

Scenario analysis steps

Promotion Structure


Identified risks/opportunities and respective financial impacts

The Company conducted a scenario analysis and identified the following risks and opportunities. The Company has already begun to address the increased costs resulting from the carbon tax, including setting reduction targets for Scope 1 and 2. The Company will deliberate on further measures to address each risk and opportunity, such as starting development of ZEH apartments, and take appropriate actions.

Risks/opportunities Category Outline Financial impact
1.5℃ 4℃
Risks Transition risks Policy and legal Increase in operating costs due to tighter regulations such as carbon tax Medium Medium
Technology Increased construction costs for new properties Large Large
Market Low evaluation by investors as a company with inadequate response to climate change Large Large
Reputation Avoidance of trade by corporate customers due to delay in environmental response Medium Medium
Acute Decrease in sales due to occurrence of weather-related disasters Small Small
Chronic Increased costs due to longer construction periods resulting from increased extremely hot days Medium Medium
Opportunities Products/
Increased sales due to increased demand for environmentally friendly apartments (Construction) Small Small
Increase in sales through provision of environmentally friendly apartments (Leasing) Small Small
Increase in sales due to the new production lines at corporate customers which are engaged in environmentally friendly business (Leasing) Small Small
Resilience Restoration demand in the event of flood or flood-related damage (Construction) Medium Medium
  • Financial impact
    Large: Impact on net sales of JPY 5 billion or more / Significant impact on operations
    Medium: Impact on net sales of JPY 500 million or more but less than JPY 5 billion / Mid-level impact on operations
    Small: Less than JPY 500 million impact on net sales / Minor impact on operations

Risk management

The Leopalace21 Group has established a Risk Management Committee under the Board of Directors to comprehensively identify and manage company-wide risks. Risks are being evaluated and addressed based on six broad classifications. Climate change-related risks are positioned as "external factors" in the risk classifications. Climate change-related risks identified by the Sustainability Committee or periodically reviewed by the Sustainability Committee are communicated to the Risk Management Committee as appropriate to share them as company-wide risks. The Sustainability Committee and the Risk Management Committee will play a central role in studying, formulating, and implementing measures to address climate change-related risks in cooperation with related departments. The results are reported to the Sustainability Committee and Risk Management Committee, and are then shared with the Board of Directors.

Risk classification table

External factors
  1. Risks related to changes in external environment
  2. Country risks
  3. Disaster risks
  1. Legal violation/lawsuit risks
  2. Compliance risks
Strategy / Governance
  1. Strategy risks
  2. Managerial risks
  3. Contractor/subsidiary management risks
  1. Operational risks
  2. Information management risks
  3. Personnel risks
  4. System risks
  1. Market risks
  2. Liquidity risks
  3. Default risks
Reputation The risk of incurring losses due to reports in the mainstream media, reputation, gossip, rumors, etc.

Risk management structure

Risk management structure

Roles and responsibilities in risk management structure

  • Board of Directors
    The Board shall receive and oversee reports by the Sustainability Committee and the Risk Management Committee on the status of and response to climate change-related risk management.
  • Risk Management Committee
    In identifying and managing company-wide risks, the Committee shall share climate change-related risks reported by departments with the Sustainability Committee as appropriate. In addition, the Committee shall comprehend such risks communicated by the Sustainability Committee.
  • Sustainability Committee
    The Committee shall manage, operate, and review climate change-related risks as appropriate. Such items shall be shared with the Risk Management Committee as appropriate, and reported to the Board of Directors on a quarterly basis.

Metrics and targets

The Leopalace21 Group has started to compile and disclose CO2 emissions from its business activities since FY2016, and has disclosed the results of each fiscal year's computation in the integrated reports as well.

The Leopalace21 Group has set in FY2020 a target of reducing Scope 1 and 2 emissions (CO2 emissions from gas, gasoline, and electricity used by the company) from its facilities by 26% in FY2030 compared to the FY2016 level, and has already achieved this target as of the end of FY2021.

One of the major factors behind the significant reduction of CO2 emissions was the reduction of the number of leasing sales offices through implementing structural reforms in the core business and streamlining the operations through withdrawal from non-core and unprofitable businesses. The Company has changed the reduction target for Scope 1 and 2 from FY2022, and will continue to work on further reductions.

In the future, the Company will also work to identify and reduce Scope 3 (CO2 emissions indirectly generated upstream and downstream of the business activities) in order to make further contributions to environmental preservation. Since the majority of the Scope 3 emissions are derived from electricity and gas consumption by the tenants, the Company is currently taking measures such as switching to LED lighting fixtures in the managed properties. Since the Company anticipates an increase in Scope 3 CO2 emissions as the occupancy rates rise, the Company will work to further reduce Scope 3 emissions through the development and sale of ZEH apartments and the use of renewable energy in our managed properties.

Reduction target for Scope 1 and 2

Reduce CO2 emissions by 46% in FY2030 compared to the FY2016 level (updated target from FY2022)

Results of Scope 1, 2, and 3

Classification FY2016 FY2017 FY2018 FY2019 FY2020 FY2021
Scope 1 5,392 5,467 5,518 5,218 3,473 3,284
Scope 2 14,692 13,719 12,558 11,578 8,089 7,232
Scope 3 873,167 864,448 786,510 692,463 693,388 748,745

Operating CSR Procurement Guidelines

The Company established CSR Procurement Guidelines in September 2019 and respect the Guidelines in all of its group operations. The Company includes the consideration for the environmental in the Guidelines and aims to reduce the environmental burdens to attain the United Nations SDGs and observe relevant laws and regulations in Japan and any other countries and regions in which the Company operates.
The Company keeps its stakeholders informed about environmental activities through communicating the CSR Procurement Guidelines to the business partners.

See Environmental Programs by Data

Energy Consumption

  FY20/3 FY21/3 FY22/3
Total energy input (GJ) 332,930 235,728 218,694
Scope 1 CO2 emissions (t-CO2) 5,218 3,473 3,284
  Head office and branches 415 172 120
  Azumi En nursing care facilities 1,063 983 1,176
  Leopalace hotels 568 106 0
  Vehicle gasoline 3,172 2,212 1,988
Scope 2 CO2 emissions (t-CO2) 11,578 8,089 7,232
  Head office and branches 5,928 4,475 3,379
  Azumi En nursing care facilities 3,836 3,412 3,853
  Leopalace hotels 1,813 201 0
Scope 1+2 CO2 emissions (t-CO2) 16,796 11,562 10,516
Ratio of Scope 1+2 CO2 emissions and sales (t-CO2/billion yen) 3.9 2.8 2.6
Scope 3 CO2 emissions (t-CO2) 692,463 693,388 748,745
  Category 1 (purchased materials) 10,898 5,850 83
  Category 2 (capital goods) 12,692 9,621 5,041
  Category 3 (electricity-related) 5,701 4,931 4,217
  Category 6 (business travel)
  Category 7 (employee commuting)
  Category 13 (electricity and gas use by rental housing) 663,171 672,987 739,403
Scope 1+2+3 CO2 emissions (t-CO2) 709,259 704,950 759,263
Ratio of Scope 1+2+3 CO2 emissions and sales (t-CO2/billion yen) 163.6 172.4 190.6
  • * Scope 1 = direct emission from gas and vehicles, Scope 2 = indirect emission from electricity, Scope 3 = indirect emission other than Scope 1 and 2

Water Resources

  FY20/3 FY21/3 FY22/3
Water resources input (thousand m3) 376 246 177
Wastewater (thousand m3) 258 108 86
Recycled water (thousand m3) 35 - -
  • * Amount of water resources input and wastewater includes domestic hotels and Guam resort facilities, recycled water includes only domestic hotels

Industrial Waste

  FY20/3 FY21/3 FY22/3
Industrial waste (t) 15,588 9,004 1,887
  Industrial waste per demolished building (t / buildings) 2,515 1,040 79
  Industrial waste per newly constructed building (t / buildings) 4,244 1,329 48
  Industrial waste per repaired building (t / buildings) 8,828 6,635 1,760
  • * Total numbers are waste weight for all construction sites/repair sites.
    The waste per completed building increased because the number of completed building decreased while the repair works increased.

Paper Input

  FY20/3 FY21/3 FY22/3
Paper input (A4-size sheets in millions) 58 44 37

More information about corporate responsibility activities

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