Ryohin Keikaku : MUJI REPORT2023 (For Viewing)

3

RYOHIN KEIKAKU CO., LTD.

About MUJI REPORT

This report is intended to lead to dialogue with stakeholders by presenting goals for medium- to long-term value creation, management policies, business conditions, and other financial and non-financial information based on the philosophy and mission of Ryohin Keikaku, which is aiming to help create "a truthful and sustainable life for all."

Information Resources

Financial Information

Non-Financial Information

MUJI REPORT

Information on medium- to long-term value creation

Securities Report	Consolidated	Investor Relations	Sustainability (website)
(Japanese only)	Financial Results	(website)	https://ryohin-keikaku.jp/eng/sustainability/
		https://ryohin-keikaku.jp/
		eng/ir/

Contents

Introduction

Enhancing Our Corporate Value

Our Philosophy	3
Our History	5
Toward "a Truthful and Sustainable Life
for All"	7
Financial and Non-Financial Highlights	9
Global Network	11
Message from the Chairman	13
The Value We Create	15
Ryohin Keikaku and Sustainability	17
Message from the President	19
Our Goals and How We Will Achieve Them	25
Feature 1: Overseas Growth Potential	27
Feature 2: Changes in Our People and Stores	29
Feature 3: An IT Strategy Aimed at Realizing
Comfortable Online Services	31
Feature 4: Strengthening Our Earning Power	35

Material Issue 2:

Address Local

Challenges and

Revitalize Regions

Material Issue 3:

Practice Business

Activities in Which Each

and Every Diverse

Individual Plays a

Leading Role

Material Issue 4: Realize Governance Aligned with Public Interest and People- Centered Management

Basic Information

Store Strategy	51
Interview with a General Manager	53
Sustainable Community Design	55
Human Resource Development	57
Initiatives for Diversity & Inclusion	59
Working toward "Public Interest and
People-Centered Management"	61
Directors and Corporate Auditors	63
Corporate Governance	65
Messages from Outside Officers	69
Message from an Outside Corporate

Business Strategies	Ryohin Keikaku's Business Strategies	37
Material Issue 1:	Ryohin Keikaku's Unique Product
Build a Sustainable and	Development	39
Circular Society That	Apparel	41
Coexists with Nature
Household Goods	42
	Food	43
	Overseas Product Development	44
	Supply Chain Management	45
	Raw Material Procurement	47
	Recovery and Recycling Initiatives	48
	Caring for the Environment	49
	Climate Change	50

Auditor	71
Risk Management and Compliance	72
11-Year Summary	75
ESG Data	77
Stock Information	79
Corporate Information	80

Scope of This Report Consolidated subsidiaries and consolidated companies of Ryohin Keikaku Co., Ltd.

Period Covered	Fiscal year ended August 2023 (September 1, 2022 to August 31, 2023)
	Note: Information outside this period is reported when it is appropriate to show past events and data or recent examples. In this report, amounts and number of
	shares that are less than one unit are rounded down, and all ratios and percentages are rounded to the nearest whole number.

Forward-Looking Statements

This report contains forward-looking statements and projections. These statements and projections are based on the Company's judgments at the time the report was produced, and include risks and uncertainties. Changes in various factors could cause actual results to differ materially from forward-looking statements and projections contained herein.

MUJI REPORT 2023 2

Our Philosophy

Our Corporate Purpose

Our corporate purpose is to contribute to the creation of "a truthful and sustainable life for all through our products, services, stores and business activities; believing human society rich in heart, with balanced relationship between human, nature and artifacts."

Our Two Missions

1. To provide daily necessities and services with genuine quality and ethical value, at appropriate and affordable prices.

2. To have a positive impact on each region by operating stores that serve as community centers, sharing concerns and values with local residents and collaborating with them to tackle local issues.

Our Core Value

We make efforts to reduce our environmental burden and to respect individual human rights through our product development, services and actions. Through our core value of "contributing to society and people" our employees and associates will proactively respond to issues facing society and the Earth.

Our Management Policy

We will practice "public interest and people-centered management," where each of our employees and associates contribute to the public interest through our business activities and locally rooted stores, have a sense of ownership and take leading roles in the community.

Enhancing Our Corporate Value

Through our activities, we will create a highly profitable business structure, pay taxes properly and return profits to shareholders appropriately. Furthermore, we will strive to create long-term value for the Company by making a positive impact on society together with stakeholders.

MUJI Tsubame

3 MUJI REPORT 2023

MUJI REPORT 2023 4

Introduction

Our History

Ryohin Keikaku's "Grand Strategy" is to realize "a truthful and sustainable life for all." Our "Grand Strategy" defines who we are-being useful to people and society. Of course, as a business enterprise, profit is also important, but our top priority is this "Grand Strategy." Ryohin Keikaku has been working since its founding to make a contribution wherever it can help with social issues and people's concerns. This approach has led to the Ryohin Keikaku of today.

	1980-2000	2001-2015
Our Perspective	Redefining the value of goods	The relationship between life and goods
	We aimed to minimize unnecessary elements and create	We sought to give customers a feeling of rational satisfaction,
	products that are truly useful to consumers from the perspective	expressed not with "This is what I really want," but with "This will do."
	of selection of materials, streamlining of processes and
	simplification of packaging.

Introduction

2016-2020	2021-
A truthful and sustainable life	"A truthful and sustainable life for all," and beyond
By providing functional, streamlined products that help simplify	We offer affordable products that are not only essential and useful but also
and beautify people's lives based on our concept of "conscience	beneficial for the environment, producers and local communities. We will also
and creativity," we have contributed to solving social issues with	evolve our efforts to help address local challenges, and contribute to the harmonious
proposals for peaceful, relaxed living.	coexistence and development of daily life, culture and the environment together
	with local communities.

Products with simplicity

Products that fit all life occasions

Products for organizing people's life

Products in harmony with society

Evolution of

Our Products

Evolution of Our	New store openings both in
Stores and Services	Japan and overseas	Launch of flagship stores and new services	Expansion of services close to daily life	Creation of platforms for realizing a better society

History of Ryohin Keikaku

1980

Seiyu Co., Ltd., a Japanese retail company, established Mujirushi Ryohin (MUJI) as its private brand

1983

First directly managed store, MUJI Aoyama, opened in Japan

1986

Production and procurement started outside Japan

1991

Began business outside Japan (First store in U.K. and first store in Hong Kong opened)

1995

MUJI Tsunan Campsite opened

2000

Listed on the first section of the Tokyo Stock Exchange* MUJI.net Co., Ltd. established

2001

MUJI Yurakucho, a flagship store for information dissemination, opened

2005

MUJI (Shanghai) Company Limited established

2006

Business transfer from IDÉE Co., Ltd.

2007

First store in U.S. opened

2011

Found MUJI Aoyama opened

2012

Muji Retail (Thailand) Co., Ltd. established

2013

Joined UN Global Compact

Launched MUJI passport smartphone app

2014

MUJI Sino-Ocean Taikoo Li Chengdu opened

2016

Entered the market in India as the first Japanese retailer there

2017

Number of MUJI stores surpassed 400 both in Japan and overseas

2018

Began sales of frozen food

2019

MUJI Ginza and MUJI HOTEL GINZA opened

2021

New start under our "Second Founding"

Started monthly furniture rental service

Opened Healthcare Center

2022

Opened MUJI Hiroshima Alpark

Started sales of MUJI products in Lawson convenience stores nationwide and through CO-OP Sapporo's Todock home delivery system

2023

FY2023/8

Operating revenue

JPY 581.4 billion

Operating profit

JPY 33.1 billion

1989

Ryohin Keikaku Co., Ltd. established

5 MUJI REPORT 2023

(currently MUJI HOUSE Co., Ltd.)

• Now listed on the Tokyo Stock Exchange Prime Market

2010

Began MUJI x JICA Project Kyrgyz

2015

Began ReMUJI initiative for reuse and recycling of fabric items

2020

Established production management base in Vietnam Launched MUJI passport Pay service

Expanded range of plastic products collected Reopened MUJI Shinjuku Yasukuni-Dori as a specialty clothing store

The graph in the background shows operating revenue.

MUJI REPORT 2023 6

Introduction

Introduction

Toward "a Truthful and Sustainable Life for All"

The scope of our activities has greatly expanded since the creation of MUJI 43 years ago, but our core philosophy has remained the same. We envision a future where "a truthful and sustainable life for all" is a reality. We will provide various products based on our concept of "conscience and creativity," and help solve social issues through our businesses and services.

A store with all lifestyle essentials	Local community centers	Platforms for realizing "a truthful
		and sustainable life for all"

Organization of local resources: Collaboration with local businesses and sales of local products

Space design business: Designing residences and spaces that reflect MUJI's value

Apparel

Household goods Food products

Events and workshops	Community Market events	Development of local products
	(page 55)	exclusive to the area

Fresh food	Rental of stall space inside MUJI	Café&Meal (local production
	stores at shopping arcades	for local consumption)
	Store opening support for local
	business owners

Residential design

Public spaces

Renovation

Revival projects for regional areas: Highlighting local traditions and utilizing local resources

Revitalization of shopping	Store openings at roadside	Revitalization of housing complexes
arcades	rest areas	and renovation projects

Circularity: Collaborating with customers in product recycling and waste reduction

Repurposing of abandoned	Revitalization of unused houses
school buildings

Accommodation business: Managing facilities and

MUJI CYCLE (page 48)	ReMUJI (page 48)	Mottainai Market (page 48)	facilitating local experiences

Shokoku Ryohin (Sales of local products)

Services that support daily life: Enhancing customers' well-being

MUJI BASE (page 56)

MUJI HOTEL

Campsites

Community engagement: Developing activities and collaborating with local governments, entrepreneurs and producers

Mobile sales

Healthcare Centers (page 56) MUJI SUPPORT (page 52)

	ITSUMO MOSHIMO (page 56) Satoyama landscape	Art events
7	conservation​	MUJI REPORT 2023 8
MUJI REPORT 2023

Introduction

Financial and Non-Financial Highlights

Introduction

Operating Revenue

(Billion JPY)

600				581.4
500			496.1
	453.6
438.7
400
300
200	179.3
100
0
2020/2	2020/8	2021/8	2022/8	2023/8

Operating Profit/

Operating Profit Ratio

(Billion JPY)					（%）
50						15
			42.4
40						12
36.3
				32.7	33.1
30			9.4			9
8.3
				6.6
20					5.7	6
10						3
0	0.8	0.5				0
2020/2	2020/8	2021/8	2022/8	2023/8

Net Assets/ROE

(Billion JPY)				（%）
320					40
				267.4
240			244.8		30
	214.8
208.4
	182.9
160					20
		17.3
11.8			10.8		10
80				8.7
0					0
(80)	(8.8)				(10)
2020/2	2020/8	2021/8	2022/8	2023/8

Number of Employees1

Number of employees at the end of the period

3,000							2,874
2,500		2,446			2,527
	2,343
2,285
								1,576
2,000
1,250	1,374	1,295	1,404
1,500
1,000
1,035	1,072	1,048	1,123	1,298
500
0
2020/2	2020/8	2021/8	2022/8	2023/8

Percentage of Women in Managerial Positions1

131

（27.8%）

340

（72.2%）

Total 471

Number of New Employees Hired1

400				366
300				142
	252
			208
200
173
	200		103
116				224
100
		66
		28	105
57	52	38
0
2020/2	2020/8	2021/8	2022/8	2023/8

Operating profit (Left scale)		Operating profit ratio (Right scale)			Net assets (Left scale)		ROE (Right scale)

Number of female		Number of male
employees		employees

Female Male

Number of new university		Number of mid-
graduate hires		career hires

Total Assets/ROA

(Billion JPY)				（%）
500				25
				453.7
400		393.3	399.3	20
	343.9
306.5
300				15
12.8	12.3
200			9.4	10
				8.5
100				5
0	0.2			0
2020/2	2020/8	2021/8	2022/8	2023/8

Dividends per Share/

Dividend Payout Ratio

(JPY)				47.9	（%）
50				50
41.1			42.9
	40.0		40.0
40			40
		40.0
36.4
30		31.8			30
20					20
10					10
	5.0
0					0
2020/2	2020/8	2021/8	2022/8	2023/8

Number of Stores (Total) in Japan and Overseas

Includes licensed stores, Cafe&Meal MUJI and IDÉE

1,500
					1,251
1,200			1,068	1,136
	1,033	1,029
900					654
				604
	556	550	571
600
300					597
477	479	497	532
0	2020/2	2020/8	2021/8	2022/8	2023/8

Volume of Textile Products Collected1

（t）
80
		66.9
60
			49.1	52.0
44.2
40
20	17.1
0
2020/2	2020/8	2021/8	2022/8	2023/8

ReMUJI1, 2 Sales Volume

(ReMUJI products)

35,000
30,000					30,433
			28,623
25,000
20,000
15,000
10,000
5,000	3,214		3,927
0		224
2020/2	2020/8	2021/8	2022/8	2023/8

CO2 Emissions/Emissions per Unit of Operating Revenue

Scope 1 and 2 only1

(t-CO2e)					(t-CO2e/per 100 million JPY)
50,000						20.0
40,000						40,378 16.0
					35,819
				30,839		12.0
30,000	27,073
				11.6	11.8
	10.1	9.5
	10.0
20,000						8.0
			11,614
10,000						4.0
0						0.0
	2020/2	2020/8	2021/8	2022/8	2023/8

Total assets (Left scale) ROA (Right scale)

Dividends per share (Left scale)		Dividend payout ratio (Right scale)		Number of stores		Number of stores
Note: The dividend payout ratio for FY2020/8 is not presented		overseas		in Japan

as the Company recognized net loss per share.

Sales grew substantially in FY2022/8 due to the expansion of ReMUJI sales at MUJI Shinjuku* from September 2021. * Currently MUJI Shinjuku Yasukuni-Dori

CO2 emissions		Emissions per unit of operating
(Left scale)		revenue (Right scale)

Cash Flow

(Billion JPY)

90
60		63.7	61.4			56.5
30
24.4				23.3
0		(1.7)	(13.5)	(16.6)
		(22.1)
(31.4)	(4.2)	(15.1)			(11.2)
(30)
(11.4)
(60)
					(58.6)
(90)
2020/2	2020/8	2021/8	2022/8	2023/8

Capital Investment and Depreciation

(Billion JPY) 30.0
30
				26.3
25				24.8
			22.0
20		18.9 18.9	17.6
17.6
15
10	10.3
9.0
5
0
2020/2	2020/8	2021/8	2022/8	2023/8

Operating Revenue by Product Category

Parentheses indicate percentage of total

(Billion JPY)

600					23.9
					（4.1%）
			20.7		74.8
500				（12.9%）
18.2		（4.2%）
	（4.0%）		59.9
400	54.5		（12.1%）
（12.0%）			260.0
			232.7		（44.7%）
300
211.8		（46.9%）
	（46.7%）
200
					222.5
			182.7		（38.3%）
100	169.0		（36.8%）
	（37.3%）
0	2021/8	2022/8	2023/8

Number of Regional Cooperation Agreements1

40
				31
30
20		17	19
10
5	5
0
2020/2	2020/8	2021/8	2022/8	2023/8

Number of Employees in Employee Shareholding Association1

3,000
		2,626	2,623
2,000	1,848
1,425
1,000
0
2020/8	2021/8	2022/8	2023/8

Number of Employees under the Balanced Four-Day Workweek System1

100
		89
75	70
50
32
25
0
2021/8	2022/8	2023/8

Cash flows from operating activities Cash flows from investing activities

Cash flows from financing activities

Capital Investment		Depreciation

Apparel		Household goods

Food products Other

For FY2021/8, the figure covers the four-month period since the launch of the system in May.

1. Ryohin Keikaku Co., Ltd. only

Note: Due to the change in fiscal year, 2020/8 covers the six-month period from March 1 to August 31, 2020.

9 MUJI REPORT 2023

2. Resale of goods reprocessed from products collected at stores for recycling and from products soiled or damaged during the manufacturing process

MUJI REPORT 2023 10

Introduction

Global Network (As of August 31, 2023)

We operate directly managed MUJI stores and a wholesale business in Japan and overseas, with more than 1,200 stores in

Introduction

Employees

Stores

Cafés

Hotels

Campsites

32 countries and regions. Although points of emphasis differ depending on the region, by enhancing our lineup of locally developed products and services that match lifestyles in each region, we establish a locally rooted business model. We also focus on hiring employees locally. We will continue to expand globally with the aim of being useful to the people of each country and region where we operate to help realize "a truthful and sustainable life for all."

Europe	East Asia
7,274 (2,070)1
715
(334)1	482
384		25
		2	Japan

10,737 (7,784)1

Southeast	5712
26
Asia	1
1,545 (208)1	3

North America

388 (257)1

19

Countries/Regions	32
Where We Operate
Number of Stores	1,251	3
Employees	20,795
Number of Group
	(10,721)1

Breakdown of Operating Revenue by Area

	Europe/North America
Southeast Asia/	6.1%
Oceania
5.4%
	Japan
East Asia	59.0%
29.5%

Breakdown of Employees by Area

834

3

Southeast Asia/ Oceania

Europe/North America

5.3%

Oceania

136 (68)1

4

8.1%

East Asia

35.0%

Japan

51.6%

1. Number of non-regular employees (average number of employees per year based on an eight-hour workday calculation method)
2. Including 9 IDÉE stores and 84 licensed stores
3. Including licensed stores, Café&Meal MUJI and IDÉE
4. Including licensed stores

11 MUJI REPORT 2023

MUJI REPORT 2023 12

Enhancing Our Corporate Value

Message from the Chairman

We intend to continue building our envisioned consumer society by returning to the concept that defined MUJI when it started out, and evolving and deepening it.

This is a perspective that does not bow to the current form of commercialism or trends, which rely on attributes such as uniqueness, innovativeness, luxuriousness or a position of superiority. It is the reason that people appreciate MUJI as the only store of its kind.

We aim to continue building our envisioned consumer society.

Economist E.F. Schumacher makes some very interesting observations in his book Small Is Beautiful, published in 1973. He wrote that "Since consumption is merely a means to human well-being, the aim should be to obtain the maximum of well-being with the minimum of consumption." I think this is something that many young people of today would agree with. If we follow his theory, people in modern society are likely to view natural resources not as capital, but as their own income. That has made us into a civilization that thinks of everything in terms of monetary value, which has led to excessive consumption. Humans have a desire to gain superiority over others, and worrying about what others think in order to get ahead has created fertile ground for this society that embraces excessive consumption.

The result is that the constant push to consume has led to faster product obsolescence, and society has moved in a direction in which needs are never satisfied. In other words, it has produced large quantities of products with transient ownership value that is quite divorced from their utility value. This society of excessive

Enhancing Our Corporate Value

The "Second Founding" means going back to our roots of contributing to society and people.

Ryohin Keikaku has two missions. One is to provide daily necessities and services with genuine quality and ethical value, at appropriate and affordable prices. The second is to have a positive impact on each region by operating stores that serve as community centers, sharing concerns and values with local residents and collaborating with them to tackle local issues.

The "Second Founding" we set out in 2021 represents a new commitment to realizing "a truthful and sustainable life for all" by returning to MUJI's origins of providing satisfaction and value. We want to help people be their true selves, and will work to evolve and deepen that concept. One example is IDEA PARK. This is an initiative featured on the MUJI website aimed at helping consumers better understand the MUJI concept while also helping us to create better products through dialogue with consumers. This initiative enables people to contribute a variety of comments and suggestions, such as "We need children's playground equipment in the town's parks." It is also extremely significant for us in terms of our efforts to serve as community centers that create "a truthful and sustainable life for all" together with the local residents.

We are also promoting employee-driven independent store management to accelerate activities that lead to solving issues in each community. Dialogue and co-creation with stakeholders are essential to that effort. Going forward, we plan to increase the number

Masaaki Kanai

Chairman & Representative Director

Achieving the satisfaction and value that comes from being one's true self is the concept that drove MUJI when it started out.

We introduced Koshin Shiitake Mushroom Pieces to the market in 1980, at around the same time MUJI itself was established. Dried shiitake mushrooms were prized for their high nutritional value and because they can be rehydrated for use as a soup stock, but the general perception back then was that they were too expensive. In reality, it doesn't matter to customers if some mushrooms are broken or come in different sizes. However, at the time, only standard shaped and sized shiitake were valued by the market, and non-standardshiitake were piling up at farms. We were the first to skip the sorting process used to standardize sizes and reject broken items, and to start marketing those non-standardpieces as a commercial product. Our idea of developing a product to "provide customers with the lifestyle essentials they actually need, in the form they actually want" found acceptance among many people, and was adopted as a slogan that was printed on the package at the time of the launch.

This simple story illustrates how MUJI approaches product development. From the very beginning, our attention has been on people's lifestyles as well as production sites. In addition, we have placed importance on MUJI's unique marketing approach of focusing on the satisfaction that people experience when they embrace their true selves, rather than on established standards of value.

In offering a lineup of products essential to daily life, MUJI's approach encompasses the belief that people, not goods, should take precedence, and that the products themselves should never prevail over or get in the way of that concept. We also try not to lead people into placing too much emphasis on product attributes such as simplicity or being free from bleach or artificial colors. We just want to offer straightforward and unassuming products that people can feel comfortable with in their "me time," when they just want to be themselves. Since we do not embellish our products with contrived charm and value, their sense of seamlessness increases, and they become true "no-brand" products. The products created in this way are naturally easy on the environment, and on customers' wallets.

We genuinely take the viewpoint of consumers in developing good products based on what is true and real in production, and pass those products along as they are, without dressing them up. That is why developing products with a direct link to production is so essential.

• Selection of Materials
• Streamlining of Processes
• Simplification of Packaging	Shitake mushroom pieces

consumption has given rise to shortages of water, food and energy, and further exacerbated global warming, inequality and conflict. Furthermore, a digital culture that is tied to how we ourselves have essentially become domesticated1 and capital theory has given added impetus to the trend toward excessive consumption.

The way I see it, the desired consumer society should not depend any more than necessary on the modern excesses of goods and civilization, but should reflect a world in which people can enjoy life on their own terms, and in which each of us can achieve a high cultural level. The original concept behind MUJI was to develop "good products" from a true consumer perspective, and to offer them to customers just as they are, without any unnecessary embellishments. Ever since MUJI was founded, we have prized our view of product development that emphasizes three perspectives: selection of materials, streamlining of processes and simplification of packaging. How we see apparel is a good example. We define apparel as clothing that helps people stay at a comfortable temperature, is easy to wear, looks good, and has an impact on the feelings of the person wearing it. We have always come up with attractive designs requiring minimal materials and processing. That means simply respecting the diverse people who live for the here and now, and providing a lineup of products that serve as the means for giving customers the chance to organize their own lifestyles the way they want.2 We believe that reenvisioning our consumer society is an urgent matter, and one that Ryohin Keikaku continues to address.

1. The idea that if domestic animals can be defined as "animals that have been cut off from the wild and have undergone changes in their appearance and habits for the convenience of humans," then human beings themselves have also been domesticated as a result of their adaptation to our current social and economic systems, turning themselves into domestic animals through the loss of intrinsic human emotions and senses (i.e., their true selves).
2. The concept of rethinking and rearranging one's current lifestyle in pursuit of an ideal state

of Shareholders' Meeting events and opportunities for dialogue with customers. It is also important that all stores, employees, products and services share our unique concept to maintain overall consistency. Ryohin Keikaku endeavors to nurture employees who have the same values as consumers, and places employees with a sense of ownership in leading roles in order to enhance autonomous, decentralized organizations and businesses where employees consult with each other and support each other's growth. We are practicing "public interest and people-centered management" in which the activities of individual stores rooted in their communities, and the actions of individual employees and stakeholders, benefit the public interest.

MUJI stores will continue to serve as community centers that create value in partnership with local businesses and residents. We will strive to realize "a truthful and sustainable society for all" while achieving a balance among the economy, the environment and culture. Ryohin Keikaku cannot do that alone. We hope you will join us as we work to make this future a reality.

*

Good

Services products Promotion

Ideas

GoodGood

environmentinformation

* Back to the beginning again

and again. Imagining the Activities future again and again.

13 MUJI REPORT 2023

MUJI REPORT 2023 14

Enhancing Our Corporate Value

The Value We Create

Structure of Our Business Activities

Based on our core value of "contributing to society and people," we will work with all of our stakeholders to solve social issues. The

Enhancing Our Corporate Value

Public Interest and People-Centered Management

The MUJI stores that Ryohin Keikaku operates are venues for activities that benefit the public interest. Our aim is to practice "public interest and people-centered management" in which the value and profit generated by the participation of stakeholders are shared with those stakeholders and used to fund further activities.

participation of stakeholders with different backgrounds and values enables us to provide products and services "to be a part of people's daily necessities" and to promote activities that enable us "to take root in local society," which will lead to the creation of new value.

Participation

Returns

Stakeholders are encouraged to freely participate in Ryohin Keikaku's activities in various ways, such as by making an investment, cooperating in initiatives or purchasing products.

Stakeholders receive benefits in some form, whether it be dividends, profit, or discounts.

	Stakeholders participate directly in MUJI's activities,
Co-Creation	and we also develop new products and services
	together with them.
	Stakeholders benefit in various ways, including
Enjoyment	through quality products and services, community
	vitality and growth, and improvement of the environment.

Social Issues

Escalating

Six Foundations

● Number of Group employees: 20,795

● A corporate culture based on our founding

Human Capital		philosophy of practicing ESG management
●	Human resources that drive MUJI's unique form

of product development

● An advisory board made up of industry experts

Public Interest and People-Centered Management

	Circular
	society
Participation	Co-Creation
	Customers

environmental

problems

Shrinking

labor force

Changes in

lifestyles

Rural

depopulation

Social Capital

Intellectual

Capital

Financial Capital

Manufacturing

and Marketing

Capital

Natural Capital

• Countries/regions where we operate: 32
• Downloads of MUJI passport app: 78.53 million
• Number of regional cooperation agreements: 31
• Community Market events in stores
• MUJI design
• Product planning know-how
• Know-howin sourcing of materials and raw materials
• Store design with consideration for the environment and community
• Net assets: JPY 267.4 billion
• Capital: JPY 6,766,250,000
• Equity ratio: 58%
• Number of stores: 1,251
• Distribution bases in Japan: 11
• Distribution bases overseas: 22
• Production partners who share MUJI's perspective of product development
• Electricity consumption: 87,684 MWh
• CO2 emissions: 1.23 million t-CO2
• Water consumption: 144 thousand m3 (Ryohin Keikaku Co., Ltd. only)

					Economic
					growth in
Employees	Structure of Our	Business	production
Partners	areas
	Business Activities
					Enhancement
					of quality
	To be a part of		To take root		of life
	people's daily		in local
	necessities		society
Local			Community
			Shareholders	revitalization
Communities
and Society				and Investors

	Governments		Helping to Realize
Returns		Enjoyment	"a Truthful and
	Sustainable Life
			for All"

15 MUJI REPORT 2023

Four Material Issues	See pages 17-18 for details. See page 37 onward for information on the progress of initiatives.

MUJI Concept

MUJI REPORT 2023 16

Enhancing Our Corporate Value

Ryohin Keikaku and Sustainability

A Consistent Commitment to ESG since Day One

Ryohin Keikaku's MUJI brand has consistently served society as a whole since day one. Our core value is "to contribute to society and people." This is a value that is rooted in all of our business activities.

Our commitment to the three perspectives of selection of materials, streamlining of processes, and simplification of packaging has made us a pioneer in what the world now calls sustainability. We continue to create products with social and environmental considerations in mind based on these three perspectives. That policy will not change, and will become even more important as we work toward a better future society over the next 100 years.

We will achieve our ideal ESG management by implementing innovative ESG approaches for products, business activities and communities to create new value and contribute to society.

Enhancing Our Corporate Value

ESG Management Structure

Ryohin Keikaku launched the ESG Management Committee at the start of FY2022/8 to address its material issues and further accelerate ESG management. The chairman & representative director chairs this committee, which addresses medium- and long-termCompany-wide ESG issues. Inside directors, executive officers, managers and people in charge of related business divisions participate in the committee's monthly meeting.

Board of Directors

ESG in products

ESG in business activities

ESG in communities

We will democratize sustainability* by adopting circular design for all products and offering them at affordable prices.

We will collaborate with stakeholders to reduce social costs and environmental burden. At the same time, we will contribute directly to solving social issues through our business activities.

We will make a positive impact on society by leading the revitalization of local areas through activities with local communities.

ESG Management Committee

(Chairperson: Chairman & Representative Director)

Administrative Support: Corporate Planning Division

• "Democratizing sustainability" means promoting sustainability in a way that is accessible to everyone. We recognize that in the current consumer market, in general, companies strengthen ESG and sustainability initiatives in a way that makes consumers bear some of the cost. Ryohin Keikaku conducts environmental and social initiatives that take nature into consideration, and provides products and services at affordable prices. Through MUJI, we want to reduce our environmental impact in a way that occurs seamlessly in daily life-in fact, that is MUJI's founding philosophy. By practicing and broadly expanding this philosophy, we seek to promote sustainability in a way that is accessible to everyone.

ESG Strategy through 2030

Process for Identifying Material Issues

Ryohin Keikaku identified material issues in formulating its ESG strategy through 2030. The process involved:

Ryohin	① Build a sustainable	② Address local	③ Practice business	④ Realize governance
activities in which	aligned with "public
Keikaku's	and circular society
challenges and	each and every	interest and
Material	that coexists with
revitalize regions	diverse individual	people-centered
Issues	nature
	plays a leading role	management"

In FY2023/8, we promoted 19 Company-wide,cross-functional projects organized by theme to address our material issues. Executive

1. Identifying and understanding social issues
2. Conducting interviews with management executives and experts
3. Implementing a scoring system that is unique to Ryohin Keikaku with the help of an external organization

Importance

Stakeholders

Ryohin Keikaku

Importance

officers are responsible for each project and select project leaders. Project leaders then select project members from throughout Ryohin Keikaku. Progress toward achieving goals for 2030 is their benchmark.

In September 2023, we established a system to make ESG the main focus of our business, with the 19 projects divided among different divisions. Each division has formulated short-, medium- and long-term ESG targets and roadmaps based on our material issues, and is working to further incorporate ESG management into our business activities and create value unique to Ryohin Keikaku. The ESG targets of each division are also incorporated into the individual targets of the persons responsible in each division. The divisions and administrative support office have established a forum to regularly exchange opinions, where they discuss issues related to ESG promotion. The progress of each division is reported to the ESG Management Committee, and discussions take place among the inside directors, executive officers, managers and people in charge of related business divisions.

We used the scoring system to narrow our focus to four items. These items were then approved by the Board of Directors and positioned as our material issues. In January 2024, we reviewed some of our material issues due to changing market and business conditions.

① Build a sustainable and circular society that	③ Practice business activities in which each and
coexists with nature	every diverse individual plays a leading role
● Reduce the use of fossil-based raw materials and fuels	● Maximize the value of diversity and inclusion to achieve
● Ensure business operations based on integrity and	open innovation
ethical judgements	● Build a self-motivated and autonomous corporate culture
● Democratize sustainability in a way that is accessible	● Achieve high employee engagement and workplaces where
to everyone	everyone can play an active role

② Address local challenges and revitalize regions	④ Realize governance aligned with "public interest
● Revitalize regional economies and industry through store	and people-centered management"
openings and business development that highlights local	● Generate co-creation with people and local communities
traditions and utilizes local resources	● Realize governance with people in local communities
● Build local communities that are active and lively	as shareholders
	● Encourage co-owned management by employees
	● Earn strong support from investors

Main Themes

• Reduction of use of virgin plastics in our products and packaging. Acceleration of recycling and reuse of products ▶Page 48
• Development of new materials and new businesses that take environmental and social issues into consideration ▶Pages 47-48, 55-56
• Reduction of greenhouse gas (GHG) emissions globally and across our supply chains, looking ahead to 2030 and 2050 ▶Page 49
• Minimization of adverse impact of business activities on the environment, including in areas such as water resources, biodiversity and waste ▶Page 49
• Projects that improve diversity & inclusion and engagement ▶Pages 59-60
• Achieve "public interest and people-centered management" ▶Pages 57-58, 61-62
• Enhancing information and data security including personal information and ensuring compliance with various laws and regulations ▶Pages 73-74

17 MUJI REPORT 2023

MUJI REPORT 2023 18