62,505...©2016 tokyo gas co., ltd. inclusion in socially responsible investment (sri) indices all...

Tokyo Gas Group

CSR Report 2016

Tokyo Gas G

roup CSR Report 2016Tokyo G

as Co., Ltd.

Tokyo Gas Group CSR Report 2016First edition: December 2016

Planning and editing:Corporate Communications DepartmentTokyo Gas Co., Ltd.1-5-20 Kaigan, Minato-ku, Tokyo 105-8527, Japan

Production: TOKYO GAS COMMUNICATIONS, INC.

All rights reserved.

©2016 Tokyo Gas Co., Ltd.

Inclusion in socially responsible investment (SRI) indices

All electricity (400 kWh) used in the production (printing plates, printing, bookbinding) of CSR Report 2016 came from green power (wind power).

This report is printed on Tokyo Gas Recycled Paper (made from recycled paper from Tokyo Gas offices, trimmings from afforestation activities, and reused and unused wood materials).

FTSE4Good Index Series Ethibel Sustainability IndexExcellence Global

Morningstar Socially Responsible Investment Index

As of December 2016

* THE INCLUSION OF Tokyo Gas Co. Ltd.IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HERIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF Tokyo Gas Co. Ltd.BY MSCI OR ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

MSCI ESG Indexes * STOXX ESG Leaders Indices

Member 2016/2017

Supporting you Always and bettering every day.

Tokyo Gas Group is striving to become the driving force of our lives and society. For over 130 years, we have worked closely with our customers to foster a strong foundation of experience and trustworthiness, with which we aim to create a brighter, safer and a more comfortable tomorrow. By thinking and acting from a place closest to our customers, the Tokyo Gas Group will continue with this challenge as one.

32 Tokyo Gas Group CSR Report 2016

Tokyo Gas Group has identified a number of specific issues

(“material aspects”) in each of six key areas of CSR activity in order

to meet society’s expectations and guide implementation of its

own “Main Policies FY2015-2017 toward Realizing Challenge

2020 Vision,” and the Group’s members are working in concert to

address these material aspects.

This report is a digest of information on how the Group is meeting

society’s expectations and addressing the challenges that we face

in the LNG value chains that form the core of our business. It is

designed to keep our various stakeholders clearly informed about

the Group’s CSR activities.

● The “Special Topic” section of this report describes the actions

that we are taking as a total energy company to contribute to

society in readiness for full liberalization of Japan’s electricity

and gas retail sectors.

● “Highlights of Key Activities” reviews the key initiatives

undertaken in fiscal 2015 to tackle material aspects.

● In “Stakeholder Dialogue,” the focus is on expert opinion

concerning “supply chain management,” which will only

continue to grow in importance as we globalize our operations

as a total energy company.

This year’s report features two new appendices: one consists

of a set of tables that shows the reader where to refer to in this

report for information on activities that fall under GRI Guidelines,

etc., and the other is a glossary of terms, which are indicated for

convenience in the text by an icon of an open book.

Overview of Sources of Information on CSR at Tokyo Gas

● Information on CSR

● Information on Specific Topics

In addition to the information contained in this report, more detailed information on the Group’s CSR initiatives, categorized from the perspectives of the environment, society, and governance, can be found online on our website:

This booklet provides essential information on the Group’s CSR initiatives.

Tokyo Gas Group

CSR Report 2016

● Disclosure Policy

● PeriodPrimarily fiscal 2015 (April 1, 2015-March 31, 2016), with additional information on other fiscal years.

● BoundaryTokyo Gas on a non-consolidated basis and its subsidiaries and affiliates. Tokyo Gas LIFEVAL and partner companies are also included in some sections.Environmental performance data for fiscal 2015 are for Tokyo Gas and its 46 consolidated subsidiaries in Japan.

● Publication PeriodDecember 2016 (Last year’s report was published in December 2015. The next is scheduled for October 2017.)

● Referenced GuidelinesGRI “Sustainability Reporting Guidelines version 4 (G4)”Ministry of the Environment of Japan “Environmental Reporting Guidelines (2012 Version)”

Impo

rtan

ce to

sta

keho

lder

s

Importance to the Tokyo Gas Group

Full report (website)

Digest edition(this report)

High

High

Annual Report 2016

Tokyo Gas Earthquake Disaster Prevention Measures

This report brings together carefully selected financial data and basic information on business strategy and other related topics for the latest fiscal year to help investors better analyze Tokyo Gas.

This booklet explains the earthquake disaster prevention measures we have implemented to maintain the safe and stable supply of city gas.

TOKYO GASANNUALREPORT 2016Tokyo Gas Co., Ltd.

in order to ensure that our customers can use gas safely and convenientlyin order to ensure that our customers can use gas safelyy and conveniently

Earthquake Disaster Prevention Measures

Tokyo Gas GroupCSR Report 2016

(Full report)

(April 1, 2015-March 31, 2016)

Tokyo Gas GroupCSR Report 2016(Digest edition)

http://www.tokyo-gas.co.jp/csr/index_e.html

Editorial Policy Contents

Company Profile

Glossary

Relationship between GRI Content Index Sections on Compliance, the United Nations Global Compact (GC) Ten Principles, and ISO 26000

Corporate Information

4 - 5

62 - 63

64 - 65

66 - 67

Resource Procurement Management

Engagement with Stakeholders

Stakeholder Dialogue

Third-Party Independent Assurance Report

57

58 - 59

60 - 61

56

Top Commitment

Special Topic Energy and the Future Our Response to Gas and Electricity Deregulation

6 - 9

10 - 11

CSR Management in Overview

Corporate Governance

The Tokyo Gas Group’s LNG Value Chain and Its Impact on Society

The Tokyo Gas Group’s Key CSR Activities and Material Aspects

Key CSR Activities, Targets and Performance

CSR at the Tokyo Gas Group

12 - 13

14 - 15

16 - 19

20 - 21

22 - 23

Enhancement of Energy SecurityStable Supply / The Pursuit of Safety / Provision of Better Products and Services

Contribution to the EnvironmentBasic Policy on Environmental Protection and Targets / Global Warming Countermeasures /Promotion of Resource Saving / Promotion of Biodiversity Conservation / Promotion of Environmental Technologies Development / Material Balance

Contribution to Local CommunitiesSafe and Secure Ways of Life and Urban Development / Enrichment of Society

Respect for Human RightsHuman Rights Due Diligence

Promotion of CompliancePermeation and Rigorous Practice of Compliance / Protection of Personal Information / Prevention of Bribery and Corruption

Enhancement of People-Centered Management BasePromotion of Diversity / Development of Human Resources / Occupational Safety and Health

Highlights of Key Activities

24 - 31

32 - 41

42 - 45

46 - 47

48 - 51

52 - 55

24 - 56

This section describes main actions undertaken in fiscal 2015 to address material aspects.

12 - 23

This section describes our basic approach to CSR, social impacts along our LNG value chains, and the identification process, state of management, and outcomes of action on specific issues of key activities (“material aspects”).

*2 Includes intra-group transactions.

Gas appliances and installation work10.2

Other energy (electricity, etc.)

16.7

Other 9.8

Real estate 1.2

City gas62.1

Consolidated sales

1,884.6billion yen

Sales

Number of Customers

(FY)

(FY) (FY) (FY) (FY) (FY)

Tokyo Gas Co., Ltd.

Financial Data (as of March 31, 2016)

FY2015 Sales by Segment (Consolidated)*2 Return on Equity (ROE)

15

10

5

0

2011 2013 20152012

Consolidated Non-consolidated

13.1

9.2

2014 2011 2013 20152012 20142012 2014 20152011 2013

30,000

20,000

10,000

0


2012 2014 20152011 2013

11,500

11,000

10,500

10,000

Consolidated Non-consolidated Consolidated Non-consolidated Consolidated Non-consolidated

Operating Income

2012 2014 20152011 2013 2012 2014 20152011 2013

2,000

1,500

1,000

500

0

Net Income for the Term

11.3

10.3

5.1

5.4

10.9

11.5

11.2

11.9

Consolidated Non-consolidated9

6

3

0

5.8

4.3

5.1

5.0

2.3

2.54.9

5.3

5.2

5.3

Return on Assets (ROA)

Established

Capital

Sales

Number of employees

Service area

　

October 1, 1885

141.8 billion yen

1,884.6 billion yen (Consolidated basis)

16,998 (7,973 Non-consolidated basis*1)

Principal cities of Tokyo, Kanagawa, Saitama, Chiba, Ibaraki, Tochigi, and Gunma

Subsidiaries and

affiliates　

Lines of business

Consolidated subsidiaries: 67Equity-method affiliates: 7

(1) Production, supply, and sale of city gas(2) Supply and sale of gas appliances and related installation work(3) Construction work relating to the supply of city gas(4) Energy services(5) Supply of electricity

Company Profile (as of March 31, 2016) Tokyo Gas Group Service Areas and Pipeline Networks

(FY)

Gas Sales Volume


2011 2013 20152012 2014

16,000

14,000

12,000

10,000

Commercial2,678

Wholesale 2,161

Industrial7,233

Residential3,365

FY2015 Gas Sales Volume by Usage (Consolidated)

Consolidated gas sales volume

15,436million m3

(thousands)

(hundred million yen) (hundred million yen)(%)

(million m3, 45 MJ/m3) (million m3, 45 MJ/m3)

11,111

10,809

11,263

10,958

11,398

11,09110,978

10,67810,557

10,855

15,436

15,23215,190

13,759

15,390

14,201

14,735

14,519

15,541

15,332

17,542

15,503

19,156

17,142

21,121

19,085

22,925

20,835

16,773

18,846

2,000

1,500

1,000

500

0

770

514

1,456

1,660

1,286

1,7171,920

1,048

1,261

1,550

(hundred million yen) (%) (%)

460

357

1,0161,119

785

1,084

9001,038

958

935

100km 50km150km

Tochigi Gas

Washinomiya Gas

Shoei Gas

Nagano Toshi Gas

Tsukuba Gakuen Gas

Miho Gas

Chiba Gas

Tokyo Gas Yamanashi

Nagano Pref.

Saitama Pref.

静岡県

Yamanashi Pref.

Kanagawa Pref.

Tokyo Bay

Tokyo

Chiba Pref.

Gunma Pref.

Tochigi Pref.

Ibaraki Pref.

Gunma Line

Joso Line

Chiba Line

Chiba Line II

Saitama Line

Saihoku Line

Tochigi Line

Utsunomiya Line

Kumagaya-Sano Line

Chiba-Kashima LineTokyo Line Yokohama Line

Chuo Line

Waterfront Line

Keihin Line

Submarine Line

Joso Line II

New Negishi Line

Ibaraki-Tochigi Line

Saito Line

Koga-Moka Line(FY2017)

Ibaraki Line

Hitachi LNG Terminal

Sodegaura LNG Terminal

Negishi LNG Terminal

Ohgishima LNG TerminalTotal length of pipelines:

62,505km(as of March 31, 2016)

Tokyo Gas high-pressure pipelines(existing)Tokyo Gas high-pressure pipelines(planned)Other companies’ high-pressurepipelines

Tokyo Gas Group’s service areas

Tokyo Gas’s wholesale service areas

*

*

*

*Merged into Tokyo Gas on May 1, 2016.

*1 Full-time employees


Company Profile

Key events in the history of Tokyo Gas

Oct. 1885 Tokyo Gas established.

July 1893 Following the enactment of the Commercial Code, name changed to Tokyo Gas Co., Ltd.

Sep. 1962 Calorifi c value conversion completed in head offi ce area.*4

May 1966 Negishi LNG Terminal entered operation.

Nov. 1969 LNG imports from Alaska commenced.

June 1972 Calorifi c value conversion to natural gas commenced.*5

Jan. 1973 LNG imports from Brunei commenced.

Feb. 1973 Sodegaura LNG Terminal entered operation.

Jan. 1976 Looped Line from the Negishi LNG Terminal to the Sodegaura LNG Terminal entered operation.

Dec. 1977 Tokyo Bay Underwater Line entered operation.

Feb. 1983 LNG imports from Malaysia commenced.

Oct. 1988 Calorifi c value conversion to natural gas completed.

Aug. 1989 LNG imports from Australia commenced.

Jan. 1994 LNG imports from Indonesia commenced.

Oct. 1998 Ohgishima LNG Terminal entered operation.

Dec. 1998 LNG imports from Qatar commenced.

Dec. 1999 Keihin Line and Yokohama Line entered operation, connecting three terminals.

Apr. 2009 LNG imports from Russia commenced.

May 2009 ENE-FARM residential fuel cell goes on sale.

Oct. 2009 Establishment of Tokyo Gas LIFEVAL completed.

May 2010 Chuo Line entered operation.

Mar. 2012 Chiba-Kashima Line entered operation.

Apr. 2015 Unconventional LNG imports from Queensland Curtis LNG Project commenced.

Mar. 2016 Hitachi LNG Terminal and Ibaraki-Tochigi Line entered operation.

Apr. 2016 Sale of electricity to residential and small commercial customers commenced.

Main gas resources Coal Oil Natural gas

*3 This was the second time that the number of customers had reached one million (the first time being in 1938), as the number had declined by approximately 340,000 during World War II.*4 Increased from 3,600 kcal to 5,000 kcal. *5 Increased from 5,000kcal to 11,000 kcal. *6,7 Based on consolidated data for the Tokyo Gas Group.

1885

300178,000 m3

19km

1955

1 million*3

774 million m3

11,937km

2013*6

11 million

14,735 million m3

61,063km

2015*7

11.39 million

15,436 million m3

62,505km

1966

3 million

2,633 million m3

19,601km

1974

5 million

6,189 million m3

30,851km

1995

8 million

7,624 million m3

44,904km

2007

10 million

14,053 million m3

52,310km

Number of customers

Gas sales volume

Total length of pipelines

History of Tokyo Gas


Broadening our business baseEvolution as a global company groupEvolution as a total energy company group

Average for fiscal 2009-2011 Tokyo Gas in 2020Composition of consolidated net profit

Tokyo metropolitan area

Japan

Gas business

50%

Gas business70%

Overseas business

25%

Electric power and other business

25%

Overseas business 10%

Electric power and other business

20%

“Yatsugatake (mountain range with several peaks)

-style of management” with multiple core businesses

“Mount Fuji-style of management” dominated by

city gas business

Transforming our operating structure

Transformation and broadening of operating structure and business base

World

Top Commitment

Transforming our operating structure means continuing to evolve

the city gas business that has formed the core of our operations to

date, while at the same time developing second and then third core

businesses (such as the electricity and engineering businesses) in

order to emerge as a total energy company group. To use a “mountain”

analogy, we will move from a “Mount Fuji-style of management,” in

which our business is dominated by a single core business focused on

gas, to a “Yatsugatake (mountain range with several peaks) -style of

management” with multiple core businesses.

Broadening our business base, meanwhile will involve remaking

ourselves into a global company group by accelerating our domestic

and overseas expansion while still retaining our focus on the Tokyo

metropolitan area. We will also leverage the natural gas-related

technologies and expertise that the Group has cultivated in North

America and Southeast Asia, where energy use is expected to expand

dramatically in the future.

By pursuing these twin goals, we aim to achieve a “2:1:1” profit

structure by 2020, with half of our net profits generated by the gas

business, a quarter by the electricity business and other segments, and

the remaining quarter by overseas business.

Tokyo Gas Group is pursuing action in line with three main policies set in

our “Main Policies FY2015-2017” (“Main Policies”)—namely, evolution of

the total energy business, acceleration of global business development,

and construction of a new group formation—in order to advance us

along the path toward realizing the Vision.

In fiscal 2015, the Hitachi LNG Terminal and Ibaraki-Tochigi Line

entered operation and were connected to our existing three terminals

in the Tokyo Bay area and high-pressure pipeline network, thereby

increasing the supply stability of our entire infrastructure. In the

electricity business, we expanded our competitive power generation

capacity by bringing Unit 3 at the Ohgishima Power Station online,

and we also unveiled rates plans and services designed to improve

the lives of our low-pressure customers and raise our business value in

readiness for full liberalization of the electricity retail sector. Overseas, we

strengthened our U.S. operations by bolstering Tokyo Gas America Ltd. in

Houston and acquiring new prime assets. As regards our midstream and

downstream operations overseas, we established Tokyo Gas Asia Pte.

Ltd. in Singapore to serve as a regional headquarters for our business

and investment activities in Southeast Asia. We further established a new

company, Tokyo Gas Liquid Holdings Co., Ltd., to oversee the liquid gas

business and provide a new formation contributing to our evolution as a

total energy company group.

Fiscal 2016 will usher in an era of mega-competition for the energy

industry, and we will respond by continuing to pursue our Main Policies

for attaining our Vision.

To evolve our total energy business, we will ramp up measures to

ensure the safety and stability of energy supplies. We will also prepare

for the new arrangements that will come into effect when Japan’s gas

retail sector undergoes full liberalization next spring, and will work to

strengthen ties with customers by identifying and reliably meeting

their needs. The launch of our electricity business will be followed

up by steady action to ensure that we remain customers’ first-choice

new entrant electricity supplier. To accelerate our global business

development, we will start participating in overseas projects in earnest

now that the foundations of our overseas network are in place. To

construct a new group formation, we will formulate and put into practice

growth strategies for segments that we intend to grow and cultivate

alongside our city gas and electricity supply businesses, including the

engineering solutions business, liquid gas business, lifestyle services

business, and real estate business. At the same time, we will develop

and strengthen the Group’s management and structures to assist

implementation of these strategies.

Following on the full liberalization of Japan’s electricity retail sector

in April 2016, it will be the gas retail sector’s turn next April. In

recognition of the momentous changes afoot in the industry, Tokyo

Gas has adopted “Supporting you Always and bettering every day” as

our new corporate slogan. This slogan encapsulates our appreciation

for our customers and our unwavering determination to continue to

boldly take on new challenges and fulfill our social responsibilities.

Tokyo Gas Group is committed to using all our resources to contribute

to the sustainable development of society in answer to the needs and

expectations of our customers and all our stakeholders.

In November 2011, we responded to the Great East Japan Earthquake

by formulating a new vision, the “Challenge 2020 Vision,” (“Vision”) that

maps out our public mission as an energy company and our path toward

sustainable growth in the future.

This Vision calls for Tokyo Gas to fur ther step up its existing

commitment to innovation, and to transform its operating structure and

broaden its business base while maintaining its core presence in the gas

business and the Tokyo metropolitan area in order to be better able to

contribute even more to society.

Realizing our “Challenge 2020 Vision”

Progress on Main Policies

Initiatives in Fiscal 2016

Tokyo Gas Group is working to evolve as a total energy business and accelerate its global business development by constructing a new group formation, thereby contributing to the sustainable development of society through CSR management.

Michiaki HirosePresidentTokyo Gas Co., Ltd.


Top Commitment

As an official partner of the Tokyo 2020 Olympic and Paralympic Games*1,

Tokyo Gas will work with the Tokyo Metropolitan Government and other

local governments and authorities to make the Games a success and create

an appealing Tokyo. We will also contribute to society in our role as a public

utility by contributing to the development of Paralympic sports.

For us, corporate social responsibility means both contributing to sustainable

development and growing as a company by winning stakeholders’ trust

through meeting the continually changing needs and expectations of

society.

In fiscal 2014, Tokyo Gas Group identified six key areas of CSR activity and

material aspects on the basis of the Main Policies we had adopted previously.

Sound progress was made on CSR in fiscal 2015 by following PDCA cycles.

Fiscal 2016 saw not only the full liberalization of the electricity retail

sector but also the finishing touches being put to preparations for the full

deregulation of the gas retail sector. As we push ahead with implementation

of our Main Policies, such as by commencing our participation in overseas

projects in earnest and developing and strengthening our group

management structures, compliance in keeping with these changes will

assume even greater importance. We consider it essential to practice fair and

transparent management, while further enhancing communication with

all our stakeholders, sharing knowledge within the Group on customers’

and society’s needs, and incorporating this knowledge into our activities.

In March 2016, we signed the United Nations Global Compact to help us

further improve our CSR activities and approach CSR from a more global

perspective, and we will continue our pursuit of more advanced CSR

management and contributions to the sustainable development of society in

the years ahead.

Social pressure for action to tackle global environmental problems continues

to grow, as exemplified by last year’s COP21 climate summit and its adoption

of an international framework and “Intended Nationally Determined

Contributions (INDC)” for reducing greenhouse gas emissions up to 2030.

For our part, we recognize that our responsibilities as an energy company

will only grow as the Group expands by evolving its total energy business

and accelerating its global business development. In the city gas business,

increased use of cogeneration systems (which are attracting interest for their

contribution to both energy efficiency and security) and the development

and adoption of smart energy networks and other low-carbon systems will

be promoted through the expanded use of natural gas, a low-CO2 emission

source. In the electricity business, we will actively promote generation of

electricity using highly efficient thermal power plants and renewable energy

sources. Globally, we plan to accelerate our rollout of the Group’s world-

beating CO2-reducing, energy-saving technologies as part of our effort to

enhance action against global warming.

We will also put into practice revised Environmental Policies and

Environmental Protection Guidelines in fiscal 2016, strengthen our

environmental management systems, and take even more serious action on

environmental issues in accordance with global standards as we continue

our efforts to raise our corporate value.

To help develop communities that are both environmentally friendly and

disaster resilient, we will promote the adoption of smart energy networks

and work with local residents to raise awareness of energy and the

environmental issues.

Children are a particular focus of our community activities, as our

future will depend on the kids of today. Activities already underway

include school education support, operation of our corporate museums,

and our participatory “HIIKU” fire education program. As regards our

global expansion, we are placing a high premium on building trust with

stakeholders of all nationalities, cultural backgrounds, and legal and business

traditions.

We are committed to building good communications by explaining the

Group’s initiatives and ascertaining what our stakeholders expect from us as

we work to better serve local communities.

Employees are the driving force of any business and are a crucial element

of the Group’s management base. It is essential to create an environment

that allows all employees to maximize their personal potential and approach

their work positively.

Tokyo Gas Group employs a vast range of individuals, including people

who face time constraints due to parental and nursing care or other

responsibilities, women, older people, people with disabilities, mid-career

hires, and foreign nationals. They all bring diverse knowledge, skills, and

experience to the table. We recognize the enormous importance of diversity,

which for us means respecting one another’s individuality, and we also

believe that respect for diversity leads to improvements in productivity. We

consider women’s employment to be an important element of diversity, and

we are working to establish and expand various programs, raise awareness,

and cultivate an organizational culture that allows women to contribute fully

in the workplace. We continue to steadily increase our promotion of women,

and this year appointed our first female executive officer from within the

company.

Looking ahead, we will accelerate development of human resources

within the Group to assist our evolution into a total energy company and

global business, and we will continue to ensure the health and safety of

employees and further strengthen our people-centered business base.

Key CSR Activities of the Tokyo Gas Group

■ Enhancement of Energy Security

We will deliver stable, low-cost energy supplies and provide better products and services to ensure safe, secure, and comfortable energy use by the customer.

■ Contribution to the EnvironmentWe will take more positive action to protect the environment at both the regional and global level in fulfillment of our obligations as an energy company.

■ Contribution to Local Communities

We will value ties with communities and contribute to safe and secure ways of life and urban development and the enrichment of society.

■ Respect for Human Rights

We will respect the dignity and rights of all in our business activities and raise our employees’ awareness of the importance of doing so.

■ Promotion of Compliance

We will pursue more rigorous compliance by our employees and practice business in a fair and transparent manner.

■ Enhancement of People-Centered Management BaseEmployees are the driving force behind our operations, and we will develop programs and strengthen our management base to enable them to make the most of their abilities.

Tokyo Gas Group practices CSR-based management to assist implementation of its Management Philosophy and Corporate Action Philosophy in the course of its daily business activities and to fulfill its social responsibilities and public mission. We have identified six key areas of CSR activity and specific issues (“material aspects”), and are implementing plan-do-check-act (PDCA) cycles to address them.

CSR is crucially important to the implementation of our Main Policies and the attainment of our Vision. Tokyo Gas President Michiaki Hirose explains below in Q&A format how we are practicing CSR activities.

How is the Tokyo Gas Group tackling global environmental problems?

How will the Tokyo Gas Group contribute to local communities?

What does Tokyo Gas hope to achieve through the Tokyo 2020 Olympic and Paralympic Games?

What is your thinking and approach regarding the human resources on which the Tokyo Gas Group depends?

Could you explain the vision of the Tokyo Gas Group’s CSR management?

President

Tokyo Gas Co., Ltd.

Q Q Q

Q

Q

*1 Tokyo Gas is an official partner (in the Gas & Gas Utility Services category) of the Tokyo 2020 Olympic and Paralympic Games.

Michiaki Hirose


100km 50km150km

静岡県

Nagano Pref.

Saitama Pref.

Yamanashi Pref.

Kanagawa Pref.

Tokyo

Chiba Pref.

Gunma Pref.

Tochigi Pref.

Ibaraki Pref.

Tochigi Gas

WashinomiyaGas

Shoei Gas

Nagano Toshi Gas

Tsukuba Gakuen Gas

Miho Gas *

*

*Chiba Gas

Tokyo Gas Yamanashi

Tokyo Bay

Gunma Line

Joso Line

Chiba Line

Chiba Line II

Saitama Line

Saihoku Line

Tochigi Line

Utsunomiya Line

Kumagaya-Sano Line

Chiba-Kashima LineTokyo Line Yokohama Line

Chuo Line

Waterfront Line

Keihin Line

Submarine Line

Joso Line II

New Negishi Line


Saito Line

Koga-Moka Line(FY2017)

Ibaraki Line

(FY2019)

(mid-2020s)



Negishi LNG Terminal Ohgishima LNG Terminal

Ohgishima Power Co., Ltd.

Tokyo Gas Yokosuka Power Co., Ltd.Chiba-Sodegaura Energy Co., Ltd.

Tokyo Gas Baypower Co., Ltd.Kawasaki Natural Gas Power Generation Co., Ltd.

Kobelco Power Moka Inc.

Tokyo Gas high-pressure pipelines (existing)

Tokyo Gas high-pressure pipelines (planned)

Other companies’ high-pressure pipelines

Tokyo Gas Group’s service areas

Tokyo Gas’s wholesale service areas

Sales and service network (Tokyo Gas LIFEVAL, Enesta and Enefit)

Tokyo 107

Kanagawa Pref. 53

Saitama Pref. 24

Chiba Pref. 11

Gunma Pref. 8

Ibaraki Pref. 8

Tochigi Pref. 2

Yamanashi Pref. 3

* Merged into Tokyo Gas on May 1, 2016. As of July 1, 2016

Full liberalization of the electricity retail sector in April 2016 will be followed in April 2017 by full liberalization of the gas retail sector.

This will add residential and small commercial customers to the scope of liberalization, which already includes wholesale and large-

volume users, giving them the freedom to choose which energy provider they wish to use.

Entry to the electricity retail business is in keeping with the objectives of regulatory reform of the electric power system (these being

to (1) secure the stable supply of electricity, (2) suppress electricity rates to the maximum extent possible, and (3) expand electricity

choices for consumers and business opportunities) and serves customers’ needs. As regards liberalization of the gas retail sector, we will

leverage our years of expertise in the gas business to better meet customer needs, and will continue to promote natural gas use and

improve customer safety.

Our Group will provide a one-stop shop for gas, electricity, and value-added services, allowing us to evolve into a total energy group

that will always be the customers’ first choice and that contributes to the enrichment of society.

Regarding the gas business, the Hitachi LNG Terminal, the first LNG

terminal to be built by Tokyo Gas outside the Tokyo Bay area, has now

entered commercial operation, and has been linked to our existing

three terminals by a loop line to increase stability of our supply

infrastructure as a whole. Two other lines, the Saito Line and the

Ibaraki-Tochigi Line, have entered service to tap into latent natural gas

demand in and around the northern Kanto region, and we plan to build

another line called the Ibaraki Line in order to further enhance supply

stability and boost redundancy in our pipeline network. We will also be

augmenting our manufacturing infrastructure in order to expand use of

natural gas.

In the electric power business, we are the generation capacity holder

of any of the new entrants, and plan to expand the power generating

capacity in which we have a stake from 1,600 MW at present to around

3,000 MW by 2020.

Along with continuing to expand generating capacity (especially

competitive natural gas-fired capacity), we will also increase our use

of renewables to generate electricity as a measure to combat global

warming.

Energy and the FutureOur Response to Gas and Electricity Deregulation

Tokyo Gas Group tapped well over a century of expertise in the gas business to enter the electricity retail business in April

2016. In the years ahead, we will continue to deliver stable, affordable energy to meet customer needs in both our gas

business and our electric power business as a total energy group.

We are working to both diversify and expand procurements of

gas resources (including unconventional gas) and develop our

overseas LNG value chains in order to ensure access to low-

cost supplies of LNG. In the last several years, we have signed

memorandums of understanding on strategic collaboration with

Korea Gas Corporation and Taiwanese oil and gas major CPC

Corporation, and negotiations are currently underway on LNG

procurements and supply sharing. Looking ahead, we aim to

lower the cost of our gas resources by entering alliances on LNG

procurements with energy firms in Japan and overseas.

Electricity will be supplied taking advantage of our strengths,

including our existing city gas supply infrastructure (LNG carriers, LNG

terminals, and pipelines), LNG procurement capabilities, and expertise

in the city gas business. Power generation facilities will be built

on land adjoining our LNG terminals to enable efficient operation,

further contributing to the continuity of electricity supply and low

electricity rates.

Tokyo Gas Group has over 200 showrooms in Kanto region operated

by Tokyo Gas LIFEVAL, Enesta, and Enefit. These give us access to a

network of more than 11 million customers that we use to deliver

a host of community-based residential services. Through these

showrooms, customers can order gas appliance repairs, installations,

and kitchen, living room, and plumbing renovation work, as well as

apply for gas and electricity services and arrange for periodic safety

inspections of gas appliances.

In April 2016, we launched a new electricity tariff menu called

the “Zuttomo Plan,” which lets customers choose from a range of

gas, electricity, and other services to create a personalized package

of services suited to their lifestyles. The Zuttomo Plan offers not

only electricity discounts, but also a range of other options that

provide good value for money, peace of mind, and simplicity and

convenience. These include the “Tokyo Gas Triple Discount,” which

provides a further discount when customers choose Tokyo Gas as

their Internet provider as well as their gas and electricity supplier; the

“Emergency Home Assist Package,” which provides 24/7/365 onsite

emergency support and repairs in the event of plumbing problems,

broken windows, or getting locked out; and the “Paccho Point” loyalty

program, through which customers can earn points to spend on

handy lifestyle gifts or affiliated loyalty programs.

Other useful information for home users will be delivered via the

“myTOKYOGAS” online members’ program, including instant, easy-

to-understand data on gas and electricity usage and rates, and alerts

when customers use too much energy.

Looking ahead, we will strengthen and expand our partnerships

so that gas companies receiving wholesale gas from Tokyo Gas and

LPG distributors can provide their customers with “total energy

services” combining value-added services with gas and electricity. We

will expand sales through collaboration with firms across a range of

industries.

Note: Some services will be available to customers who have service contracts with gas

companies receiving wholesale gas from Tokyo Gas and LPG distributors.

Customer needs

Tokyo Gas Group

“One-stop” service

Electricity Gas Energy-saving services

Cost savings Stable supply Wide choice of services

Appliance recommendations

Energy management

Customer support

Internet Smart energy promotion

Energy industry Communications industry Housing industry Building industry Other industries

Others

・・・

Collaboration with partners

Development of Supply and Demand Structures Contributing to Stable Supply and Wider Use of Natural Gas Suppressing Electricity Rates to the Maximum Extent Possible

Contributing by Expanding Electricity Choices for Consumers and Business Opportunities

Special Topic

Supply Infrastructure of the Tokyo Gas Group

Delivery of One-Stop Services in Partnership with Other Companies

Procurement and transportLNG value chain

Increase in value added

Area expansion

Production and supply Energy solutions

Energy solutions content upgrading and scale expansion

Supply security, security enhancement

Low prices and stable procurementDiversification and expansion of upstream activities

Expansion of the LNG value

chain from Japan to overseas

Expansion of the Natural Gas value chain from the Tokyo metropolitan area to the whole of Japan

■ Spread and expansion of natural gas use■ Engineering■ Energy services

■ Overseas Natural Gas-fired thermal power generation ■ Overseas city gas supply ■ Overseas engineering ■ Overseas energy services

PDCA Cycle

Departmental missions

Challenge 2020 Vision

Enhancement of LNG Value Chain Targeted by Challenge 2020 Vision

CSR Promotion System

Corporate Action Philosophy

Key Social Demands and Expectations

Daily Business Activities

Six Key Activities*2

Impl

emen

tatio

n of

Man

agem

ent P

hilo

soph

y an

d Co

rpor

ate

Act

ion

Philo

soph

y

Management Philosophy

Enhancement of energy security

Contribution to the environment

Contribution to local communities

Respect for human rights

Promotion of complianceEnhancement of people-centered

management base

Individual employees’ daily business activities

As a leading energy company with focus on natural gas business, the Tokyo Gas Group shall actively contribute to create a pleasant lifestyle and environmentally friendly society, maintain and enhance its trust from our customers, shareholders, and society.

*1 UN Global Compact The UN Global Compact was launched by then UN Secretary-General Kofi Annan at the World Economic Forum in 1999, and officially inaugurated by the

United Nations in New York in 2000. An international initiative designed to achieve “sound globalization” and “sustainable societies,” and it calls on companies to implement their business strategies and activities in adherence to 10 principles in four fields (human rights, labor, the environment, and anti-corruption).

Tokyo Gas Group believes that promoting CSR is synonymous with implementing our Management Philosophy and Corporate Action Philosophy,

and we are committed to serving the public, fulfilling our social responsibilities as an energy company, and contributing to society through our

daily business activities. In March 2016 we signed up to the UN Global Compact*1 to give us a more global perspective on practicing CSR as a

responsible member of the international community and to realize the Challenge 2020 Vision, and we will use this as a springboard for engaging in

more advanced CSR management.

We constantly monitor society’ s changing demands and expectations, identify key CSR activities and specific issues ( “material aspects” ) in accordance with them and the direction of our business strategy, set CSR indicators, and pursue them in the course of our business. We will contribute to the sustainable development of society by disclosing information on our progress toward achieving our targets and by gathering extensive feedback from our stakeholders for incorporation into our business activities.

In 2004, Tokyo Gas created a CSR promotion system by creating a CSR Promotion Committee (chaired by the executive officer in charge of CSR) and establishing a dedicated CSR unit in the Corporate Communications Department. (The functions of the CSR Promotion Committee were transferred to the Corporate Communications Promotion Committee in fiscal 2011.)This committee is composed of 15 general managers drawn from divisional planning departments and other associated departments and is tasked with promoting CSR management. It deliberates key CSR issues within the Group, including the establishment of key CSR activities, identification of material aspects, and sharing and discussion of information concerning the state of action. Matters examined by the committee are reported to the Corporate Executive Meeting and Board of Directors for deliberation and finalization as necessary.

1. We will continue to grow while maintaining awareness of our company’s public mission and social responsibilities.

2. We will provide quality products and services, and always endeavor to improve customer satisfaction.

3. We will hold ourselves to high ethical standards, and fairly and transparently conduct corporate activities while observing both the letter and the spirit of related laws and ordinances.

4. We will contribute to alleviating global environmental problems as a leader in environmental management.

5. We will remain keenly aware of our obligations to be a good corporate citizen and work towards the betterment of society by contributing to community activities.

6. We will pursue continual innovation to promote a cost effective business approach that is both flexible and resilient.

7. We will aspire to build organizations that are based upon the full exercise of and respect for the talents, desires, and creativity of each and every employee.

Customers● Stable supply of energy● Ensuring of safety and quality of energy and products● Provision of information on appropriate products and services● Provision of environmentally friendly products and services● Improvement of customer satisfaction

Shareholders and Investors● Maintenance and growth of corporate value● Equitable distribution of profits● Timely and appropriate information disclosure

Global Environment● Prevention of global warming● Conservation of biodiversity● Creation of resource saving society

Local Communities● Contribution to social issues in individual countries and regions● Support for education of the next generation

Administrative Organizations● Tax payments● Compliance with laws and regulations● Cooperation in public policy and programs to solve social issues

Business Partners● Fair and equitable business transactions● Practice of CSR procurement

Employees● Diversity● Development of human resources● Creation of a comfortable work environment● Occupational safety and health

(Corporate Communications Promotion Committee and Corporate Executive Meeting)■ Identification/review of key activities and material aspects

P Establish key CSR activities and targets■ Action by each department

D Implement■ Tracking and assessment of target attainment■ Information disclosure through publication of CSR reports■ Communication with stakeholders■ Monitoring of opinion (through dialogue, external questionnaires, etc.)

C Evaluate■ Feedback from stakeholders■ Review of activities

A Improve

CSR to enhance management base

CSR contributing to business strategy

Promoting CSR and Implementing Our Management Philosophy and Corporate Action Philosophy

The CSR Management PDCA Cycle

P

D

C

A

Cont

ribu

ting

to th

e Su

stai

nabl

e D

evel

opm

ent

of S

ocie

ty

Real

izat

ion

of th

e Ch

alle

nge

2020

Vis

ion

Enha

ncem

ent a

nd R

einf

orce

men

t of

Corp

orat

e G

over

nanc

e

*2 In FY 2014, the Corporate Communications Promotion Committee reviewed the key activities to be implemented from FY 2015 in light of stakeholder opinion and “Main Policies FY 2015-2017.” As a result, key activities were increased from 3 to 6 by adding three additional activities: “CSR to enhance management base.” Material aspects corresponding to these activities were also identified (see p. 20).

Prom

otio

n of

CSR

Structure of the CSR Promotion System (as of April 2016)

Boar

d of

Dire

ctor

s

Pres

iden

t (Co

rpor

ate

Exec

utiv

e M

eetin

g) Corporate Planning Dept.Finance Dept.Accounting Dept.Personnel Dept.*3Purchasing Dept.Real Estate Management Dept.Secretary Dept.General Administration Dept.Corporate Communications Dept.Environmental Affairs Dept.*4Fundamental Technology Dept.Compliance Dept.*5Internal Audit Dept.Other related departments

Audit & Supervisory

Board Member's Office

Audit & supervisory

board members

Corporate Communications Promotion CommitteeChairman: Senior Executive Officer (executive officer in charge of CSR)

Secretariat: CSR Section in Corporate Communications Dept.; Corporate Planning Section in Corporate Planning Dept.

Residential Sales and Service Div.

Energy Solution Div.

Regional Development Div.

Pipeline Network Div.

Regasification & Power Generation Div.Energy Resources & Global Business Div.

IT Div.

Subsidiaries and affiliates(including Tokyo Gas LIFEVAL and partner companies) *3, 4, 5 CSR Section personnel present.



CSR Management in Overview

The Tokyo Gas Group believes that the foundation of CSR lies in achieving its public mission and fulfilling its social responsibilities by conducting daily business activities in accordance with our Management Philosophy and Corporate Action Philosophy.We are committed to being a corporate group that contributes to the sustainable development of society, and that continues to grow and be trusted by customers, shareholders, and society on a permanent basis as we meet the demands and expectations of society in Japan and abroad by steadfastly tackling the challenges faced by society though our business activities.

Basic Policy on CSR



We have established a system that ensures efficient and effective audit activities across the Group by coordinating closely with each other through liaison meetings and workshops. In fiscal 2015, we held four liaison meetings for audit & supervisory board members of subsidiaries and affiliates.

Enterprise Risk Management System (ERM)In fiscal 2003, Tokyo Gas established an Enterprise Risk Management (ERM) system and drew up risk management regulations, which include documented rules concerning major risks faced by the Group. The Risk Management Committee was established in fiscal 2008 with the aim of tracking progress on the establishment and the operational status of the ERM system. The Committee reports to the Corporate Executive Meeting and obtains the necessary approvals. Under the framework, around 120 Risk Management Promotion Officers are appointed in the business departments of Tokyo Gas and its subsidiaries and affiliates in order to promote ERM. Each year, we assess risks and the state of implementation and improvement of countermeasures. This system facilitates the steady implementation of the ERM-PDCA cycle.

Crisis Management SystemAs a public utility with responsibility for critical infrastructure, Tokyo Gas has had a crisis management system in place for many years. Specifically, we have formulated Emergency Response Organization Regulations. In case of crises, including major natural disasters, such as earthquakes, or major accidents at pipelines or LNG terminals, the Emergency Response Organization is established in order to respond to the situation immediately in accordance with the Emergency Response Organization Regulations. Periodic training is provided in major risk response measures, and we also have a Business Continuity Plan (BCP) that outlines how we will respond in the event of an incident or disaster such as a major earthquake of the magnitude assumed by Japan's Cabinet Office, a major accident disrupting gas supply, a major power blackout, an outbreak of infl uenza, etc. This plan is in place to reinforce our risk management system.

Corporate GovernanceTokyo Gas seeks to generate greater corporate value by pursuing accurate and prompt decision-making, efficiently

conducting business, strengthening auditing and monitoring functions, and clarifying management and executive

responsibilities, while guaranteeing the legality, soundness, and transparency of management.

In 2002, Tokyo Gas reduced the number of directors to enhance the speed and effectiveness of management decision-making. In addition, we have invited outside directors to serve on the Board of Directors in order to improve transparency and to reinforce the supervision of business operations. (The Board of Directors has 11 members, including 3 outside directors as of the end of June 2016.) Furthermore, we have established an Advisory Committee, which is made up of 3 representatives from among our outside directors and outside audit & supervisory board members and 2 internal directors. The Advisory Committee selects officer candidates, deliberates on officer remuneration, and reports the results to the Board of Directors. In the past, the Company had invited 2 outside audit & supervisory board members, and in 2006 the number of outside audit & supervisory board members was increased by one. The 5 audit & supervisory board members, who now include 3 outside audit & supervisory board members, conduct strict audits. The Corporate Executive Meeting, which meets weekly as a general rule, deliberates on matters requiring Board of Directors discussion and resolutions and important management-related

Tokyo Gas has formulated a “Basic Policy on Corporate Governance” in keeping with Japan’s Corporate Governance Code for listed companies. We are committed to working in cooperation with stakeholders, practicing proper disclosure and transparency, and ensuring that the Board of Directors and other management bodies fulfill their obligations in order to achieve sustainable growth and raise corporate value in the mid- to long-term, and we will pursue full compliance based on dialogue and understanding with our shareholders and other stakeholders.

In order to put into practice our management philosophy and ensure the legality, soundness, and transparency of our management, we developed and are suitably implementing a “Basic Policy on Development of Corporate Structures and Systems for Ensuring Appropriateness of Operations (Internal Control System) for Tokyo Gas Group.”

Compliance with the Internal Controls Reporting SystemTo comply with the Internal Control Reporting System under the Financial Instruments and Exchange Act, Tokyo Gas follows the internal controls basic framework presented in Financial Services Agency standards, arranges and administers internal controls related to financial reporting, assesses their status, and improves them as necessary. In the internal controls report for the previous consolidated fiscal year prepared following this system, which found our internal controls regarding financial reporting to be effective, the auditors expressed the opinion that all the material points were represented appropriately.

Coordination of Audit & Supervisory Board Members’ Audits, Internal Audits, and Independent Auditors’ AuditsIn order to enhance the effectiveness of three-way auditing (audit & supervisory board members’ audits, internal audits, and independent auditors’ audits) as well as improve the quality of audits as a whole, we endeavor to strengthen the close interlinkages between these audits in areas such as the reporting of audit plans and results, as well as exchanges of opinions and witnessing of audits.

Internal Audit DepartmentAn Internal Audit Department (with a staff of 37, including personnel tasked with working on the Internal Control Reporting System, as of June 30, 2016) has been set up as an internal audit body to enable specialized audits to be made of areas such as accounting, operations, compliance, information systems, and risk management.

Coordination of Audits within the GroupIn Tokyo Gas Group, audit & supervisory board members, audit & supervisory board members of subsidiaries and affiliates, and the Internal Audit Department periodically exchange opinions.

issues, thus realizing accurate, rapid decision-making and efficient business operations. The Company has introduced an executive officer system for business operations in accordance with decisions of the Board of Directors. Substantial authority has been delegated to executive officers, while directors, as appropriate, receive reports on the status of operations from executive officers and monitor the executive officers. In addition, executive officers report to the Board of Directors as needed. (To clarify management responsibility and executive responsibility, the terms of office of directors and executive officers have been fixed at one year.) The Company established the Management Ethics Committee and formed other in-house committees as needed to address issues that are important from a management perspective, which facilitates the sharing of information as well as deliberations and adjustments regarding the overall direction of the Company. Thus Tokyo Gas takes a proactive stance in employing outside directors and outside audit & supervisory board members and has created a system featuring multiple auditing and monitoring layers in order to ensure highly objective and transparent governance.

Tokyo Gas Corporate Governance Promotion System Compliance with Japan’s Corporate Governance Code

Internal Control System

Risk Management System

Audit Structure

Corporate Governance System

Local Community Shareholders/InvestorsCustomers

Audit, etc.

CollaborationCollaboration

Collaboration

Report

Monitor

Audit

Answer

Inquiry Monitor

Appointment

Appointment

Appointment

Report

Report

Report submission

Report submission

Deliberation and report

Report submission Add to agenda and report

Approval

Settlement and monitor

Decision and monitoring

*1 Board of Directors: 11 directors (3 outside directors and 8 internal directors), and 5 audit & supervisory board members (3 outside auditors and 2 internal auditors)

*2 Advisory Committee: 3 representatives of outside directors and outside audit & supervisory board members, Chairman (1), and President (1)*3 Audit & Supervisory Board: 5 audit & supervisory board members (3 outside auditors and 2 internal auditors)*4 Corporate Executive Meeting: President, 2 Executive Vice Presidents, and 10 Senior Executive Officers (3 of the representative directors also serve

as President and Executive Vice Presidents)

General Shareholders’ Meeting

Audit & Supervisory

Board*3

President (Corporate Executive Meeting)*4

Board of Directors*1

Stakeholders

General Shareholders’ Meeting

Tokyo Gas Co., Ltd.

Business operations

Legends

Management Ethics Committee

Safety Committee

Customer Satisfaction Promotion Committee

Investment Evaluation Committee

Environmental Committee

Risk Management Committee

Corporate Communications Promotion Committee

Other in-house committees

Business Departments, Subsidiaries and Affiliates

Internal Audit Department

Independent Auditors

Advisory Committee*2

Emergency Response Organization

(Group-wide coordination)

Suggestion of establishment of Emergency Response Organization, etc.

President (Organizational leader) Executive Office*5

Business Departments Corporate Planning Dept.

Report CollaborationInstructions/orders

*5 The organization unit in charge of the executive office is determined in advance according to the type of emergency.

16 17

Negishi LNG Terminal

The Tokyo Gas Group’s LNG Value Chain and Its Impact on SocietyIn order to ensure the safe, uninterrupted supply of energy to our customers in and around the Tokyo metropolitan area, Tokyo

Gas Group engages in a chain of business activities, extending all the way from natural gas procurement and transportation to the

production and supply of city gas, power generation, and provision of energy solutions. We are committed to contributing to the

sustainable development of society by enhancing the LNG value chain while continuing to develop technologies and leverage IT

to meet future needs.

Procurement of Raw Materials

In order to source natural gas flexibly and competitively to meet

demand, we work with diverse players in Japan and abroad while

diversifying our procurement sources, contract conditions, LNG

networks, and other factors.

Procurement of raw materials

■ Raw materials procurement to ensure stable and affordable

supply (see p. 24)

■ GHG emissions from LNG suppliers’ gas fields and liquefaction

facilities (see p. 34)

■ Impact on biodiversity around LNG sources (see p. 39)

Common to LNG value chains ■ Respect for human rights (see pp. 46 and 47) ■ Compliance (see pp. 48 and 49) ■ Employees’ occupational safety and health (see p. 55)

Production of city gas

■ Augmentation and development of LNG terminal storage capacity to ensure stable supply (see p. 26)

■ Production problems due to natural disasters, etc. (see p. 15)

■ GHG emissions from LNG terminals (see p. 36), resource saving (see p. 38) and impact on biodiversity at LNG

terminals (see p. 39)

Power generation

■ Augmentation and development of capacity to ensure continuous power supply (see p. 27)

■ Production problems due to natural disasters, etc. (see p. 15)

■ GHG emissions from power stations (see p. 36) and impact on biodiversity (see p. 39)

Transportation of raw materials

■ GHG emissions from transportation by LNG carriers (see p.

34)

■ Impact on biodiversity of ballast water discharged from

LNG carriers (see p. 39)

Supply of city gas

■ Development of pipeline network and safety measures

to ensure stable supply (see pp. 26 and 28)

■ Supply problems due to natural disasters, etc. (see p. 15)

■ Excavated soil from during gas pipeline construction

and resource saving (see pp. 38 and 39)

Transportation of Raw Materials

Tokyo Gas owns and operates its own fleet of LNG

carriers, allowing raw materials to be shipped swiftly

and flexibly. Four highly fuel-efficient, environmentally

friendly carriers are now being built to further expand our

fleet capacity in order to transport LNG sourced from the

U.S. Cove Point Project, which comes on stream in 2017.

Main Activities

Main CSR Considerations

Procurement of Raw Materials Transportation of Raw Materials

Production of City Gas

By receiving LNG and constantly producing city gas, the

Group contributes to energy security in the Tokyo metropolitan

area. Our 4 LNG terminals (Negishi, Sodegaura, Ohgishima, and

Hitachi) function as mutual backups for one another, ensuring

uninterrupted city gas supplies even in the event of a power

failure or other incident.

Power Generation

Using our LNG procurement capabilities and facilities such as

our LNG terminals and pipelines, we operate high-efficiency

combined cycle natural gas-fired power stations. We also

generate electricity using wind power and other renewable

energy resources.

Supply of City Gas

The Group operates pipelines

measuring a total of about 62,000 km

in length. This network is being further

developed to ensure the safe and stable

supply of city gas. The Group is also

involved in supplying gas over a wide

area by supplying other gas utilities

on a wholesale basis and transporting

supplies by LNG tanker truck, ocean-

going tanker, and coastal tanker.

Production of City Gas

Power Generation

Energy HorizonDarwin LNG Project

High-pressure pipeline

Wind power facility at Sodegaura LNG Terminal

Ohgishima Power Station


LNG terminal storage capacity

3,845 ML

Total length of pipelines

62,505km

Long-term contracts entered

5 12 countries

/ projects

LNG procurement volume

13.875 million tons

LNG carriers owned and operated by Tokyo Gas

10 vessels

Ohgishima LNG Terminal


18

■ Development of technologies contributing to safety and environmental friendliness (see pp. 29 and 40)

■ Information security(see p. 49)■ Corporate governance (see pp. 14 and 15)■ Development of global human resources

(see p. 54)

Energy solutions

■ Ensuring safety at customer sites (see p. 29)

■ GHG emissions and resource saving at customer sites (see pp. 35 and 38)

■ Contributing to solving challenges in local communities (see pp. 42, 43 and 44)

■ Protecting customers’ personal information (see p. 50)

■ Ensuring quality and customer satisfaction (see pp. 30 and 31)

Energy Solutions

The Group develops solutions combining multiple resources and technologies

to reduce energy consumption and CO2 emissions and lower peak load. These

include distributed energy systems ( fuel cells and gas cogeneration systems),

wider use of environmentally friendly gas appliances, and renewable energy

sources. We are also providing energy systems that offer an optimal combination

of gas, electricity, and added value.

Number of Customers

11.40 million

Gas Sales Volume

15,436 million m3

Electric power sales volume

10.96 billion kWh

Power generation capacity (own stake)

Approx.1,600 MW

Residential

3,365 million m3

Wholesale

2,161 million m3

Commercial

2,678 million m3

Industrial

7,233 million m3

Energy Solutions

Power Transmission (general power transmission business)

Ocean-going tankerLNG tanker truckLNG tanker truck

Note: As of end March 2016


Tokyo Gas Group CSR Report 2016

Supply of City Gas

Sodegaura Power Station(operated by Tokyo Gas

Baypower Co., Ltd.)

2019Tokyo Gas Group CSR Report 2016

Overseas Business Expansion

6 countries

Main Projects

15 projects

Barnett

Mexico, MT Falcon

BelgiumT-Power

1

42

6

78

3 Mexico, Bajio

Cordova

Queensland Curtis

Gorgon

Pluto

Ichthys

Darwin

Tokyo

Gas MalaysiaEnergy AdvanceGas Malaysia

59

Projects of overseas midstream and downstream business

Projects of overseas upstream business

6 Tokyo Gas Asia Pte. Ltd. (Singapore)

7 Tokyo Gas Australia Pty. Ltd. (Perth office)

8 Tokyo Gas Australia Pty. Ltd. (Brisbane office)

9 Tokyo Gas America Ltd. (Houston)

Main overseas offices

1 Paris Representative Office

2 Kuala Lumpur Representative Office

3 Jakarta Representative Office

4 Hanoi Representative Office

5 Bangkok Representative Office

Cove Point

TGES America

Eagle Ford

Overseas Upstream and Midstream/Downstream Operations

In addition to sourcing gas from existing large-scale LNG projects and acquiring participating interests, we are diversifying and

expanding our sources and upstream projects overseas through involvement in unconventional gas ( shale gas, etc.) and

small-and medium-scale LNG projects. At the same time, we are leveraging the Group’s technologies and expertise in the total

energy business to develop energy infrastructure and energy solutions for customers who are expanding overseas (especially in

Southeast Asia and North America). By developing LNG value chains overseas as well as in Japan, we seek to contribute to both the

flexible procurement of raw materials for Japan and the stable supplies of energy in the countries of these regions.

The Tokyo Gas Group’s Key CSR Activities and Material Aspects

Tokyo Gas Group has set targets in six key areas of CSR activity, and is working to achieve and exceed these targets in order to improve

its CSR practice.

Following the formulation in October 2014 of our “Main Policies FY2015-2017 toward Realizing Challenge 2020 Vision,” (hereafter “Main

Policies”), we reviewed our key CSR activities in light of social expectations and identifi ed specifi c issues for each activity that should be

addressed as a matter of priority (“material aspects”) in accordance with GRI Guidelines.

In fi scal 2016, these material aspects were reviewed once again further to the addition of “supplier assessment” to the important issues

based on the results of the previous review, and action to address them continues today.

The activities being pursued will undergo ongoing assessment and improvement using PDCA cycles.

■ The issues to be considered are identified comprehensively based on GRI G4 Guidelines,

ISO 26000, and other relevant international guidelines on the social responsibilities of

organizations.

■ The impacts of these social issues (CSR-related issues) are determined based on the business

characteristics, strategies, and scope of impact of each of the Tokyo Gas Group’s LNG value

chains, then narrowed down to important issues.

■ Stance on sustainability is an important contributor to raising corporate brand value. The three S’s that lead to sustainability (safety, supply, and stakeholder satisfaction) are inseparable from the Tokyo Gas Group. As employees are both organizational insiders and external stakeholders, they are in a unique position to influence other stakeholders. Placing a premium on ES (employee satisfaction) and raising employee motivation will therefore be of prime importance to CSR practice in the future.

■ If the expertise built up in Southeast Asia is rolled out to other regions as well, Tokyo Gas will be able to make a major contribution as a global enterprise. It has the potential to become a company capable of sustaining sustainability worldwide.

■ Japanese firms will undoubtedly attract attention as the Tokyo 2020 Olympic and Paralympic Games draw closer, necessitating still greater action on CSR (including along supply chains) and disclosure.

■ The Tokyo Gas Group’s business activities have an inherent significant bearing on the public interest, and its CSR practice appears to be exceedingly well integrated into its operations. Priority CSR activities are being pursued through appropriate operational processes, with accordingly effective results.

■ Tokyo Gas has become a total energy business that no longer just supplies gas, and highlighting the way it anticipates society’s expectations should reveal its commitment as a frontrunner.

■ Supply chain management is a weak spot for Japanese firms. Showing concern for societies in the countries where gas resources are procured is extremely important. Starting with the immediately feasible, Tokyo Gas should step up action while disclosing information on the initiatives it is already pursuing.

■ Overall, the company still comes across as being domestically focused. Information should also be provided on such topics as action on human rights, labor, and biodiversity in the context of globalization, and approaches to training and hiring employees capable of working overseas.

■ With interest further spurred by the adoption of SDGs, sustainability will be a guiding watchword for the future. Consumers in Japan are very price conscious when it comes to energy. Internationally, however, the shift away from carbon is accelerating under the influence of the Paris Agreement, and the Tokyo Gas Group needs to set long-term targets for roughly two phases (up to 2030 and up to 2050) to show what types of energy it intends to supply in the future.

■ As business structures change, so too do their impact on the environment, human rights, and like issues. Foreign workers are used extensively in resource extraction and marine transportation, and consideration should be given to taking action in these fields in collaboration with foreign firms experienced in human rights issues.

■ The question of how to go about expanding overseas is a topic of extreme importance, and it is hoped that Tokyo Gas will optimize its contributions in each region where it does business through the use of new technologies, finding the best mix of gas and electricity, and other means. The means and technologies developed to date to ensure safe gas use will also have a role to play.

■ Important issues selected at STEP 1

● Questionnaire findings and other feedback are assessed to provide a stakeholder perspective.

● The issues selected are provisionally ranked by the relevant business departments.

■ The results of assessments of material aspects from both stakeholder and Tokyo Gas Group

perspectives are mapped. Important issues to be addressed by the Group on a priority basis are

identified through internal consultations.

■ Activities are assessed based on attainment of CSR indicators for the material aspects identified,

and a CSR report published.

■ Annual reviews are conducted taking into account the results of internal and external

questionnaires, SDGs and other international goals and guidelines, and the views of outside

experts.

■ This information is used to review the material aspects and CSR indicators and improve report

content, and is incorporated into business.

■ The suitability of the important issues is assessed by experts in relevant fields.

■ The Group’s key CSR activities are reviewed and the important issues defined for each activity as

material aspects.

■ Material aspects are finalized by approval of the Corporate Communications Promotion

Committee (the body driving CSR).

■ Targets (“CSR indicators”) are set for each material aspect in collaboration with the relevant

business departments.

Determination and Review of Material Aspects

Opinions from Experts

STEP 1

STEP 2

STEP 3

STEP 4

Identification of Social Issues

Rating by Priority Level

Suitability Confirmed and Issues Finalized

Review

Junichi Mizuo Professor, Surugadai University Faculty of Economics and Management

Yoshinari KoyamaVice President and Professor, College of Economics, Kanto Gakuin University

Naoki Adachi CEO, Response Ability, Inc.

Material Aspects Analysis Map

Identification of Key Activities and Material Aspects

Importance to the Company

Impo

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sta

keho

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sH

igh

High

Important Issues IdentifiedTop priority areas

Areas to address to develop business and meet social demands and expectations

Areas recognized as issues

123456

Enhancement of energy security

Contribution to the environment

Contribution to local communities

Respect for human rights

Promotion of compliance

Enhancement of people-centered management base

Six Key Activities and Material Aspects

■ Stable supply　■ The pursuit of safety　■ Provision of better products and services

■ Global warming countermeasures　■ Promotion of resource saving　■ Promotion of biodiversity conservation　■ Promotion of environmental technologies development

■ Safe and secure ways of life and urban development　■ Enrichment of society

■ Human rights due diligence

■ Permeation and rigorous practice of compliance　■ Protection of personal information　■ Prevention of bribery and corruption

■ Promotion of diversity　■ Development of human resources　■ Occupational safety and health

■ Resource reserves■ Customer health and safety■ Product and service labeling■ Atmospheric emissions and energy■ Drainage and waste■ Biodiversity■ Products and services■ Local communities■ Sustainable consumption

■ Human rights due diligence■ Customer privacy■ Bribery and corruption prevention■ Social and environmental compliance■ Diverse human resources and equal opportunity / diversity (employment)■ Training and education■ Occupational safety and health□ Supplier assessment (environment, labor practices, human rights, and social impacts)

■ Indirect economic impacts■ Environment in general■ Procedure for handling environmental complaints■ Working conditions and social protection■ Public policy■ Anti-competitive practices

■ Presence in the community■ Procurement practices■ Raw materials

■ Local water resources■ Pollution prevention■ Labor relations

■ Procedure for handling complaints regarding labor practices■ Employee satisfaction■ Discrimination and the socially vulnerable

Assess identified important issues in terms of priority activities and material aspects to be tackled by the Group Arrangement

■ Procedure for handling complaints about social impacts■ Asset maintenance and management and process safety■ Education and culture■ Health promotion■ Information disclosure

Grounds for Determining Material Aspects

Stakeholder perspective Company perspective

・ Requirements under international guidelines

・ Stakeholder feedback (questionnaires, expert opinion,

employee opinion surveys, etc.)

・ Questionnaire and assessment items used by fi nance-related

research agencies

・ Environmental impact assessment

・ Priority vis-a-vis group business strategy*1

(scale of impact, degree of urgency)

*1 Main Policies (evolution of the total energy business, acceleration of global business development, construction of a new group formation)


Tokyo Gas Group CSR Report 2016 21

Main CSR Considerations

Overseas upstream and midstream/downstream operations

■ Raw materials procurement to ensure stable and affordable supply (see p. 25)

■ GHG emissions from operations and impact on biodiversity (see pp. 34 and 39)

■ Contributing to solving challenges in local communities (see website)

Note: As of end June 2016


Key

activityMaterial aspect CSR indicator FY2015 performance highlights Evaluation Page

Stable supply

Raw materials procurement to ensure stable and affordable supply

● Signed memorandum of understanding on strategic collaboration with CPC Corporation, Taiwan (Aug.).

● Signed basic agreement with Mitsubishi Corporation subsidiary concerning sale and purchase of LNG from Cameron LNG project in the U.S. (Mar.). ○

P24

Diversification and expansion of overseas business

● Tokyo Gas Engineering Solutions Corporation began providing project management consultation services for capacity expansion work at Map Ta Phut LNG Terminal in Thailand.

● TGES America Ltd. signed basic agreement concerning its first energy service plant (Dec.).P25

Infrastructure development to accommodate wider use of natural gas

● Construction of Saito Line completed (Oct.).● Onahama Satellite at Sakai Chemical Industry Co., Ltd.’s Onahama Manufacturing Site entered

commercial operation (Jan.).● Hitachi LNG Terminal completed and entered commercial operation (Mar.).● Ibaraki-Tochigi Line entered use (Mar.).

○ P26

Expansion of competitive power generating capacity and electric power sales

● Established Chiba-Sodegaura Energy Co., Ltd. in partnership with Idemitsu Kosan Co., Ltd. and Kyushu Electric Power Company Inc. (May).

● Invested jointly with Tohoku Electric Power Co., Inc. in launching electricity retailer Synergia Power Co., Ltd. (Oct.).

● Ohgishima Power Station Unit 3 entered commercial operation (Feb.).

○ P27

The pursuit of safety・ Earthquake

disaster prevention measures

・ Safety measures at customer sites

Promotion of earthquake, tsunami, and other disaster measures

● Subdivided disaster prevention blocks for low-pressure pipeline networks in head office area to increase number from 207 to 220 (June). ○ P28

Replacement and improvement of safety of aging gas pipes

● Replaced aging cast-iron pipes, etc.: Finished upgrading and ensuring safety of gray cast-iron pipes in need of replacement and other aging pipes.

● Worked on aging house pipes: Completed work on aging buried white gas house pipes considered important to safety.

○ Web

Promotion of switch to safer appliances to improve disaster resilience

● Expanded adoption of “Si” sensor-equipped cooking stoves: 1.58 million units sold (as of the end of March 2016) ○ P29

Provision of better products and services

Provision of products, services and related information

● 20,784 comments received from customers in FY2015. These consisted of 1,911 expressions of thanks (9.2%), 2,411 complaints (11.6%), and 16,462 system

requests (79.2%).● Based on the comments received, identified and analyzed issues, and made relevant improvements.

○ P30P31

Global warming countermeasures

Reduction of CO2 emissions at customers’ sites by 8 million tons by FY2020

● Reduced CO2 emissions at customers’ sitesReduced by 3.43 million tons (compared with FY2015 target of 3.40 million tons)

○ P35

Energy usage intensity at LNG terminals250 GJ/million m3 by FY2020

● Energy usage intensity at LNG terminals201 GJ/million m3 (compared with FY2015 target of 220 GJ/million m3)

○

P36Heat sales intensity for district heating and cooling centers1.19 GJ/GJ by FY2020

● Heat sales intensity for district heating and cooling centers1.34 GJ/GJ (compared with FY2015 target of 1.33 GJ/GJ)

×

Reduction of CO2 emission factor at the electricity retail stage*1

● CO2 emission factor in the electric power business0.357 kg-CO2/kWh (compared with FY2015 target of 0.36 kg-CO2/kWh)

○Energy usage at Tokyo Gas offices, etc.910 TJ in FY2020

● Energy usage at Tokyo Gas offices, etc.887 TJ (compared with FY2015 target of 915 TJ) ○ P37

Promotion of wider use of renewables

● Continued making maximum use of renewable and unused energy sources to power smart energy networks (SEN).

● 675,000 m3 of biogas derived from food waste fed to city gas distribution pipes.● Examined feasibility of the provisionally named Fukushima Coastal Wind Power Generation Initiative

and submitted environmental impact statement at the planning stage jointly with Fukushima Prefecture.

○P36P40P43

Promotion of resource saving

Maintenance of zero emissions at production plants (final disposal rate of less than 0.1%)

● Final disposal rate of industrial waste at production plants: 1.3% ×

P38

Maintenance of 98%+ construction waste recycling rate ● Construction waste recycling rate: 96.0% ×Recycling rate for industrial waste generated at plants and offices, etc.At least 90% by FY2020

● Recycling rate for industrial waste generated at plants and offices, etc.:85.3% (compared with FY2015 target of at least 88%)

△Soil excavated during gas pipeline constructionReduction to and maintenance at 16% or less

● Ratio of actual surplus soil disposed of against baseline in gas pipeline construction reduced to 22.3%. ×

Promotion of biodiversity conservation

Promotion of biodiversity conservation activities along value chains*2

● Consideration for biodiversity at source gas fields surveyed. Confirmed that there were no particular problems.

● Ballast water discharged during LNG transportation managed, habitat surveys of green space at three LNG terminals implemented, and green space conservation activities pursued.

● Reduction, reuse, and recycling (the 3Rs) of soil practiced when laying gas pipes to reduce ecosystem impact caused by excavation of pit sand.

● Implemented forest conservation activities and habitat surveys at Nagano Tokyo Gas Forest.

○ P39

Promotion of environmental technologies development

Promotion of development of low-carbon technologies*3

● Produced theoretical design for an innovative technique to dramatically raise the power generation efficiency of solid oxide fuel cells (SOFCs) (Aug.) and commenced empirical testing of 5 kW SOFC for commercial use (Mar.).

● Senju Hydrogen Station entered commercial use (Jan.). Urawa Hydrogen Station opened (Feb.).● Conducted ongoing research with Yokohama City to expand effective use of sludge biogas.

○ P40

Key

activityMaterial aspect CSR indicator FY2015 performance highlights Evaluation Page

Safe and secure ways of life and urban development

Promotion of smart networks built around cogeneration systems

● Smart energy center built in Toyosu pier district.● Work commenced on provisionally named “TGMM Shibaura Project” in Block II-2 (West area) adjoining

Tamachi Station east exit (Oct.).● Commenced involvement in “Tsunashima Sustainable Smart Town” project underway in Tsunashima-

higashi, Kohoku-ku, Yokohama (Mar.).

○ P42P43

Enrichment of society

Promoting activities to raise energy and environmental awareness

● Total number of pupils attending special classes taught by our employees at elementary and junior high schools: 32,550 (cumulative total: 1,051,848)

● Annual number of visitors to Gas Science Center: 274,256● Total of ¥10,000,000 granted to 18 organizations by Tokyo Gas Environment Support Fund

○ P44Promotion of communication with local communities and the regional contribution program

● Annual number of participants in the “HIIKU” fi re education program: approximately 3,100● Held Tokyo Gas cooking classes (including the “eco-cooking” program) taken by approximately 100,000

participants annually.

Human rights due diligence

Promotion of human rights compliance management

● Trained “human rights promotion leaders” and provided follow-up training. (280 participants)● Support delivered by internal and external advisory service desks (56 cases handled).● Provided company-wide training (primarily level-specifi c training) (1,534 participants); provided training

by workplace (7,983 participants)● Held workshops on LGBT issues as part of steps to address new human rights issues. (350 participants)

○ P46P47

Permeation and rigorous practice of compliance

Promotion of complianceSound application of PDCA cycle

● Support provided by compliance advisory service desks, permeation of compliance awareness, auditing results, etc. examined and confi rmed by the Management Ethics Committee (twice annually)

● Support delivered by compliance advisory service desks (52 cases handled).● Training (2,634 participants) and workplace workshops (23,745 participants) provided to cultivate

compliance awareness.● Extent of compliance confi rmed, compliance audits performed, and assistance with remedying problem

areas identifi ed as a result provided by Internal Audit Dept.● Steps taken to enhance information security.

○ P48P49

Protection of personal information

Practice of safety management in accordance with our policy on protection of personal information

● Level-specifi c training provided to ensure rigorous practice in accordance with policy on protection of personal information (1,534 participants). ○ P50

Prevention of bribery and corruption

Promotion of “sincere and equitable” activities in accordance with Our Code of Conduct

● Arrangements put in place to enable overseas employees to report and seek advice, and supervisors responsible for implementing measures to prevent bribery and corruption overseas appointed.

● English edition of “Our Code of Conduct” produced and training provided to ensure compliance with its content.

● “Foreign Public Offi cial Anti-Bribery and Corruption Guidelines” put into eff ect and overseas hires made fully aware of their content.

● Training in how to ensure proper compliance with the guidelines provided to employees involved in business overseas (235 participants)

○ P51

Promotion of diversity

Promoting the active participation of diverse human resources and work-style fl exibility

● Ratio of women in management positions (as of April 1, 2016): 6.5% (up 2.0% from fi ve years ago)● Average length of employment by gender (as of March 31, 2016): 21.1 years for men, 19.9 years for women● Rate of reemployment after mandatory retirement: 83.7% (267 employees)● Ratio of employees with disabilities (as of March 2016): 2.0% (137 employees)● Employees taking parental leave: 85 (100% returned to work afterwards)*4● Employees taking nursing care leave to care for relatives: 3● Seminars held (for female employees and their line managers) to promote women’s participation in the

workplace.

○ P52P53

Development of human resources

Development of training structure

● Implemented a combination of skills development programs (instructive training from superiors on the job (OJT) supplemented by training (Off -JT), self-development, and workplace transfers and rotations).

● Twin-pillared training provided to (1) develop foundational and common skills and (2) develop a broad range of expertise.

● Operated three personnel systems: a contribution-type personnel management system, a goal management system, and a 360-degree appraisal system.

○ P54

Occupational safety and health

Promotion of occupational safety and health

● Occupational health physicians provided health consultations, career ladder consultations, and health education services.

● 100% of employees received health checkups in FY2015.● Implemented the company’s occupational safety and health management system (OSHMS).● Operated in-house driving license system and arranged instruction in road safety provided by safety

driving instructors.

○ P55

Key CSR Activities, Targets and Performance

*1,2,3 Revised FY2016. *4 Percentage of employees taking parental leave each fi scal year who returned to work at the company.

Note: “Highlights of Key Activities” contains some information on performance in fi scal 2016.


Tokyo Gas Group defines specific issues (“material aspects”) and CSR indicators for each of its key activities to better apply the PDCA cycle to CSR.Below is a summary of our performance on material aspects in the key areas described beginning on page 24.Further details can be found at the Tokyo Gas website: (http://www.tokyo-gas.co.jp/csr/report_e/3_achievement/index.html)

Criteria for evaluating indicators

○ Target achieved (100% or above)

△ Target not achieved but improved from previous fiscal year (not 100% achieved but improved from previous fiscal year)

× Target not achieved

Note: Qualitative indicators with no evaluation axis are evaluated on the basis of whether or not progress has been made since the previous fiscal year.

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Enhancement of Energy Security ｜ Stable Supply


Qatar

Sakhalin

Cameron

Queensland CurtisGorgon

Pluto

Ichthys

Darwin

NWS

Tokyo

Brunei

Malaysia

Cove Point

New LNG projects

Existing LNG projects

■ Signed a basic agreement on LNG sale and purchase from

the Cameron LNG Project in the U.S.

In March 2016, we signed a heads of agreement with Diamond Gas

International Pte. Ltd. (DGI), a wholly owned subsidiary of Mitsubishi

Corporation, for the sale and purchase of LNG from the Cameron

LNG Project in the state of Louisiana.

This project will see construction of a new natural gas liquefaction

plant at the Cameron LNG Terminal to refine and liquefy shale gas

and other U.S.-produced natural gas, and will export about 12 million

tons per year. DGI will handle some 4 million tons of this per year,

of which approximately 200,000 tons will be purchased by Tokyo

Gas from DGI at a price linked to the Henry Hub price. With this

agreement, Tokyo Gas purchases at prices linked to the Henry Hub

price will reach a total of some 2.12 million tons per year from 2020

onwards. The effect will be to further diversify our LNG sources, price

indices, and destinations.

■ Strategic alliances on LNG procurements

Following on from our agreement with Korea Gas Corporation in

2014, in August 2015 we signed a memorandum of understanding

on strategic collaboration with Taiwan’s largest oil and gas company,

CPC Corporation. This is expected to lead to cooperation in a wide

range of fields, including collaboration on LNG-related engineering

and technologies and use of energy services, as well as LNG

procurement and supply sharing. In April 2016, we reached an

agreement with Kansai Electric Power Co., Inc. to collaborate on

fuel procurements and technologies relating to the operation and

maintenance of power plants.

Looking ahead, we will continue to bolster our partnerships with

buyers in Japan and abroad to bring down raw material costs and

achieve more reasonable prices in the Asian market.

■ Participation in the Eagle Ford shale gas development in the

U.S.

In June 2016, Tokyo Gas America Ltd. (a wholly owned subsidiary of

Tokyo Gas) created a new subsidiary called TG Eagle Ford Resources

LP (TGER), through which it acquired participating interests in

development of Eagle Ford shale gas assets held in Texas by the

VirTex Group. This is Tokyo Gas’s second acquisition of

participating interests in shale gas development in the U.S., the

first being the shale gas development project in the Barnett Shale.

TGER’s stake in gas production is estimated to come to about

200,000 tons per year in LNG equivalent (20-year average), which

will be sold on the domestic U.S. market. Our plan is to actively

expand overseas with the goal of increasing involvement in upstream

operations in other countries and further developing LNG value

chains.

Raw Materials Procurement to Ensure Stable and Affordable Supply

With more now expected of natural gas following the 2011 Great East Japan Earthquake and Japan’s energy industry undergoing

major changes due to the full liberalization of the gas and electricity retail sectors, Tokyo Gas Group recognizes that providing

society with inexpensive, stable supplies of energy stands high on the list of the public’s concerns, and is committed to pursuing a

range of measures to meet society’s expectations.

The Group is pursuing stable, low-cost procurement of raw materials through a range of strategies, including diversification of sources and contract

conditions, and entering partnerships with buyers in Japan and abroad.

Triple Diversification

1 Procurement sources

We will examine ways to broaden our procurement sources to include North America and other regions as well as our current sources in Southeast Asia and Australia. We will also adopt unconventional gas resources such as shale gas as part of our moves to improve supply continuity.

Prices will be stabilized by making balanced use of two forms of contracts: contracts linked to oil market prices (as used to date), and contracts linked to Henry Hub (U.S. natural gas market) prices. We will also improve procurement flexibility by using a combination of long-, medium-, and short-term

contracts, and by making expanded use of contracts offering greater destination flexibility.

We will acquire gas fields, power plants, and similar assets on a global basis. By developing an LNG network linking the markets of Asia, North America, and Europe, we will also work to shrink regional disparities in market prices, creating an environment that allows for flexible supply and demand adjustments.

2 Contract conditions

3 LNG network

■ PMC provided for capacity expansion work at Map Ta Phut LNG Receiving Terminal in Thailand

In February 2014, TGES was awarded by PTT LNG Co., Ltd. of Thailand to be the project

management consultant (PMC) for a capacity expansion project at the company’s Map Ta

Phut LNG Receiving Terminal. This is the first time a Japanese company has been contracted

to provide project management consultancy services for a project at an overseas LNG

receiving terminal.

Thailand’s first LNG receiving terminal, Map Ta Phut LNG Receiving Terminal commenced

operation in 2011 and currently receives about 5 million tons of LNG per year. The project

will raise its capacity to around 10 million tons per year. TGES will be PMC until the project’s

scheduled completion at the end of March 2017, utilizing our abundant knowledge and

technology of design, construction, operation and maintenance for LNG receiving terminal.

■ Signed a basic agreement on first energy service plant in the

U.S.

In December 2015, TGES America Ltd. (established jointly by Tokyo

Gas Engineering Solutions Corp. (TGES) and Tokyo Gas America)

signed a basic agreement with the Toray Group regarding the

provision of steam and other energy services to a new plant to be

built in the state of South Carolina by Toray Industries Inc. This is the

first energy service project undertaken by TGES America, and it is also

the Tokyo Gas Group’s first energy service project in North America.

We will continue to leverage the Group’s technologies and

expertise in the total energy business to develop local energy

infrastructure and energy solutions for customers who are

establishing operations in Southeast Asia and North America.

Diversification and Expansion of Overseas BusinessWe are developing LNG value chains overseas that will contribute to ensuring energy supply continuity in Japan and other countries.

TGES was contracted from the design stage for Phase II work at Thailand’s Map Ta Phut LNG Receiving Terminal. Four

or five companies were considered and compared when the basic design and other work were put out for tender.

TGES was chosen not only because of its advanced engineering capabilities, but also because of its own experience in

operating terminals.

After we chose TGES, I visited Tokyo Gas’s Negishi LNG Terminal and was impressed by its location next to a built-up

area. I learned a lot about how good relations are built with local residents regarding safety and environmental matters.

Concern for the environment is of tremendous importance at Map Ta Phut, too. The terminal is distinguished by

the shallowness of the surrounding sea, making it necessary to avoid dredging as much as possible due to the serious

impact it would have on the environment. TGES was able to bring its advanced engineering skills to bear on this

challenge as well, delivering support from the basic planning stage on. We are delighted with TGES’ extensive expertise

and the attentiveness and appropriateness of their consulting services and suggestions for improvements.

Technological Expertise and Extensive Experience Clinch the Deal

Rattikool PiyavongwanichProject Director

PTT LNG Co., Ltd.

VOICE

Map Ta Phut LNG Receiving Terminal expansion project in Thailand


Enhancement of Energy Security ｜ Stable Supply


■ Expanding power generation and making power

procurement more flexible

We believe in the importance of delivering total solutions combining

gas and electricity to supply energy in a manner that matches

customer needs better than ever before. In order to secure stable

access to competitive power sources, we will develop a “power source

portfolio” combining base-load power sources with natural gas-fired

power generation.

The Group is expanding its presence in the electric power business

by making effective use of the LNG value chains we have developed

to date in the gas business, and currently owns power generating

capacity of around 1,600 MW (own stake).

We aim to expand this capacity in which we have a stake to around

3,000 MW by 2020. In addition to expanding our own power plants,

therefore, we have signed an agreement on electricity supply with

Kobelco Power Moka Inc. (a wholly owned subsidiary of Kobe Steel,

Ltd.) and have committed to receiving 1,200 MW of electric power

beginning in 2019.

■ Stable generation of electricity

The Group’s thermal-fired power generations use natural gas

produced at our LNG terminals. These generations are operated,

monitored, and undergo daily checks and periodic inspections to

ensure continued supply stability.

Looking ahead, we will continue to leverage our expertise in

the gas business to meet society’s demands and expectations

as an energy company, and to deliver safer, more stable, and

more affordable electricity while doing our best to protect the

environment.

■ New power retailer Synergia Power Co., Ltd. established

In October 2015, Tokyo Gas and Tohoku Electric Power Co., Inc.

established Synergia Power Co., Ltd., which commenced retail sale of

electricity to high-voltage and extra-high-voltage customers in the

Kanto region (primarily in northern Kanto) in April 2016. The company

will make maximum use of its two backers’ operational know-how and

competitive generating capacity to promote optimized, comfortable

energy use by users, lower their energy costs, and so contribute to

regional economic revitalization.

Saitama Pref.

東京湾

Tokyo

Chiba Pref.

Gunma Pref.

Tochigi Pref.

Ibaraki Pref.

Fukushima Pref.


Negishi LNG Terminal Ohgishima LNG Terminal


Kanagawa Pref.


Hitachi-Onahama Line (name provisional)

Ibaraki Line

Tokyo Gas high-pressure pipelines (under construction)

Tokyo Gas high-pressure pipelines (construction planned)

Tokyo Gas high-pressure pipelines (planned in mid/long term)

Tokyo Gas high-pressure pipelines (existing)

Koga-Moka Line (FY2017)

Saito Line

Onahama Satellite Terminal


Planned development of our natural gas infrastructure

Infrastructure Development to Accommodate Wider Use of Natural Gas Expansion of Competitive Generating Capacity and Electricity SalesWe will expand our supply capacity to meet latent natural gas demand in and around the northern Kanto region, and further increase

supply stability by creating a pipeline loop.

In order to further expand stable and competitive power sources and increase electricity sales amid the major changes in the energy

environment (including reforms to the electric power and gas system), we will further expand generating capacity with the goal of

increasing the capacity in which we have a stake to approximately 3,000 MW by 2020.

■ Supply infrastructure stability improved by Hitachi LNG

Terminal and new trunk lines

In March 2016, the Hitachi LNG Terminal in the Hitachi district of

Ibaraki Port (the fi rst terminal to be built by Tokyo Gas outside Tokyo

Bay) entered commercial operation. Two new high-pressure gas

pipelines, the Saito Line and the Ibaraki-Tochigi Line, also entered use.

These give Tokyo Gas a 950 km high-pressure gas pipeline network

centered on the Tokyo metropolitan area, and the linkage of this

terminal with our three existing terminals*1 around Tokyo Bay will

improve the stability of our supply infrastructure as a whole.

We aim to complete a second LNG storage tank at the Hitachi LNG

terminal by 2020. We will also continue construction of the Koga-

Moka Line and plan to construct a new Ibaraki Line, adding more

looping to our high-pressure pipeline network to raise energy security

throughout the Kanto region.

*1 Negishi LNG Terminal (Yokohama City, Kanagawa Prefecture), Sodegaura LNG Terminal (Sodegaura City, Chiba Prefecture), Ohgishima LNG Terminal (Yokohama City, Kanagawa Prefecture).

■ Onahama Satellite Terminal enters commercial operation

In January 2016 we completed work on the Onahama Satellite Terminal

under construction at Sakai Chemical Industry Co., Ltd.’s Onahama

Manufacturing Site (in Iwaki City, Fukushima Prefecture), and it has

now begun supplying natural gas via the Onahama medium-pressure

pipeline.*2 This is the first time we have built and run our own satellite

terminal to supply natural gas in Fukushima Prefecture.

Satellite terminals are gas production plants that supply natural gas

to regions that cannot feasibly be reached by extending existing gas

pipelines. Gas is delivered to the terminal by LNG tanker trucks to be

stored locally before being vaporized and supplied by gas pipeline. LNG

for Onahama is shipped and transported from the Hitachi LNG Terminal,

and the natural gas vaporized at Onahama is fed to the Onahama

medium-pressure line.*2 A new 3.9 km medium-pressure gas pipeline built to supply natural gas to customers living

near the Onahama Satellite Terminal.

Ohgishima Power Station

■ Unit 3 at the Ohgishima Power Station enters commercial

operation

In February 2016, Ohgishima Power Co., Ltd. (a firm founded with

investment from Tokyo Gas and Showa Shell Sekiyu K.K.) commenced

commercial operations at Unit 3 of the Ohgishima Power Station.

Ohgishima Power Station is a thermal power station that supplies

energy produced using environmentally friendly natural gas and

super energy efficient gas turbine combined cycle technology, and

its first two units entered operation in March and July 2010. Work on a

third unit began in June 2013 in order to contribute to stable, efficient

electricity supply in the Tokyo metropolitan area following the Great

East Japan Earthquake.

Unit 3 has a maximum efficiency of approximately 58% (on a lower

heating value basis at the generation end) and power generation

capacity of 407 MW, and its entry into operation takes Ohgishima

Power Station’s generating capacity to approximately 1,221 MW.


Enhancement of Energy Security ｜ The Pursuit of Safety


Vent stackVaporizers

Radio tower

Governor station

Gas imported

Gas produced

Gas delivered

To customers

High/medium-pressure pipelines

Tokyo Gas prepares for a major earthquake through a combination of three types of measures: preventive measures, emergency

measures, and recovery measures.

We engage in various services and activities to ensure that gas appliances and equipment are safe and easy for customers to use.

These include inspections, emergency dispatch services, and the development of safer appliances and equipment.

■ Periodic safety inspections of gas equipment every three years

To ensure customers’ safe use of gas,

specialized service personnel conduct

onsite safety inspections to check for

gas leaks from pipes and examine the

customer’s own gas appliances and

air supply and exhaust systems, as

required by the Gas Business Act.

■ “Pointing and checking” for worksite safety

We are working to prevent human

error and enhance safety by ensuring

that our staff always follow “point and

check” procedures when performing

periodic safety inspections, starting

gas service, maintaining gas

appliances, and other tasks.

■ “Gaslight 24” : 24-hour emergency dispatch system

Some 600 experts are on call at 49

locations throughout our service

area (divided into 5 blocks), ready to

respond, 24 hours a day and 365 days

a year, the moment a gas leak from

a pipeline or customer equipment is

reported.

■ Safety measures for gas appliances/equipment

We continue to develop gas appliances/equipment with even more

advanced safety functions.

Safety Measures at Customer Sites

Imported LNG is stored in LNG tanks that have no risk of leaking even in a major earthquake.

The Supply Control Center comprehensively monitors gas production and supply and precisely controls them around the clock, 365 days a year. In the event of an earthquake, the Center gathers information through the earthquake disaster prevention system and remotely stops gas supply.

Designed to connect terminals with district pressure regulators, high/medium-pressure pipelines use welded joint steel pipes, which have excellent strength and flexibility and can withstand large ground movements.

Gasholders store smaller amounts of gas to send out according to demand. They are constructed of multiple steel plates joined together to form a robust structure.

District pressure regulators reduce gas pressure from medium to low before it is sent out to customers. There are approximately 4,000 district pressure regulators across the Tokyo Gas service area, and all are equipped with earthquake sensors and emergency shut-off devices. When a large earthquake is detected, the gas supply is shut off.

Arrangements are in place to enable more than 200 city gas companies across Japan to assist one another via the Japan Gas Association with restoring supplies following a major disaster.

In July 2014 we launched a system for remotely restarting district pressure regulators without having to send specialized personnel to do it on the spot.

Customers will be notified of procedures*1 to reset gas meters and stop/restart status of gas supply through TV, the Internet and other media.

*1 Instructions on how to reset gas meters are provided on an attached label.

Low-pressure pipelines, accounting for about 90% of the total length of our gas pipelines, consist of polyethylene pipes which flex and are thus less likely to rupture.

The pipeline networks are divided into 25 medium-pressure blocks and 252 low-pressure blocks. Emergency measures (i.e., decisions on whether to stop or continue supply) are taken at the individual block level according to the degree of damage.Note: As of June 2016

Upon detecting an abnormal gas flow or an earthquake measuring 5 or greater on the Japanese seismic scale, intelligent gas meters automatically shut off the gas supply to the homes where they are installed.

Supply Control CenterIntelligent gas meters

SUPREME is our earthquake disaster prevention system using a highly concentrated network of earthquake sensors (approximately one sensor per square kilometer). SUPREME quickly collects data from observation points, remotely suspends and restarts gas supplies at district pressure regulators, and measures damage to pipelines.

High/medium-pressure pipelines GasholdersLNG tanks

District pressure regulators

● Mutual support structure● Recovery systems

Recovery measures

Emergency measures

Preventive measures

Safe and swift resumption of gas supply

Gas supplies shut off swiftly to prevent secondary disasters

Highly earthquake resistant gas delivery facilities

● Notification of stop/recovery status

Low-pressure pipelines

Disaster prevention blocks ● Earthquake disaster prevention system

Post-earthquake TV broadcast Our website

1

5

7

6

8

2 3 4

LNG tanks

Low-pressure pipelines

District pressure regulators

Supply Control Center7

8

4

2

3

1

5

6

Intelligent gas meters

Disaster prevention blocks

Gasholders

We make maximum use of IT systems in order to work more efficiently and reduce the time it takes to

resume gas supply to areas where service has been suspended.

Tokyo Gas has rolled out a system for shutting off the supply of gas both to individual homes and buildings and entire regions by remote control. The pipeline network has also been sub-divided into smaller blocks to minimize disruption in the event that gas supplies have to be shut off in an emergency.

Critical facilities are designed to be more resistant to earthquakes and tsunami in order to minimize potential damage.Note: Additional seismic evaluations are being performed reflecting issues and events identified following the Great East Japan

Earthquake. We determine the necessity of additional measures based on tsunami projections and discussions on seismic design standards by the Central Disaster Management Council (Cabinet Office) and scientific societies.

■ How we protect safety of customers

Earthquake Disaster Prevention Measures

Integrated fire and gas alarmTriggers a buzzer and blinking light when it detects a fire, imperfect combustion, or a gas leak.

Gas cooking stoveEvery burner on gas stoves marketed since 2008 is equipped with a safety sensor to prevent overheating of cooking oil, a safety device to detect flame failure, and a self-extinguishing function. Some 1,580,000 units had been sold by the end of March 2016.

Gas valve with safety deviceAutomatically turns off gas when the soft gas tube ruptures or comes loose.

Fan heaterEquipped with a safety device to prevent imperfect combustion and detect flame failure.

Damage suffered by Saibu Gas Co., Ltd. during the 2016 Kumamoto Earthquakes, the main shock of

which struck during the early hours of April 16, 2016, led the Japan Gas Association to issue a request

for assistance from city gas companies across Japan. Together these companies formed the “Service

Restoration Task Force.” Tokyo Gas took part, and contributed some 1,300 personnel, more than it has

ever sent on such a mission before. Thanks to these combined efforts, gas service was restored to all

customers in the affected areas by April 30.

Dispatch of Service Restoration Task Force after the Kumamoto EarthquakesTOPICS

Trucks used by the task force

Assembly before patrol to restart gas supply

Steps in restoration of gas service

Onsite patrols to disconnect gas supply

Districts divided up

Under-road gas pipes repaired

District pressure regulators restarted

Onsite patrols to restart gas supply

All homes visited to disconnect gas at meters

Valves closed, and individual districts divided up

Underground gas pipes inspected and damage repaired

District pressure regulators that shut off gas restarted

All homes visited to confirm gas can be used safely

We put safety first to ensure that customers can put their trust in gas. We are committed to further ramping up our efforts to make

gas supplies safer and more disaster resilient.


Enhancement of Energy Security ｜ Provision of Better Products and Services


How We Use Customer Feedback in Management

Actively Informing the CustomerTokyo Gas believes that the key to remaining in the customer’s

choice is not what we provide, but whether what we provide delivers

customer satisfaction. Following our policy of always providing

high value-added products and services with the goal of enhancing

customer satisfaction, we use customer feedback to improve the

Group’s business.

We believe it is crucial to improve the quality of management by

incorporating customer feedback into our products and services.

The opinions and requests expressed by customers via calls to our

Customer Center, the Internet, and our service quality surveys are

shared within the company, all the way up to top management. This

feedback is actively utilized in our daily improvement activities and to

enhance the quality of our products and services.

In fiscal 2015 we received 20,784 comments and requests. Of these,

9.2% of these were thanks and appreciation, 11.6% were complaints,

and 79.2% were system requests. Customer feedback like this is

utilized by individual departments in their various improvement

activities. Some are also reported to customers via our website.

■ Service quality surveys

To help us meet diversifying customer needs, we monitor satisfaction

and work accuracy by conducting “service quality surveys” of key

services that bring us into contact with our customers.

Service Quality Surveys Conducted in FY2015(Satisfaction with Service Personnel)

Percentage responding “satisfied” or “somewhat satisfied” (5-step scale)

Periodic safety inspections of gas equipment 95.7%

Commencement of gas service 93.9%

Paid-for TES inspections 94.3%

Explanation of TES use 92.3%

Appliance repairs 95.7%

■ Proper information provision in accordance with the law and

voluntary standards

To ensure that our customers can

make properly informed decisions

when considering whether to

purchase Tokyo Gas Group’s

products or services, we comply

with the Act against Unjustifi able

Premiums and Misleading

Representations and work with legal

aff airs personnel when producing leafl ets, catalogs, and pamphlets

to ensure that they provide correct information. We also have

arrangements in place for training personnel involved with legal

aff airs and improving their skills.

To ensure safe use of the Group’s products and services, we

provide appropriate information and labeling in accordance with

Japan Industrial Standards (JIS) and Japan Gas Appliances Inspection

Association (JIA) guidelines, our own internal policies and standards,

and other relevant standards. We will also adhere to the sales rules

published by the Ministry of Economy, Trade and Industry to guide

the sales practices of new entrants following full liberalization of the

electricity retail market for home users. Following these rules, we will

make sure that our customers are always properly informed and that

sales activities are conducted without using any language that might

mislead the customer.

■ Tokyo Gas website

Our website functions as our point of contact with the customer.

Through it, customers can apply for various gas and electricity-related

services, get news on gas services in the event of emergencies such

as earthquakes and gas leaks, and access information provided for

individual and corporate customers. In addition to user manuals, we

publish a range of accessible information explaining our products and

services to help customers make informed purchasing decisions.

■ The Tokyo Gas Group’s locally based service network

Tokyo Gas LIFEVAL network was set up by Tokyo Gas to deliver individualized service and develop close ties with customers in order to better meet

their specific needs. It functions as a one-stop shop for products and services that will improve quality of life. As of July 1, 2016, the network consisted

of 35 corporations in 62 blocks.

Our Tokyo Gas LIFEVAL showrooms handle the arrangements for a range of city gas-related tasks, including periodic safety inspections, meter

readings, commencement and termination of gas service, the sale, repair, and installation of gas appliances, and applications for gas and electricity

service. They help local residents enjoy safe, environmentally friendly, comfortable lives by providing information on plumbing renovations

(especially for kitchens and bathrooms) and energy conservation and generation in the home, and they are also active in organizing events, such as

cooking classes using the latest equipment, that allow customers to see, feel, and experience gas

appliances in actual use.

Tokyo Gas provides LIFEVAL personnel with various objective-based and level-specific training to

enable them to master and improve their technical abilities and service skills. As well as assisting with

human resource development, Tokyo Gas helps the network deliver better services and proposals by

gathering and sharing customer feedback on LIFEVAL.

The Group further provides various services through its Enesta and Enefit outlets to contribute to

comfort in everyday life.

Enhancement of quality

Improvement of product and service development

Customers

Points noticed by our employeesOpinions and requests

Customer feedback system

Information sharing

Customer feedback collection

● Chair of Customer Satisfaction Promotion Committee (President)● CS meetings in each department● CS meetings with business partners

Improvement activities Customer Center

Service quality surveys

Contact with our customers

Top management

Top management EmployeesEmployees Partner

companiesPartner

companies

To ensure that our customers can use energy safely, securely, and comfortably, we actively provide information and community-

based support, and incorporate customer feedback into delivering better services.

Basic Policy

■ Giving form to customer feedback

Onsite service fee normally charged at time of repairs waived for gas appliances not covered by service contract (if connected to same meter).

Warranty periodFrom TES installation to

5th year(excluding warranty period)

15th year

14th year

13th year

12th year

11th year

10th year

9th year

8th year

7th year

6th year

TES installation End of contract

Annual maintenance

inspection

Warranty period

■Enrolling for the service offers the following benefits.● Warranty program (free)

Repair warranty

11th to 15th year from TES installation

Annual maintenance

inspection

Repair warranty

From end of warranty to 10th year from TES installation

● If not signed upEngineer visits to make repairs

onsite service fee engineering fee cost of parts

(parts charged for at cost)

Service expanded from April 1, 2015

● TES maintenance service agreement (fee charged)

Repair cost equals

Event at a Tokyo Gas LIFEVAL showroom

Training session for legal aff airs personnel

My job is to repair gas appliances and equipment, and I am constantly on the lookout for ways to shorten the time that

customers are without their gas appliances to reduce the inconvenience that causes. When customers contact us, we

listen carefully to what they want and the details of their problems, and when we visit them at home, we do our best to

perform repairs swiftly and appropriately. Once the repairs have been made, we make a point of explaining what had

been the fault or problem in an easy-to-understand way to set their minds at rest. We are also constantly working to

improve the quality of our repairs by, for example, sharing feedback from the customer once we get back to the office,

feeding it into improving our services, and actively undergoing training and taking part in contests to improve our repair

knowledge and skills.

We will continue to work to get the basics right and value our contacts with the customer to meet their needs as well

as possible, performing repairs so well that they will be glad to see us again whenever they need help.

Reassuring the Customer with Clear Explanations

Yoshitaka OmuraTeam Leader

Maintenance GroupAppliance Servicing Section

Tokyo Gas LIFEVAL Minato

VOICE

How the TES maintenance service system works

“End of contract notification” postcard with free onsite service coupon

Customer feedback Improvements made

● I’m signed up for the TES maintenance service and would like to see it extended to cover other gas appliances like stoves.

● Tokyo Gas should consider providing some other form of service after the 15-year contract expires.

1) The onsite service fee has been waived for breakdowns and other problems with gas appliances not normally covered during the term of the TES maintenance service contract.

Note 1: Gas appliances must be connected to the same gas meter as that covered by the customer’s TES maintenance service contract.

Note 2: If repairs are required, the customer is still charged an engineering fee and the cost of replacement parts.

2) The onsite service fee is waived for three years after the end of the maintenance service contract for breakdowns and other problems with TES appliances that were covered by the contract.

Note 3: Waived for customers who present an “End of contract notification” postcard bearing a free onsite service coupon.


The natural gas from which city gas is made contains no harmful substances such as SOx, and produces 20% to 40% less CO2 when combusted than fuels like oil and coal, making it the most environmentally friendly fossil fuel available.

As natural gas that has been transported as LNG is vaporized at LNG terminals and delivered to customers via gas pipeline, there occurs no loss due to energy conversion or transportation. By combining our city gas infrastructure with cogeneration and other gas-use technologies, we aim to assist the development of a low-carbon society and decentralized energy systems, thereby contributing significantly to the stabilization of energy services at the local level.

We are raising the environmental awareness of group employees

by providing timely information on the environment and regular

environmental education. In February 2016, we held Environmental

Forum 2016 to encourage employees to think about how they can

personally address environmental issues moving forward in light

of COP21. The event was attended by about 500 employees from

Tokyo Gas and its subsidiaries and affiliates. In light of children’s

importance to future action on energy and the environment and in

recognition of the Group’s responsibilities as an energy company, we

are also contributing to local communities by providing energy and

environmental education for kids (see p. 44).

In fiscal 2015, we committed no infringements and were subject to no

fines under any laws or ordinances on the environment.

Basic Policy

Environmental Management System

Environmental Education

Environmental Protection Guidelines*1 (Results of Efforts in Fiscal 2015)

Compliance with Environmental Law

The Tokyo Gas Group has established an “Environmental Philosophy”

and “Environmental Policies” based on its Management Philosophy

and Corporate Action Philosophy. The entire group is working actively

to protect regional and global environments in line with the mid- to

long-term environmental action targets detailed in its Environmental

Protection Guidelines.

In fiscal 2015, designated part of the “step” stage of our Challenge

2020 Vision, the Environmental Policies and Environmental Protection

Guidelines were revised to assist implementation of our main policies.

Biodiversity conservation and compliance with environmental

legislation are nothing new to Tokyo Gas Group, but we will need to

understand society’s needs and expectations even better than before

and translate them into further improvements if we are to successfully

evolve as a total energy business and accelerate our global business

development. In fiscal 2016, therefore, we added two new items to

our Environmental Policies, namely “5. Biodiversity conservation and

sustainable use” and “6. Compliance with environmental law and

fulfillment of social responsibilities” We will be taking group-wide

action to put these policies into effect.

Environmental PhilosophyThe Tokyo Gas Group will promote more sustainable ways of energy use to

contribute to the protection of regional and global environments as well as to the

sustainable development of society.

Environmental Policies1. Reduction of the Environmental Impact of Customers’ Energy Use

Tokyo Gas will actively and continuously attempt to reduce the environmental

impact of customers’ energy use by promoting the use of environmentally

friendly energy (natural gas) and providing highly efficient appliances and

systems.

2. Reduction of the Total Environmental Impact of Tokyo Gas’s Business OperationsTokyo Gas will continuously reduce energy intensity and resources used in

its business operations through the implementation of efficient and effective

environmental management to contribute to the realization of a sustainable

society. At the same time, we will reduce our business operations’ overall

environmental impact by aggressively promoting “green purchasing” and 3R

initiatives (Reduce, Reuse, and Recycle).

3. Strengthening of Environmental Partnerships with the Local and International CommunitiesTokyo Gas will strengthen its environmental partnerships with both the local

and international communities by engaging in a wide variety of programs,

such as participation in local environmental events and technology transfers to

developing countries.

4. Promotion of Green Technology R&D ProgramsTokyo Gas will promote R&D programs for environmental technologies, including

renewable energy, to protect regional and global environments.

5. Biodiversity Conservation and Sustainable UseTokyo Gas will recognize the benefits of nature, and will monitor and mitigate

the impact of our business activity on biodiversity, promote sustainable use of

resources, and conserve biodiversity in partnership with local communities in

order to ensure the continued enjoyment of those benefits in the future.

6. Compliance with Environmental Law and Fulfillment of Social ResponsibilitiesTokyo Gas will comply with environmental laws, ordinances, agreements, and

other relevant standards and regulations, and all employees will practice social

responsibility in accordance with global standards.

We have established and are working to achieve guideline targets in six fields in order to contribute to the realization of a low carbon society, the creation of a resource-saving society, and the development of a society that coexists with nature. In fiscal 2015, we attained our targets in four fields, namely, the promotion of biodiversity conservation, promotion of green purchasing, promotion of environmental communication, and promotion of environmental technologies development. We did not achieve our targets in two fields: global warming countermeasures and promotion of resource saving. Regarding global warming, we fell short of our target for heat sales intensity for district heating and cooling centers. Regarding promoting resource saving, we set ourselves demanding targets and performed to a high standard in all categories in this field, but, did not reach our target recycling rates for industrial waste and excavated soil. Going forward, we will set challenging targets while taking into account changing conditions, and renew our efforts to ensure guideline targets are met by reinforcing target management. In fiscal 2016, we revised our Guidelines for Global Warming Countermeasures (covering our electric power business only) to keep abreast with our entry into the electricity retail market. Revisions were also made to our Guidelines for Promoting Biodiversity Conservation,

Guidelines for Promoting Environmental Communication, and Guidelines for Promoting the Development of Environment-related Technology to reflect changes to our Environmental Policies and progress in these areas.

*1 See our website for details: http://www.tokyo-gas.co.jp/csr/report_e/5_environment/target_01.html

Tokyo Gas Group promotes group-wide environmental management

to reduce environmental impact and mitigate environmental risks.

Tokyo Gas and several of its subsidiaries and affiliates have developed

and operate environmental management systems (EMS) that

comply with the ISO 14001 international standard. Our fiscal 2015

internal audit of EMS found that all units meet the requirements set

by ISO 14001:2004 and are operated effectively. Looking ahead, we

will explore new environmental management structures to keep

pace with the construction of our new group formation. We also are

scheduled to transition to the revised 2015 edition of ISO 14001 in

September 2017.

Environmental Management System (as of May 2016)

Top Management

Environmental Management

Director-General

Note: 41 units have set environmental targets and operate an EMS.

Environmental Committee

Internal Auditors

Residential Sales and Service Div.

Energy Solution Div.

Regional Development Div.

Pipeline Network Div.

Regasification & Power Generation Div.

Energy Resources & Global Business Div.

IT Div.

Support Dept., Audit & Supervisory Board Member's Office

ISO Secretariat (Environmental Affairs Dept.)

Overview Image of Environmental Protection Guidelines

2Guidelines for

Promoting Resource Saving

・ Industrial waste

・ General waste

・ Excavated soil

Creation of a

resource-saving society

3Guidelines for

Promoting Biodiversity Conservation

Development of a society

that coexists with nature

1Guidelines for

Global Warming Countermeasures

・ Global warming countermeasures at customers’ sites・ Global warming countermeasures in our electric power business・ Global warming countermeasures in our business activities ・ Promoting the widespread use of renewable energy

Realization of a low carbon

society

4Guidelines for

Promoting Green Purchasing

5Guidelines for

Promoting Environmental Communication

6Guidelines for

Promoting the Development of

Environment-related Technology

How the Tokyo Gas Group Contributes to the Global Environment

● Reduction of impact of business activities● Environmental protection activities

● Selection of products and services● Evaluation of corporate value and investment

Returns

Inputs

City gasElectricity

Other business

Customers

Local communities

International community

Business partners

Shareholders and investors

Globalenvironment

Water, air, soil, fossil fuels…

Use of natural resources

Contribution to global environmental

protection

Tokyo GasGroup

Value

Cooperation

Consideration

Contribution to global environmental

protection

Cooperation

Consideration

Contribution to the Environment ｜ Basic Policy on Environmental Protection and Targets


Environmental Forum 2016

Comparison of emissions during combustion (coal = 100)

Source: Agency for Natural Resources and Energy, Energy White Paper 2013.

CO2 NOx SOxCoal

Natural gas

100 100100

7070

0

Oil

6040

City gas

LNG terminal Customer

Gas pipeline

Almost zero loss during production and transportation

City gas production and transportation efficiency

100% 100%

Environmental Advantages of Natural Gas

80


Overseas In Japan

Scope 3*4

Scope 1 and Scope 2*3 Scope 3*4

■ Surveys of GHG emissions and other conditions at gas fields and liquefaction terminals, etc.

■ Introduction of high-efficiency LNG carriers for transportation by sea

Procurement of raw materials (LNG)

Production of city gas

Power generation

Heat supply centers, offices, etc.

Supply of city gasEnergy solutions

■ Exploitation of cold energy, energy conservation, etc. at the city gas production stage

■ Promotion of high-efficiency natural gas-fired thermal power generation and use of renewable energy in the electric power business

■ Provision of district heating and cooling services■ Installation of energy-saving equipment and

at-a-glance access to data on energy use at business offices

Other

■ Diffusion of highly eco-friendly natural gas use

■ Development and dissemination of highly energy-efficient equipment and systems

■ Promotion of renewable energy use■ Promotion of smart networks■ Reduction of carbon footprint of

transportation■ Proposal of energy-saving lifestyles■ Supply of electricity generated by

high-efficiency natural gas-fired power plants, etc.

■ Forest preservation and greenification activities

Action at the Raw Material Procurement Stage Action in Business Activities Action at Customers’ Sites

Customers’ sitesBusiness activitiesRaw material procurement

As an energy company, Tokyo Gas Group recognizes its duty to prioritize action to prevent global warming. We have therefore established Guidelines for Global Warming Countermeasures that set concrete numerical targets, and are working as a group to put them into practice. As CO2 emissions from LNG value chains are highest at the city gas consumption stage, i.e., customers’ sites, we place a strong focus on curbing emissions at this point and are pursuing a variety of strategies to achieve this, including the development and adoption of low-carbon systems. In the electric power segment of our business activities (see diagram below) we are taking active steps to generate power using high-efficiency thermal power plants, and generate and procure more power produced using renewable energy. We are also monitoring the impact on global warming of our raw material procurement activities, and are working with group companies to deploy high-efficiency LNG carriers to reduce emissions from transportation by sea. Looking ahead, we will contribute further to the fight against global warming by rolling out our CO2 emission reduction technologies to other countries and other means in order to meet social needs and expectations in the wake of COP21.

■ Action along the LNG value chain

Efforts to Prevent Global Warming

Contribution to the Environment ｜ Global Warming Countermeasures − Toward the Realization of a Low Carbon Society


Customers’ sites

Scope 3*4

Business activities

Scope 1 and Scope 2*3

Raw material procurement

Scope 3*4

Greenhouse Gas Emissions along the LNG Value Chain (FY2015)Third-party assured

6.78 million t-CO2

(17.3%)

28.96 million t-CO2

(73.8%)

3.49 million t-CO2

(8.9%)

City gas production0.21 million t-CO2

Power generation and power procurement2.94 million t-CO2

Heat supply 0.21 million t-CO2

Other 0.13 million t-CO2

Extraction and liquefaction 5.66 million t-CO2 *1Transportation by sea 1.12 million t-CO2 *2

*1,2 Calculated based on emission intensity analyzed following the LCA (life-cycle assessment) approach (see p. 41 “Tokyo Gas Group Business Activities and Material Balance”).

As one duty of an energy company, we are working to reduce CO2 emissions throughout our LNG value chains to minimize the

impact on global warming.

As gas use by customers is the largest source of CO2 emissions along

the LNG value chain, Tokyo Gas Group places a particular focus on

reducing CO2 emissions at customers’ sites.

Specifically, we are pursuing a number of strategies to achieve this,

including not only encouraging users to switch from other fuels to

natural gas, but also the development and dissemination of highly

energy-efficient equipment and systems, the support of renewable

energy use, and the development of smart energy networks. Thanks

in large part to the increase in highly-efficient natural gas-fired power

generation, we achieved our target by reducing CO2 emissions

by 3.43 million tons in fiscal 2015, resulting in customer site CO2

emissions of 28.96 million tons. We also suggest ways our customers

can use energy more efficiently in their daily lives through activities

including the provision of “Eco-Life” proposals and energy and

environmental education for the next generation.

Contribution to Reduction of CO2 Emissions at Customers’ Sites

ENE-FARM is a highly energy-efficient system that generates electricity by reacting hydrogen extracted from city gas with oxygen in the air, while simultaneously capturing the heat generated to heat water. The ENE-FARM lineup was expanded by the addition of

hitherto optional self-sustaining power generation functionality to models for detached homes in April 2015, and to models for home use at housing complexes in July 2016. By March 2016, the total number of units sold had reached 60,000, and we will continue to promote their wider use to help reduce CO2 emissions at customers’ sites.

“ENE-FARM”Residential Fuel Cell Cogeneration System

Launch of the ENESINFO Service for Optimizing Use of “Smart Multi” Commercial Gas/Electricity

Air-Conditioning Systems

New ENE-FARM model for detached home use (Model shown is an illustration. Actual installations may differ.)

TOPICS

In April 2016, Tokyo Gas launched the “ENESINFO” control system. This system allows optimal remote control of the “Smart Multi,” a conceptually new type of commercial air-conditioning system combining a gas heat pump (GHP) and an electric heat pump (EHP) in the same refrigerant system. The system forecasts air-conditioning load based on Smart Multi’s own operating data, the building’s peak power demand, and the daily weather forecast. Based on this load and other factors such as hardware characteristics and energy prices, the mix of GHP and EHP use is optimized by remote control to produce energy and cost savings suited to the customer’s usage. The mix can be controlled to minimize CO2 emissions as well. The service contributes to society as a whole by accommodating expected changes in the balance of supply and demand for electricity and prices due to expanded adoption of solar and wind power and other factors, and also makes possible electricity savings when supply is tight.

*5 Reduction due to diffusion of gas cogeneration and natural gas-fired power generation was calculated using marginal coefficients (respectively 0.69 kg-CO2/kWh (demand side) and 0.65 kg-CO2/kWh (transmission side)).

Reduction of CO2 Emissions at Customers’ Sites*5 (million t-CO2)

1.521.50

Base year0

3.293.00

3.433.403.70

8.00

20132011 2015 20202014 2016

8.00

4.00

3.00

2.00

1.00

0(FY)

Reduction of CO2 emissions: Reduction of CO2 emissions relative to fiscal 2011 by introducing high-efficiency appliances and systems (such as “Eco-JOES” water heaters and gas cogeneration systems), using natural gas in place of other fuels, supplying gas to power stations to promote wider use of natural gas, and other means.

Results

Target

Third-party assured

*3,4 Standards for calculation and reporting of greenhouse gas emissions:Scope 1 Business’s own direct emissions of greenhouse gases.Scope 2 Indirect emissions from consumption of electricity, heat, and steam supplied by others.Scope 3 Indirect emissions other than covered in Scope 1 and 2 (emissions by other parties involved with business’s

activities).

■ Diffusion of gas cogeneration systems

As gas cogeneration systems (CGSs) generate electricity and utilize

the heat produced exactly where heat and power are needed,

they help decentralize energy systems and contribute significantly

to the rise of a low carbon society. As of the end of fiscal 2015,

gas cogeneration systems supplied via Tokyo Gas pipelines were

generating a combined total of 1,943 MW of electricity (excluding

residential systems). We are pushing ahead with the development of

smart energy networks (see p. 42), which combine a core CGS with

maximum use of renewable energy to optimize energy use at the

level of entire communities using information and communications

technology (ICT).

■ Switching to natural gas and more advanced use

CO2 emissions are being dramatically reduced by switching away

from the use of fuels such as oil and LPG to natural gas and supplying

natural gas to power plants. Emissions are being further reduced

by installing more efficient industrial burners and furnaces when

switching fuels. For example, the installation of energy-saving

regenerative burner systems when switching over to natural gas is

halving CO2 emissions.

STEP 1Selection of optimum fuel

Heavy oil A + conventional burner

Replaced with natural gas

Development of more efficient burner

STEP 2Selection of high-performance equipment

CO2 emission reduction100 75 45


Carbon Offsetting Partner for the G7 Ise-Shima Summit and

Intercity Baseball Tournament

Retrofitting Office Buildings in Line with Design Guidelines to Make

Them Energy Efficient and Environmentally Friendly

TOPICS

Contribution to the Environment ｜ Global Warming Countermeasures − Toward the Realization of a Low Carbon Society


■ Efforts at business officesWe have been implementing a range of hardware-related measures at our business offices, including the installation of gas cogeneration systems and energy-saving equipment, and equipment upgrades including improved lighting, air conditioners, and other hardware to enhance efficiency. We have also been pursuing energy savings in other less tangible but equally effective ways, such as adjusting the inflow of outside air according to CO2 concentrations and controlling lighting, humidity, and temperature more energy efficiently. We are also working to facilitate the tracking of energy usage at a glance, and are using displays and other means to raise employee awareness of energy conservation. Energy usage at our business offices and other facilities came in on target at 887 TJ in fiscal 2015, thanks especially to the installation of LED lighting and improved use of equipment.

Since opening Nagano Tokyo Gas Forest in Kitasaku-gun, Nagano Prefecture, Tokyo Gas has been continuously engaged in forest conservation and providing outdoor environmental education in order to contribute to biodiversity conservation and the wider fight against global warming. The forest celebrated its 10th anniversary in 2015, and in the 10 years since its inception, some 300,000 saplings have been planted and 40,000 thinned out to promote growth. The plan for the future is to develop other projects like the forest as carbon sinks, and to clearly quantify how much CO2 they absorb so they can be used to offset emissions from other business activities using the J-Credit Scheme. In addition, we are supporting the preservation and expansion of green space in the Group’s service areas through the Tokyo Gas Tree Planting Project.

Forest Preservation and Greenification Activities

Nagano Tokyo Gas ForestTrees are thinned, planted, and otherwise maintained to conserve the forest, while the forest’s administration building, a mountain lodge called Ohisama House, has been designed to make maximum use of natural energy sources (such as wind, sun, and water to generate power and a pellet stove for heating).

Tokyo Gas developed a set of design guidelines for buildings in fiscal 2010,

and all plans for buildings owned by the Tokyo Gas Group are drawn up in

accordance with these guidelines. The first building to be retrofitted to reflect

the guidelines was the Tokyo Gas Hiranuma Building. Work was finished in

March 2013, and in December 2015 the building was awarded the Environment

Minister’s Award for Global Warming Prevention Activity by the Ministry of the

Environment in recognition of its pioneering use of renewable energy and other

green technologies.

The second building to be similarly retrofitted was the Earth Building

Tachikawa (Tokyo Gas Tachikawa Building). This building has been made more

environmentally friendly by adopting a range of technologies, including the use

of renewable energy and high-efficiency equipment, with the aim of creating

a net zero energy building, or “ ZEB.” Work was completed in July 2015, and

the building is now expected to consume at least 50% less primary energy than

a typical office building of comparable size. It also offers outstanding business

continuity in the event of a disaster, as it incorporates a combination of seismic

isolation and damping technologies to drastically reduce earthquake damage.

In addition to being Tokyo Gas’s first building to be awarded the top “S” rank

for “new construction” under the CASBEE certification system, BELS

accreditation is also being sought this year.

Tokyo Gas uses reductions in greenhouse gas emissions accredited

under the J-Credit Scheme administered by the Japanese

government to offset emissions from events within and outside

the company in order to better contribute to the environment. For

example, we provided 100 tons of J-Credits for the G7 Ise-Shima

Summit in May 2016,*2 and 250 tons for Japan’s annual Intercity

Baseball Tournament in July.*3

*2,3 Once CO2 emissions have been confirmed, offset credits up to the

amount offered by each company are finalized.

Energy Usage at Business Offices, Etc. (TJ)

952

950

896

935

887

915 915 910

2013 2015 20202014 2016

1,000

900

800

0

Results Target

(FY)

Third-party assured

Tokyo Gas Hiranuma Building Earth Building Tachikawa

Tokyo Gas Group delivers diverse energy solutions through not only our city gas business, in which we drive the spread and expansion of eco-friendly natural gas use, but also in our electric power business, etc., in which we leverage our strengths in natural gas.

■ Efforts in city gas productionThe Group’s energy efficiency at the city gas production stage now exceeds 99%, and we will continue to pursue further improvements by, for example, using the cold energy of -162°C LNG and promoting more energy-efficient operation. Energy usage intensity is on the increase due to the rise in gas send-out pressure in line with growing gas demand leading up to fiscal 2020, but by promoting energy-saving operations and other measures, we have succeeded in achieving our targets. Energy usage intensity at our city gas production plants in fiscal 2015 was 201 GJ/million m3 and greenhouse gas emissions came to 212,000 tons.

■ Efforts in the district heating and cooling businessTokyo Gas Group operates district heating and cooling plants (including small-scale heat supply centers) in 43 districts. Steam and heated and chilled water are produced by various natural gas systems, including gas cogeneration systems, absorption chillers, and boilers. We supply this steam and heated and chilled water within specified areas, contributing to improved area-wide energy efficiency. In fiscal 2015, despite enhancements made to plant efficiency, reduced use of gas cogeneration by large-scale district heating and cooling centers due to improvement work meant that heat sales intensity fell short of

Energy Usage Intensity at Gas Production Plants (GJ/million m3)

206

210

203

210

201

220215

250

2013 2015 20202014 2016

300

250

200

0

Results Target

(FY)

Third-party assured

Tokyo Gas Group has to date promoted wind power generation through the operation of the Sodegaura Wind Power Plant (1.99 MW) at our Sodegaura LNG Terminal, our 30.2% stake in Shonai Wind-Power Generation Co, Ltd. (total power generating capacity of 15.91 MW), and the purchase of a total of approximately 12 MW of electric power generated at Kuroshio Furyoku Hatsuden K.K.’s wind power plants. In February 2016, we teamed up with Fukushima Prefecture to jointly submit an environmental impact statement for a wind power generation business in Fukushima to the Ministry of Economy, Trade and Industry and the relevant local governments, and we are now surveying wind conditions and other factors in preparation for implementing the provisionally named “Fukushima Coastal Wind Power Generation Initiative.” Looking beyond wind power generation, we plan to investigate biomass power generation (which has a high capacity factor), abundant photovoltaic power, and other renewable power sources to continue our contribution to the creation of a low carbon society.

our target at 1.34 GJ/GJ. We will continue to upgrade our facilities and fine-tune their operation in search of further improvements.

■ Efforts in the electric power business

We are contributing to the prevention of global warming by

generating electric power using cutting-edge gas turbine

combined cycle technology for highly-efficient natural gas-fired

thermal power generation, which we are augmenting by actively

developing renewable sources such as wind power. In fiscal 2015, we

generated electric power at natural gas-fired power stations with a

total capacity of approximately 1,600 MW (owned by the Group) and

wind power plants. Our electric power business in fiscal 2015 had a

CO2 emission factor*1 of 0.357 kg-CO2/kWh. We have helped reduce

our overall CO2 emissions by replacing some existing thermal power

generation capacity.

Now that we are also an electricity retailer, in fiscal 2016 we will

be revising our targets for the electric power business under our

Guidelines for Global Warming Countermeasures so that they can be

applied to business at the retail stage. We will also aim to increase

power procurements from high-efficiency thermal power plants and

renewable sources. We have been a participant in the Electric Power

Council for a Low Carbon Society since its inauguration, and through

our involvement we will work with other electricity utilities to build a

low carbon society.*1 The average CO2 emission factor for all transmitted wholesale power, including

business-use power purchased from other companies and the market as well as the Group’s own power stations.

Energy Conservation and Reduction of CO2 Emissions in Business Activities

Yuza Wind Power Plant operated by Shonai Wind-Power Generation Co, Ltd.

Making Greater Use of Renewable Energy in the Electric Power BusinessTOPICS

Heat Sales Intensity at District Heating and Cooling Centers (GJ/GJ)

1.39

1.39

1.34

1.35

1.34

1.33 1.33

1.19

2013 2015 20202014 2016

1.5

1.4

1.3

1.2

1.1

1.0

0

Results Target

(FY)

Third-party assured

Third-party assured

TOPICS


SUPPLYPracticing the 3Rs during work on gas pipelinesRoads are dug up when gas pipelines are laid, producing excavated soil (i.e., residual soil) and asphalt concrete lumps. The Group promotes the 3Rs to decrease the amount of excavated soil through the shallow-laying of pipes in narrow trenches and the use of non-open-cut construction methods, as well as by reburying excavated soil to reduce the amount to be disposed of and increased use of improved soil and recycled road surface materials. Although the amount to be disposed of in fiscal 2015 was held down to 22.3% relative to the baseline amount had no action been taken, we fell short of our final target because (a) there were cases in which excavated soil could not feasibly be reburied, and (b) there was more work performed on trunk lines in fiscal 2015, which produces considerably more excavated soil than work on ordinary gas pipelines. We again succeeded in recycling all used pipes removed when replacing gas pipes in fiscal 2015. This included polyethylene (PE) pipe scrap and excavated sections of pipes, which are recycled to make labels for customers’ gas meters explaining how to restart meters after an emergency.

BUSINESS OFFICES Paper recycling by Tokyo GasTokyo Gas has been collecting used documents and waste paper internally for recycling into “Tokyo Gas Recycled Paper” for producing pamphlets and other literature since fiscal 2003. We supply the materials for recycling, and purchase the resulting paper made from them as part of our proactive efforts to make our paper product chain greener. Each and everyone of our employees practices strict paper sorting so we can provide high quality paper for recycling. In fiscal 2015, we purchased 537 tons of recycled paper.

AT CUSTOMERS’ SITESRecycling of used gas appliancesSince 1994, Tokyo Gas has operated its own waste collection and recycling system, called the Saving & Recycling Innovative Model System (SRIMS). This system enables us to reduce the impact on the environment and cut costs by collecting waste at the same time we deliver gas appliances, parts, and piping materials to partner companies. Under SRIMS, we are working to collect used gas appliances and waste materials produced when equipment is replaced or gas installation or renovation work is carried out at customers’ sites. In fiscal 2015, we collected 8,936 tons of waste and recycled 8,367 tons (93.6%).


We are contributing to creating a “resource-saving society” through a broad range of activities, including promotion of the 3Rs to

deal with waste and excavated soil generated in the course of our business activities, recycling of used gas appliances disposed of

by our customers, and green purchasing.

Practicing the 3Rs (reduce, reuse, and recycle) is essential to creating a resource-saving society. The most important of these is controlling the generation of waste. In addition to limiting emissions by, for example, producing zero emissions at production plants (defined as a final disposal rate of less than 0.1%) and reducing the amount of soil excavated during gas pipeline construction, Tokyo Gas Group practices the 3Rs at every stage of its business activities, including reusing gas meters and recycling used gas pipes and gas appliances, in order to recycle and reuse waste and other resources. In fiscal 2015, the Group produced 152,460 tons of waste and achieved a recycling rate of 95.2%. The amount of industrial waste generated during construction work was up from a year earlier. While industrial waste emissions are on the rise due to the increase in gas pipeline work generated by growing demand, we are committed to continuing to improve recycling rates by reusing and recycling as much as possible.

PRODUCTIONEfforts to achieve zero emissionsWe are working to achieve zero emissions of industrial waste (final disposal rate of less than 0.1%) not only at the LNG terminals where city gas is produced, but also at production facilities such as power plants, gas appliance factories, and district heating and cooling centers. In fiscal 2015 emissions of industrial waste came to 1,291 tons. Although this was less than in the previous fiscal year, there still remained some scope for further resource recycling in some cases, leaving our final disposal rate at 1.3%. We will further step up collaboration with disposal contractors as we continue our efforts to reduce the final disposal rate.

Many species are facing imminent extinction due to human activities, and natural ecosystems around the world are being disrupted at an alarming rate. Tokyo Gas Group considers the realization of rich ecosystems to be one of our important business bases in order to protect the global environment while sustaining our business, and has formulated its Guidelines for Promoting Biodiversity Conservation. Specifically, we are monitoring conditions along each

value chain to mitigate their impact on ecosystems, practicing forest conservation at our own Nagano Tokyo Gas Forest, and engaging in a variety of other initiatives. In fiscal 2016, we added an item on biodiversity conservation to our Environmental Policies, and we will be both ramping up our efforts in this area and adopting a more global approach to protecting biodiversity as our own business activities become more globalized.

■ Action on water risksTokyo Gas Group recognizes threats to water resources as a business risk and therefore manages the amount of tap water, industrial water, and seawater it uses in order to conserve freshwater and control wastewater emissions. In fiscal 2015, we used a total of 5,421,000 m3 of freshwater at the LNG terminals where city gas is produced, district heating and cooling centers (DHC), power plants using LNG, offices, and other facilities in Japan. We are working to reduce water consumption at LNG terminals, DHC, and power plants by optimizing boiler operation, reducing steam loss, replacing chillers with more efficient electric turbo types, and more. To reduce our use of tap water at offices and similar facilities, we are making greater use of wastewater, installing water-saving toilets, and encouraging employees to conserve water. Regarding wastewater, we measure emissions and manage indicators of water quality, including pH, chemical oxygen demand (COD), and nitrogen and phosphorus concentrations, in accordance with local government ordinances, agreements, and other relevant standards. Seawater is used mainly as a heat source by LNG terminals and power stations, and is returned in its entirety to the sea. As we accelerate our globalization in the years ahead, we will monitor risks in the regions in which we establish operations and take appropriate action in response.

Promotion of the 3Rs to Minimize Waste, etc. Biodiversity Conservation and Sustainable Use

Used PE pipes after collection

Alongside reducing the impact of our business activities on ecosystems, we will work with local communities, NPOs, and other

entities to conserve biodiversity.


■ Impacts on biodiversity and responses along LNG value chain

■ Ballast water management during transportation by Tokyo Gas owned/managed vessels

■ Habitat monitoring, greening, conservation activities at LNG terminals

■ Power plant environmental impact assessment

■ Use of Tokyo Gas Recycled Paper and FSC-certified paper

■ Greenification activities

■ Conservation activities at Nagano Tokyo Gas Forest, “My Forest” Project, etc.

■ Support for NPOs, etc. delivered through Tokyo Gas Environment Support Fund and Keidanren Committee on Nature Conservation

■ Reduction of excavated soil disposal after pipeline construction

■ Confirm biodiversity awareness during source gas field development

“My Forest” Project to develop mini forests in housing complexes

where customers live

Raw material procurement

(Power transmission)

Raw material transportation

Loss of biodiversity around gas fields

Ecosystem disturbance by invasive species

Impact on ecosystems during operation

Biodiversity loss due to pit sand excavation

Biodiversity loss due to illegal logging, etc. to

make paper

City gas production

Power generation

City gas supply Offices Working with customers and local communities

The Environmental Forum 2016 event

held for group employees in February

2016 featured a display on biodiversity

conservation. By simply explaining the

benefits of and risks to biodiversity and

how Tokyo Gas Group is responding,

the display raised group employees’

understanding of the issue.

Raising Group Awareness of Biodiversity

Environmental Forum 2016

City gas production plants

DHC

Power plants

Tokyo Gas offices, etc.

Other

Third-party assured

5,273 5,647

2012

6,023

2013

5,421

2015

5,751

20142011

8,000

6,000

4,000

2,000

0(FY)

Water Resource Inputs of Tokyo Gas Group (Tap/Industrial Water) (1,000 m3)

Resp

onse

RiskWaste (tons)

Total amount generated Amount recycled Recycling rate Top: general wasteBottom: industrial waste

122,068 121,239

2012

126,350

2013

133,650

2014 20152011

180,000

160,000

140,000

120,000

100,000

0

100

90

80

70

60

0

121,794127,700

152,460

145,070

118,951 117,483

97.4 96.9 96.495.295.5

(FY)

(Tons) (%)

Third-party assured

Third-party assured

Contribution to the Environment ｜ Promotion of Resource Saving − Toward the Creation of Resource-Saving Society

Contribution to the Environment ｜ Promotion of Biodiversity Conservation − Toward Developing a Society that Coexists with Nature

Third-party assured

Third-party assured

TOPICS


Development of Solid Oxide Fuel CellsDevelopment of Hydrogen Technologies

Effective Use of Biomass

Tokyo Gas is building and operating hydrogen stations and contributing to the development of the hydrogen supply infrastructure in order to promote wider use of fuel cell vehicles. Our goal is to reduce carbon emissions and diversify fuels in the transportation sector. In fiscal 2015 we wound up our demonstration and R&D projects conducted at our Senju and Haneda Hydrogen Stations. Our Nerima Hydrogen Station entered regular service as the first commercial hydrogen station in the Kanto region in December 2014, and in January 2016 we converted our Senju Hydrogen Station into a commercial hydrogen station as well. It was followed in February 2016 by our Urawa Hydrogen Station, our first commercially operational hydrogen station in Saitama Prefecture. Tokyo Gas is pursuing R&D on hydrogen stations as a participant in the FY2013-17 research and development project on hydrogen utilization technology run by the New Energy and Industrial Technology Development Organization (NEDO). Through this program, we are investigating methods of controlling the quality of hydrogen fuel, assessing measurement accuracy when refueling, and studying ways of refueling fuel cell vehicles other than passenger cars (i.e., buses and motorcycles). We are also developing industry guidelines on these methods and working to have them incorporated into international standards. We are further exploring efficient ways to run commercial hydrogen stations and to reduce maintenance costs.

Tokyo Gas seeks to expand and popularize the use of biomass to

help reduce greenhouse gas emissions, and is doing so by promoting

not only technologies that use biogas, but also technologies for

extracting biogas and converting it to higher quality gas. In fiscal

2015, the biogas generated at customers’ sites was used primarily

to generate electricity onsite using gas cogeneration, but we also

received 675,000 m3 of biogas (equivalent to an approximately

1,151-ton reduction in CO2 emissions) derived from food waste

into our gas pipelines once it had been upgraded, adjusted to the

appropriate calorific value, and odorized. In addition, we continued

our joint research with the City of Yokohama (ongoing since fiscal

2013) into making more effective use of sewage biogas generated by

the city’s Hokubu Sewerage Center.

A major advantage of solid oxide fuel cells (SOFCs) is their high power generating efficiency. To accelerate their entry into the mainstream, Tokyo Gas is evaluating technologies that might facilitate the early commercialization and launch of commercial systems, while also developing underlying technologies to improve SOFCs’ durability and reliability, lower their cost, and further improve their generating efficiency.

■ Commencement of 5 kW-class commercial fuel cell demonstration trial at a public facility in Arakawa

In March 2016, we installed a 5 kW-class commercial fuel cell at the Arakawa Sogo Sports Center in Arakawa, Tokyo, and a demonstration trial is now underway. The trial is being conducted under an agreement on real-world testing of 5 kW-class commercial fuel cells signed between Arakawa and Tokyo Gas in December 2015, and is the first trial of its kind to be conducted in Japan at a public facility.

■ Successful development of a theoretical design for an innovative technique to dramatically improve fuel cell efficiency

In a joint study, researchers from Kyushu University and Tokyo Gas succeeded in producing a theoretical design for an innovative technique to dramatically increase the power generation efficiency of SOFCs. In a world first, the researchers demonstrated the theoretical attainment of “super high” generating efficiency in excess of 80% LHV (lower heating value) and the mechanism for achieving it.


As a total energy company, we will promote the development of innovative environmental technologies to help ameliorate global

environmental issues.

We monitor and manage impacts on the environment at every stage of our LNG value chain in order to reduce the impact on the

environment.

Contribution to the Environment ｜ Material Balance


Collectiontruck

Fermentation

Desulfurizationtower

Calorific valueadjuster Odorizer Measure

-ment

To gas pipes

City gas derived from biogas

Refiner

Storage

Fuel cells Gas EngineCrushing

SortingAdjustment

Electricity

HeatRaw material

Urawa Hydrogen Station (adjacent to a natural gas station)

Presentation on the 5 kW-class commercial fuel cell demonstration trial

How Biogas is Fed into Gas Pipelines

LNG procurements Resource and energy inputs

Emissions into the environment Waste generation (recycling rate)

Raw materials Energy Water

Gas pipes

Sales volume

CO2 emissions at customers’ sites

LNG 11.41 million tons

LPG 0.44 million tons

Domestic natural gas, etc.

269 million m3

Extraction 0.58 million tons

Liquefaction 5.08 million tons

Transportation by sea

1.12 million tons

LNG procured by Tokyo Gas Group

13.87 million tons

Greenhouse gas emissions(CO2 equivalent)

Emission intensity

　Total 68,561 TJ

Electric power 615,419 MWh

City gas 1,447 million m3

Vehicle fuel 3,429 kl

Heat 48 TJ

Other energy 5.80 TJ

General waste 3,143 tons (78％)Industrial waste 149,317 tons (96％)PE pipes*5 235 tons (100％)Steel and cast-iron pipes*6 5,003 tons (100％)Excavated soil and asphalt concrete 1 million tons (78％ reduction relative to baseline disposal amount)

CO2 3,479 thousand tons

CH4 14 thousand tons

NOx 302 tons

Wastewater 1,091 thousand m3

COD 1.6 tons

City gas 13,102 million m3

Wholesale supply 2,161 million m3

Heat 3,251 TJ

Electric power 10.96 billion kWh

PE pipes, steel pipes, cast-iron pipes

（Total pipe extension work:）1,121 km

Tap water, industrial water

5,421 thousand m3

28.96 million tons

Business activitiesProcurement and transportation of

raw materialsCustomers’ sites

*1 For city gas production by the Tokyo Gas Group.*2 Energy usage by the Tokyo Gas Group excluding double-counting due to intra-group supply

of heat and electricity.*3 City gas: Volume of gas sales by the Tokyo Gas Group excluding supply to other gas utilities. Wholesale supply: Volume of gas supplied to other gas utilities. Heat: Includes sales from LNG terminals as well as district heating and cooling center and

spot heat supply. Includes intra-group supply. Electric power: Volume of sales of all electric power, including power purchased for

business use from other companies and the market as well as Group power stations.*4 CO2, CH4, NOx: Excludes double-counting due to intra-group supply. Volume of wastewater: Specified wastewater and domestic sewage.

*5, 6 Tokyo Gas on a non-consolidated basis.　*7 Gas sales volume according to consolidated financial statements multiplied by emission

intensity.

Greenhouse gas emission intensity at each stage of the natural gas life cycle, from extraction to processing and transportation, as calculated by the Life Cycle Assessment (LCA) approach.

Source: “Study of Life Cycle Greenhouse Gas Emissions of LNG and City Gas 13A” (35th Annual Meeting of the Japan Society of Energy and Resources, June 2016).

Production

0.77Liquefaction

6.71Transportation

by sea1.48

(g-CO2/MJ based on gross heat value)

Above values calculated based on emission intensities below.

Companies included in the data: Tokyo Gas and its 46 consolidated subsidiaries in Japan.

Greenhouse Gas Emissions from Business Activities (CO2 Equivalent)

(thousand tons of CO2)

2,7993,157

2012

3,078

2013

3,494

2015

3,382

20142011

4,000

3,000

2,000

1,000

0(FY)

Extraction, liquefaction, transportation by sea LNG terminals

Power plants

DHC

Industrial

Commercial

Residential

Tokyo Gas Group offices, etc.

Renewable energy, biomass

Renewable energy, wind powerR

City gas

Heat

Electric power

, Gas pipelines

P

*2*1

*3

*4 *7

Tokyo Gas Group Business Activities and Material Balance (FY2015)

Contribution to the Environment ｜ Promotion of Environmental Technologies Development

Third-party assured



Linkages among multiple facilities with different purposes Public facility, hospital, etc.

Use of solar heat and heat of underground tunnel water for air conditioning (first application in Japan for district heating)

Capable of uninterrupted power supply to disaster management base (Minato Park Shibaura) and uninterrupted heat supply to Aiiku Hospital during power outages

Optimization for area-wide heat and power according to outside air conditions and energy usage (first in Japan)

Maximum adoption and effective use of renewables, untapped energy, etc.

Contribution to BCP

Optimal supply/demand control by SENEMS

We are pursuing the development of “smart energy communities” that use energy smarter by connecting buildings in the community with a heat

and electric power network. Communities can be made “energy smart” by building smart energy networks (SENs), which link supply and demand in

a community into a single heat and power network based around a gas cogeneration system (CGS). Energy supply and demand throughout the

network are optimized by an energy center, which precisely manages the network’s heat and power use. By using such networks to provide low-

carbon, disaster-resilient energy tailored to local characteristics, we will contribute to making communities both more environmentally friendly and

resilient to disasters.

■ SEN development in the Toyosu wharf districtTokyo Gas Group is pursuing urban development with the potential

to last well into the 22nd century in a redevelopment area located

around land the Group holds in the Toyosu wharf district of Tokyo’s

Koto-ku. This is a project called “Tokyo Smart City TOYOSU 22.”

Under this project, we are undertaking futuristic urban development

guided by three conceptions of “smartness”—“smart energy,” “smart

green,” and “smart community,” from a long-term perspective looking

beyond the Tokyo 2020 Olympics and Paralympics, which is a high-

quality development to raise the value and appeal of the area.

In May 2016, we completed construction of a smart energy center

in Zone 4 (see figure below), owned by Tokyo Gas Site Development

Co., Ltd., in preparation for development of a SEN in the Toyosu

wharf district. This is the second SEN to be developed by Tokyo

Gas in an urban redevelopment district, the first being a SEN in the

northern district adjacent to Tamachi Station’s east exit. The newly

completed smart energy center will be equipped with one of the

world’s most efficient gas cogeneration systems, which will supply

electric power to the Toyosu wholesale market while waste heat is

used by the center itself. Environmental friendliness will be enhanced

by adopting gas pressure differential power generation using gas

supply pressure. By giving the CGS blackout start functionality,*1

laying independent power lines,*2 and employing disaster-resistant

medium-pressure gas pipelines, we will create a system that is

capable of supplying uninterrupted heat and electricity even during

power outages or other emergencies, thus enhancing the district’s

disaster resilience. The network will also have a “SENEMS”*3 for

centrally managing and controlling energy throughout the district

using ICT. This will make it possible to optimally control heat

sources and visually track energy usage, thereby contributing to

greater environmental awareness among building users. We plan to

progressively expand the heat and power network as development of

Zones 4 and 2 progresses.*1 Capability to independently restart the generator during a power outage.*2 Power lines laid independently by an operator. They can be used at a customer’s

discretion when grid power has been interrupted.*3 Smart Energy Network Energy Management System.

Promotion of Smart Networks Built around Cogeneration Systems

Zone 8Zone 2

Zone 1Zone 6

Zone 7Zone 5

Zone 4

Shinonome Canal

Toyosu

Shin-ToyosuShijo-mae

Ariake Tennis Forest

Heat supply project area

Area developed by Tokyo Gas Site Development Co., Ltd.

Smart Energy Center

Tokyo MetroYurakucho line

Tokyo Waterfront New TransitWaterfront line Metropolitan Expressway No. 10

Harumi line

Toyosu Wharf District Development Area

Tokyo Gas’s Toyosu Smart Energy Center

We will develop “smart energy networks” to contribute to the creation of low-carbon, disaster-resilient communities as we work to

realize a sustainable society.

TOYOSU 22 Urban Development Concept

•Development of smart energy network •Development of smart energy center •Promotion of environmentally friendly buildings

Smart energy

Smart green

Smart community

•Formation of a “green cross” •Creation of “green style” leveraging green and waterside space •Creation of a sustainable townscape

•Promotion of area management •Locally rooted community •Safe and secure disaster-resilient urban development

■ Work started in Block II-2 (West area) in the northern district adjacent to Tamachi Station’s east exit

Tokyo Gas Group is developing an SEN in the northern district adjacent to Tamachi Station’s east exit (East area in Minato-ku, Tokyo) in partnership with the Minato ward authorities with the goal of reducing the area’s carbon footprint and making it more disaster resilient. Supplies of heat and power have been progressively rolled out to three facilities—Minato Park Shibaura (a public facility), Aiiku Hospital, and a childcare support facility—since November 2014. The project is the first new urban development project in Japan to incorporate development of an SEN. In October 2015, work started on the TGMM Shibaura Project (provisional name) in Block II-2 (West area) in the northern district adjacent to Tamachi Station’s east exit. This project will create a multipurpose business center on land owned by the company, and we plan to build a second smart energy center for the new center to be operated in tandem with the first as the district undergoes further development, thereby reducing CO2 emissions in the entire northern district adjacent to Tamachi Station’s east exit by some 45% relative to 1990.

Childcare support facility

Minato Park Shibaura

HotelSolar thermal/ photovoltaic

Underground tunnel water

Use of untapped energies

Use of renewable energies

Aiiku Hospital

Center-to-center coordination

Heat Electric power Information

Office building

Office building

(planned) Cogeneration system

Solar thermal

Smart Energy Network in the Northern District Adjacent to Tamachi Station’s East Exit

CGSCGS

First smart energy center

Second smart energy center

Tokyo Gas Group is pursuing a number of projects, including development of an energy center, in Tsunashima Sustainable Smart Town, a next-generation urban smart city that is to be developed on the former site of a Panasonic factory in the Tsunashima-higashi district of Kohoku-ku in Yokohama, Kanagawa Prefecture, with energy supply scheduled to commence in phases beginning in December 2016. The plan is to develop energy supply systems based on an advanced model for sharing heat and power supplies to diverse facilities over a more compact area than in the past. We will improve supply continuity by installing a CGS in the town energy center and using multiple power sources and disaster-resistant medium-pressure gas lines, while the use of more efficient equipment and area-wide energy utilization will also improve environmental friendliness. And lastly, the delivery of energy services will ensure the financial viability of these improvements in supply stability and environmental friendliness.

Participation in Yokohama’s Tsunashima-Higashi Smart Town ProjectTOPICS

Key Advantages of SEN in the Northern District Adjacent to Tamachi Station East Exit

Artist’s impression of town energy center

Contribution to Local Communities ｜ Safe and Secure Ways of Life and Urban Development


■ Contributing to the next generation with activities supporting school education

Tokyo Gas wants the children upon whose shoulders the future

rests to know just how important energy and the environment

are, and so has been supporting school education since 2002. We

organize training workshops for teachers to help them deepen their

knowledge of energy and environmental issues and enable them to

convey that knowledge to the children they teach. These workshops

are held at the request of the boards of education and educational

study groups in several prefectures, and were attended by 1,122

teachers in fi scal 2015. Special classes are also taught in the schools

themselves by Tokyo Gas employees. As of the end of March 2016, a

total of 1,051,848 children had taken part in these classes.

Outside of school itself, we host fi eld trips to our Gas Science

Museum and provide information for teachers and children via

our “Odoroki! Naruhodo! (Oh! Now I get it!) Gas World” educational

website in order to broaden and deepen children’s education and

give them an opportunity to think about energy and the part it plays

in their lives.

■ Tokyo Gas Environment Support FundThe Tokyo Gas Environment Support Fund was established with

a grant from Tokyo Gas to the Japan Environment Association to

commemorate our reaching the 10 million customer milestone in

fi scal 2007. Through the fund, we support non-profi t, private-sector

organizations engaged in ongoing environmental conservation

activities. In fi scal 2016, we launched a new program called

the Morikatsu Forest & Sea Support Program to strengthen our

contribution to the fi ght against global warming by supporting

activities conducive to the protection and nurturing of forests and

seaweed beds. So far 21 organizations have been selected to receive a

total of ¥10 million in funding under this program.

Special elementary school class taught by one of our employees

Learning how to stack fi rewood Making a fi re using everyday materials

Contribution to Local Communities ｜ Enrichment of SocietyPutting a strong emphasis on educating the children who will be responsible for the next generation, we will work with local

communities to organize activities that will encourage people to think of ways of using energy that will enrich our lives, as well as

activities that contribute to the development of a cohesive society through para sports.


Kids in the Kitchen

Building a Society and Ways of Life That Are Good for the Environment

Enriching Our Lives and CultureBuilding a Cohesive Society by Supporting Sports for the disabled

TOPICS

The Tokyo Gas Group has been involved in support activities as an offi cial

partner of the Japan Para-Sports Association (JPSA) since 2013 in order to

help empower people with disabilities to participate in society and to build a

more cohesive society.*4 In the process, we have sought to raise awareness

and involvement in para sports by, for example, creating opportunities for

employees and their families to experience para sports, watch para sports

events, and meet competitors. We also sponsor athletes such as Tokyo

Gas employee and swimmer Keiichi Kimura, who represented Japan at the

Rio 2016 Paralympic Games. In conjunction with these activities, we are

broadening our support activities to encompass our customers as well. These

activities include staging para sports-related exhibitions at our facilities to

increase visitor understanding, and raising donations for the JPSA through

Tokyo Gas’s online members’ program. We aim to apply the insights gained

through these support activities to off er better community development and

lifestyle solutions, and in the future we will be looking into pursuing further

support activities in partnership with other companies.

By 2020, we want the Tokyo Gas Group’s employees to be a driving force

in building a cohesive society whose members recognize and value one

another, whether they have disabilities or not, by continuing to contribute

to the steady development of the capital’s appeal, the appeal of local

communities, and general awareness of para sports.

*4 A “cohesive society” is what the Cabinet Offi ce proposes to achieve through a range of policies designed to create a society whose members “develop as rounded, humane individuals equipped with all the skills necessary to contribute as full-fl edged members of society” and that “nurtures and supports children and young people and enables everyone to live safely and securely, regardless of age or disability.”

Website Cabinet Offi ce “Policies on Cohesive Society” http://www8.cao.go.jp/souki/index-eng.html

In July 2015, Tokyo Gas was named an offi cial partner of the

Tokyo 2020 Olympic and Paralympic Games in the “Gas & Gas

Utility Services” category. As a locally-based company that has

supplied the Tokyo metropolitan area with energy ever since our

establishment in 1885, we are committed to helping make the

Games safe and successful by stepping up a full range of measures

to ensure the security of the energy infrastructure. We will be

working hand in hand with the Tokyo Organising Committee of

the Olympic and Paralympic Games to design and deliver robust,

cutting-edge energy services that add to the capital’s appeal.

By improving and expanding support for sports for the disabled,

we hope to contribute to the success not only of the Olympic

Games but also of the Paralympic Games, which -- in a fi rst for the

Olympic movement -- are being held for a second time in the same

host city.

Swimmer Keiichi Kimura (Tokyo Gas employee)

Wheelchair basketball game

Tokyo Gas Becomes a Tokyo 2020 Offi cial Partner in the Gas & Gas Utility Services Category

Initiatives to Support Para Sports

Tokyo Gas is an offi cial partner in the Gas & Gas Utility Services category of the Japanese Paralympic Committee.

■ “HIIKU”: Education about the power and benefi ts of fi reAs part of our next-generation youth education activities, we have

been working since 2012 to expand our participatory “HIIKU” fi re

education program. The program’s aim is to give youngsters the

opportunity to learn through direct experience about fi re, its benefi ts

and how to handle it safely. It is also designed to develop their

disaster survival skills and equip them to use fi re to enrich their own

lives. The program attracted some 3,100 participants in fi scal 2015.

■ Helping enrich food culture in tune with the timesOur cooking class program, which celebrated its centenary in 2013,

off ers a variety of classes tailored to diff erent participants and needs.

These include “Kids in the Kitchen,”*1 which teaches children how to

cook for themselves and to use all their fi ve senses in the process, and

“La Cucina Espressa,”*2 which shows how gas is uniquely suited to

quickly cooking multiple dishes at one time. These classes drew more

than 100,000 participants in fi scal 2015. All of our cooking classes

incorporate an environmentally conscious approach to eating habits

that we call “eco-cooking,”*3 and 2015 marked the 20th anniversary

of our unveiling of this concept. We also emphasize training

instructors to teach eco-cooking, training some 330 new instructors

in fi scal 2015. Going forward, we will continue our eff orts to enhance

customers’ lifestyles and eating habits.

*1,2,3 “Kids in the Kitchen,” “La Cucina Espressa,” and “eco-cooking” are registered trademarks of Tokyo Gas.


Basic Policy

The Tokyo Gas Group lays down the following policies on human

rights in Our Code of Conduct.

1. We will respect human rights and will not discriminate or

harass anyone on the basis of race, religion, gender, age, origin,

nationality, disability, education, social status, or other such

grounds.

2. We will respect one another’s positions and treat everyone

equally, irrespective of form of employment, gender, title, or

any other diff erences.

3. We will not commit sexual harassment, workplace bullying, or

any other acts that infringe the dignity of the individual. We will

also not allow such acts to be condoned.

The concept of human rights includes all the basic human rights laid

out not only in the Constitution of Japan and Japan’s Labor Standards

Act, but also in the Universal Declaration of Human Rights. It further

encompasses the basic rights regarding labor (freedom of association,

the right to collective bargaining, elimination of forced labor,

abolition of child labor, elimination of discrimination) stipulated in the

ILO International Labour Standards, as well as the local laws, culture,

and practices of the countries in which our offi ces are located. As we

further expand our business overseas, all of our related departments

will work together to advance our initiatives for the respect of human

rights.

We have established a committee called the Central Human Rights

Promotional Meeting to raise understanding and awareness of

human rights issues in general and to promote PDCA practices for

addressing them. Committee meetings are attended by the general

managers responsible for personnel matters in each division or

department, and are chaired by the chief compliance officer. When

the committee met in fiscal 2015, it reported on the state of human

rights awareness training at Tokyo Gas, our subsidiaries and affiliates,

and Tokyo Gas LIFEVAL (“LIFEVAL”), provided information on human

rights of particular concern to companies, and deliberated and

approved plans for activities in fiscal 2016.

■ Human rights promotion leadersWe provide year-long training for “human rights promotion leaders”

who can lead constructive discussion and autonomous action on

human rights in the workplace in order to further raise awareness

of our social responsibilities and so improve our performance in this

area. Launched in 1995, the 14th cohort completes its training in

2016. There are currently 193

workplace leaders, including

those in our subsidiaries

and affiliates, planning,

giving advice, and providing

instruction in human rights at

our branch offices.

■ Human Rights Advisory Service DeskAdvisory service desks have been established both inside the

company (the Communication Support Section in the Compliance

Department) and outside (an independent support agency) to deal

with issues concerning communication in the workplace. We make

our best efforts to conduct face-to-face consultations wherever

possible on the precondition of protecting those seeking assistance,

while working together and supporting the company to create a work

environment where workers can feel safe and comfortable. A total of

56 consultation requests were received in fiscal 2015.

We believe that the starting point for advancing human rights is

fair human resource selection procedures and the creation of a

vibrant workplace, and we are implementing various measures to

achieve both. We are continuing to provide training on human rights

awareness and are widening coverage as far as possible to include

not only employees at Tokyo Gas itself, but also employees at our

subsidiaries, affiliates, and LIFEVAL.

■ FY2015 state of implementationWe make extensive use of participatory training so employees

can learn about various human rights issues and gain a better

understanding of the conditions that companies face, and we place a

premium on participants discovering things for themselves.

■ Human rights lecturesWorkshops (including lectures) are held to raise human rights

awareness and promote diversity among Tokyo Gas Group

employees. In fiscal 2015, participants heard status reports on training

in human rights awareness and learned about the latest news on

human rights. Outside speakers were also invited to talk on the

subject of “First Steps toward Supporting LGBT Employees in Order

to Utilize Diverse Human Resources,” enabling participants to learn

about what action society wants companies to take, what people can

do as individuals, and what developments to expect in the future.

Type Classification Overview Participants

Company–wide

Level-specific training

Training upon entering the company, during the third year, and during qualification promotions (two levels)

1,534

Training programs and follow-up for human rights promotion leaders

First-time leader training (1 year) and follow-up training 280

Planning-type training

Human rights study sessions 350

Training assistance for affiliates and subsidiaries

Training provided upon direct request to the secretariat

695

Dispatch of lecturers to outside workshops

Training upon request by companies, local authorities, and other organizations (including the Industrial Federation for Human Rights, Tokyo)

135

By workplace

Human rights training at branch offices

Theme-specific training by workplace 7,983

Human Rights Promotion System Education and Training

Human Rights Promotion System Chart (as of April 1, 2016)

(Communication Support Section)

(Chief compliance officer)

Central Human Rights Promotional Meeting(Central Human Rights Promotional Committee)

District Human Rights Promotional Meeting

Chairperson

Secretariat

Members Chairperson

Human rights promotion leaders

Members

(General managers responsible for human resources)(General managers responsible for human resources)

Secretariat

Human rights awareness provides the foundation for employees to achieve their full potential and for the development of smooth

relations with stakeholders.

We will continue to address human rights issues as we put into eff ect our main policies for implementation in fi scal 2015-

17.

Respect for Human Rights ｜ Human Rights Due Diligence


The Communication Support Section provides training for Tokyo Gas Group employees when they join the company

and on other appropriate occasions, such as when they are promoted, and also helps individual workplaces in the Group

to organize their own training. Another of its roles is to keep track of public expectations through its involvement in

relevant bodies, such as the Industrial Federation for Human Rights, Tokyo, and it uses the information obtained to

improve the training provided and better equip the Group to achieve its Challenge 2020 Vision.

The starting point in training is to get employees to understand human rights for themselves. For example, with

important strides being made today in promoting diversity as a means of enhancing corporate competitiveness by

creating workplaces in which diverse minorities, including women, people with disabilities, and LGBT people, can all

make full use of their abilities, showing respect for diverse values and individuality will only grow in importance. Our

goal, therefore, is to encourage participants to consider what they themselves would do in various scenarios, instead of

thinking of human rights and diversity as having little to do with them personally, in order to provide pointers for action

in real life. Awareness at the individual level is what gives a company its culture, and as the Group’s globalization will

add to the importance of creating room for diversity and human rights, we will continue to play our part in broadening

employees’ perspectives and helping them to see how various social challenges concern them too.

Awareness at the Individual Level Is What Makes a Company What It Is

Rumi YashiroCommunication Support Section

Compliance Department

VOICE

A training session for human rights promotion leaders

A human rights workshop on LGBT rights


Level-specific training and made-to-order training tailored to

individual companies’ and departments’ circumstances are provided

to raise compliance awareness throughout the Group.

The business environment faced by the Group is changing in

all kinds of ways. Legislation is being revised and enforced more

strictly, while the total energy business is evolving and global

business development accelerating. To ensure that all our employees

are capable of responding appropriately to these developments

occurring both within and outside the Group, we gather information

on compliance, share it internally, and provide relevant training.

In fiscal 2015, about 620 Group employees received training on

topics including the Antimonopoly Act, the Act against Unjustifiable

Premiums and Misleading Representations, and the Subcontract

Proceeds Act.

FY2015 State of Implementation

Breakdown Overview Participants

Workplace workshopsTraining at the individual workplace level led by compliance promoters 23,745

Made-to-order training

Training requested by individual companies and departments 2,634

Legal compliance training

Training in complying with legal revisions and stricter enforcement About 620

Basic Policy

To ascertain the effects of compliance promotion activities, Tokyo

Gas conducts yearly surveys of all employees, including those at our

subsidiaries and affiliates. In order to reflect the outcome of these

surveys in our future activities, in January 2016 we provided feedback

on the survey results and the nature of the actions we are taking in

response to those results to our compliance promoters. Feedback

was furthered delivered individually to subsidiaries and affiliates in

February and March, and the survey results and information on our

response have also been shared with the employees of Tokyo Gas

and its subsidiaries and affiliates through publication on our intranet.

In addition, the Internal Audit Department regularly conducts audits

of Tokyo Gas and its subsidiaries and affiliates focusing on the

seriousness of risks and the probability of their materialization from

the perspective of legislation related to the audited unit’s operations,

as well as corporate ethics and social norms.

Tokyo Gas is duty bound as a public utility to prevent the leakage of

customer and other confidential information and the manipulation

and destruction of data on its computer systems.

Tokyo Gas Group has established PDCA cycles and is stepping up

action to ensure information security in the face of changes in the

environment, including increasingly sophisticated use of the Internet

and the growing threat posed by cyber-attacks.

Information security promotion systems have been set up in all

divisions and departments with the aim of preventing information

security incidents (such as leaks of confidential information and

the destruction or falsification of data on computer systems) and

minimizing the damage and impact in the event that an incident

should occur. On the technology front, we have reinforced

information security by deploying multilayered defenses, including

hardware to protect against unauthorized access from external

networks and systems to detect and remove computer viruses. On

the personnel front, we have made organizational arrangements to

promote information security, and are also providing education in

information security and on performing self-checks. We will continue

to take action to enable employees at Tokyo Gas, our subsidiaries and

affiliates, and Tokyo Gas LIFEVAL to improve their own information

security standards.

The Tokyo Gas Group is committed to being a sound business

group whose executives’ and employees’ observance of high ethical

standards as well as laws and regulations earn it the trust of society.

To this end it seeks to improve compliance through the following

three approaches.

The Management Ethics Committee chaired by the President

meets twice a year to monitor the handling of concerns and

inquiries received by our compliance advisory service desks and

the extent to which compliance awareness has taken root, to

confirm the findings of compliance audits and other reviews, and

to discuss and decide on future activities.

1. Fostering of a compliance oriented mentality

We aim to establish values and a corporate culture in which each

executive and employee practices compliance-based decision-

making and actions.

2. Compliance efforts by each business department based on the

basic policies

Under the basic policies formulated by the Management Ethics

Committee, each business department of our group takes

specific and independent approaches closely connected to each

operation.

3. Establishment of the compliance PDCA cycle

In order to execute business activities in a flexible and consistent

manner in accordance with changes in operations or the legal

environment, we have established a PDCA cycle that enables us

to review our operations from the perspective of compliance and

improve them.

The Compliance Department, serving as secretariat to the

committee, conducts activities in each unit, including development

of compliance promotion systems, training and activities to raise

awareness, reduction of compliance risks, operation of compliance

advisory service desks, and distribution of information within the

Group.

■ Putting compliance into practiceOver 300 management-level personnel have been appointed

“compliance officers” and “compliance promoters” at each

workplace to lead action to promote concrete compliance activities,

and information is shared through the Compliance Promotion

Liaison Committee in order to stimulate greater action to promote

compliance. In order to promote compliance by Tokyo Gas LIFEVAL,

which provides services for Tokyo Gas Group at the local level, we

send out instructors to deliver training, provide workshop tools

tailored to the conditions faced by each company and help them to

implement PDCA cycles. Parallel with these activities, the Tokyo Gas

Merchandisers Organization (TOMOS) has established a “TOMOS

Charter of Conduct” in accordance with Our Code of Conduct in order

to align its compliance practices with those of Tokyo Gas.

■ Compliance advisory service desksTokyo Gas has established compliance advisory service desks

both internally (in the Compliance Department) and externally (at

law firms), and has expanded their coverage to include suppliers

and customers as well as Tokyo Gas Group members. All who use

these services are assured of their privacy and freedom from unfair

treatment as a result of having used them. Subsidiaries, affiliates, and

Tokyo Gas LIFEVAL also have their own advisory service desks, and

through the effective operation of these desks we are endeavoring

to ensure that compliance-related problems are discovered and

resolved quickly so that our corporate self-regulatory processes can

continue to function effectively.

In fiscal 2015, the compliance advisory service desks dealt with 52

cases, including cases concerning internal rules and cases concerning

relations in the workplace.

Education and Training

Compliance Promotion Structure (as of April 1, 2016)

Report

Report

Support/ReportInstruct/Report

Report/Consult

Consult/Inform

Compliance Audit

Report

Report/Consult

Management Ethics Committee

President

Board of Directors

Internal Audit Dept.

Audit and Supervisory Board Members

Compliance Dept.

Compliance Committee

Subsidiaries and Affiliates/Tokyo Gas LIFEVAL

Employees

Each Tokyo Gas Department

Each Unit

Chairperson: PresidentMembers: Division Executive Officers, Related General Managers

Our Code of ConductWe are taking ongoing action to ensure our employees

understand and practice Our Code of Conduct that

explains the values and decision-making standards that

all executives and employees are expected to share.

Learning from Cases! Collected StatutesThis guide takes a case study approach to explaining

legal issues that might arise in personnel management

and in routine dealings with customers. It is designed

for use by Tokyo Gas LIFEVAL members and other fi eld

managers.

Compliance Promotion Structure

We will practice fair and transparent management following PDCA cycles designed to strengthen Tokyo Gas Group’s compliance.


Information Security

Verification and Audit of Penetration of Compliance

A training session on the Antimonopoly Act

Promotion of Compliance ｜ Permeation and Rigorous Practice of Compliance


Tokyo Gas Group collects and utilizes a vast amount of personal

information, including information on over 11 million customers. We

established a company-wide system for maintaining secure control of

personal information ahead of the full entry into effect of the Act on

the Protection of Personal Information on April 1, 2005. We have also

developed our own in-house rules and manuals to meet requirements

under this law and have implemented awareness-raising activities for

all group employees. Since the law took effect, personal information

protection audits have been performed by the Internal Audit

Department in addition to self-checks in order to confirm compliance

with the Act on the Protection of Personal Information and other

relevant laws, ordinances, and guidelines, and to assess compliance

with Tokyo Gas’s own privacy policy and internal regulations.

Awareness is continuously enhanced by educating our employees

in the protection of personal information when they join the

company, in their third year with us, whenever they are promoted,

and on other appropriate occasions. As part of our information

security education, we help employees improve their knowledge

of protection of personal information through annual e-learning

courses.

We will be ramping up our efforts to ensure secure management

of personal information in order to keep pace with our entry into the

electricity retail business.

We recognize that properly protecting and handling personal

information is the foundation of its business activities and an

important social responsibility. To assist its fulfillment of these

responsibilities, Tokyo Gas has established the following policies

under which the company makes its best efforts to protect personal

information.

Privacy Policy

1 Observing laws

In addition to observing all applicable laws and regulations

governing the protection of personal information and all relevant

laws, regulations, and guidelines, Tokyo Gas establishes its

company policy and internal rules for the protection of personal

information, and strives to improve them.

2 Managing personal information

Tokyo Gas takes necessary actions under relevant laws,

regulations and guidelines and properly manages personal

information in order to prevent any loss or leakage of or

unauthorized changes to said information. In addition, a person

responsible for the protection of personal information is assigned

at each workplace to educate and monitor employees in relation

to this issue.

3 Obtaining and using personal information

Tokyo Gas obtains personal information in appropriate ways in

order to properly and smoothly carry out its business activities.

When obtaining such information, Tokyo Gas informs the

person concerned in advance of the purpose of use of his or her

information, and uses said information only within the scope

necessary to achieve this purpose.

4 Providing personal information to third parties

Tokyo Gas does not provide personal information to any third

party without obtaining the agreement of the person involved,

except when allowed to do so under relevant laws, regulations

or guidelines, and in certain cases where, for example, parties

receiving the entrusted information are not deemed by law to

be third parties. When providing personal information to, for

example, an entrustee, Tokyo Gas selects a party that can meet

and fulfill the necessary standards and obligations for managing

personal information, makes appropriate arrangements for the

protection of the personal information, and exercises monitoring

over said party.

5 Disclosure, correction, etc. of personal information

When a person seeks to, for example, disclose or correct his or

her personal information, Tokyo Gas endeavors to respond to the

request promptly, within reasonable limits under relevant laws

and guidelines, after confirming the person's identity.

Secure Control of Personal Information

We recognize that properly protecting and handling the personal information of our more than 11 million customers is an

important social responsibility, and we will practice secure control of such information in accordance with our policy to protect

personal information.

Basic Principles

Let’s use properly in accordance with the rules: A Guide for Protecting Personal InformationThis practical commentary on the Act on Protection of Personal Information is distributed to employees of Tokyo Gas, its subsidiaries and affiliates, and Tokyo Gas LIFEVAL to ensure that they properly understand and practice protection of personal information.

Promotion of Compliance ｜ Prevention of Bribery and Corruption


Promotion of Compliance ｜ Protection of Personal Information


Bribery and corruption not only harm society’s trust in a company,

but can also impede economic growth in developing countries

themselves and lead to poverty and other problems of international

concern. To prevent this, Tokyo Gas requires in Our Code of Conduct

that “we will maintain fair relations and do nothing questionable

under applicable laws and ordinances.” To keep pace with our

globalization in accordance with the goals set forth in the Challenge

2020 Vision, we introduced “Foreign Public Official Anti-Bribery and

Corruption Guidelines” in April 2015 that outline the basic policies to

be followed in order to ensure that business is pursued in a fair and

transparent manner and in accordance with high ethical standards,

overseas in the international community as well as in Japan. These

guidelines declare that even acts expected to create opportunities for

business growth and profit are prohibited if they infringe our basic

policies.

Outline of the Foreign Public Official Anti-Bribery and Corruption

Guidelines

Guidelines for action

● Bribery and corruption of foreign public officials and other

individuals and spending on facilitation payments to foreign public

officials and other individuals are prohibited.

● The provision of inappropriate hospitality, gifts, donations, and

the like is prohibited. All hospitality, gifts, donations, and the like

made to foreign public officials and other individuals must first be

approved by the procedure described in the guidelines, and must

be accurately accounted for in a timely manner.

● To prevent the bribery and corruption of agents, consultants,

and similar third parties, due diligence must be performed before

appointing them, clauses prohibiting bribery and corruption

must be incorporated into their contracts, and other appropriate

measures must be taken. The same applies to M&As with foreign

firms.

The guidelines are promoted with the chief compliance officer serving

as the executive officer with chief responsibility for the prevention

of overseas bribery and corruption. Supervisors responsible for

implementing measures to prevent bribery and corruption overseas

are appointed in every department and company in the Group and

are responsible for the approval of hospitality, gifts, and donations,

confirmation of due diligence findings when appointing third parties,

approval of entry into contracts, and similar matters.

Tokyo Gas Group provides training for all those primarily involved

with business overseas to ensure that they understand and follow

the guidelines properly. In fiscal 2015, 235 personnel received this

training. We have also produced an English-language version of

the guidelines for locally hired employees, and have distributed the

English edition of Our Code of Conduct (see p. 49) to ensure that

everyone understands its content. We also have established a system

for overseas local employees to report incidents and seek advice

on these issues. We follow PDCA cycles to ensure that bribery and

corruption are being prevented by conducting regular internal audits

and other reviews to confirm that the procedures established by the

guidelines are being followed.

Effective Application of the Guidelines to Prevent Bribery and Corruption

Operating Structure

A training session in progress

As one means of addressing the risks that arise as we expand our operations overseas, we will take action to prevent the bribing of

foreign public officials and other individuals, and ensure that business is conducted in a fair and trustworthy manner.

Basic Principles


Enhancement of ｜ Promotion of DiversityPeople-Centered Management Base


Tokyo Gas Group supports diverse work styles and is working to enhance opportunities for diverse human resources in accordance

with its overarching commitment to promoting diversity with the aim of creating an energetic workplace in which every

employee can exercise his or her knowledge, skills, and experience to the full.

Tokyo Gas is working hard to foster employee awareness and create

an organizational culture conducive to developing the careers of the

company’s female employees by promoting a variety of initiatives,

including seminars.

■ Seminar for employees before they return to work after parental leave

These seminars are taken by employees on parental leave before they

return to the workplace. They are designed to give them a clearer

picture of work arrangements after their return and how they can

work with superiors and coworkers to both smooth their return and

balance work and parenting.

■ Seminar for managers with subordinates who have small childrenThese seminars give managers a better understanding of how to support employees’ work-parenting balance, and equip them with the management skills needed to nurture subordinates and help them make the most of their abilities.

■ Seminar on women’s career developmentThese seminars for women in their twenties provide pointers on active career development in order to help them build their careers from an early stage.

Tokyo Gas has been retaining employees beyond the mandatory retirement age even before the revised Act on Stabilization of Employment of Elderly Persons took force in order to provide appropriate employment opportunities to employees who have both the ability and motivation to continue working. It has also launched a scheme called the Grand Career Support Program under which employees in their fifties receive individualized career development support, including training and sessions with career consultants in the Personnel Department.

Reemployment after Mandatory Retirement (FY2015)

Number reemployed (% of total)

Tokyo Gas*2 241 people (75.5%)

Subsidiaries and affiliates, etc. 26 people (8.2%)

Total 267 people (83.7%)

Number mandatorily retired (total number) 319 people

*2 Number of people re-hired in career positions.

Number of Full-time Employees by Gender*1

(as of March 31 of each fiscal year) (persons)

FY2013 FY2014 FY2015

Male 6,847 (87.9%) 6,642 (87.3%) 6,519 (86.7%)

Female 942 (12.1%) 968 (12.7%) 999 (13.3%)

Total 7,789 7,610 7,518

At Tokyo Gas, people with disabilities perform all kinds of work alongside our other employees. As of March 2016, we employed 137 people with disabilities, meeting the statutory rate. To further expand employment of people with disabilities and create opportunities for them to excel, we will establish a new “Liaison Committee to Promote Employment of Disabled People,” expand the locations and scope of work opportunities in the company for people with disabilities, and support initiatives by Tokyo gas Group companies. At the same time, we will promote the creation of a safe and comfortable work environment.

Tokyo Gas has been working to create a more comfortable working environment, including making it easier to balance work and parenting, since before the entry into effect of the Act on Advancement of Measures to Support Raising Next-Generation Children. We have also created arrangements for taking longer periods of leave and working shorter hours that go beyond our legal obligations as an employer. Our rate of return to work after parental leave is consistently high, averaging close to 100% every year. We also offer systems that allow employees to take leaves of absence for fertility treatments, to attend school events for their children or grandchildren, and to provide nursing care to family members. These systems are widely used by our employees.

Main Systems and Numbers of Users (FY2015)

Parental leave (until end of April immediately following child’s 3rd birthday) 85 (2 males)

Shorter hours for parents of small children (during pregnancy and until child completes 6th grade) 213

Nursing care leave (up to 3 years) 3Nursing care work (up to 2 years) 0Community service leave (special leave for up to 5 days within 1 year) 88Sabbatical system (for employees who reach the age of 30, 35, 40, and 50) 594

Note: The data on p. 52 is for Tokyo Gas employees on a non-consolidated basis.

*1 The above figures include employees loaned by Tokyo Gas to other organizations but exclude those loaned to Tokyo Gas from other organizations.

Tokyo Gas Group attributes its success in business to the combined contributions of all its employees.

That is one of our strengths, yet with the extensive use now being made of ICT, business processes as well

as technologies are changing and evolving. We therefore established a new unit in April 2016 called the

Operational Reforms Project Department to explore more effective and efficient ways of performing work

using ICT. The department is now pursuing three initiatives guided by the overall principle of making work

“waku waku” (“exciting” in Japanese).

The first of these initiatives is “omakase” (“hands-off”) work. This means making maximum use of ICT

wherever feasible to increase the value and productivity of work. The second initiative is “dokodemo”

(“anywhere”) work, the aim of which is to enable employees to work with anyone anywhere anytime, whether

at home, at a satellite office, or away on business, using mobile and other technologies. And the third

initiative is “wai wai” (“lively”) work. This involves creating a communicative environment in which all people

can pool their expertise and enjoy producing more valuable work together.

In recent years an increasing number of people have been finding themselves unable to make the most of

their abilities due to time and locational constraints. The reasons for this are manifold, with some people, for

example, having to leave their jobs to care for a young child or an elderly relative. Regardless of the reasons,

however, it is a waste of their abilities to leave them no option except to give up on remaining at work from

the outset when—with proper communication with coworkers and superiors about what they are thinking

and their needs—it should be possible to remove many of the obstacles they face. The Operational Reforms

Project Department aims to use ICT to accommodate individual employees’ hopes and needs, thereby

creating an environment in which not only women but all employees can make maximum use of their own

individual abilities.

Effective use is made of ICT to create the conditions for individuals to make the most of their abilities

Ayumi Shigitani

Executive Offi cerGeneral Manager

Operational Reforms Project Department

VOICE

Basic Policy

Overarching Commitment to DiversityWith competition between companies in the energy market continuing to intensify, the Tokyo Gas Group aims to maintain its position as the customer’s choice and achieve sustainable growth and development in the future by realizing its Challenge 2020 Vision. One important priority for the Group as a whole is the promotion of diversity. For us to continue to meet diversifying customer needs, it is vital that every single person employed by the Group should have the chance to excel and make maximum use of his or her knowledge, ability, and experience. We are committed as a corporate group to developing and expanding systems to achieve this goal and foster employee awareness of it while continuing to proactively create an organizational culture in which everyone can excel, regardless of gender, age, disability, nationality, or whether they were hired straight out of university or mid-career.

Basic Policy Regarding Promotion of Diversity

1 We aim to realize an organization (diverse working styles and productivity enhancement) in which every person accepts each other's working style while enhancing productivity.

2 We regard promoting the success of women as the beginning of the promotion of diversity, and will continue to undertake this proactively.

3 We will establish a “Group Diversity Promotion Team” and promote diversity in the entire Group in an integrated manner with management.

With the average length of employment for men and women now almost the same and more and more women being appointed to management positions, opportunities for women are growing at Tokyo Gas.

Overview of Employees

Continuous Career Development Support

Employment of People with Disabilities

Promoting Work-Life Balance

Action to Promote Women’s Participation in the Workplace

Average Length of Employment by Gender(as of March 31 of each fiscal year)

Male

(Years)

2013 2014 2015

25

20

0

21.122.8

21.9

19.920.1 20.0

Female

(FY)

Ratio of Women in Management(as of April 1 of each fiscal year)

(%)

2014.4 2015.4 2016.4

7.0

6.0

0

5.8

6.36.5

(year and month)

Third-party assured

Third-party assured

Third-party assured

Third-party assured


Tokyo Gas is pursuing occupational health activities in order to

maintain and enhance the health of its employees. These activities

consist primarily of continued action on mental health and the

prevention of lifestyle-related diseases through the provision of

health consultations and health education services at the workplace

by visiting teams of industrial physicians and nurses. We are working

hard to ensure that 100% of our employees receive health checkups,

and are committed to the early detection of disease and effective use

of outside medical institutions.

In fiscal 2006, Tokyo Gas introduced the company-wide Occupational

Safety and Health Management System (OSHMS) with the aim of

further strengthening daily occupational safety and health activities

at the workplace level and so preventing work-related injuries. This

system has now been in operation for 10 years. By utilizing the risk

assessments introduced as part of this system, we are also working

to quantify the risk of accidents in order to better prevent them. We

are further working to comply with related laws such as the Industrial

Safety and Health Act by periodically confirming and checking

occupational safety and health systems across the company and

other measures.

We also provide level-specific education on occupational safety

and health and safety considerations. Additionally, we proactively

train legal administrators through a variety of programs. Alongside

these activities, we have launched a program of lectures on safety

and health given by outside speakers in order to further promote and

raise awareness of safety and health activities.

To prevent traffic accidents, we provide various forms of driver

training through our own in-house driving license system. Safety

driving instructors who have undergone special training are also

assigned to each workplace to give everyday instruction on safety

through both behind-the-wheel and classroom training.

Occupational safety and health, which protects the lives and health of workers, is the foundation of a company’s existence and a social responsibility that all companies must bear. The Tokyo Gas Group believes that the values of “Safety, Security, and Reliability” that we advocate for our customers as our corporate brand are accepted only when we continue to secure our own occupational safety and health. We consider occupational safety and health to be one of the most important challenges of corporate management. Our Group gives the highest priority to ensuring safety and health, and enforces compliance, including adherence to all related laws and regulations, making every effort to eliminate the risk of disasters and accidents with the goal of being a company with an excellent safety and health record.

Group Occupational Safety and Health Policy

1. All employees, from top management down, will actively promote safety and health activities to safeguard safety and health for all.

2. In full awareness of its public mission and social responsibilities, the Group will strictly observe internal regulations on safety and health and work procedures, as well as legislation such as the Industrial Safety and Health Act and the Road Traffic Act.

3. The Group will promote and seek to further enhance its occupational safety and health management system (OSHMS). It will further ensure that “point and check” procedures are always followed and work to reduce accident risks and eliminate industrial accidents in line with policies set by leaders in the workplace.

4. To reinforce the Tokyo Gas brand’s reputation for safety, security, and reliability, leaders in the workplace will lead action by all to prevent traffic accidents. Particular attention will be paid to reducing accidents caused by younger employees, accidents in parking areas, and accidents caused by carelessness, with the aim of cutting the number of traffic accidents caused by own negligence and accidents causing injury to others by 20% from the previous fiscal year.

5. Action will be taken to encourage all employees to receive health examinations and to prevent passive smoking. We will enhance measures to prevent mental and physical illness and to maintain and improve health.

6. Support will be provided to promote safety and health activities so that all Tokyo Gas Group member companies can more smoothly and without exception take their own proactive action on health and safety.

Measures to Maintain and Enhance Health

Prevention of Traffic Accidents

Preventing Work-related Injuries

Structure of Safety and Health Management (as of April 1, 2016)

(Declaration of company-wide policies on safety and health activities)

(Declaration of divisional policies on safety and health activities for each division)(Development of divisional safety and health activities plan)

(Plan and disseminate safety and health activities plans for each business office)

Divisional Safety and Health Committee

(six divisions)

Safety and Health Committee in

each office

General Safety and Health AdministratorSafety AdministratorSafety and Health Promoter/Health PromoterIndustrial PhysicianHealth AdministratorSafety Driving ManagerAssistant Safety Driving Manager

Central Safety and Health Committee

Chair: Senior Executive Officer (executive in charge of Personnel Dept.)

Basic Policy Basic Policy

We develop the skills of our employees in recognition of the fact

that people experience growth through their jobs. To this end, we

focus on providing instructive training given by superiors on the job

(OJT), effectively combined with training (Off-JT) programs, self-

development programs, and workplace transfers and rotations. We

also operate an open recruitment system and conduct interviews on

career plans so that employees can find self-fulfillment and a sense of

satisfaction in their work.

Tokyo Gas’s human resource development programs is composed

of two pillars: training to develop foundational and common skills as

business people, which takes the form of basic training, managerial

training, and support for career development; and departmental

and cross-departmental training designed to develop a broad range

of expertise specific to individual departments. Tokyo Gas Group

employees, too, take part in some of the training in common skills to

help foster a sense of group unity.

In April 2016, all new Group employees received “Tokyo Gas Group

Mindset Training.” The purpose of this training is to instill a strong

sense of belonging in new recruits in order to make them more

aware of being part of our Group. This training includes lectures on

CSR-related subjects such as main policies, customer satisfaction,

compliance, human rights, and the environment.

In order to develop globally competent human resources capable

of playing an active role in business in Japan and around the world,

beginning this June we have implemented “Global Leader Training”

to develop participants’ language, presentation, and discussion skills,

and give them direct experience of business overseas.

Every year, employees have an interview with their superiors regarding their career plan. Their self-evaluation, along with the evaluation by their superiors, is entered into the personnel system to be utilized for relocation plans and further career development. As a system to supplement the regular method of personnel transfers, we also operate an “open recruitment system” through which employees can put themselves forward for positions in new business projects and other opportunities, as well as a “free agent” system that allows employees to challenge themselves by applying for positions that they wish to be considered for. We aim to allocate the right person to the right position so that our employees can feel challenged by and gain satisfaction from their work.

We have introduced a new contribution-type personnel management system designed to accelerate employees’ development by giving greater weight to positive, multi-angled assessments of the extension and utilization of each employee’s skills and abilities. By clearly specifying the roles expected of employees by the company according to each type of contribution made, the system aims to make individuals more aware of their styles of organizational contribution, hone and get the most out of their qualities and strengths, and so maximize organizational outputs.

Roles and Type of Person Sought by Contribution Type

Contribution type Roles and type of person sought

Expert

Supervises or supports duties at Tokyo Gas Group on-site locations by utilizing the skills, techniques, knowledge, and network acquired through experience in a specialized work field.

General

Promotes the business of Tokyo Gas Group from the perspective of what is best for the Group overall, while strengthening his/her field of expertise based on the skills, techniques, and knowledge acquired from various work experience.

Business fellow

Promotes improvements in Tokyo Gas Group’s solution and innovation functions through his/her high-level skills, techniques, and knowledge in a specialized field.

To facilitate improvements in approaches to work, workplace conduct

and other behaviors, we have introduced a “360-degree appraisal

system” to provide workers with feedback on their daily conduct from

their coworkers and subordinates as well as from their superiors.

Human Resource Development Programs

360-Degree Appraisal System

Transfers and Rotations

Contribution-Type Personnel Management System

capable of responding flexibly to changes in society and the business environment.

We are pursuing improvements in occupational safety and health in order to ensure the safety and health of the employees who

form our management base.

Tokyo Gas Group Mindset Training session

Highlights of Key ActivitiesHighlights of Key Activities

Enhancement of ｜ Development of Human ResourcesPeople-Centered Management BaseEnhancement of ｜ Occupational Safety and HealthPeople-Centered Management Base


Resource Procurement ManagementThird-Party Independent Assurance Report

CSR ProcurementIn delivering products and services to the customer, it is important that not only Tokyo Gas but also its business partners work

together to fulfill their social responsibilities.

We practice good CSR together with our business partners by, for example, establishing basic requirements for purchasing

activities that we and our business partners are expected to adhere to.

We will continue to value trustworthy relationships with our business partners and work to further raise the level of action

throughout our supply chains to achieve our Challenge 2020 Vision.

Tokyo Gas established guidelines and basic requirements in 1992 to ensure open, fair, and equitable conduct in its purchasing activities. These guidelines and basic requirements have been made public through the website since July 2000. We will continue to win the trust of our business partners by putting the above guidelines and basic requirements into practice, and conducting business transactions that are based on being highly transparent, fair, and equitable, thus enhancing our brand value of “Safety, Security, and Reliability.” To assist trust-based cooperation on purchasing activities with our business partners, we ask our business partners to work with us on meeting the conditions set forth in our “Basic Requirements for Purchasing.” We have also established “Environmental Common Specifications” covering areas such as legal compliance, reduction of environmental impacts, and concern for occupational safety and health, and these are presented to and required to be followed by business partners every time that we place an order with them.

In addition to guidelines and basic requirements for purchasing, we have disclosed on our website primary items to be procured and their method of procurement, in an effort to provide other companies with opportunities to do business with our company. We also share information with our business partners through regular meetings and other occasions, and strive to maintain mutual communications. In addition, we conduct annual surveys on general information, compliance, and environmental efforts for each of our business partners. Upon review of the survey results, we discuss them with executives of our business partners when necessary.

Green purchasing is the practice of giving preference to businesses that have less of an environmental impact when purchasing items and services. Tokyo Gas has systematically practiced green purchasing since fiscal 1996, and established the Green Purchasing Guidelines in 2000. We also use an electronic catalog purchasing*1 system containing more than 100,000 items that is designed to preferentially select products (primarily office supplies, printed materials, and fixtures, furniture, and equipment) that meet our green purchasing requirements.

*1 Electronic catalog purchasing (system name: PASPO) is an Internet-based method of ordering items conveniently and efficiently through an electronic catalog.

Basic Policy

Initiatives for Green Purchasing

Communication with Our Business Partners

Basic Requirements for Purchasing

1. Quality GuaranteeProducts to be supplied should meet the requirements for quality and performance set by Tokyo Gas, and such quality and performance must last for a certain period of time to be determined on the basis of what is considered reasonable. Furthermore, all products to be supplied must be superior in terms of shape, structure, operability and maintenance system support.

2. Reasonable PricingThe prices of the products to be supplied must be reasonable in light of the quality and performance of the product, the specifications, terms of delivery, purchasing quantities, payment terms and conditions, and the trend in market prices.

3. Delivery on TimeSuppliers must observe the contractual time of delivery specified by the Company.

4. Securing SafetyProducts to be supplied shall be absolutely safe in their use and operation.

5. Maintenance and ServiceSuppliers of the goods and services to be purchased by the Company must be able to provide inspection, maintenance, and repair services quickly and properly when required by the Company. The goods and services should therefore be designed and supplied with this requirement in mind. Suppliers must be capable of providing necessary parts and technical assistance quickly for standard repairs or in the event of an emergency.

6. Actions for Corporate Social Responsibility (“CSR”) (1) Practice of the Compliance (2) Environmental Conservation (Green Purchasing) (3) Risk Control (4) Consideration on Labor and Human Rights

0 20 40 60 80 100 （%）

FY2015 (n=312 companies)

Note: Only business partners with which Tokyo Gas did at least a certain amount of business in the previous fiscal year were surveyed.

93.3

93.9

83.3

86.2

85.9

82.1

71.5

Emergency response in times of disaster

Clarification of emphasis on CSR

Reduction of CO2

Measures against industrial waste

Green procurement

Promotion of environmental protection activities

Education on environmental conservation

Results of the Survey on CSR Efforts Made by Our Business Partners

Percentage of respondents tackling the issue indicated

The environmental and social performance indicators provided in this report (data on the environment and human resources) have been

third-party assured by KPMG AZSA Sustainability Co., Ltd. (a member of the KPMG Japan group) to enhance their credibility. We will work

to further raise the standard of our CSR activities in the future, taking account of the issues pointed out in the course of the third-party

assurance process and reader feedback received via our website and other channels.


Engagement with the Tokyo Gas Group’s Main Stakeholders

The Group practices CSR in the course of its daily business activities while interacting with its various stakeholders.

In order to practice sustainable management we are disclosing corporate data in a timely and appropriate manner. At the same

time, we are soliciting the opinions of our stakeholders, reviews of our CSR reports, and the opinions of outside experts while

working to improve communication with our own customers at the point of service, and using this feedback to improve our

activities.

Engagement with Stakeholders

Main stakeholders

● Main demands and expectations

■ Main responses of the Group

● Examples of engagement opportunities

Employees

● Diversity● Development of human resources ● Creation of a comfortable work

environment● Occupational safety and health

■ Promotion of opportunities for diverse human resources

● Career development seminars for women

● LGBT seminars

■ Employee skills development■ Career planning counseling■ Support for personal

development■ Sharing of various information

and promotion of understanding concerning Group

● Regular interviews with superiors● Various

training

● Workplace communication activities

● Group newsletter and intranet

■ Handling of consultations on compliance, human rights, etc. in Group

■ Monitoring of employee attitudes

● Advisory service desks (compliance, human rights, etc.)

● Employee opinion surveys

■ Provision of information and awareness raising on occupational safety and health

■ Action on mental health and prevention of lifestyle-related diseases

● Meetings and training on safety and health

● Action to maintain and improve health

■ Stabilization and improvement of labor-management relations

● Labor-management dialogue/consultation

Business partners

● Fair and equitable business transactions

● Practice of CSR procurement

■ Provision of fair and equitable business opportunities through disclosure of standards, policies, etc.

● Website disclosure of Guidelines for Purchasing Activities and Basic Requirements for Purchasing

● Briefings for business partners

● CSR questionnaire surveys of business partners

● Regular consultation with business partners

■ Improvement of quality and appeal of products in collaboration with business partners

● Recognition of efforts made by business partners at Business Partner Appreciation Awards

■ Provision of opportunities to further understanding of our operations

● Organization of tours of facilities for business partners

Administrative organizations

● Tax payments ● Compliance with laws

and regulations● Cooperation in public

policy and programs to solve social issues

■ Participation in urban development through main line of business

● Development of smart towns

● Urban revitalization and housing complex regeneration

● Re-development projects

■ Participation in local government committees and workshops

● Bodies such as environmental councils

■ Promotion of disaster prevention activities

● Participation in central and local government disaster prevention drills

■ Provision of information to resolve social issues and promote policy implementation

● Tours of experimental and demonstration testing facilities such as Senju Ei-WALK and Ku-Ra-Sou Home

Global environment

● Prevention of global warming● Conservation of biodiversity ● Creation of resource-saving

society

■ Provision of information and promotion of understanding regarding Group’s environmental activities

■ Provision of opportunities to experience environmental activities

● Environmental events for customers

■ Sharing of information on Group’s environmental activities, provision of information and awareness raising on environmental protection

● The Group’s environmental contribution award system

● Internal the Group training, study tours, and presentations

Shareholders and investors

● Maintenance and improvement of corporate value

● Equitable distribution of profits ● Timely and appropriate

information disclosure

■ Disclosure of information on performance and finances

■ Explanation of state of Group’s activities and plans

● General shareholders meetings ● Financial results briefings● Service plan briefings ● Briefings and one-on-one

meetings with individual investors

● Facility tours for individual shareholders

● Annual reports

● Shareholder correspondence

● Disclosure of investor relations information on website

Local communities

● Contribution to solution of social issues in individual countries and regions

● Support for education of next generation

■ Provision of information and awareness raising concerning Group’s disaster prevention activities

■ Provision of information contributing to safety and peace of mind in everyday life

■ Monitoring of views/demands and incorporation into activities

● Disaster prevention events organized by local governments

● Local activities

■ Provision of information and awareness raising on disaster prevention

● Disaster prevention events cohosted with NPOs

■ Support for environmental protection activities

● Environmental groups supported by Tokyo Gas Environment Support Fund

■ Provision of information, promotion of understanding, and provision of opportunities to experience energy and the environment

● Support for education in schools (teaching in schools, training for teachers, and provision of information via out-of-school learning activities, educational materials, and e-learning site)

● “Donguri” outdoors environmental education project● “HIIKU” fire education program for next generation youth

■ Support for para sports■ Support for children’s sports for next generation

● Activities as an Official Partner of the Japanese Para-Sports Association

● Provision of opportunities for active engagement in sports through soccer coaching, tournaments, etc.

■ Volunteer activities undertaken by employees

● Support for regions affected by Great East Japan Earthquake

● Collection and donation of used stamps, cards, and spoiled postcards

■ Support for Tokyo 2020 Olympic and Paralympic Games

● Activities as an Official Partner (in Gas & Gas Utility Services category) of Tokyo 2020 Olympic and Paralympic Games

Customers

● Stable supply of energy ● Ensuring of safety and quality of energy and products ● Provision of information on appropriate products and

services ● Provision of environmentally friendly products and services ● Improvement of customer satisfaction

■ Receipt of applications, feedback, and inquiries■ Improvements based on feedback

● Periodic safety inspections of gas equipment

● Meter readings● Gas appliance repair● Local service outlets

(Tokyo Gas LIFEVAL, Enesta, Enefit)

● Customer Center (phone and email) ● Customer feedback postcards● Customer satisfaction surveys

■ Provision of information and promotion of understanding concerning measures to ensure stability of city gas supply and prevent disasters

● Tours of LNG terminals and disaster prevention facilities

■ Provision of information on energy, the environment, household facilities, appliances, etc.

■ Proposal of comfortable home and lifestyle solutions■ Provision of cooking classes

● Gas Science Museum● Gas Museum● Shinjuku Showroom and Yokohama Showroom● Kitchen Lands● Gas exhibitions and other events ● Seminars

■ Provision of information on energy, facilities, appliances, and services

■ Provision of tips for everyday life (on food, saving money and energy, etc.)

● Tokyo Gas website ● Email newsletters● Facebook

TOKYO GASANNUALREPORT 2016Tokyo Gas Co., Ltd.


Working with Business Partners to Create a Sustainable Society

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Hidemi TomitaMr. Tomita graduated from the Faculty of Engineering at the University of Tokyo and obtained his Master from Princeton University. He was executive manager of Sony Corporation’s CSR department for some 10 years from its inception, and was later appointed a task group convenor for the ISO 26000 Working Group. Since the development of the ISO 26000 standard, he has been an active member of ISO 26000 PRO-SAG. He is also a member of the GRI Global Sustainability Standards Board (GSSB) for the development of new disclosure standards, and Japan expert for the ISO 20400 standard for sustainable procurement.

■ Stakeholder Dialogue 2016

Date: Wednesday, July 6, 2016

Location: Tokyo Gas Co., Ltd. Head Office

Outside expert: Hidemi TomitaSenior Project PrincipalLloyd's Register Quality Assurance Limited

Facilitator: Yoshihiko YamabukiDirector of Communications InnovationCetus & General Press Inc.

1 LNG procurementWe currently procure LNG for making city gas from

five countries under long-term contracts. To take the example of our Australian projects, which account for the bulk of our procurements, we meet requirements by performing to a high standard in areas such as concern for the environment, local employment, provision of vocational training, sensitivity to human rights, and communication with local communities. As our sources will diversify further in the future, we will be paying even greater attention to the factors that should be taken into consideration in supply chain management.

2 Material procurementWhile our Basic Requirements for Purchasing demand

good practice in regard to compliance, environmental conservation, risk control, and consideration for labor and human rights, we recognize that these requirements need to be rethought from an international perspective. We currently take a PDCA approach to managing procurements by surveying our business partners’ actions on compliance, the environment, and so on, as well as their business profiles, and providing feedback on our findings.

We value building trust with our business partners. We give them tours of various facilities and engage in dialogue to give them greater insight into the gas business. We also visit our business partners’ manufacturing facilities. As we cannot visit them all, however, we need to find better ways of keeping track of overall conditions.

3 Management of supply chainsIn the years ahead, we aim to shift from what we call the

“Mount Fuji-style of management” dominated by a single core business, namely the city gas business, to what we have named the “Yatsugatake (mountain range with several peaks) -style of management” with multiple core businesses. This will require us to think of our supply chains holistically from the point of view of the governance of the Group as a whole, and we recognize that how we go about doing so will be a key management question.

In order to practice good supply chain management, Tokyo Gas first needs to consider what policies to pursue as a group, and then make these policies known to its business partners and keep track of conditions at those business partners. It is important that Tokyo Gas be proactively involved in this process. In the case of new development projects, it needs to first conduct proper preliminary surveys and, if using existing assessment tools, it should properly determine that they are in fact compatible with the Group’s policies.

As Japanese firms are also now globalizing and thus face evolving challenges depending on the global situation, they need to take international standards as well as Japanese standards into account when surveying suppliers. There is also much that cannot be discovered from surveys alone. It is surprisingly difficult to get proper answers, due for example to the giving of inaccurate responses or failure to understand the point of a question. It is important not only to ascertain conditions on the spot, but also to provide opportunities for information to be shared. Communication with business partners should be continuously maintained.

It is not presently necessary to expend too much effort trying to visit all business partners. Tokyo Gas should instead survey a sample of the places that pose the greatest risks so as to study and identify overall trends, and then follow up with audits and other investigations. It is often not possible to get to the heart of a problem just by surveying large, primary suppliers. The Group should therefore identify where the risks lie and decide where to survey by ascertaining how its supply chains are structured. It needs to determine, in other words, what kinds of things it purchases and by what processes they are made.

Recent years have seen the emergence in various industries of schemes for joint supply chain management and one possible approach would be to draw on these examples. As supply chain concerns differ depending on the line of business, it would be important in this case to analyze the features of each area of business the Group is engaged in to ensure that schemes of this kind are applied properly. Another possible approach is to consider also adopting assessment indices that are suited to Tokyo Gas while drawing on practice by leaders in the field overseas in order to identify likely risks. There is not necessarily any need to strain too hard to adopt tools and frameworks.

While our business divisions are each

pursuing various measures, today’s

dialogue served as a powerful reminder

that companies face a dramatically

changing environment, that the time

has come to take serious action to

make CSR an integral part of supply

chain management, and that it is vital

that we determine what direction our

management should take.

With the Group globalizing as a total energy company, we believe

that we need to ground our actions in a greater awareness of world

trends than we have hitherto.

Based on the advice received, we will consider what action we

should take in the context of the governance of the Group as a whole,

and we will proceed to take steady action one step at a time, bearing in

mind practice at other companies and the demands of society.

Satoru SawadaSenior Executive Offi cer

Corporate philosophy

Steps toward CSR-Sensitive Procurement

Source: Envisioning the Desired Form of CSR Procurement A Vision of Desirable CSR Activity in the Supply Chain —A Proposal from the Supply Chain Working Group— Global Compact Network Japan Supply Chain Working Group

Formulate CSR procurement policiesFormulate code of conduct

(1) Supplier briefings

(2) SAQ

(3) Audit

Report on evaluation results

On to the next step

（　　　　　）Self Assessment Questionnaire

In Response to Mr. Tomita’s Analysis

Tokyo Gas Group’s Current Situation and Issue Awareness

Mr. Tomita’s Analysis

Stakeholder Dialogue

Participants from Tokyo Gas

Satoru SawadaSenior Executive Officer (executive in charge of CSR)Motoyuki OkadeGeneral Manager of Customer Service DepartmentHisashi NoguchiGeneral Manager of Residential Sales Marketing DepartmentShinya NishigataGeneral Manager of Energy Sales & Service Planning DepartmentYoichi ShibataGeneral Manager of Regional Development Planning DepartmentFumihiko HaraExecutive Officer, General Manager of Strategy Planning DepartmentTakayuki GenmaGeneral Manager of Regasification & Power Generation DepartmentKentaro KimotoExecutive Officer, General Manager of Gas Resources DepartmentKazuyoshi SawadaGeneral Manager of IT Application Department

Shinichi SasayamaExecutive Officer, General Manager of Corporate Planning DepartmentKeiichi HasebeGeneral Manager of Personnel DepartmentShunichi KoikeGeneral Manager of Purchasing DepartmentAkihiro SaitoGeneral Manager of General Administration DepartmentHiroshi HanadaGeneral Manager of Corporate Communications DepartmentTsuneaki NakamuraGeneral Manager of Environmental Affairs DepartmentYoshio SorimachiGeneral Manager of Compliance DepartmentShuichi HanadaChief Manager of CSR, Corporate Communications Department

Expectations of Tokyo Gas Group

Two key goals of Tokyo Gas’s Challenge 2020 Vision are the transformation of the Group’s business structure and broadening of its business base. Given the uniqueness of the gas business and the diverse lines of business that it pursues, Tokyo Gas needs to conduct risk analyses of its supply chains in each area of business. Although not shown in the figure opposite depicting the steps toward CSR-sensitive procurement, risk management is of the utmost importance and should be made the first step in supply chain management by the Group. In addition, although various initiatives are currently being pursued from the bottom up by each business division, it is possible that important issues may not be properly addressed when viewed from an overall perspective unless action is pursued in an integrated manner in accordance with a company-wide policy. It would best to pursue these initiatives as a company-wide effort while sharing information among all departments. As each sector of the energy industry and each utility has its own distinctive features and challenges, Tokyo Gas should work as far as possible in collaboration with other companies in the same sector to improve efficiency, rather than simply using pre-existing schemes.


Glossary

A Asphalt concrete lump p. 38

Lump of asphalt and concrete generated during work such as road resurfacing.

B Ballast water pp. 16, 39

Water pumped aboard a ship to improve its balance when it is sailing with little load and could be unstable. The seawater at ports of call is often used as ballast water, and the aquatic organisms it contains may become invasive and adversely affect ecosystems when discharged in other locations.

BCP pp. 15, 43

Abbreviation for Business Continuity Plan.A plan made by a company in preparation for an emergency, such as a natural disaster, major fire, or terrorist attack. Business continuity plans describe actions to be taken during normal conditions, and the means, methods, and other arrangements to be implemented in emergencies to ensure business continuity, minimize loss and damage to operating assets, and maintain or immediately restore core operations.

BELS p. 37

Abbreviation for Building-Housing Energy-efficiency Labeling System.A system for assessment of new and existing buildings’ energy-saving performance by third-party evaluation agencies.

Biomass p. 36Organic matter other than fossil resources derived from renewable sources such as waste wood and kitchen waste.

C CASBEE p. 37

Abbreviation for Comprehensive Assessment System for Built Environment Efficiency.Buildings are assessed on the basis of their environmental performance and assigned a rating on a five-tier scale.

D Destination p. 24

The country or region in which is located the final port of discharge for which LNG is bound. LNG contracts have traditionally contained “destination clauses” by which sellers restrict where LNG can be landed.

Diversity pp. 47, 52

In a business context, promoting diversity means respecting and accepting all people regardless of gender, age, disability, ethnicity, values, and other attributes by creating an inclusive work environment for all. Diversity can contribute to sustainable business growth and development.

E Energy services pp. 24, 43

The bundle of services efficiently delivered by energy service providers to solve customers’ various energy-related problems. They include provision of heat, electricity, and water generated by gas cogeneration systems, boilers, air conditioners, water treatment plants, and other facilities.

I ISO 14001 p. 32

The international standard for EMS developed by the International Organization for Standardization (ISO). It aims to align management with mitigation of environmental risk and contribution to the environment, and is further intended to encourage continuous improvements in EMS standards.

J J-Credit Scheme p. 37

A program by which reductions and sequestrations of emissions of greenhouse gases such as CO2 achieved by such means as installing energy-saving equipment and planting trees are certified by the government as “credits.” These credits can be used to offset other carbon emissions and attain the targets set by commitments for achieving a low carbon society.

L LCA p. 34

Abbreviation for Life Cycle Assessment.A method of assessing how a product affects the environment at every stage of its life, from production to use and disposal.

LGBT p. 47

An initialism used to refer collectively to lesbian, gay, bisexual, and transgender people.

LNG (Liquefied natural gas) pp. 11, 17, 24, 33, 61

A gas consisting principally of methane (CH4) that has been liquefied by cooling to around -160°C. In Japan, it is used primarily as fuel for power stations and as city gas. It is a clean energy source that produces virtually no SOx or particulate emissions.

LNG tanker truck pp. 18, 26

Tank truck used to transport LNG to areas where gas pipelines have not been built.

LNG value chain pp. 11, 12, 16, 20, 25, 34

The series of business activities that add value at each stage from procurement of raw materials to delivery of products and services to the customer.Tokyo Gas Group considers the “LNG value chain” to be the chain of all business activities extending from the procurement of LNG to the transportation, production and supply of city gas, power generation, and delivery of energy solutions.

P Participating interest pp. 19, 25

Interest a trading company or other entity obtains when it finances (through a loan or investment) a development project in a resource-producing country, giving it the right to acquire resources produced as a result that are proportional to the size of its financial stake.

Polyethylene pipe, polyethylene (PE) pipe pp. 28, 38

Gas pipe made from highly corrosion and quake resistant polyethylene that is used for buried sections of pipeline. Tokyo Gas is increasing its use of polyethylene pipes for the low-pressure pipelines that make up 90% of its network in order to minimize damage from earthquakes.

Environmental management system (EMS) p. 32

Environmental management is the establishment of policies and targets by a business or other entity to guide its independent action to protect the environment, and its pursuit of these policies and targets. It encompasses the systems, procedures, and other arrangements put in place for doing so at its factories and offices.

Excavated soil pp. 18, 33

Soil and waste asphalt generated by work such as the laying of gas pipelines under roads.

F Fuel cell pp. 18, 35

A system that generates electricity by electrochemically reacting oxygen in the air with hydrogen extracted from a source such as the natural gas used to make city gas.

G Gas cogeneration system pp. 18, 35, 42

A distributed energy system that simultaneously generates electricity by various means (engine, turbine, fuel cell, etc.) burning natural gas or other fuels, and uses the waste heat produced to generate steam or hot water. Systems of this kind are very environmentally friendly and also help diversify power sources and conserve electricity.

Gas pressure differential power generation p. 42

The generation of electricity by utilizing the differential pressure of city gas flowing through gas pipelines to drive a turbine. Systems of this kind conserve energy as they consume no gas. Using the cold energy produced at the same time as electricity generation yields further energy savings.

Gas turbine combined cycle pp. 27, 36

A means of achieving high electricity generating efficiency through a combination of two methods. First, a fuel such as natural gas is combusted to drive a gas turbine. The heat of the exhaust gas from the turbine is then recycled by using it to convert water into steam, which is recovered to drive a steam turbine.

H Henry Hub (U.S. natural gas market) price p. 24

The name for the benchmark price of natural gas in the U.S., derived from the Henry Hub distribution node in Louisiana in the U.S. South. The price of natural gas bought and sold is used as the index (benchmark) value of the futures price on the New York Mercantile Exchange (NYMEX).

High-pressure gas pipeline p. 26

Also known as a trunk line. A gas pipeline with a gas pressure of at least 1 MPa and a typical diameter of 65-75 cm that is used to transport city gas from an LNG terminal.Gas is supplied from pipelines of this kind via governor stations to medium-pressure pipelines, and then by district pressure regulators to the low-pressure pipelines that deliver city gas to the home.

Human rights due diligence p. 46

The process of identifying and assessing the impacts on human rights of business activities as a whole, and implementing measures to prevent and mitigate these impacts.

R Regenerative burner system p. 35

An energy-saving system that combines high combustion efficiency with low NOx emissions. Two burners are alternately fired and the heat of the exhaust gas when one burner is fired is recovered by a heat reservoir to preheat the air for the next combustion, resulting in a 30-50% reduction in energy consumption and CO2 emissions.

Renewable energy pp. 17, 34

Inexhaustible energy sources such as sunlight, solar heat, hydropower, wind power, biomass, and geothermal energy. Once used, they can be replenished comparatively quickly.

S SDGs p. 20

Abbreviation for Sustainable Development Goals. The SDGs are a set of international goals for building a better world that establish priority issues on a global scale and provide a vision of the world in 2030. They were adopted at the United Nations Sustainable Development Summit held at the United Nations Headquarters in New York in 2015, which was attended by over 150 world leaders.

Shale gas pp. 19, 24

Methane gas trapped in shale, thin, flakey rock formations formed from ancient mud deposits. Shale gas resources are abundant, and are expected to have a major impact on world energy production and consumption.

Supply chain management pp. 21, 60

Activities undertaken to promote CSR along the length of the supply chains by which a business procures raw materials and delivers products and services to its customers. Suppliers are required to meet CSR objectives in areas such as the environment, working conditions, and human rights, as well as requirements regarding specifications, prices, and delivery times.

T TES p. 30

Abbreviation for Tokyogas Eco System. Tokyo Gas water heating system for the home that uses heated water from a single heat source to provide hot water for baths, space heating, underfloor heating, and bathroom heating and drying.

U Unconventional gas pp. 11, 19, 24

Gas produced from sources other than ordinary gas fields. In addition to tight sand gas, coalbed methane, biomass gas, and shale gas currently being produced commercially, unconventional gas also includes methane hydrate, deep earth gas, and other gas sources which are expected to become commercially viable energy sources in the future.

Z ZEB p. 37

Abbreviation for Net Zero Energy Building. A building designed to achieve a net zero annual balance between primary energy consumption and generation by combining the use of renewable energy sources with major energy-saving features.


Relationship between GRI Content Index Sections on Compliance, the United Nations Global Compact (GC) Ten Principles, and ISO 26000

General Standard Disclosures

Aspects Indicator Pages in this Report

GC 10 principles

ISO26000

Strategy and Analysis

G4-1 Statement from the most senior decision-maker of the organization

pp. 6–9 4.76.27.4.2G4-2 Description of key impacts, risks, and

opportunitiespp. 6–9pp. 12–13pp. 16–19pp. 20–21p. 41

Organizational Profile

G4-3 Name of the organization pp. 4-5 6.3.106.4.1-6.4.26.4.36.4.46.4.56.8.57.8

G4-4 Primary brands, products and/or services

G4-5 Location of the organization's headquarters Back cover

G4-6 Number and names of countries where the organization operates

pp. 16-19

G4-7 Nature of ownership and legal form pp. 4-5

G4-8 Markets served

G4-9 Scale of the reporting organization pp. 4-5pp. 66-67

G4-10 Details of workforce pp. 52-53p. 54

GC6

G4-11 Percentage of total employees covered by collective bargaining agreements

Website GC3

G4-12 Organization’s supply chain pp. 16-19

G4-13 Significant changes during the reporting period

Website

G4-14 Whether and how the precautionary approach or principle is addressed by the organization

pp. 14-15pp. 32-33

G4-15 Externally developed charters, principles, or other initiatives to which the organization subscribes or endorses

p. 12

G4-16 Memberships of associations and national or international advocacy organizations

Identified Material Aspects and Boundaries

G4-17 All entities included in the organization's financial statements or equivalent documents

pp. 66-67 5.27.3.27.3.37.3.4G4-18 Process for defining report content and

Boundariesp. 2pp. 20-21

G4-19 All the material Aspects identified in the process for defining report content

G4-20 Report the Aspect Boundary within the organization

Website

G4-21 Report the Aspect Boundary outside the organization

G4-23 Significant changes from previous reporting periods in the Scope and Aspect Boundaries.

N/A

Stakeholder Engagement

G4-24 Stakeholder groups engaged by the organization

pp. 12-13pp. 58-59

5.3

G4-25 Basis for identification and selection of stakeholders

pp. 12-13 pp. 20-21

G4-26 The organization’s approach to stakeholder engagement

pp. 20-21 pp. 58-59 pp. 60-61

G4-27 Key topics and concerns raised through stakeholder engagement

pp. 58-59 pp. 60-61

Report Profile

G4-28 Reporting Period for information provided p. 2 7.5.3 7.6.2 G4-29 Date of most recent report

G4-30 Reporting cycle

G4-31 Contact point for questions Back cover

G4-32 The ‘in accordance’ option chosen, the GRI Content Index, and the reference to the External Assurance Report if the report has been externally assured

p. 56pp. 64-65

G4-33 Organization’s policy and current practice with external assurance of the report

p. 2p. 56

Governance

G4-34 Governance structure of the organization pp. 12-13pp. 14-15pp. 32-33pp. 46-47pp. 48-49pp. 50-51pp. 52-55

6.27.4.37.7.5

Ethics and Integrity

G4-56 Organization's values, principles, standards and norms of behavior

pp. 12-13pp. 48-49

GC10 4.46.6.3


GC 10 principles

ISO26000

[Material Aspects] ComplianceDMA pp. 22-23

G4-EN29 Monetary value of signifi cant fi nes and total number of nonmonetary sanctions for noncompliance with environmental laws and regulations

No incidents of non-com-pliancepp. 32-33

GC8 4.6

TransportG4-EN30 Signifi cant environmental impacts of

transporting products and other goods and materials used for the organization’s operations, and transporting members of the workforce

p. 41 GC8 6.5.46.6.6

OverallG4-EN31 Total environmental protection expenditures

and investments by typeWebsite GC7,8,9 6.5.1-6.5.2

[Material Aspects] Supplier Environmental AssessmentDMA pp. 60-61

G4-EN33 Signifi cant actual and potential negative environmental impacts in the supply chain and actions taken

pp. 16-19 GC8 6.3.56.6.67.3.1

Labor Practices and Decent Work[Material Aspects] Employment

DMA pp. 22-23G4-LA1 Total number and rates of new employee

hires and employee turnover by age group, gender and region

Website GC6 6.4.3

G4-LA2 Benefi ts provided to fulltime employees that are not provided to temporary or part-time employees, by signifi cant locations of operation

pp. 52-53 6.4.46.8.7

G4-LA3 Return to work and retention rates after parental leave, by gender

GC6 6.4.4

[Material Aspects] Occupational Health and SafetyDMA pp. 22-23

G4-LA6 Type and rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities, by region and by gender

Website 6.4.66.8.8

G4-LA8 Health and safety topics covered in formal agreements with trade unions

p. 55 6.4.6

[Material Aspects] Training and EducationDMA pp. 22-23

G4-LA10 Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings

pp. 52-53p. 54

6.4.76.8.5

G4-LA11 Percentage of employees receiving regular performance and career development re-views, by gender and by employee category

Website GC6 6.4.7

[Material Aspects] Diversity and Equal OpportunityDMA pp. 22-23

G4-LA12 Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity

pp. 52-53 GC6 6.2.3 6.3.76.3.106.4.3

[Material Aspects] Supplier Assessment for Labor PracticesDMA pp. 60-61

G4-LA15 Signifi cant actual and potential negative impacts for labor practices in the supply chain and actions taken

pp. 16-19p. 57

6.3.56.4.36.6.67.3.1

Labor Practices Grievance MechanismsG4-LA16 Number of grievances about labor practices

fi led, addressed, and resolved through formal grievance mechanisms

pp. 48-49 6.3.6

Human RightsInvestmentG4-HR2 Total hours of employee training on human

rights policies or procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained

pp. 46-47 GC1 6.3.5

Non-discriminationG4-HR3 Total number of incidents of discrimination

and corrective actions takenpp. 46-47 GC6 6.3.6

6.3.76.3.106.4.3

Freedom of Association and Collective BargainingG4-HR4 Operations and suppliers identifi ed in which

the right to exercise freedom of association and collective bargaining may be violated or at signifi cant risk, and measures taken to support these rights

pp. 46-47p. 57

GC3 6.3.36.3.46.3.56.3.86.3.106.4.56.6.6

Child LaborG4-HR5 Operations and suppliers identified as

having significant risk for incidents of child labor, and measures taken to contribute to the effective abolition of child labor

pp. 46-47p. 57

GC5 6.3.36.3.46.3.56.3.76.3.106.6.66.8.4

Forced or Compulsory LaborG4-HR6 Operations and suppliers identified as

having significant risk for incidents of forced or compulsory labor, and measures to contribute to the elimination of all forms of forced or compulsory labor

pp. 46-47p. 57

GC4 6.3.36.3.46.3.56.3.106.6.6


GC 10 principles

ISO26000

[Material Aspects] Supplier Human Rights AssessmentDMA pp. 60-61

G4-HR11 Significant actual and potential negative human rights impacts in the supply chain and actions taken

pp. 16-19 p. 57

GC2 6.3.36.3.46.3.56.6.6

Human Rights Grievance MechanismsG4-HR12 Number of grievances about human rights

impacts filed, addressed, and resolved through formal grievance mechanisms

pp. 46-47 GC1 6.3.6

Society[Material Aspects] Local Communities

DMA pp. 22-23G4-SO1 Percentage of operations with implemented

local community engagement, impact assessments, and development programs

pp. 44-45pp. 58-59

GC1 6.3.96.5.1-6.5.26.5.36.8

G4-SO2 Operations with significant actual and potential negative impacts on local communities

Website 6.3.96.5.36.8

[Material Aspects] Anti-bribery and corruptionDMA pp. 22-23

G4-SO3 Total number and percentage of operations assessed for risks related to corruption and the significant risks identified

p. 51 GC10 6.6.1-6.6.26.6.3

G4-SO4 Communication and training on anticorruption policies and procedures

6.6.1-6.6.26.6.36.6.6

G4-SO5 Confirmed incidents of corruption and actions taken

No incidents of corruption

6.6.1-6.6.26.6.3

Public PolicyG4-SO6 Total value of political contributions by

country and recipient/beneficiaryNo political contributions made

GC10 6.6.1-6.6.26.6.4

Anti-competitive BehaviorG4-SO7 Total number of legal actions for anti-

competitive behavior, antitrust, and monopoly practices and their outcomes

No incidents of anti-competitive behavior

6.6.1-6.6.26.6.56.6.7

[Material Aspects] ComplianceDMA pp. 22-23

G4-SO8 Monetary value of significant fines and total number of nonmonetary sanctions for noncompliance with laws and regulations

No incidents of non-compliance with laws and regulations

4.6

[Material Aspects] Supplier Assessment for Impacts on SocietyDMA pp. 60-61

G4-SO10 Significant actual and potential negative impacts on society in the supply chain and actions taken

pp. 16-19p. 57

6.3.56.6.1-6.6.26.6.66.8.1-6.8.27.3.1

Grievance Mechanisms for Impacts on SocietyG4-SO11 Number of grievances about impacts

on society files, addressed, and resolved through formal grievance mechanisms

pp. 30-31 6.3.66.6.1-6.6.26.8.1-6.8.2

Product Responsibility[Material Aspects] Customer Health and Safety

DMA pp. 22-23G4-PR1 Percentage of significant product and

service categories for which health and safety impacts are assessed for improvement

pp. 28-29 6.7.1-6.7.26.7.46.7.56.8.8

G4-PR2 Total number of incidents of non-compliance with regulations and voluntary codes concerning the health and safety impacts of products and services during their life cycle, by type of outcomes

Website 4.66.7.1-6.7.26.7.46.7.56.8.8

[Material Aspects] Product and Service LabelingDMA pp. 22-23

G4-PR3 Type of product and service information required by the organization’s procedures for product and service information and labeling, and percentage of significant product and service categories subject to such information requirements

pp. 28-29pp. 30-31

6.7.1-6.7.26.7.36.7.46.7.56.7.9

G4-PR5 Results of surveys measuring customer satisfaction

pp. 30-31 4.66.7.6

Marketing CommunicationsG4-PR6 Sale of banned or disputed products WebsiteG4-PR7 Total number of incidents of non-

compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship, by type of outcomes

No incidents of non-compliance

4.66.7.1-6.7.26.7.3

[Material Aspects] Customer PrivacyDMA pp. 22-23

G4-PR8 Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data

Website 6.7.1-6.7.26.7.7

ComplianceG4-PR9 Monetary value of significant fines for

non-compliance with laws and regulations concerning the provision and use of products and services

No incidents of non-compliance

4.66.7.1-6.7.26.7.6


GC 10 principles

ISO26000

Economic

Economic Performance

G4-EC1 Direct economic value generated and distributed

Website 6.8.1-6.8.26.8.36.8.76.8.9

G4-EC2 Financial implications and other risks and opportunities for the organization’s activities due to climate change

GC7 6.5.5

G4-EC3 Coverage of the organization’s defined benefit plan obligations

6.8.7

Indirect Economic Impacts

G4-EC7 Development and impact of infrastructure investments and services supported

pp. 24-27 6.3.96.8.1-6.8.26.8.76.8.9

Environmental

Materials

G4-EN1 Materials used by weight or volume p. 41 GC7,8 6.5.4

G4-EN2 Percentage of materials used that are recycled input materials

GC8

[Material Aspects] Energy

DMA pp. 22-23

G4-EN3 Energy consumption within the organization

pp. 22-23pp. 34-37p. 41

GC7,8 6.5.4

G4-EN4 Energy consumption outside of the organization

pp. 34-37p. 41

GC8

G4-EN5 Energy intensity pp. 22-23pp. 34-37p. 41

G4-EN6 Reduction of energy consumption pp. 22-23pp. 34-37

GC8,9 6.5.46.5.5

G4-EN7 Reductions in energy requirements of products and services

pp. 34-37

Water

G4-EN8 Total water withdrawal by source pp. 32-33p. 39p. 41

GC7,8 6.5.4

[Material Aspects] Biodiversity

DMA pp. 22-23

G4-EN11 Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas

p. 39 GC8 6.5.6

G4-EN12 Significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas

G4-EN13 Habitats protected or restored Website

[Material Aspects] Emissions

DMA pp. 22-23

G4-EN15 Direct greenhouse gas (GHG) emissions (Scope 1)

pp. 34-37p. 41

GC7,8 6.5.5

G4-EN16 Energy indirect greenhouse gas (GHG) emissions (Scope 2)

G4-EN17 Other indirect greenhouse gas (GHG) emissions (Scope 3)

G4-EN18 Greenhouse gas (GHG) emissions intensity p. 41 GC8

G4-EN19 Reduction of greenhouse gas (GHG) emissions

pp. 34-37p. 41

GC8,9

G4-EN20 Emissions of ozone-depleting substances (ODS)

Website GC7,8 6.5.36.5.5

G4-EN21 NOx, SOx, and other significant air emissions p. 41 6.5.3

[Material Aspects] Effluents and Waste

DMA pp. 22-23

G4-EN22 Total water discharge by quality and destination

p. 41 GC8 6.5.36.5.4

G4-EN23 Total weight of waste by type and disposal method

p. 38p. 41

6.5.3

G4-EN26 Water bodies and related habitats significantly affected by the organization’s discharges of water and runoff

p. 39 6.5.36.5.46.5.6

[Material Aspects] Products and Services

DMA pp. 22-23

G4-EN27 Extent of impact mitigation of environmental impacts of products and services

pp. 34-37p. 40

GC7,8,9 6.5.36.5.46.5.56.7.5

G4-EN28 Percentage of products sold and their packaging materials that are reclaimed by category

p. 38p. 41

GC8 6.5.36.5.46.7.5

Specifi c Standard Disclosures

● Prepared in accordance with the core option in GRI “Sustainability Reporting Guidelines version 4 (G4).”● The full report can be found on Tokyo Gas website: http://www.tokyo-gas.co.jp/csr/report_e/rightmenu/gri-iso.html● The page numbers in the tables indicate the pages on which the information described in the “Indicator” column can be found. Where information is provided in

both the print and online editions, page numbers are given only for the print edition.


Residential Sales and Customer service Dept. Service Div.

Customer Safety Dept.

LIFEVAL Project Management Dept.

Residential Fuel Cell Business Development Dept.

Energy Sales & Service Promotion Dept.

Sales Marketing I Dept.

Sales Marketing II Dept.

Residential Sales Marketing Dept.

Residential Sales Strategy Dept.

Residential Sales Planning Dept.

Residential Service Innovation Project Dept.

Energy Energy Sales & Service Planning Dept. Solution Div.

Commercial Customer Sales& Service Dept.

Industrial Gas Sales Dept.

NGV Business Dept.

Volume Sales Dept.

Solution Technology Dept.

Regional Development Div. Chiba Branch Office

Saitama Branch Office Kanagawa Branch Office Yokohama Service Branch / Kawasaki Service Branch / Kanagawa Nishi Service Branch

Hitachi Branch Office

Joso Branch Office

Gumma Branch Office

Kumagaya Branch Office

Utsunomiya Branch Office

Sakura Branch Office

Tsukuba Branch Office

Ibaraki Branch Office Regional Development Planning Dept. Chuo Service Branch / Seibu Service Branch / Tama Service Branch / Tobu Service Branch / Hokubu Service Branch

Wholesale & Regional Service Dept.

Pipeline Network Div. Strategy Planning Dept.

Pipeline Dept. Customer-owned Gas Lines and Gas Meter Maintenance Dept.

Emergency Management Dept.

Chuo Pipeline Regional Office

Seibu Pipeline Regional Office

Tobu Pipeline Regional Office

Hokubu Pipeline Regional Office

Kanagawa Pipeline Regional Office

Supply Control & Disaster Management Dept.

Transmission Construction Dept.

Area Development Planning Dept.

Facility Engineering Business Dept.

Regasification & Negishi LNG Terminal Power Generation Div.


Ohgishima LNG Terminal


Regasification & Power Generation Dept.

Energy Resources & Gas Resources Dept. Global Business Div. Global Business Dept.

IT Div. IT Application Dept.

CIS Planning Dept.

Operational Reforms Project Dept.

Corporate Planning Dept.

Finance Dept.

Accounting Dept.

Personnel Dept.

Purchasing Dept.

Real Estate Management Dept.

Secretary Dept.

General Administration Dept.

Corporate Communications Dept.

Environmental Affairs Dept.

Fundamental Technology Dept.

Power Business Planning Dept.

Gas Business Deregulation Project Dept.

Compliance Dept.

Internal Audit Dept.

Audit & Supervisory Audit & Supervisory Board Member’s Office Board Member

Corporate Information

Organization of Tokyo Gas

Top

Man

agem

ent

Residential Sales and Service Div.Living Engineering Co., Ltd. Design, installation, and maintenance of

supply and exhaust systems and city gas supply safety systems, and sale of suppliesRepair, inspection, maintenance, sale, and installation of gas appliances

Tokyo Gas Remodeling Co., Ltd. Detached house and housing complex renovations

Tokyo Gas Lease Co., Ltd. Loans and leasing of gas appliance and installation

Tokyo Gas Telemarketing Co., Ltd. Call center, telemarketing, staffing, and research services

Tokyo Gas Communications, Inc.(Residential Sales and Service Div.)

Operation of Living Design Center OZONE

Tokyo Gas Living Line Co., Ltd.Tokyo Gas Lifeval Nishi-ota Co., Ltd.Tokyo Gas Lifeval Minami-setagaya Co., Ltd.Tokyo Gas Lifeval Chiba Co., Ltd.

Periodic gas appliance safety checks, meter-reading and billing services, commencement and termination of gas service, sale, installation, and repair of gas appliances, household appliance renovation, and other gas appliance work

East Japan Housing Evaluation Center Co., Ltd.

Housing performance assessments and building checks and inspections

Energy Solution Div.Capty Co., Ltd.(Energy Solution/Air Conditioning Div.)

Air-conditioning installation and other services

Tachikawa Toshi-Center Co., Ltd. Heat supply in Faret Tachikawa District and other services

Regional Development Div.Nagano Toshi Gas Co., Ltd. Supply of gas in parts (8 cities and 3 towns) of

Nagano Pref.

Tokyo Gas Yamanashi Co., Ltd. Supply of gas and wholesale/direct sale of LPG in parts of Kofu, Chuo, and Kai cities and Showa town in Yamanashi Pref.

Showa Unyu Co., Ltd. LPG refueling and delivery services

Washinomiya Gas Co., Ltd. Gas supply in parts of Kuki and Kazo cities in Saitama Pref.

Shoei Gas Co., Ltd. Supply of gas in parts of Higashi-matsuyama city and Namegawa town in Saitama Pref.

Tochigi Gas Co., Ltd. Supply of gas in parts of Tochigi city in Tochigi Pref.

Pipeline Network Div.Capty Co., Ltd. (Pipeline and Hot Water Systems Construction Div.)

Gas pipeline laying/civil engineering works/water supply and drainage lines, etc.

Capty Tech Co., Ltd. Underground shopping area safety checks and inspections of work performed by other contractors

Kawasaki Gas Pipeline Co., Ltd. Gas pipeline business in Ohgi town and Ohgishima districts in Kawasaki-ku, Kawasaki city and Ohgishima district in Tsurumi-ku, Yokohama city

Tokyo Gas Pipeline Co., Ltd. Operation and maintenance of gas pipelines

Regasification & Power Generation Div.Tokyo Gas Baypower Co., Ltd. Power generation at Tokyo Gas Sodegaura

LNG Terminal

Ohgishima Power Co., Ltd. Power generation business

Tokyo Gas Yokosuka Power Company, Ltd. Power generation and electricity wholesale

Energy Resources & Global Business Div.Tokyo Gas International Holdings B.V. Investment in overseas projects

Tokyo Gas-Mitsui & Co Holdings Sdn. Bhd. Investment in Gas Malaysia Sdn. Bhd.

Tokyo Gas Bajio B.V. Investment in Bajio power project in Mexico

Tokyo Gas Shale Investment Ltd. Participation in upstream business in the field of shale gas in Canada

TG Europower B.V. Investment in T-Power project in Belgium

TOKYO GAS AUSTRALIA PTY LTD Investment in and management of upstream projects in Australia

TOKYO GAS DARWIN LNG PTY LTD Participation in Darwin LNG project

TOKYO GAS PLUTO PTY LTD Participation in Pluto LNG project

TOKYO GAS GORGON PTY LTD Participation in Gorgon LNG project

TOKYO GAS QCLNG PTY LTD Participation in Queensland Curtis LNG project

●Tokyo Gas LIFEVAL ●Enesta ●Enefi tThese outlets provide a range of services to enhance quality of life for customers in the community, including the commencement and termination of gas service, safety inspections, meter readings, the sale, installation, and repair of gas appliances, the handling of applications for gas and electricity service, and the sale, installation, and renovation of other household appliances.

Tokyo Gas LIFEVAL (62 blocks in the Greater Tokyo service area)West Greater Tokyo: Chiyoda Chuo, Minato, Shinagawa, Higashi Ota, Nishi Ota, Meguro, Shibuya, Shinjuku, Nakano, Kita Suginami, Nishi Suginami, Minami Suginami, Musashino, Chofu Komae, Minami Setagaya, Higashi Setagaya, Nishi Setagaya, Nishitokyo, Tama Chuo, Kita Tama, Hachioji, Minami Tama, Nishi MusashiEast Greater Tokyo: Higashi Koto, Nishi Koto, Sumida, Taito, Arakawa, Bunkyo, Adachi/Saitama Higashi, Edogawa, Katsushika, Chiba, Kazusa, Nerima/Itabashi Kita, Toshima, Kita, Minami Itabashi, Shakujii, Urawa, Warabitoda, Kawaguchi, Omiya

Kanagawa: Yokohama Kannai, Yokohama Chuo, Yokohama Kohoku, Yokohama Tsurumi, Yokohama Nishi, Hodogaya, Yokohama Minami, Yokohama Totsuka, Yokohama Kita, Machida, Sagamiyamato, Sagamihara, Shonan, Kawasaki Nakahara, Kanazawa, Yokosuka, Kawasaki, Kawasaki Kita, Shonan Chigasaki

Enesta (Wide-area service district) Joso: Ushiku/Ryugasaki / Hitachi: Taga / Gumma: Takasaki Nishi, Maebashi, Torimachi Takasaki Higashi, Takasaki Kita / Kumagaya: Gyoda, Kumagaya / Utsunomiya: Utsunomiya / Sakura: Narita, Usui, Katsutadai/Yotsukaido / Tsukuba: Tsukuba

Tokyo Gas Customer Center

Tel: 0570-002211 (Navi Dial)** Not toll free. * If you are using an IP phone or cannot otherwise access the

Navi Dial number, please call 03-3344-9100Hours: Monday to Saturday - 9:00 a.m. to 7:00 p.m.

Sundays and public holidays - 9:00 a.m. to 5:00 p.m.

Calls about gas leaks and other safety matters can be made 24 hours a day, 365 days a year.

● ShowroomsShinjuku Showroom3-7-13, Nishi Shinjuku, Shinjuku-ku, Tokyo

Yokohama Showroom4F MARK IS Minatomirai3-5-1, Minatomirai, Nishi-ku, Yokohama-shi, Kanagawa Prefecture

● Kitchen LandsKoto, Katsushika, Adachi, Chiba, Setagaya, Chofu, Hachioji, Shakujii, Omiya, Urawa, Kawasaki, Shonan, Meguro, Kokubunji, Konan, Izumi, Hodogaya, Hongodai

● Corporate MuseumsGas Science Museum6-1-1, Toyosu, Koto-ku, Tokyo

Gas Museum4-31-25, Onumacho, Kodaira-shi, Tokyo

Showrooms, Kitchen Lands, and Corporate Museums

Tokyo Gas’s Local Service Outlets

TOKYO GAS ICHTHYS PTY LTD Participation in Ichthys LNG project

TOKYO GAS ICHTHYS F&E PTY LTD Upstream participation in WA-285-P permit and provision of financial services for Ichthys LNG project

Tokyo Gas America Ltd. Investment in upstream, midstream, and downstream projects in North America

TG Barnett Resources LP Participation in shale gas development project in the U.S. Barnett basin

TG Eagle Ford Resources LP Participant in the development of Eagle Ford shale gas assets in the U.S.

Tokyo Gas Asia Pte. Ltd. Regional headquarters for investment in and management of business operations throughout Southeast Asia

TG PLUS Co., Ltd. Procurement and sale of LNG

Tokyo LNG Tanker Co., Ltd. Marine transportation of LNG and ownership and leasing of LNG and LPG carriers

IT Div.TOKYO GAS i NET CORP. Computer-based information processing,

provision, and communications services and related consulting and software development

Corporate Planning Dept.Tokyo Gas Engineering Solutions Corporation

Energy services, district heating and cooling, sale and maintenance of cogeneration systems, and comprehensive engineering services with a focus on energy projects

TGES (SHANGHAI) LNG ENGINEERING CO.,LTD. Gas production and supply equipment design, construction, and management-related consulting and technical services for Asian markets

TGES America Ltd. Energy service company in the U.S.

Tokyo Gas Liquid Holdings Co., Ltd. Holding company that owns Tokyo Gas Chemicals Co., Ltd., Tokyo Gas Energy Co., Ltd., and Japan Super Freeze Co., Ltd.

Tokyo Gas Chemicals Co., Ltd. LNG cryogenic-related business and sale of industrial gas and chemical products

Tokyo Oxygen and Nitrogen Co., Ltd. Production and sale of liquefied nitrogen, oxygen and argon

Tokyo Carbonic Co., Ltd. Production and sale of liquefied carbon dioxide and dry ice

Tokyo Rare Gases Company, Ltd. Production and sale of rare gases (neon, krypton, xenon)

Tokyo Gas Energy Co., Ltd. Wholesale and direct sale of LPG

Enelife Carrier Co., Ltd. LPG refueling and delivery services

Tokyo Auto Gas Co., Ltd. Wholesale and direct sale of automotive LPG (automotive gas station operator)

Tokyo Gas LPG Terminal Co., Ltd. LPG storage and shipment

Japan Super Freeze Co., Ltd. Frozen and cold storage of marine products, etc.

Nicchou Operation Co., Ltd. Warehouse cargo handling

Purchasing Dept.Tokyo Gas Auto Service Co., Ltd. General automotive services with a focus on

business and personal vehicle leases

Real Estate Management Dept.Tokyo Gas Urban Development Co., Ltd. Real estate administration, rental, brokerage,

and non-life insurance agency services

Tokyo Gas Facility Service Co., Ltd. Building and facility management, district cooling center operation, security and disaster prevention, travel agency and office services, and sale of supplies

Park Tower Hotel Co., Ltd. Management of the Park Hyatt Tokyo hotel

Tokyo Gas Site Development Co., Ltd. Large site development and administration

Corporate Communications Dept.Tokyo Gas Communications, Inc.(Corporate Communicate Relations Div.)

Advertising, showroom operation and management, planning and organization of seminars and other events, publishing, and research services

Power Business Planning Dept.Nijio Co., Ltd. Wholesale of electric power

As of July 1, 2016

Tokyo Gas Subsidiaries and Affiliates

Tokyo Gas Group

CSR Report 2016

Tokyo Gas G

roup CSR Report 2016Tokyo G

as Co., Ltd.

Tokyo Gas Group CSR Report 2016First edition: December 2016

Planning and editing:Corporate Communications DepartmentTokyo Gas Co., Ltd.1-5-20 Kaigan, Minato-ku, Tokyo 105-8527, Japan

Production: TOKYO GAS COMMUNICATIONS, INC.

All rights reserved.

©2016 Tokyo Gas Co., Ltd.

Inclusion in socially responsible investment (SRI) indices

All electricity (400 kWh) used in the production (printing plates, printing, bookbinding) of CSR Report 2016 came from green power (wind power).

This report is printed on Tokyo Gas Recycled Paper (made from recycled paper from Tokyo Gas offices, trimmings from afforestation activities, and reused and unused wood materials).

FTSE4Good Index Series Ethibel Sustainability IndexExcellence Global

Morningstar Socially Responsible Investment Index

As of December 2016

* THE INCLUSION OF Tokyo Gas Co. Ltd.IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HERIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF Tokyo Gas Co. Ltd.BY MSCI OR ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

MSCI ESG Indexes * STOXX ESG Leaders Indices

Member 2016/2017

Supporting you Always and bettering every day.

Tokyo Gas Group is striving to become the driving force of our lives and society. For over 130 years, we have worked closely with our customers to foster a strong foundation of experience and trustworthiness, with which we aim to create a brighter, safer and a more comfortable tomorrow. By thinking and acting from a place closest to our customers, the Tokyo Gas Group will continue with this challenge as one.

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