Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Introduced BEMS (Building Energy Management System) at headquarters
• Installed solar power generation equipment at Shizuoka branch
• Promoted LED lighting at business sites
• Utilizing environment-friendly materials such as Enaice/All-in-One
• Employing DREAM and Goodmall methods for environmentally conscious construction

Social Achievements

• Implemented a new personnel system aiming for diversification of career paths and utilization of senior personnel
• Health management declaration to improve employee vitality, attract talent, and increase productivity
• Disaster recovery support through collaboration with gas companies
• Quality management system and CS activities to improve customer satisfaction

Governance Achievements

• Introduction of executive officer system to separate management decision-making/supervisory functions from operational functions
• Establishment of internal control system based on high corporate ethics
• Policy to completely sever ties with anti-social forces

Climate Goals & Targets

Environmental Challenges

• Construction delays and suspensions due to the COVID-19 pandemic
• Decreased golf course visitors leading to project freezes and postponements
• Reduction in new housing construction starts
• Transfer of part of gas pipeline maintenance business to Tokyo Gas Pipe Network Co., Ltd.
• Uncertainty in future order environment due to repeated declarations of a state of emergency

Mitigation Strategies

• Focusing on high-profitability projects
• Promoting measures for early conversion to a “true comprehensive equipment construction company” as stated in the medium-term management plan “Evolution Plan 21”
• Closely monitoring the impact of the COVID-19 pandemic and the order plans of major clients
• Expanding the scope of contracting and narrowing down target markets
• Exploring possibilities for entry into new business areas

Supply Chain Management

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• Enaice/All-in-One
• DREAM method
• Goodmall method

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Introduced BEMS (Building Energy Management System) at headquarters
• Installed solar power generation equipment at Shizuoka branch
• Promoted LED lighting at business sites
• Utilizing environment-friendly materials such as Enaice and employing environmentally conscious construction methods like DREAM and Goodmall methods

Social Achievements

• Implemented safety education, accident case studies, and executive site visits to prioritize safety
• Launched initiatives for work-style reform, health management, and a new personnel system to improve employee well-being and productivity
• Provided disaster recovery support to affected areas

Governance Achievements

• Introduced an executive officer system to separate management decision-making/supervisory functions from operational functions
• Established a policy to completely sever ties with anti-social forces

Climate Goals & Targets

Environmental Challenges

• Temporary suspension of some construction projects due to the COVID-19 pandemic
• Decrease in new housing starts and large-scale renovation projects
• Reduced demand for irrigation work due to decreased golf course attendance

Mitigation Strategies

• Continued operations in core businesses (gas, electricity, water) due to government requests, implementing infection prevention measures
• Focused on cost reduction measures
• Strengthened one-stop service system, expanded business scope in existing areas, and promoted the development of multi-functional employees

Supply Chain Management

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• Enaice/All-in-One HEMS
• DREAM method
• Goodmall method

Environmental Metrics

ESG Focus Areas

• Corporate Governance
• Sustainability
• Human Capital
• Risk Management
• Compliance

Social Achievements

• Multiple instances of women and mid-career hires in management positions.
• Implementation of an action plan based on the Act on the Promotion of Women's Participation in Society

Governance Achievements

• Separation of management decision-making/supervisory functions and business execution functions through the executive officer system.
• Establishment of a basic policy to completely sever ties with anti-social forces.
• Regular disclosure of ESG initiatives to institutional investors and on the company website.

Climate Goals & Targets

Environmental Challenges

• Low percentage of institutional and foreign investors among shareholders, making the implementation of electronic voting and English translations of meeting notices difficult.
• Low percentage of women employees making it difficult to set measurable targets for women's promotion to management positions.
• Absence of a concrete succession plan for the CEO.
• Lack of performance-based incentives for management.

Mitigation Strategies

• Future consideration of platform implementation and English translation of meeting notices based on shareholder composition changes.
• Focus on increasing the number of women employees through recruitment, appropriate placement, and promotion to increase diversity.
• Future consideration of a succession plan based on management policies and strategies.
• Ongoing review of management's evaluation and compensation systems to incorporate performance-based incentives.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Expanded sales of environmental products aiming for 2500 units/year by March 2025.
• Introduced BEMS (Building Energy Management System) at headquarters.
• Installed solar power generation equipment at Shizuoka branch, Yamato office, and Chiba branch office.
• Promoted LED lighting at business sites.

Social Achievements

• Increased the number of women in male-dominated jobs by 40% (compared to March 2021).
• Introduced a CSR procurement system in April 2022.
• Achieved “Gold Certification” in the Healthy Excellent Company Certification System of the Tokyo Promotion Council for Healthy Companies.

Governance Achievements

• Compliance with the Corporate Governance Code (CGC), including explain items (director evaluation, compensation system based on evaluation, establishment of selection and dismissal criteria, establishment of nomination and compensation committees, etc.), and response to the next revision of the CGC.
• Improved various indicators related to compliance by 5% in the company-wide internal control evaluation questionnaire conducted annually.

Climate Goals & Targets

Environmental Challenges

• Increased construction costs due to rising energy and material prices.
• Decreased GHP (gas heat pump air conditioner) projects.
• Difficult construction work in gas pipeline projects.
• Shortage of construction workers and aging workforce.
• Upcoming restrictions on overtime work.
• Increased construction costs and long construction periods.
• Deterioration of housing acquisition mind due to rising construction costs.
• Dependence on a single client (Tokyo Gas).

Mitigation Strategies

• Negotiations with clients to mitigate the impact of increased construction costs.
• Strengthening the information sharing and cooperation between sales and construction departments.
• Focusing on profitable projects.
• Developing alternative sourcing strategies.
• Strengthening the construction management system.
• Developing a new core business in building equipment.
• Improving business efficiency through IT and workflow review.
• Promoting the diversification of business portfolio.

Supply Chain Management

Responsible Procurement

• CSR procurement system

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• Eneace (All-in-One)
• NPL-Ⅲ method (water pipe renovation)
• DREAM method (drain pipe renovation)

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Environmental material sales target significantly exceeded (700 units achieved vs. 500 target; 750 units targeted for 2024)
• CO2 emissions reduced by 1.7% (from 1.74 million kg in 2022 to 1.71 million kg in 2023)
• Installation of solar power generation equipment at various locations (Shizuoka branch, Yamato office, Chiba branch, Hino office)
• Promotion of LED lighting at business sites
• Introduction of BEMS (Building Energy Management System) at headquarters

Social Achievements

• Increased female staffing in male-dominated jobs by 40% (compared to 2021)
• Implementation of CSR procurement system (April 2022)
• Initial implementation of engagement survey to improve workplace environment

Governance Achievements

• Compliance with the Corporate Governance Code (CGC), including explanations of director evaluation, compensation based on evaluation, appointment/dismissal criteria, and establishment of a nomination and compensation committee
• 5% improvement in compliance-related indicators in the company-wide internal control evaluation survey conducted annually

Climate Goals & Targets

Environmental Challenges

• High construction costs due to rising material prices and labor costs
• Shortage of construction workers
• Changes in the business environment due to the completion of aged pipe replacement projects and the shift to other types of pipe replacement work
• Concerns about the impact of the upper limit regulation on overtime work (effective April 1, 2024) on labor costs and logistics costs
• Concerns about changes in the policies of major clients and revisions to transaction guidelines for construction companies

Mitigation Strategies

• Focus on profitable projects and cost-effective procurement
• Strengthening of construction management systems
• Development of a new core business in building equipment construction
• Implementation of measures to improve efficiency and internal control
• Development of a new core business in building equipment construction to reduce dependence on a single business
• Continuous review of risks and response measures
• Strengthening of the governance structure and addressing capital issues

Supply Chain Management

Responsible Procurement

• CSR procurement system

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• Enefarm, hybrid water heaters, solar power generation, batteries
• DREAM method (drainage pipe renovation)
• NPL-Ⅲ method (water pipe renovation)

Environmental Metrics

ESG Focus Areas

• CO2 emissions reduction
• Disaster resilience
• Workplace safety and health
• Diversity and inclusion
• Supply chain management
• Corporate governance
• Compliance

Environmental Achievements

• Reduced CO2 emissions by 10% from 2021 to 2022 (1740,000 kg to 1710,000 kg). Note: 2023 data not available due to delayed CO2 emission coefficient publication.
• Increased environmental product sales to 700 units in 2023.

Social Achievements

• Increased female employees in male-dominated roles by 83.3% (2021-2024)
• Held 28 out of a 3-year target of 40 training sessions (2022-2024)
• Implemented an engagement survey in 2023 and developed action plans based on the results.
• Implemented various health management initiatives, including harassment training and mental health counseling.

Governance Achievements

• Implemented a director and executive officer evaluation and compensation system (annual).
• Introduced and installed a nomination and compensation committee in 2024.
• Conducted annual company-wide internal control surveys.

Climate Goals & Targets

Environmental Challenges

• Increased construction costs due to high material prices and labor costs.
• Declining new housing starts.
• Aging workforce and labor shortages in the construction industry.
• Compliance with work style reforms, including overtime regulations.
• Changes in the business environment due to the shift to new aged pipe replacement in the gas pipeline business.
• High dependence on major clients (approximately 60% of sales from Tokyo Gas Group).
• Risks associated with large-scale investments (M&A, property acquisition, system investment).
• Risks related to legal regulations and business practices.
• Risks of unprofitable construction projects.
• Risks from natural disasters.
• Risks of declining organizational capabilities.
• Risks of securing construction capabilities.
• Risks of defective construction.
• Risks of traffic accidents and workplace accidents.
• Compliance risks.
• Information security risks.

Mitigation Strategies

• Developing a new core business in building equipment construction.
• Diversifying customer base.
• Implementing M&A strategies carefully.
• Establishing clear decision-making and approval processes for investments.
• Regularly monitoring market changes and client trends.
• Strengthening compliance measures and internal audits.
• Implementing measures to prevent unprofitable projects (e.g., stricter approval processes, monthly reviews).
• Developing a business continuity plan (BCP).
• Strengthening safety measures and training.
• Implementing various health management initiatives, including harassment training and mental health counseling.
• Strengthening human resource development and training.
• Improving information sharing and collaboration between sales and construction departments.
• Regular price adjustments and negotiations with clients to mitigate the impact of rising material costs.
• Implementing a CSR procurement policy and guidelines for subcontractors.
• Implementing a quality management system (QP management system).
• Strengthening information security measures and employee training.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• CSR procurement policy and guidelines

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters (earthquakes, heavy rain, floods)

Transition Risks

• Changes in client policies and procurement strategies.
• Increased competition in the energy industry.

Opportunities

• Increased demand for disaster prevention and mitigation measures.
• Growth in the maintenance and renovation market for existing buildings.

Reporting Standards

Frameworks Used: Null

Certifications: ISO 9001:2015

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Energy-efficient products (e.g., Enefarm, hybrid water heaters, solar power generation, storage batteries)

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Achieved 83.2% progress towards a 40% increase in women in male-dominated roles (compared to 2021)
• Early achievement of a 5% improvement in compliance-related indicators in the company-wide internal control evaluation survey

Social Achievements

• Obtained the “Gold Certification” in the Healthy Excellent Company Certification System
• Implementation of employee health and well-being initiatives

Governance Achievements

• Addressing the Corporate Governance Code (CGC), including executive evaluation, compensation based on evaluation, and establishment of nomination and compensation committees
• Implementation of CSR procurement policy and guidelines

Climate Goals & Targets

Environmental Challenges

• Delays in strengthening the construction system for the building equipment business
• High material costs due to the Russia-Ukraine situation
• Challenges in increasing the number of construction managers in building equipment construction
• Delayed progress in remote work implementation and remote presence for construction management

Mitigation Strategies

• Strengthening the sales and construction management systems through organizational integration
• Developing a system for sharing information on properties between sales and construction management departments
• Implementing a team-based system for efficient construction
• Developing and implementing a system for sharing documents and construction photos via cloud and apps
• Conducting regular online study sessions
• Utilizing wearable cameras for remote support and site inspections

Supply Chain Management

Responsible Procurement

• CSR procurement policy and guidelines

Climate-Related Risks & Opportunities

Awards & Recognition

• Gold Certification (Healthy Excellent Company Certification System)

Environmental Metrics

ESG Focus Areas

• Governance
• Human Capital

Social Achievements

• Multiple instances of women and mid-career hires in management positions.
• Implementation of action plan based on the Act on the Promotion of Women's Participation in Society

Governance Achievements

• Established a Nomination and Remuneration Committee with independent outside directors.
• Implemented a performance-based compensation system for the president and senior management.
• Regularly conducts effectiveness evaluations of the board of directors.

Climate Goals & Targets

Environmental Challenges

• Low percentage of women employees making it difficult to set measurable targets for women in management.
• Low percentage of foreign investors making it difficult to justify English language disclosures.

Mitigation Strategies

• Actively working to increase the percentage of women employees through recruitment, appropriate placement, and promotion.
• Will consider introducing platforms for electronic voting and translating meeting notices into English in response to changes in shareholder composition.
• Will consider providing information in English in response to changes in shareholder composition.

Supply Chain Management

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• DREAM method for extending the lifespan of aging drainage pipes

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Sold 1700 units of environmental products (Enefarm, hybrid water heaters, solar power generation, storage batteries) in FY2023.
• Reduced CO2 emissions by 30,000 kg (approximately 1.7% reduction) compared to FY2022.

Social Achievements

• Increased the number of women in male-dominated jobs by 83.3% compared to FY2021.
• Implemented an engagement survey.
• Shared CSR procurement guidelines with suppliers and conducted surveys and individual interviews.

Governance Achievements

• Implemented a system for evaluating executives and a compensation system based on that evaluation.
• Improved compliance-related indicators by 5% in the company-wide internal control evaluation survey.

Climate Goals & Targets

Environmental Challenges

• High material costs and wage increases impacting profitability.
• Decreased profitability in the electrical and civil engineering business due to fewer large-scale projects.
• Challenges in increasing the number of construction managers.

Mitigation Strategies

• Focusing on increasing the number of construction managers.
• Developing team-based systems for efficient construction.
• Securing new partnerships for plumbing, electrical work, and simultaneous order acquisition.

Supply Chain Management

Responsible Procurement

• CSR procurement policy and guidelines

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• Enefarm
• Hybrid water heaters
• Solar power generation
• Storage batteries

Awards & Recognition

• Kin no Nintei (Gold Certification) for health and wellness