Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Society
• Governance

Environmental Achievements

• Reduced power consumption by 1% year over year (to 7.64 kWh/m² or less)
• Reduced gasoline consumption by 1% year over year (to average 98.5 liters per car/month)
• Reduced paper purchases by 1% year over year (to 46.06 million sheets or less)
• Maintained EXEO’s forests (national forests) at five locations (15.37 ha) nationwide
• Increased ratio of purchasing eco-friendly products to 62.6%

Social Achievements

• Achieved a ratio of new female graduates employed of 15.8%
• Achieved a ratio of handicapped people employed of 2.38%
• Annual paid leave taken: 13.3 days per person/year
• Reduced total working hours
• Included in the Top Hundred Telework Pioneers by the Ministry of Internal Affairs and Communications

Governance Achievements

• Updated the corporate governance guidelines
• Disclosed the corporate governance report
• Reconfirmed the basic policy of the internal control system
• Provided education reflecting the latest laws and regulations and the recent problems and complaints
• Designated a month to promote compliance and promoted the use of the whistleblowing system

Climate Goals & Targets

Environmental Challenges

• Labor shortage in the construction sector
• Concerns over labor shortage in the construction sector
• Concerns over information security and the protection of personal information

Mitigation Strategies

• Radical business innovation using digital technology
• Strengthening efforts regarding information security and the protection of personal information
• Promoting efforts to ensure the protection of private information under the Privacy Policy
• Providing all employees with information security training and simulation exercises

Supply Chain Management

Responsible Procurement

• Green procurement

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI “Sustainability Reporting Standards”, ISO26000 “Guidance on social responsibility”

Certifications: JIS Q 9001:2015, JIS Q 14001:2015, BS-OHSAS 18001:2007, JIS Q 27001:2014

UN Sustainable Development Goals

• Goal 7
• Goal 13

The KYOWA EXEO Group’s corporate philosophy includes cultivating technological capabilities, seeking affluence and contributing to society. Under this philosophy and with its technological capabilities as a driver of growth, the Group has grown to be the way it is now, while reflecting the needs of the times.

Sustainable Products & Innovation

• Energy Viewer

Awards & Recognition

• FY2017 Grand Prize for Excellence in Energy Efficiency and Conservation—Chairman Prize for The Energy Conservation Center, Japan (ECCJ) in the Product Category & Business Model Category
• JMAQA AWARDS 2019

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Governance

Environmental Achievements

• Power generation capacity of solar panels installed: 612 MW (cumulative total of facilities constructed: 448 locations across Japan as of March 2021)
• Industrial waste recycling rate: 94.4% in FY2020 (Kyowa Exeo Corporation only)
• CO2 emission reduction: (Specific figures not clearly stated, but a 10% reduction target is set for FY2025 compared to FY2020)
• Minami Kanto branch office certified as a net zero energy building (ZEB) project

Social Achievements

• Introduced GIGA school package to approximately 5,000 schools (about one-sixth of all public elementary and junior high schools in Japan)
• Five gold medal winners in the WorldSkills Competition
• Ratio of women in managerial positions increased to 1.8% in FY2020 (Kyowa Exeo Corporation only)
• Percentage of annual paid leave taken: 64.0% in FY2020 (Kyowa Exeo Corporation only)
• Received Eruboshi certification for outstanding efforts to support the career development of women
• Recognized as a 3.5 Star Company in the Nikkei Smart Work Management Survey

Governance Achievements

• Increased the number of outside directors (from 2 to 3 in 2018, and from 3 to 4 in 2020)
• Increased the number of independent outside statutory auditors by one from June 2021
• Established a Nomination Committee and Compensation Committee
• Regular labor-management meetings to exchange opinions

Climate Goals & Targets

Environmental Challenges

• Securing construction personnel due to Japan's declining birthrate and aging population
• Shortage of highly skilled and experienced personnel in urban infrastructure business
• Profit margin issues in some large-scale projects in urban infrastructure business
• Maintaining profitability in system solutions business due to rapid business change and intense competition
• Impact of lockdowns due to the pandemic on overseas business

Mitigation Strategies

• Improving the efficiency of the construction process, including the use of digital transformation and promoting multi-skilling among staff (Telecom Carriers Business)
• Consider mergers and acquisitions to expand business (Urban Infrastructure Business)
• Using advanced digital technologies such as BIM/CIM and AI to automate design, cost estimation, and reform work follow-up (Urban Infrastructure Business)
• Pivot to a new business model based on co-creation and collaboration with customers (System Solutions Business)
• Venturing into higher value-added fields such as AI, robotics, and drones (System Solutions Business)
• Offshoring of inspection operations (Telecom Carriers Business)
• Expanding recurring business such as maintenance, operation, and security services (System Solutions Business)
• Utilizing Singapore location to expand business in the APAC region (System Solutions Business)

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Requests for collection of packaging materials to suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters

Transition Risks

• Changes in government policy or business strategies of telecommunications carriers

Opportunities

• Increased demand for renewable energy and accelerated development in environment and energy field

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards, SASB Standards, International Integrated Reporting Framework

Certifications: ISO 14001, ISO 45001, JIS Q 9001:2015, JIS Q 27001:2014

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Solar power generation facilities
• Biomass boilers
• Net zero energy buildings (ZEB)

Awards & Recognition

• Eruboshi certification
• Semi-Nadeshiko Brand

Environmental Metrics

ESG Focus Areas

• Environment & Energy
• Human Resources
• Digital Transformation (DX)
• Safety, Quality & BCP
• Governance

Environmental Achievements

• Built two woody biomass power plants generating approximately 72 million kWh of power per year
• Switched to electricity from renewable sources at our sites (73.2% in FY2022)
• Promoted switching to EVs and other low-emission vehicles (96.1% for passenger vehicles in FY2022)
• Reduced Scope 1 & 2 emissions by 11.2%

Social Achievements

• Introduced & implemented a transformation leader development program
• Introduced & implemented an overseas trainee system
• Worked on multi-skilling & reskilling employees
• Earned outside recognition & awards for efforts toward diversity & inclusion (PRIDE Index silver certification and D&I Award “Best Workplace for Diversity & Inclusion”)
• Established work environments that make it easier for employees to thrive, normalizing remote work while also introducing a flextime system, remote work location system, etc.
• Raised employee engagement
• Increased ratio of females among new graduate hires to 25% in fiscal 2023

Governance Achievements

• Conducted approximately ¥30.0 billion in M&A cumulative over three years starting in fiscal 2021
• Invested heavily in human resources and DX
• Raised the DOE of our dividend policy from 3.5% to 4.0%
• Reorganized Group companies in the system solutions field by function
• Strengthened Group-wide collaboration, including functional reorganization by area
• Increased the joint procurement capabilities of the Group
• Made business processes more efficient by establishing common systems
• Promoted implementation of Group standardized network & security infrastructure

Climate Goals & Targets

Environmental Challenges

• Profitability challenges despite record high net sales
• Unprofitable projects in urban infrastructure and system solutions businesses
• Surging prices for raw materials and energy
• Inability to fully accommodate demand in the urban infrastructure market
• Low profit margin in the system solutions business
• Long working hours

Mitigation Strategies

• Improving productivity in existing fields
• Shifting resources to growth fields
• Maximizing synergies among Group companies
• Actively investing in human resource development and R&D
• Accelerating the transformation of our business portfolio
• Strengthening Group operations by transforming organizations
• Eliminating inefficiency and waste in management
• Implementing DX
• Actively pursuing M&A in growth fields
• Revamping procurement supply chain for devices
• Reskilling efforts between Group companies
• Implementing digital workflows for document preparation and approvals
• Installing and integrating a standard Group-wide network and security infrastructure
• Standardizing IT environments and business processes
• Joint declaration by labor representatives and top management to rectify long working hours

Supply Chain Management

Responsible Procurement

• Revamped procurement supply chain for devices, utilizing refurbished devices and internal subscription service

Climate-Related Risks & Opportunities

Physical Risks

• Intensifying weather (flooding, supply chain disruptions)
• Higher temperatures (worsening labor shortages, lower work efficiency)

Transition Risks

• Increase in taxation (carbon tax)
• Increase in cost to buy credits for CO2 emissions
• Soaring renewable energy procurement prices
• Surging raw materials prices
• Obligation to disclose information
• Changing customer preferences

Opportunities

• Expansion of business due to increased demand for renewable energy
• Expansion of smart grid business
• Expansion of energy storage plant construction and maintenance business
• Expansion of solar sharing business

Reporting Standards

Frameworks Used: TCFD

Certifications: PRIDE Index Silver Certification, D&I Award “Best Workplace for Diversity & Inclusion”

Sustainable Products & Innovation

• Renewable energy solutions (solar, wind, biomass)

Awards & Recognition

• PRIDE Index Silver Certification
• D&I Award “Best Workplace for Diversity & Inclusion”
• Kurumin Mark
• Nadeshiko Brand (2020), Semi-Nadeshiko Brand (2021, 2022)

Environmental Metrics

ESG Focus Areas

• Solutions to social issues through connectivity and engineering
• Creating diverse and thriving workplace environments
• Fostering an innovative company culture
• Fair and highly transparent governance

Social Achievements

• Established the Innovation Promotion Office to create new business domains.
• Introduced employee learning programs to develop innovation personnel.

Governance Achievements

• Identified materiality through broad-perspective considerations, referring to GRI and SASB Standards and incorporating stakeholder opinions.

Climate Goals & Targets

Environmental Challenges

• Unprofitable projects due to inexperience in new fields.
• Surging costs of materials.
• Curtailed investments by mobile operators.
• Less construction for reception of 700 MHz.
• Shortage of development personnel.

Mitigation Strategies

• Multi-skilling engineers and revamping organizations and locations.
• Unified organizational structure for mobile construction.
• Broadening services in data center projects.
• Accelerating charge into new domains such as renewable energy.
• Expanding high value-added services and recurring business.
• Acquiring and developing human resources.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards, SASB Standards

Environmental Metrics

ESG Focus Areas

• Achieving a carbon neutral society
• Contributing to circular economies
• Building and maintaining infrastructure
• Contributions and building good relationships in local communities
• Advancing digital transformation in construction
• Creating workplace environments in which diverse human resources can thrive
• Ensuring soundness and transparency in governance

Environmental Achievements

• Reduced CO2 emissions (Scope 1 & 2) by -43.9% vs. FY2020 (target for FY2030)
• Achieved 77.8% renewable electric power usage rate at company-managed domestic sites in FY2023 (target 100% by FY2025)
• Reduced final disposal rate of industrial waste (non-consolidated) by 3.3% vs. FY2020 in FY2023 (target -50% by FY2025)
• Reduced paper usage (non-consolidated) by -28% year-on-year in FY2023 (target -50% by FY2024)

Social Achievements

• Increased number of holders of technology-related professional qualifications to 11,814 (cumulative)
• Conducted 92 social & community contribution activities
• Implemented various human resource development programs, including the Transformation Leader Development Program (227 participants in FY2023, cumulative 589)
• Achieved 78.8% annual paid leave taken (non-consolidated) in FY2023 (target 80% by FY2025)
• Achieved 98.3% undergoing stress checks (non-consolidated & five major subsidiaries) in FY2023 (target 100% by FY2024)
• Increased number of women in management positions to 35 in FY2023 (target 1.5x FY2020 by FY2025)
• Increased percentage of male employees taking childcare leave to 32.9% in FY2023 (target 20% by FY2025)

Governance Achievements

• Received SBT validation for FY2030 target in July 2024
• Obtained an independent third-party assurance report from Sustainability Accounting Co., Ltd. for emissions figures
• Declared support for TCFD recommendations and joined the TCFD Consortium
• Declared support for TNFD principles and joined the TNFD Forum
• Established the Exeo Group Human Rights Policy in January 2024 and formulated training policy & e-learning

Climate Goals & Targets

Environmental Challenges

• Climate change impacts (intensifying weather, higher temperatures)
• Increased costs due to carbon tax, emissions controls, renewable energy procurement, raw materials, and information disclosure obligations
• Limited capacity to accept orders due to engineer shortage
• Changing customer preferences toward environmentally conscious companies
• Negative stakeholder assessments due to insufficient climate change measures

Mitigation Strategies

• Shift to renewable energy, energy saving efforts, CO2 emissions reduction measures
• M&A and business partnerships to mitigate cost increases and engineer shortage
• Expand renewable energy businesses, urban infrastructure, and refurbishments
• Promote flexible work styles
• Increase business value through in-house decarbonization and social contributions

Supply Chain Management

Responsible Procurement

• Formulate & instill our Basic Procurement Policy
• Bolster communication with partner companies

Climate-Related Risks & Opportunities

Physical Risks

• Flood damage
• Supply chain disruptions due to intensified weather
• Worsening labor shortages due to heat stress

Transition Risks

• Increased costs due to carbon tax, emissions controls, renewable energy procurement

Opportunities

• Expansion of renewable energy businesses
• Expansion of urban infrastructure and refurbishments businesses
• Markets for renovation construction and cloud services due to increased demand for disaster response and mitigation

Reporting Standards

Frameworks Used: GRI Standards, SASB Standards, TCFD, TNFD

Certifications: Eruboshi certification, Nadeshiko Brand (2020), Semi-Nadeshiko Brand (2021, 2022), PRIDE Index (Bronze 2020, Silver 2021-2023), D&I Award (Best Workplace for Diversity & Inclusion 2021-2023)

Third-party Assurance: Sustainability Accounting Co., Ltd.

Sustainable Products & Innovation

• ESG renovations
• NutriMate nutritional meal management system

Awards & Recognition

• Eruboshi certification
• Nadeshiko Brand (2020), Semi-Nadeshiko Brand (2021, 2022)
• PRIDE Index (Bronze 2020, Silver 2021-2023)
• D&I Award (Best Workplace for Diversity & Inclusion 2021-2023)

Environmental Metrics

ESG Focus Areas

• CO2 emissions
• Green procurement
• Workforce diversity
• Employee well-being

Environmental Achievements

• Not disclosed

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed