are now in an advantageous position that enables us to con-Environmental Initiatives

tribute to the preservation of the global environment by simply expanding our own business activities. To concretely

One way Tokyo Gas contributes to environmental preservation is by encouraging people to use clean, eco-friendly natural gas.

The mission of Tokyo Gas is to make our customers’ lives more comfortable
and rewarding by providing a safe and constant supply of environmentally

express our commitment to environmental conservation, we
have established “global warming prevention guidelines,”
which set forth targets for reducing CO2 emissions by city

Promoting the Use of Natural Gas Helps Protect thegas customers. Our goal is to reduce CO2 emissions in fiscal

Natural Environment

2005 to a level that is five million tons below the 1990 levels,

Natural gas, the main source of city gas, is a clean energy

and seven million tons lower in fiscal 2010, by substituting

friendly natural gas. Our business is firmly rooted in the communities we serve.

source that has the lowest environmental load of any fossil

The Tokyo Gas Group wholeheartedly engages in environmental preservation,

atmosphere-polluting sulfur oxides (SOx). Compared to oilsocial support and strict compliance with the law, remaining a company thatpheric pollutant, and carbon dioxide (CO2), a cause of global

appliance and systems efficiency.
Comparison of Emission Levels (Coal=100)

or coal, emissions of nitrogen oxides (NOx), another atmoswarming, are from 40% to 80% lower.

customers, shareholders and local communities choose on the basis of respect.

gas for other energy sources and by achieving greater gas

fuel in widespread use. Natural gas combustion emits noSOx

The core business of the Tokyo Gas Group is to extend

Oil
70

0

the use of natural gas to as many people as possible, and we

CO2

NOx

Natural Gas

Natural Gas

Natural Gas

Coal

Oil

Coal

100

20-40 70

100

60

Oil

Coal

80

100

Source: IEA Natural Gas Prospects (1986), Natural Gas Prospects and Policies (1991)

Environmental Protection Costs and Economic Benefits (Fiscal 2004)
Data scope: Tokyo Gas Co., Ltd., Energy Advance Co., Ltd., Tokyo Gas Customer Service Co., Ltd.
Investment
FY2003 FY2004

Customer
Locations

Our Basis for Solidifying Value

Company Business

Environmental Protection Cost Items
Major Content (Examples)(¥ Million)
Cost
FY2003 FY2004

Pollution Prevention

Amount of capital investment, maintenance expenses, depreciation costs, personnel expenses, etc., forprevention of air pollution, water pollution, noise pollution, etc.

8

35

182

155

Global Environmental
Protection

Amount of capital investment, maintenance expenses, depreciation costs, personnel expenses, etc., forenergy conservation, effective use of energy, protection of the ozone layer, etc.

551

144

1,019

884

Resource Recycling

Amount of capital investment, maintenance expenses, depreciation costs, personnel expenses, etc., for
reduction/recycling of residual soil, waste control, etc.

306

204

1,827

1,293

Environmental Management

Costs of green purchasing, environmental education, EMS construction, environmental organizations, etc.

10

15

476

474

Other

Costs related to greening of plants and remediation of soil in accordance with plant siting laws andordinances.

160

1,911

1,704

1,064

Environmental R&D

Costs for R&D of burden-mitigating technology, high-efficiency appliances and systems, etc.

325

585

1,991

1,661

Recycling of Discarded Gas
Appliances

Costs for recovery and recycling of gas appliance, packaging, etc.

—

—

6

7

61

75

667

808

1,420

2,969

7,872

6,346

Community Contribution Activities
Total*Depreciation costs included in figures for cost of ¥808 million in FY2004 and ¥658 million in FY2003.
*In regards to the R&D figures, since we have extracted the portion related to environmental protection, the data may differ from that disclosed in the financial section.
*Data are extracted from the environmental accounts of the Corporate Social Responsibility Report.
Economic Benefits

Cost Reduction due to Operation of Energy-saving Facilities
Cost Reduction due to Reduction of Residual Soil Generation
Sale of Valuables
Other
Total

FY2003(¥ Million)
FY2004

811
6,587
347
268
8,013

833
6,036
272
0
7,141

FY 2004
Total Capital Investment
Environmental Capital Investment
FY2004
Total Sales
Environmental Costs¥75,236 million
16%¥1,013,993 million
0.8%

A Whole New Approach to Food Preparation that Reduces Waste byConserving Food and Energy and Helps Keep Water Clean

SRI indexes that include Tokyo Gas• Dow Jones Sustainability Index (DJSI) • Ethibel Sustainability Index• MS-SRI• FTSE4Good

24 Tokyo Gas Annual Report 2005

Over the years, Tokyo Gas has proposed to customers a rich and varied diet consisting of delicious dishes
prepared using gas. In 1995, we began to advocate and promote the adoption of Eco-cooking ®, an environmentally conscious approach to meal preparation that delivers maximum benefit from the close relationshipbetween gas and cooking.
Daily meals are an integral part of people’s lives and a topic everyone can relate to, and the Eco-cooking
concept is all about considering environmental issues in an experiential and enjoyable way. By promoting Ecocooking, Tokyo Gas encourages people to develop environmentally friendly dietary habits: that is, to becomeaware of the environmental consequences of the choices they make during
Eco-cooking Classes
shopping, cooking and cleanup. In addition to holding Eco-cooking classes at
FY2000FY2001
FY2002
FY2003
FY2004our cooking classrooms and showrooms, we dispatch instructors to elementary
Sessions
200
251
407
488
616
and junior high schools and run sessions at various environmental events.
Participants
3,500
4,750
10,15015,40019,100For details concerning corporate social responsibility at Tokyo Gas, please refer tothe Corporate Social Responsibility Report at http://www.tokyo-gas.co.jp/csr/index_e.html/

Tokyo Gas Annual Report 2005

25

Contributing to Peace of Mind and the Enrichment ofSocial Activities andSafety Measures

Our Code of Conduct to include guidelines for compliance-

Compliance

People’s Lives Through Business Activities
Our business contributes to society through the conviction

Firmly rooted in local communities, theTokyo Gas Group actively contributes tosociety, as well as working on safety measures and disaster prevention.
Social Contribution on the Theme of “Lifethat Tokyo Gas can help create a more livable society bycarrying out its core business. This includes environmental
conservation through the popularization of eco-friendly
natural gas, safety and disaster prevention measures to

In addition to visiting customers at least once every three

the gas business in close touch with local communities.

years to conduct safety inspections of gas appliances, ourLeveraging the unique experience and human resources

safety initiatives include enhancing the Gaslight 24 system

accumulated through this relationship, we engage in various

with a round-the-clock emergency dispatch to respond to gas

social initiatives, including offering ideas for enrichedleaks and other problems. Tokyo Gas disaster prevention

lifestyles and education for children, who will develop into

efforts include honing our capabilities for prevention, emer-

tomorrow’s leaders. To ensure that these activities reflect

gency response and restoration. When the Niigata Chuetsu

the desires of society and the needs of customers, we place

Earthquake struck in October 2004, at the request of The

deep importance on communication with society.

Japan Gas Association, we mounted an “all Tokyo Gas” disas-

One of the many actions is the Acorn Project, an envi-

ter response, dispatching 750 employees from Tokyo Gas,

ronmental education program in collaboration with an NPO.

affiliates and business partners to help restore lifelines.

gathering acorns, nurturing their growth into seedlings andtransplanting them in the countryside, while participating in

Conduct based on a framework of “Seven Pledges.”
To ensure that Our Code of Conduct continues to serve
as a vital guide to conduct, we actively hold briefing sessions

Enhancing the Compliance Structure

for all employees (the participation rate was 91.4% as of theend of fiscal 2004) and continuously engage in awarenesstions and engaging in corporate activities grounded in a

activities using the Tokyo Gas Intranet and video programs.

sense of ethics are critical conditions for sustaining safety,
Reducing Compliance Risk

reliability and trust—brand values that are the source of our

The Compliance Department serves as the secretariat for thecompetitive advantage. Accordingly, we are working tohandling of compliance issues in the Tokyo Gas Group dis-establish a comprehensive compliance culture by fostering acovered in compliance audits or by other means. The depart-

spirit of compliance, engaging in compliance as both ament deliberates on compliance matters and implements

group-wide policy and a practice in each workplace andconcrete improvement activities by means of working groups

establishing a compliance PDCA cycle.

comprising representatives from involved departments. For

Specifically, in fiscal 2002 Tokyo Gas put in place a robust

instance, in fiscal 2004 the department established a working

compliance structure. We established the Management Ethics

group on the Temporary Staffing Services Law to reduce

Committee, chaired by the president, to determine basic

Note: Earthquake measures are a focus of the Japan Gas Association,
including emergency repair action in the case of earthquakes. The
association established a policy under which emergency repair costs
are to be paid by the damaged entity, excluding the personnel
expenses of the assisting companies.

compliance risk by identifying issues, preparing a complianceManagement Ethics Committee on risk matters affecting thepromotes group-wide compliance actions, including instituting

Programs

Number of Employees Participating

ates. The Compliance Department reports to theactual circumstances into account. We also established the“Tokyo Gas Forest” in Nagano Prefecture, as the main site

Human resources are a source of value at the Tokyo Gas Group. We
promote personal freedom and fulfillment by granting employees leave
for childrearing and care for aging parents.

who manage temporary workers at Tokyo Gas and its affili-

at each of the ten divisions execute the basic policies, taking
Compliance Department, a specialty organization that

Use of Support Programs for Pleasant Work Environment(Fiscal 2004)

manual and holding a workshop for about 400 participants

lations in regular meetings. Compliance committees installedother nature activities. In July 2005, we begun to use thefor the project.

months and culminated in the formulation of a Code ofpolicies and monitor the level of compliance to laws and regu-

Begun in 1993, the project has attracted many participants,
who learn hands-on about nature’s growth cycle byof various parties in the Group over a period of about six

Tokyo Gas recognizes that compliance with laws and regula-living and research into living environments.

Since our establishment, Tokyo Gas has always carried out

Group employees. The review involved seeking the opinions

Tokyo Gas continues to foster awareness of
the importance of compliance among Group
employees to maintain our position as a corporate group that is trusted and chosen by
our stakeholders.

ensure that people can use gas with peace of mind, the development of equipment that promotes healthy, comfortable

Communication”

oriented decision making and action, and distributed it to all

Tokyo Gas Group.

a compliance promotion system and code of conduct, conducting training and awareness activities, reducing compliance

Compliance Counseling in Fiscal 2004

risk, furnishing counseling contacts and disseminating inforTopicmation internally and externally.
Revising Our Code of Conduct and Continuously

Number of sessions

Laws and regulations

14

Internal company rules

15

Human relationships in the workplace

15

Leave for parental care

0

Raising AwarenessLeave for childcare

57

To ensure compliance by each and every employee, it is

Leave for volunteer work/holidays

43

essential to provide something to serve as a guide to proper

Employment/employment management

4

behavior. For this reason, in 2004 we reviewed and revised

Others5Compliance Structure

Acorn Project

Board of Directors

Support for School Education
Teaching about the Environment and Energy

ReportPresident

Corporate Auditors

Management Ethics Committee

To increase knowledge of the environment and energy among the leaders of tomorrow, Tokyo Gas

Reportengages in educational support activities targeting elementary and junior high school students.
Activities include the distribution of textbooks for use in fun learning about environmental andChairman: President
Members: Head of divisions/departments

Internal Audit Dept.

energy issues. In the children’s section of the Tokyo Gas website we provide answers to children’s

ReportCompliance Dept.
Instruction/report

Support/report

simple and natural questions about the environment, energy, city gas, living and other matters. We
Each division/business unit

also post links to related websites.
School VisitsClasses
Participants

FY2002

FY2003

FY2004

915

1,986

3,194

27,45059,58095,820Consultation/report

In addition, we conduct a school-visit program in which Tokyo Gas employees teach classes on topics related
to energy, the environment and public welfare using a fun andinstructive experiential learning approach.

26 Tokyo Gas Annual Report 2005

Compliance committees

Compliance audit(risk understanding)

Each department of Tokyo Gas

Group companies

Report/consultation

Report/consultation

Employees

Tokyo Gas Annual Report 200527

Corporate Governanceintroduced the strategic business unit (SBU) system by which

Board of Directors and Auditors (As of June 29, 2005)

affiliated companies involved with business divisions are inte-

To ensure open and transparent management, Tokyo Gas implements corporate
governance that goes beyond merely
establishing a governance structure.

(From left)

grated into SBUs. On the basis of the management policies

KUNIO ANZAI
Chairmandecided by the Board of Directors, the executive officers

HIDEHARU UEHARA(division chief executives) engage in consolidated unit man-Vice Chairman

agement with the aim of maximizing Group value.

NORIO ICHINO
President

To clearly define business performance responsibilities,
Board of Directors: Enhancing Transparency andEnsuring Surveillance as well as Enabling Quick andTokyo Gas has established a one-year term of office forboard directors and executive officers.

Rational Decision-making
With the aim of further increasing corporate value, in recent
years Tokyo Gas has implemented numerous measures tomake the Board of Directors more effective, clarify management responsibility and speed up decision-making. In 2002,
Tokyo Gas greatly reduced the maximum number of board
directors from thirty to fifteen. The Board currently consistsof 12 directors, including three outside directors, and functions as a highly open and transparent management board
where opinions are actively exchanged. Outside directors
were also introduced in 2002. Tokyo Gas believes that tomaximize board functions, it is essential to offer all board
members and corporate auditors accurate and sufficient
information about subjects under discussion. The outside
directors and auditors receive timely information about management measures and market.
In February 2005, an advisory committee, comprised ofoutside directors and auditors as well as internal directors,
was established to discuss the executive compensation system and related matters.

Strengthening Monitoring by Corporate Auditors andthe Internal Audit Department

MITSUNORI TORIHARATokyo Gas has put in place a system by which four corporate

SHIGERO KUSANO

Executive Vice President

Executive Vice President

auditors, including two external auditors, attend meetings of

KOUYA KOBAYASHI

the Board of Directors to monitor the performance of the

Executive Vice President

directors. The standing auditors regularly attend management meetings and work to strengthen the audit function
across the gamut of business operations.
As well as confirming the effectiveness of internal
controls, the Internal Audit Department fairly and objective-

TADAAKI MAEDA
Senior Executive Officer

ly reviews and assesses whether the activities of business

TAKASHI KUNITOMI

units and departments are carried out appropriately and

Senior Executive Officer

efficiently in line with management policies and plans and in

TSUYOSHI OKAMOTO
Senior Executive Officercompliance with the law.
In fiscal 2003, Tokyo Gas established an integrated risk
management system. We clearly stipulate and disclose to
stakeholders the risks with which management should be
involved (see pp. 38–39).

YUZABURO MOGI
Outside Director

Compensation for Directors and Corporate Auditors (Fiscal 2004)

YURI KONNO
Outside Director

Increasing Maneuverability through Introduction of an
Executive Officer System
Another important development in 2002 was the introduction

Millions ofyen

Thousands ofU.S.$

Compensation for 15 directors (4 resigned during the term)¥324$3,028Outside Director

Retirement benefits for directors

270

2,523

of an executive officer system, a first for the city gas industry

Compensation for 5 corporate auditors (1 resigned during the term)

75

700

in Japan. Tokyo Gas has delegated substantial authority to

Retirement benefits for corporate auditors

8

74

¥677

$6,325the executive officers (division chief executives), empower-

Total

ing them to exercise independence and responsibility in decision-making and rapidly execute business.
Previously, we had followed the division system as its

KAZUMOTO YAMAMOTO

Corporate Auditors

Compensation for independent public accountant (Fiscal 2005)(By Tokyo Gas and its subsidiaries)

organizational structure. To further develop the system andCompensation for auditing services

strengthen group-level management, in April 2004 Tokyo Gas

Compensation for other services

Millions ofyen

Thousands of
U.S.$

¥131

$1,224

18

168

¥149

$1,392

HIROSHI HIRAITSUNENORI TOKUMOTO

MASAYOSHI HANABUSA (Outside Auditor)
TOSHIMITSU SHIMIZU (Outside Auditor)

Corporate Governance Structure
General Shareholders’ Meeting

Total

Reforming the Officer Remuneration System to Increase Objectivity and Transparency
Effective in fiscal 2005, Tokyo Gas restructured its officer remuneration system, abolishing retirement benefits and introducing a performance-linked remuneration scheme.
Tokyo Gas believes that the role required of corporate officers is to enhance corporate value over the short, medium and long terms and that executive
compensation should effectively function as an incentive to that end. Accordingly, we have abolished the retirement benefit system for directors and corporate
auditors and consolidated benefits into monthly compensation. At the same time, in the monthly compensation plan for directors who also serve as executive
officers, Tokyo Gas has introduced performance-linked remuneration that reflects the business performance of Tokyo Gas and the individual directors’ divisionin the previous fiscal year. Based on a new guideline, directors, excluding outside directors, are to buy Tokyo Gas shares every month through the Employees
Shareholding Association and hold them until their term of office expires.

Appointment/discharge

Appointment/discharge

Board of Directors (12 directors including 3 outside directors)
Consignment/
supervision

Board of Corporate Auditors (4 auditors including 2 outside auditors)
Monitor/check[Executive organization]
President
Company-wide Committees (Investment Evaluation Comittee, etc.)
ReportManagement meetings by senior executive officers
ReportInternal Audit Dept.

ReportAppointment/discharge

Internal audit

Business units

Independent Auditors
Financial audit

28 Tokyo Gas Annual Report 2005

Tokyo Gas Annual Report 2005

29

Management Structure
Top Management

Strategic Business Units
Residential Sales Div.

Customer Relationship Dept.
Residential Sales Planning Dept.
Area Development Dept.
● Residential Sales Promotion Dept.
● Residential Market Development Dept.
● Remodeling Sales Dept.
● Residential Facility Sales Dept.
● Energy Conservation and Renewable
Project Dept.
● 3 Regional Residential Sales Dept.
● 37 group companies●●●

Corporate
Strategic Planning Div.

Corporate Planning Dept.
Finance & Managerial
Accounting Dept.
● Personnel Dept.
● Business Development Dept.
● Affiliated Companies Dept.
● Environmental Affairs Dept.
● 17 group companies●●

Corporate
Communications Div.

Shared Service / R&D
R&D Div.

Energy Sales andService Div.

●

Wide Area Marketing Div.

●

11 offices● Corporate Communications Dept.
● General Administration Dept.
● Secretary Dept.
● 1 group company●

Energy Sales and Service Planning Dept.
Air-conditioning and Commercial Customer
Development and Service Dept.
● Industrial Gas Sales Dept.
● Energy Solution Business Dept.
● Natural Gas Vehicle Dept.
● Volume Sales Dept.
● 5 group companies●

R&D Planning Dept.
Research Dept.
● Technology Development Dept.
●●

Corporate Service Div.

Wide Area Development Planning Dept.
Wholesale and Regional Service Dept.
● 7 service branches● 13 group companies●

Service Integration andPromotion Dept.
● Personnel Support Dept.
● Accounting Dept.
● Purchasing Dept.
● Information andCommunication Systems Dept.
● Real Estate Management Dept.
● 7 group companies

Pipeline Network Div.

Strategy Planning Dept.
Pipeline Dept.
3 pipeline regional offices● Emergency Management Dept.
● Supply Control andDisaster Management Dept.
● 2 group companies
●
●

●

●

Energy Production Div.

●

Energy Resources Div.

Compliance Dept.

Energy Production Dept.
3 LNG terminals● 1 group company●●●

Gas Resources Dept.
3 group companies

Internal Audit Dept.
(As of April 1, 2005)

Auditors●

Corporate Auditors’ Office

Executive Officers (As of April 1, 2005)
President

Masaki Sugiyama

Tsutomu Oya

Norio Ichino

Chief Executive, Pipeline Network Div.

General Manager, Air-conditioning and Commercial Customer
Development and Service Dept.

Executive Vice Presidents

Mitsunori Torihara
Chief Executive, Corporate Communication Div.; Compliance Dept.

Shigeru Muraki
Chief Executive, R&D Div.

Seiichi Nakanishi

Shigero Kusano

Corporate Communication Div.
Dispatched to the Japan Gas Association

Chief Executive, Energy Sales and Service Div.;
General Manager, Volume Sales Dept.

Executive Officers

Kouya Kobayashi

Tokio Imazawa

Chief Executive, Energy Production Div.

Coordinator, Energy Sales and Service Div.

Masahiro Ishiguro

Norikazu Hoshino

Chief Executive, Corporate Service Div.

Deputy Chief Executive, Residential Sales Planning Dept.
General Manager, Customer Relationship Dept.

Senior Executive Officers

Tadashi Kaburagi

Tadaaki Maeda

General Manager, Industrial Gas Sales Dept.

Chief Executive, Energy Resources Div.; Internal Audit Dept.

Takashi Kunitomi
Chief Executive, Residential Sales Div.

Tsuyoshi Okamoto
Chief Executive, Strategic Planning Div.

Toshio Tezuka
Chief Executive, Wide Area Marketing Div.

30 Tokyo Gas Annual Report 2005

Toshiyuki Kanisawa
General Manager, Corporate Planning Dept.

Kunihiro Mori
General Manager, Energy Production Dept.

Yasuhiro Hiruma
General Manager, Corporate Communications Dept.

Mikio Itazawa
General Manager, Pipeline Dept.

Michiaki Hirose
Corporate Communication Div.
Dispatched to the Japan Gas Association

Kazuo Yoshino
General Manager, Finance & Managerial Accounting Dept.

Hisao Watanabe
General Manager, Research Dept.