Visitors in the Theme Park Segment, the core business of the OLC Group, mostly consist of guests from within Japan. Changes in demographics, such as continued population decrease owing to a falling birth rate and a deterioration of the economic environment in Japan, may lead to a decline in attendance and net sales, which could have an adverse impact on the Group’s business results.

Furthermore, failure to fully respond to the emergence of new products and services as leisure options and to changes in customers’ values may lead to a decline in attendance and net sales, which could have an adverse impact on the Group’s business results.

As measures against such risks, we will strive to enhance the value of our Theme Parks by considering measures from both tangible and intangible aspects even when demand weakens due to changes in demographics and a deterioration of the economic environment in Japan. We will also make efforts to attract more domestic and inbound visitors, increase net sales per guest and establish new revenue models. We will also conduct market research and analysis to ensure that we can respond to the emergence of new products and services and address changes in customers’ values, thereby maintaining and improving guest satisfaction. In addition, we will promote growth in new businesses such as the launch of the cruise business.

The Resort as a whole, including the theme parks operated by the OLC Group, is sustained by a large number of cast members and their hospitality. Therefore, we place emphasis on employee engagement so that employees may feel job satisfaction in their daily work and a high level of employee friendliness which involves not only the company’s facilities and systems but also employees’ relationships with their colleagues in their workplace. However, insufficient responses to the personnel system, workplace environment and organizational culture may lead to a drop in employee engagement.
This could result in a decline in the level of hospitality provided by the Group’s employees to guests, thereby undermining public trust in the Group and causing serious damage to the Group’s management strategies.

As measures against such risks, we offer support to enhance employees’ job satisfaction and employee friendliness by selecting “employee happiness” as a material ESG issue and setting policies and goals with a target year of 2030. We will conduct surveys on job satisfaction on a continuous basis. Based on the survey results, each organization will formulate and promote strategies to improve organizational management. To create an employee-friendly working environment, we make efforts to develop a digital environment and improve the workplace facility environment, as well as support the growth of employees by increasing learning opportunities and providing assistance in career development.

The Resort as a whole, including the theme parks operated by the OLC Group, is sustained by a large number of cast members. If the recruitment and development of employees become difficult due to a drop in the working population or other factors, recruiting costs and personnel costs may rise, which could cause serious damage to the Group’s management strategies for securing human resources.

As measures against such risks, we make efforts to appeal to employees and the recruiting market. We will increase employee retention by creating an employee-friendly working environment through improvements to our workplace environment and organizational culture based on an analysis of the trends in resignations. In addition, we will make investments for more efficient personnel allocations before carrying out recruiting activities.

The Resort as a whole, including the theme parks operated by the OLC Group, involves stakeholders that include employees, vendors and guests who come from various backgrounds. Society’s demands that companies address issues related to human rights and diversity have become more sophisticated amid increasing awareness of such issues.
Insufficient efforts to address human rights and diversity issues at the OLC Group and a lack of appropriate efforts for such issues in the supply chain may undermine public trust in the Group, which could have an adverse impact on the Group’s business results.

As measures against such risks, we have selected “diversity, equity and inclusion” and “supply chain management” as areas of ESG materiality and have set policies and goals with a target year of 2035 as well as KPIs for 2027 and KPIs for 2030.

In “diversity, equity and inclusion,” we promote initiatives concerning the respect for human rights of all people and diversity of guests and employees. As for the respect for human rights, we implement human rights due diligence with a focus on the human rights issues identified based on the UN Guiding Principles on Business and Human Rights, and have established a system in which the Compliance Committee, an advisory body to the Executive Committee, discusses and reports on activities. In addition, with regard to the diversity of guests and employees, we conduct educational activities for employees to promote understanding of diversity and to raise awareness that leads to voluntary action.

In “supply chain management,” with regard to human rights and diversity risks in the supply chain, we have revised the OLC Group Vendors Code of Conduct and Self-Assessment Sheets to include compliance with international human rights standards and prohibition of discrimination and harassment, and have engaged with key suppliers individually. The Supply Chain Management Subcommittee, which engages in these activities, endeavors to reduce risks by working with the Risk Management Committee, an advisory body chaired by the Representative Director, Chief Operating Officer and President.

We also perform audits of suppliers’ human rights violations in accordance with the standards set by Disney Enterprises, Inc.

The core business of the OLC Group is conditional on guests visiting our Theme Parks, which involve many outdoor experiences. Climate change in tandem with a rise in the temperature is likely to lead to a decline in attendance and an increase in the costs of countermeasures during the summer, which could have an adverse impact on the Group’s business results. Furthermore, extreme weather or intensified natural disasters induced by climate change may lead to shortened business hours or closure of the Parks due to damage to facilities as well as failure to procure products owning to damage to the supply chain, which could have an adverse impact on the Group’s business results. In addition, failure to achieve the CO2 reduction targets as well as targets related to water and biodiversity may undermine public trust in the Group due to the rise of social concerns regarding the negative impact of climate change on the global environment.

This could have an adverse impact on the Group’s business results.

As measures against such risks, we have selected “climate change and natural disasters” as an area of ESG materiality and have set policies and goals with a target year of 2035 as well as KPIs for 2027 and KPIs for 2030.

With regard to the reduction of greenhouse gas emissions, we have established the Subcommittee on Climate Change to conduct fact-finding surveys, devise strategies, and implement initiatives to reduce environmental impact.

We also conduct appropriate risk assessments, risk scenario analyses, and strategy formulation for our business by utilizing the disclosure framework recommended by the Task Force on Climate-related Financial Disclosures (TCFD). While formulating business plans from a short- and medium-term perspective, we are also considering devising a long-term business strategy that coincides with the time horizons of the “Net zero GHG by FY 2050” target, since the impact of climate change emerges over a long period of time.

(For details of disclosure in accordance with the TCFD recommendations, please see our website. (https://www.olc.co.jp/ja/sustainability/environment/climate/tcfd.html))

In order to cope with heat, we implement measures aimed at enhancing experience value and comfort, formulate countermeasure policies from both tangible and intangible aspects, and have established and enforce operational rules in consideration of safety.

We also implement facility measures and periodic facility inspections in line with government standards and give the safety of guests and employees top priority at all times in order to minimize damage caused by extreme weather events.

As for water resources, we are introducing water-saving devices to achieve the target of reducing water intake. We are also considering conducting fact-finding surveys and devising strategies in order to promote biodiversity initiatives.

The Theme Park Segment, the core business of the OLC Group, uses a wide variety of resources including foodstuffs and plastic products for its business operations. We appropriately manage the inventory levels of food and products sold in our Theme Parks by controlling orders based on demand forecasts. Any food waste or mass product disposal that occurs due to unavoidable circumstances could undermine public trust in the Group and have an adverse impact on the Group’s business results.

Furthermore, in procuring various raw materials used in our business activities, we take sustainability into consideration in the environmental and social aspects of the supply chain. However, failure to immediately respond to rapid changes in social demand could undermine public trust in the Group and have an adverse impact on the Group’s business results.

As measures against such risks, we have selected “recycling-oriented society” and “supply chain management” as areas of ESG materiality and have set policies with a target year of 2035 as well as KPIs for 2027 and KPIs for 2030. We have established the Resource Recycling Promotion Subcommittee to conduct fact-finding surveys, devise strategies and implement initiatives to establish a recycling-oriented society, with particular regard to the promotion of utilization of renewable resources, waste reduction and achieving high recycling rate. We have also implemented measures to achieve waste reduction through strengthening waste sorting, such as by ensuring appropriate inventory management and improving order placement precision, and to raise the recycling rate.

In order to ensure sustainable procurement of raw materials, the Supply Chain Management Subcommittee is in place for the timely promotion of responses based on environmental and social aspects. We have revised the OLC Group Vendors Code of Conduct and Self-Assessment Sheets to include the promotion of sustainable usage of resources and have engaged with key suppliers individually.

The OLC Group’s management performance currently relies on businesses such as the Theme Park Segment. We will continue to pursue growth centered around the Theme Park Segment. However, should the growth of the Theme Park Segment slow, the lack of other drivers of growth could have an adverse impact on the Group’s management strategies and business results, which may result in undermining public trust in the Group.

We aim for growth through business with a policy to promote the reinforcement and utilization of Tokyo Disney Resort’s customer acquisition platform. We will launch and grow the cruise business by further reinforcing and utilizing the customer acquisition platform in existing businesses such as the Theme Park Segment and the Hotel Business Segment.

In the corporate venture capital (CVC) activities aimed at generating new businesses, we will increase the ceiling on investments from 3 billion yen to 13 billion yen to accelerate activities.

The Group has decided to enter the cruise business in order to achieve further growth, and has started shipbuilding and the development of operational systems to commence operation in FY 2028. However, a significant delay in commencement of operation due to delays in the shipbuilding schedule, financial difficulties at suppliers including shipyards, or the development of operational systems taking long could have an adverse impact on the Group’s management strategies and business results.

To prevent the emergence of such risks, we will work closely with shipbuilding companies and government agencies, and make preparations for the commencement of operation in FY 2028 by obtaining advice from companies and experts with experience in building and operating cruise ships.

We strive to maintain and enhance value to be provided through the continuous capital investments with a focus on the Theme Park Segment, the core business of the OLC Group.

Higher than expected costs for the development and renewal of facilities due to a rise in material prices and personnel expenses could make it difficult to implement long-term investment plans and have an adverse impact on the Group’s management strategies and business results.

As measures against such risks, we will manage to control the amount of investment based on the cash allocation specified in the long-term management strategy. We will also flexibly update our investment plan while assessing the return on investment. In addition, we will devise ways to control the amount of investment through efficient planning, such as compiling investment plans by area rather than by individual facility.

To undertake its business, the OLC Group welcomes a large number of guests at its facilities. Its operations are almost entirely concentrated in Maihama. A natural disaster—such as a large earthquake in or around Maihama, a terrorist attack at any of the Group’s facilities or a large-scale facility in Japan or elsewhere, or an outbreak of infectious diseases—is expected to cause harm to guests and employees, damage facilities, impact the surrounding transportation systems and lifelines (electricity, gas, water supply), cause temporary closure and restrictions on theme park attendance based on requests from the national and local government, and trigger a drop in consumer sentiment toward leisure activities. These may have an adverse effect on the Group’s business results, such as reducing its net sales, as well as causing a temporary business suspension.

As common measures against such risks, we have prepared and periodically revised procedure manuals for employees to use in order to alleviate damage that may be caused when the risks emerge. We also provide training and drills, as well as procure and store the necessary materials. Should the events have a material impact on the Group’s business management, we will establish a response coordination division led by the president to create systems to cope with the situation.
In addition to the common measures above, as measures against large earthquakes, we are taking risk finance measures as needed for the purpose of ensuring we have sufficient liquidity on hand to continue our business. To respond to large earthquakes and other potential future disasters, we will secure funds needed to continue our business by using a portion of cash on hand over the near term. As measures against terrorism, we are strengthening security countermeasures, such as by installing metal detectors and X-ray inspection devices at our theme park entrances. As measures against infectious diseases, we implement comprehensive hygiene management of employees and facilities on a daily basis, and take infection prevention measures by periodically implementing employee training and awareness-raising based on information pertaining to infectious diseases provided by administrative agencies, etc.

The OLC Group executes its operations by placing importance on compliance with regard to the operation of its businesses as well as the procurement of related materials and products. However, in cases where a serious industrial accident or a violation of a law or regulation occurs due to negligence on the part of a director or employee, the Group’s business results may be adversely affected as a result of a partial suspension of operations owing to an administrative disposition, undermined public trust in the Group, damage to the brand image, huge expenses incurred due to a law suit, or other consequences.

To prevent the emergence of such risks, we set forth the OLC Group Compliance Code and Business Guidelines, have built a system for promoting compliance, and engage in education and awareness-raising activities for the Group’s officers and employees. If an officer or employee becomes aware of a compliance violation, the whistleblowing contact point receives a report on the violation, carries out the necessary investigations, and rectifies the violation.

The OLC Group possesses customer information pertaining to business execution and confidential information for its sales activities. It also uses a wide range of information systems to provide services and execute its operations. Therefore, any security breach, destruction or falsification involving customer information or confidential information that we use for sales activities due to causes such as cyberattack or assault on internal databases; or any information security incident due to an information system failure resulting in suspension of operations, etc. may result in the Group’s business results being adversely affected as a result of undermined public trust in the Group, damage to the brand image, major expenses incurred due to a law suit, or other consequences.

In measures against such risks, we strive to prevent information security incidents by building a system for information security promotion and raising awareness among the Group’s directors and employees, strengthening monitoring functions for internal networks, and limiting access to information, among other initiatives. Furthermore, when such risks emerge, the situation will be appropriately addressed, the cause will be analyzed, and the scope of impact will be examined. Additionally, we have a system in place to prevent recurrence and to optimize preventive measures.

Safety is given top priority in the design of the products and services we offer at the Resort as a whole, including the theme parks operated by the OLC Group. However, in the event of an accident  (e.g., fire, falling of structures or decorations, food poisoning, inadequate response to guests reporting food allergies), causing serious damage to our guests, the Group’s business results may be adversely affected as a result of undermined public trust in the Group’s policy of giving top priority to safety, damage to the brand image, huge expenses incurred due to a law suit, or other consequences.

As measures against such risks, we strive to prevent serious accidents from occurring by complying with safety-related laws and regulations and the Group’s own regulations, standards, and manuals, and having organizations other than the supervisory divisions of the relevant risks perform audits on a regular basis.