Initiatives for Environmental Protection and Safety

Group Management Structure

Environmental Contribution from Increased
Use of Natural Gas

eral-purpose fossil fuel. It emits almost no sulfur oxide

Tokyo Gas recognizes the vital importance of the natural

CO2 emissions are around 40% and 80% respectively ofenvironment and is determined to make a positive contribu-

the level for coal and oil.

(SOx) during combustion, while nitrogen oxide (NOx) andThe Tokyo Gas Group currently consists of Tokyo Gas Co.,

Gas corporate divisions are linked with group companies totion to global environmental conservation and sustainable

We aim to fully exploit the advantages of natural gas inLtd., together with 52 subsidiaries and one affiliated company.

form business units in each business area. The divisions andsocial development by promoting the use of environmental-

our business activities by developing highly efficient equip-

companies work closely together on tasks ranging from thely sound resources and energy technologies. This philoso-

ment and systems, such as cogeneration systems, thatfaces escalating competition from both inside and outside

formulation of business strategies to the allocation of man-phy is reflected in four policies that are making Tokyo Gas aminimize the environmental load. We see this as an excel-the industry. In April 2004 we introduced a new group struc-agement resources and the management of operations, allleader in environmental management and an active partici-

lent strategy for reducing global warming and atmosphericture known as the “Strategic Business Unit” (SBU) system,

under the responsibility of unit managers. The aim of thispant in efforts to solve global environmental problems.

pollution. Another priority is making natural gas available toWith the deregulation of the energy sector, Tokyo Gas now

which is designed to focus the entire resources of the Tokyo
Gas Group toward the task of surviving and succeeding inFirst, we are working to reduce the environmental loadcooperative approach is to maximize our group potential andfurther strengthen our competitiveness.

the competitive environment. Under this structure, Tokyo

as many customers as possible.

resulting from the use of energy by our customers; second,Tokyo Gas has developed its own environmental protec-

we are working to reduce the total environmental load result-tion guidelines to ensure that the environmental advantages

ing from our own business activities; third, we are strengthening our environmental partnerships with local and interna-Comparison of Emission Levels (Coal=100)

tional communities; and fourth, we are promoting researchGroup Management Structureand development relating to environmental technologies.
CorporateAuditors’ Office

Auditors

Strategic Business Units

Supporting Function• Corporate Planning Dept.

Energy Production Div.

Housing Development Div.

Energy Resources Div.

• Financial & Managerial
Accounting Dept.

• General Administration Dept.

Energy Solution Div.

Fundamental Function• Accounting Dept.

• Corporate Communications
Dept.

• Personal Dept.

• Environmental Affairs Dept.

• Purchasing Dept.

• Affiliated Companies Dept.

• Infrastructure Project Dept.

Technology Development Div.
Information Technology Div.

Pipeline Network Div.

• Real EstateManagement Dept.

GlobalWarmingPrevention
Measures• Major Site
Development Dept.

Residential Sales Promotion Div.

SOx

• Secretary Dept.

Resource
Recycling
Promotion
Guidelines• Compliance Dept.
• Internal Audit Dept.

01. In its city gas business, the Tokyo Gas Group aims to reduce CO2 emissions
from customers’ facilities by 8 million tons by fiscal 2010, by promoting theuse of natural gas, and by improving the efficiency of equipment and systems used with city gas.

Executive Officers

Senior Executive Officers

Executive Officers

Mitsunori Torihara

Masaki Sugiyama

Kazuo Yoshino

Chief Executive, Technology Development Div.

General Manager, Finance & Managerial Accounting Dept.

Toshio Tezuka

Hisao Watanabe

Chief Executive, Housing Development Div.

General Manager, Technology Planning Dept.,
Technology Development Div.

Executive Vice President

Shigeru Muraki

Tadaaki Maeda

Chief Executive, Energy Solution Div., General Manager,
Volume Sales Dept.

Akio Maekawa

Chief Executive, Energy Production Dept.,
Environmental Affairs Dept.

Toshiyuki Kanisawa

Manabu Fukumoto

Chief Executive, Residential Sales Promotion Div.

General Manager, General Administration Dept.

Tadashi Kaburagi

Matsuhiko Hataba

Chief Executive, IT Division

General Manager, Corporate Planning Dept.

Tsutomu Oya

Yuji Akiyama

Chief Executive, Energy Resources Div.

General Manager, Kanagawa Service Branch,
Residential Sales Promotion Div.

1. Industrial waste field
There are major differences in the ways in which industrial waste is produced in manufacturing plants (production sites) and through other activities,such as construction. These categories will therefore have separate targets.
Tokyo Gas will achieve zero emission status at all manufacturing plants
by fiscal 2010.
Tokyo Gas will increase its recycling ratio for other waste, including
construction waste, to at least 91% by fiscal 2010.

Chief Executive, Personnel Dept., Secretary Div.,
General Administration Div.
Compliance Dept., Internal Audit Div.

Norikazu Hoshino
Kunihiro Mori

Koichi Aonuma
General Manager, Sales Marking Ⅱ Dept.,
Housing Development Div.

Dispatched to the Japan Gas Association

Yutaka Kunigo

Yasuhiro Hiruma

General Manager, Gas Resources Dept., Energy Resources Div.

Chief Executive, Regional Development Marketing Div.

Mikio Itazawa

GreenPurchasing

Chief Executive, Corporate Planning Div., Infrastructure Project
Dept., Financial & Managerial Accounting Dept.,
Accounting Dept., Affiliated Companies Dept.

Coal

7010040

Oil

Coal

7010060

Oil

Coal

80100

3. From a global perspective, the Tokyo Gas Group will contribute to the prevention of global warming by identifying greenhouse gas reduction orabsorption projects in other countries, and by providing technical support forthose projects.

by fiscal 2010, compared with fiscal 2005.Tokyo Gas will increase therecycling ratio for waste paper from its offices to at least 85% byfiscal 2010.
The amount of copier paper used will be reduced to 5,000 sheets perperson per year by fiscal 2010.
3. Excavation spoil
The amount of excavation spoil from road excavations ordered by Tokyo
Gas will be reduced to 15% by fiscal 2010, through volume reductions,reuse and recycling.

3. Tokyo Gas Group will promote green purchasing within the Tokyo Gas
Group in accordance with the green purchasing promotion guidelines.

2. Tokyo Gas will encourage all group companies included in the consolidated
accounts to introduce the electronic catalog purchasing system and implement green purchasing systems by 2010.

Reduction of CO2 emissions from customers’ facilities
Unit energy use in gas production facilities (Per unit of gas production)
Unit energy use in district cooling/heating systems (Per heat sales volume unit)
Unit energy use in Tokyo Gas business offices (Per city gas sales volume unit)
Industrial waste (manufacturing plants)
Recycling of industrial waste (other sites)
Reduction ratio of waste paper
Recycling of waste paper
Sheets of copy paper used per person per year
Excavation spoil ratio

Chief Executive, Pipeline Network Division

Michiaki Hirose

Oil

Natural Gas

Results for Fiscal 2006 and Targets for Fiscal 2010

Resource Circulation

Chief Executive, Purchasing Dept., Real Estate Management Dept.,
Major Site Development Dept., Corporate Communication Dept.

1. The green purchasing ratio for items purchased from electronic catalogs
will be increased to at least 70% by fiscal 2010.

Coordinator, Energy Solution Div.
Global Warming

Tsuyoshi Okamoto

GreenPurchasing
Guidelines

CO2

Natural Gas

2. The Tokyo Gas Group aims to reduce unit energy consumption in its business
operations by an average of at least 1% per year over the medium-term future.

2. Waste paper (paper recycling)
Tokyo Gas will reduce by 10% the amount of wastepaper from its offices

President

NOxNatural Gas

However, the main resource for city gas is natural gas,
which has the smallest environmental footprint of any gen-Top Management

Regional Development Div.

Our core business activity is to supply city gas.

Green procurement ratio
Number of affiliated companies that have already introduced an electronic
catalog purchasing system

Target for FY2006

Result for FY2006

Target for FY2010

6.60 million tons
1% or more reduction
1% or more reduction
1% or more reduction
4 sites/10 sites
More than 91%
2% reductionMore than 85%
7,40019%60%

6.61 million tons
2.4% reduction*
0.6% reduction*
6.3% reduction*
5 sites/11 sites
87%
3.9% reduction
87%
7,180
19.3%
60%

8.00 million tons
1% or more reduction
1% or more reduction
1% or more reduction
10 sites/10 sites
More than 91%
10% reduction from fiscal 2005
More than 85%
5,000
15%
More than 70%

35 companies

38 companies

48 companies* Annual average reduction ratio (Unit energy use reduction ratio at power plants will be evaluated from fiscal 2007.)3435

of its city gas business are fully exploited. These guidelines
call for the reduction of CO2 emissions resulting from gas use
by Tokyo Gas customers by eight million tons by fiscal 2010.

Advanced Disaster Prevention Measures
The supply of energy is vital to the continuation of economic activity and modern life. Throughout its history, TokyoGas has remained keenly aware of its responsibilities as aGaslight 24

supplier of energy, including the responsibility to ensure
safety. We continue to fulfill that responsibility through awide range of measures.
Japan is an earthquake-prone country. Tokyo Gas maintains a high standard of safety by ensuring that key gas production and supply facilities are able to withstand major
earthquakes on the scale of the disaster that struck theHanshin-Awaji area in 1995. When seismic motion with anintensity of five or higher on the Japanese scale is detected,

Safety Inspections

computerized meters shut off the supply of gas to customers’ sites. At the same time, our Super-Dense Real-timeThis includes the implementation of restoration support sys-

Monitoring of Earthquakes (SUPREME) system instantly

tems, development of equipment and training of personnel.

monitors data from a network of approximately 4,000 seis-

Our day-to-day safety organization including themometers located throughout our service area. In order to“Gaslight 24” team, is ready to respond to gas leaks andprevent secondary disasters, our highly effective safety

other safety-related problems on a 24/7 basis.

FinancialSection

measures include automatic shut-off valves linked to seismometers and systems that allow remote shut-off of gas

Elimination of Carbon Monoxide Poisoning

supply if an earthquake with the potential to cause major

In fiscal 2006 Tokyo Gas announced the expansion of its

damage is detected. In addition to this ability to suspend gas

measures to prevent CO poisoning. We will spend up tosupplies for safety reasons, we have also developed systems¥10 billion on a campaign to encourage customers in thethat allow supplies to be resumed quickly once the situation

Tokyo Gas service area to replace kitchen and bathroom

has returned to normal. We have strengthened our collabora-

water heaters with imperfect oxygen depletion safety shut-tion with group companies and suppliers and taken every

off devices with new units that incorporate this importantpossible measure to minimize inconvenience to customers

safety feature. The campaign will continue for approximate-by ensuring restoration of services as quickly as possible.

ly three years from January 2007.
Starting in April 2007, we will progressively increase
our safety inspection work force by around 100 to support extensive inspection programs. We will also enhance
our communication activities in order to foster customer
confidence in the safety of gas by responding to safetyrelated questions and concerns.
Customer safety is the fundamental mission and themost important responsibility of a gas supplier. The entire

Current

Control RoomTokyo Gas organization has worked to fulfill its responsibility

Contents

under the leadership exercised by the top management. In

Management’s Discussion and Analysis

38

Consolidated Statements of Cash Flows53

Principal Management Risks

44

Notes to Consolidated Financial Statements

54

actively developing new technologies that will help to12-year Summary

46

Independent Auditors’ Report66

enhance safety.

Consolidated Balance Sheets48

Consolidated Statements of Income

50

Consolidated Subsidiaries andEquity-method Affiliates

67

Consolidated Statements ofShareholders’ Equity

Investor Information

68

51

Consolidated Statements ofChange in Net Asset52

addition to our efforts to expand safety inspections and promote the replacement of unsafe appliances, we are also

Center for Supply Controland Disaster Management

SUPREME Seismic Sensors
Red points are sensor locations (Approximately 4,000)

3637