JGC Group Long-Term Management Vision
2040 Vision
Full Text

July 7, 2021
JGC Holdings Corporation

JGC Group Long-Term Management Vision
2040 Vision

Contents
EXECUTIVE SUMMARY........................................................................................................................... 3
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2

INTRODUCTION ...................................................................................................................................... 7
PURPOSE OF THE JGC GROUP ................................................................................................................ 7
2.1 HISTORICAL ROLES SINCE THE COMPANY WAS FOUNDED ...............................................................................7
2.2 PURPOSE OF THE JGC GROUP ................................................................................................................................8

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SOCIAL ISSUES TARGETED BY THE JGC GROUP ................................................................................... 9
3.1 PURSUING BOTH A STABLE ENERGY SUPPLY AND DECARBONIZATION .........................................................9
3.2 REDUCING THE ENVIRONMENTAL IMPACT OF RESOURCE CONSUMPTION..................................................10
3.3 BUILDING AND MAINTAINING VITAL INFRASTRUCTURE AND SERVICES .....................................................10
3.4 ROLE OF JGC GROUP TOWARD 2040 ....................................................................................................................1142040 VISION OF THE JGC GROUP .......................................................................................................... 12
4.1 FIVE BUSINESS AREAS ..........................................................................................................................................12
4.2 SALES CONTRIBUTION BY BUSINESS AREAS AND MODELS ...........................................................................135

OVERVIEW OF TRANSFORMATION SUPPORTING THE VISION ........................................................... 14
5.1 THREE ASPECTS OF TRANSFORMATION SUPPORTING THE 2040 VISION .......................................................14
5.2 PATH TO BUSINESS AREA EXPANSION ................................................................................................................14
5.3 TARGET LEVEL FOR OPERATING INCOME..........................................................................................................15

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BUSINESS AREA TRANSFORMATION .................................................................................................... 16
6.1 CORE BUSINESS: ENERGY TRANSITION .............................................................................................................16
6.1.1ENERGY TRANSITION – LOW-CARBON/ DECARBONIZED OIL & GAS ..........................................................16
6.1.2ENERGY TRANSITION – CLEAN ENERGY ........................................................................................................17
6.2 GROWTH BUSINESS: HEALTHCARE/LIFE SCIENCES .........................................................................................19
6.3 GROWTH BUSINESS: HIGH-PERFORMANCE FUNCTIONAL MATERIALS .........................................................19
6.4 FUTURE BUSINESS: CIRCULAR ECONOMY ........................................................................................................20
6.5 FUTURE BUSINESS: INDUSTRIAL & URBAN INFRASTRUCTURE .....................................................................21

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BUSINESS MODEL TRANSFORMATION................................................................................................. 23
7.1 TRANSFORMATION OF THE EPC BUSINESS MODEL: INITIATIVES APPLYING DIGITAL TECHNOLOGIES ...23
7.2 BUSINESS MODEL DIVERSIFICATION..................................................................................................................25

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ORGANIZATIONAL TRANSFORMATION ............................................................................................... 26
8.1 STRONGER FRAMEWORK FOR REGIONAL MANAGEMENT .............................................................................26
8.2 MORE VIBRANT CULTURE OF INNOVATION .......................................................................................................26

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COMMITMENT TO CARBON NEUTRALITY BY 2050.............................................................................. 27

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GROUP MESSAGE: CREATING AN ENVIRONMENT OF HIGH MOTIVATION ...................................... 28

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JGC Group Long-Term Management Vision
2040 Vision

Executive Summary
1. Purpose of the JGC Group
Since the JGC Group's founding in 1928, the Group has changed with the times in supporting
industry and society at large. The Group’s business has always stood at the crossroads of issues thatmust be faced to balance the need for energy with the environment.
Change is now sweeping through the business environment where the Group operates. To continue
to enjoy sustained growth, we believe we must respond swiftly and flexibly to current trends whiletransforming ourselves based on the global, long-term perspective of enhancing planetary health anda shared sense of purpose among the Group’s stakeholders.
"Enhancing planetary health" – contributing to a healthy future for people and the Earth – is now thereason for the Group's existence. This sense of purpose has guided us in establishing "2040 Vision,"
our long-term management vision.
2. 2040 Vision of the JGC Group
Guided by the purpose of enhancing planetary health, the JGC Group will pursue the vision for 2040
by applying proven capabilities and experience to address the three social issues of balancing energy
stability with decarbonization, reducing the environmental impact of resource consumption, andbuilding and maintaining vital infrastructure and services.
Working toward these solutions, the Group will be diversifying operations into the following five (5)areas and transforming into a corporate group that contributes to enhancing planetary health.
Business areas:• Energy transition• Healthcare/Life sciences• High-performance functional materials• Circular economy• Industrial & Urban infrastructure

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JGC Group Long-Term Management Vision
2040 Vision

3. Three aspects of the transformation
The JGC Group has enjoyed sustained growth by constantly evolving, and now the decisivetransformation the Group is taking on marks a major turning point: the transformation of its businessareas, business models, and organization.
3.1. Business area transformation
As the Group makes steady progress in expanding its business into five areas, this long-termtransformation will occur over three phases, in consideration of factors such as when its investments
will come to fruition. The course charted will take place in the three phases of "five years ofchallenge" (2021–2025) focused on the core business in energy transition, "five years of harvesting"(2026–2030) the fruit of efforts in the growth businesses of high-performance functional materials
manufacturing and healthcare/life sciences, and "ten years of rapid growth" (2031–2040) as theGroup add the future business of circular economy and industrial & urban infrastructure as pillars ofbusiness.

The Group will take the following courses of action in five business areas.
Energy transition
Adopt low-carbon/decarbonization practices in the Oil & Gas sector and expand clean energy, for a
net-zero society.
Healthcare/Life sciences
Further develop segments providing pharmaceuticals and hospitals domestically as well as inemerging economies, to promote health through medical care.
High-performance functional materials
Develop and produce unmatched high-performance functional materials in growth segments,
applying core technologies.
Circular economy
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Cultivate markets and build ecosystems supporting circular economy for a sustainable society.
Industrial & Urban infrastructure
Provide environmentally conscious industrial & urban infrastructure integrating multiple systems.
3.2. Business model transformation
In EPC business, the Group will implement its "IT Grand Plan 2030" and "EPC DX" in particular forthe transformation of the EPC business model. The Group will seek business model expansion
upstream and downstream in the value chain, building on its accumulated experience, andestablishing new business models applying digital technologies.
In the area of non-EPC business models, while reinforcing its existing high-performance functional
materials production, the Group will undertake transformation that leverages JGC Group strengths inlicensing, PMC and other consulting, maintenance and digital O&M, digital platform business, aswell as participation in new business.
3.3. Organizational transformation
To guide the transformation of its business areas and business models steadily toward success, theGroup will also promote organizational transformation. Here, the Group will focus on strengthening
its framework for "regional management" to solve local social issues and fostering a "culture ofinnovation" to develop new technologies and business more rapidly and creatively.
4. Target level for operating income
Through its transformation, the Group envision it will generate operating income of ¥60 billion by2025, ¥100 billion or more by 2030, and ¥150–200 billion by 2040. The Group will also makestrategic investments for greater revenue over the long term.

The transformation of business will be complete by 2040, when its diversified portfolio will reflect
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JGC Group Long-Term Management Vision
2040 Visionthese changes.

Group message
In establishing the 2040 Vision, the JGC Group makes the following three commitments to all
stakeholders over a period of 20 years. For the JGC Group to transform itself, achieve sustainablegrowth, and fulfill a valuable role in society, nothing is more important than for us to continue toprovide an environment for all engaged in and with the Group to work with high motivation.
1. We will foster a culture that takes on the challenge of the unknown and encourages innovation
2. We will work toward a shared purpose and maintain a tradition of mutual respect
3. We will create an environment where exchanges of the diverse ideas of a vibrant workforce leadto positive outcomes and new value

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JGC Group Long-Term Management Vision
2040 Vision

1 Introduction
Currently, social and industrial paradigm shifts are unfolding faster than ever against backgroundfactors such as global climate change issues, advances in digital technology, and the pandemic crisis
of COVID-19 since 2020. Amid growing uncertainty about the future, issues involving the healthand welfare of the people and the Earth are also becoming more serious.
Change is sweeping through the Group's business environment as well, giving us a renewed
awareness that its own transformation is inevitable. Under these conditions, the JGC Group recently
established its “2040 Vision” as a long-term vision with the future 20 years from now in mind, sothat the Group continues to respond to current environmental changes and will be pursuing longterm growth.
To make the 2040 Vision a reality, the Group will hone the core competencies that have beencultivated in existing business and apply innovation to establish new business, as the Group takes on
corporate transformation from a long-term perspective.
This document is intended to convey to all stakeholders, including members of the Group, the kindof company we aspire to be.
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Purpose of the JGC Group

2.1 Historical roles since the company was founded

The predecessor of the JGC Group, Japan Gasoline Company, was established in 1928 targeting theoil refining business. Demand for fuel oil in Japan was growing, and the company aspired to free thecountry from relying on expensive imports by supplying economical fuel oil from domestic refining
operations, which would contribute to industrial and social development. The company later moved
on from refining but, even after becoming Japan's first EPC contractor, the Group has always
focused on the social imperative of balancing energy needs and environmental impact, remaining apresence that supports the foundations of industry and society at large.

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2040 Vision

2.2 Purpose of the JGC GroupFor the JGC Group to continue to enjoy sustained growth, we believe the Group must keep
responding swiftly and flexibly to current environmental changes while transforming ourselves
based on the global long-term perspective of contributing to a healthy future for people and theEarth, which expands on our founding management stance of contributing to industrial and social
development. We have also recognized a need to redefine the purpose of the Group so that all
stakeholders in the Group share this sense of purpose and we steadily carry out our transformation.
This thinking underlies the Group's newly redefined purpose: "Enhancing planetary health." The
health of people and the Earth are intertwined. We will enhance ourselves in working toward a more
prosperous future – this is the message behind the Group's purpose.
This purpose has guided us in establishing the 2040 Vision, our long-term management vision.

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JGC Group Long-Term Management Vision
2040 Vision

3

Social issues targeted by the JGC GroupThrough the lens of "enhancing planetary health", what challenges await the world in 2040, andwhat action is needed in the meantime?
3.1 Pursuing both a stable energy supply and decarbonization

Of particular interest to the JGC Group are developments in the energy sector. According to theInternational Energy Agency's (IEA) World Energy Outlook 2020, global primary energy demand is
set to expand with demographic and economic growth from 14.4 billion toe1in 2019 to 17.1 billion
toe in 2040 under stated policy scenario.2 Even if this demand drops as climate change measures ofmany countries take off, it is expected that the trend toward greater energy consumption willcontinue globally, especially in emerging countries.
Looking ahead to the world in 2040, climate change remains a major challenge. According to the
IPCC's Special Report on Global Warming of 1.5°C published in 2018, the global averagetemperature has already risen by 1°C relative to preindustrial levels, and at the current rate ofwarming, a further increase of 1.5°C is expected between 2030 and 2050. It is thought that limiting
the increase in average temperature relative to preindustrial levels to 1.5°C will require net-zero CO2emissions by 2050. The world is already moving toward this ambitious 1.5°C target. Renewableenergy holds promise as a new energy source, and some forecasts suggest that the current supply of
900 million toe will rise to 3.3 billion toe by 2040.3 The Group expects this global trend toward
lower carbon, and carbon neutrality, is likely to accelerate.

1 Ton of oil equivalent
2 IEA (2020), World Energy Outlook 2020, from Stated Policies Scenario
3 IEA (2020), World Energy Outlook 2020, from Sustainable Development Scenario
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3.2 Reducing the environmental impact of resource consumption

As the scale of production and consumption expands with economic growth, CO2 emissions across
manufacturing processes are increasing, and more waste is being generated. Total global waste stoodat 2 billion tons in 2016 and is projected to reach 3.4 billion tons in 2050, of which 12% will beplastic waste that is not biodegradable.4 Micro- and nanoplastics in this non-biodegradable waste
spread through the air and oceans, which raises concerns that the impact on ecosystems and humanhealth will become more serious.5 The Group believe there is a need for resources with a lighter
environmental footprint that do not represent new sources of waste.
3.3 Building and maintaining vital infrastructure and services

Asia, Africa and other emerging regions will see an accelerated urban population influx as theireconomies grow. Asia in particular may see an increase in the urban population ratio from about
50% in 2018 to 66.2% in 2050.6 One global challenge the Group will be focusing on is developing
and maintaining the industrial and urban infrastructure needed as this urbanization continues.
Greater medical needs are also expected, especially in emerging markets where economies are
growing and people are living longer. Developing medical infrastructure and providing better
4 World Bank (2018), What a Waste 2.0: A Global Snapshot of Solid Waste Management to 2050.
5 UNEP (2016), Marine Plastic Debris and Microplastics: Global Lessons and Research to Inspire Action and Guide Policy
Change.
6 United Nations (2018), World Urbanization Prospects 2018 Revision.
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2040 Vision

treatment will be required, and needs will increase in specialized medical fields.
Meanwhile, as birthrates decline and populations age in Japan as well as other advanced nations, theGroup are already seeing a need to maintain social systems and ensure quality of life throughpersonalized and preventive medical care. It is anticipated that the emerging markets will share theseneeds by 2040.
3.4 Role of JGC Group toward 2040
In view of these environmental changes, the Group believes that the social issues which should be
addressed in the years leading to 2040 can be summarized along these lines: pursuing both energy
stability and decarbonization, reducing environmental impact of resource consumption, and building
and maintaining vital infrastructure and services. These issues pertain to the health of the Earth andpeople alike. To contribute toward solutions, the Group will apply its experience and capabilities
accumulated to date.

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2040 Vision

42040 Vision of the JGC Group

4.1 Five business areas
As a corporate group committed to enhancing planetary health, the Group will leverage its
technologies and experience, applying its core competencies to fulfill this purpose in five businessareas.

Energy transition
One task for the company to confront is responding to global demand for both “more energy” and“carbon neutrality”. As the Group adopts low-carbon/decarbonization practices in its core Oil & Gas
business, it will integrate this business with clean energy business (for which the efforts haveaccelerated since the 2010s) under the new concept of "energy transition."
Healthcare/Life sciences
In the area of pharmaceuticals, drug discovery has become more diverse and sophisticated, fromlarge molecule drugs to biopharmaceuticals and new modalities. The field of medicine also facessome urgent issues, such as realization of digitally enhanced smart hospitals and responding togreater medical needs in emerging economies. The Group will further contribute to human healththrough healthcare and life sciences based on an extensive experience in supporting domestic
pharmaceutical and healthcare clients since the 1970s.
High-performance functional materials
The potential of materials will also help the Group shape a more prosperous future for people andthe Earth. The Group manufacturing companies will apply expertise in catalysts, fine chemicals, andfine ceramics to develop new products and expand capacity in applications linked to its otherbusiness areas, such as carbon/chemical recycling, environment/new energy,
semiconductors/telecommunications, and life sciences.
Circular economy
The Group will work toward solutions to issues associated with waste generated from the life cycle
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JGC Group Long-Term Management Vision
2040 Visionof petrochemical products such as plastics, as the Group promote widespread adoption of resources
with a lighter environmental footprint. For this purpose, the Group will apply process engineering
capabilities from refining and petrochemicals in order to build "circular economy" operations into a
profitable pillar of business with the partners.
Industrial and Urban infrastructure
The Group will venture into industrial and urban infrastructure based on its fundamental
technologies and project management capabilities developed to date, which enable us to meeturbanization needs through environmentally conscious solutions where demographic and economic
growth is expected. The efforts in this area will involve implementing integrated industrial and urban
infrastructure that also applies solutions from energy transition, circular economy, and other businessareas.
4.2 Sales contribution by business areas and models
Envisioned for 2040 is a transformation into a corporate group doing business in these five areas,
beyond the current focus on Oil & Gas, and a shift from its EPC-focused business model to various
other models.

The Group will diversify its business areas. Target sales contribution of each area is roughly 60% inenergy transition and 10% each in the healthcare/life sciences, high-performance functional
materials, circular economy and the industrial & urban infrastructure segments. Similarly, indiversifying business models, the Group will increase the sales contribution from non-EPC models
to 40% or more.

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2040 Vision

5

Overview of transformation supporting the vision

5.1 Three aspects of transformation supporting the 2040 Vision
Becoming the corporate group envisioned for 2040 – working in these five areas to enhanceplanetary health – calls on its commitment to transformation as individuals and an organization.
Thus, the JGC Group will take on transformation in three ways to realize the 2040 vision.
Business area transformation
The Group will transform its business area focusing on Oil & Gas to meet the needs of energy
transition, as well as expand business areas to other than energy-related areas.
Business model transformation
The Group will transform its existing EPC- and manufacturing-centered model by making the EPC
model more sustainable and, by diversifying the revenue structure through a variety of models,stabilize income.
Organizational transformation
In organizational transformation, the Group will add to the current organization, with groupmanagement focused in Japan and optimized for mega-size projects, by strengthening a framework
for regional management that can contribute to local development through smaller projects firmly
based in emerging economies, as well as by fostering a culture of innovation for the development of
new technologies and business.

5.2 Path to business area expansion
The Group business will be expanded into five areas over three phases, based on the scale ofexpansion and the timing of when its investments will come to fruition. Portfolio expansion will
involve gradually developing business in areas the Group have identified as "core" (specifically,
supporting energy transition), "growth" (high-performance functional materials manufacturing, andhealthcare/life sciences), and "future" (circular economy and industrial & urban infrastructure) into
profitable pillars of business.
The first phase from FY2021, positioned as "five years of challenge," marks a shift to low-carbon/

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2040 Vision

decarbonized Oil & Gas through the adoption of low-carbon/decarbonization technologies in the
traditional Oil & Gas business. Meanwhile, another business in the energy transition area that theGroup will develop into a core business is clean energy, which includes renewable energy. The
Group will also actively invest in growth businesses and lay the groundwork for future business at
this time.
The next "five years of harvest" are positioned as a phase to develop operations in both highperformance functional materials and healthcare/life sciences into pillars of business, and to makeother future business profitable.
In the final "ten years of rapid growth," the Group will establish diversified portfolio management inall five business areas, with operations supporting a circular economy and industrial & urban
infrastructure added as pillars of business.

5.3 Target level for operating income
Through the transformation of both its business areas and business models over the coming years to2040, the Group is targeting operating income of ¥60 billion by 2025, ¥100 billion or more by 2030,
and ¥150–200 billion by 2040.
For greater revenue over the long term, the Group will continue to make strategic investments.

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2040 Vision

6

Business area transformation

6.1 Core business: Energy transition
The Group will engage in energy transition business by both promoting low-carbon/decarbonizationin Oil & Gas (through reduced emissions and adoption of carbon-capture technologies) andexpanding use of clean energy in response to the global consensus on net-zero CO2 emissions by
2050.
In this way, operations in the Group's energy transition area will simultaneously address the twochallenges of more energy and less carbon by combining low carbon/decarbonization in Oil & Gas
with expansion of clean energy.

6.1.1 Energy transition – low-carbon/decarbonized Oil & Gas

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2040 Vision

To meet energy demand that is expected to increase amid economic growth in emerging markets, andto meet needs in the energy transition to low carbon and decarbonization in the world's Oil & Gas
industries, the Group will draw on its Oil & Gas experience – expertise and experience in mega-size
projects, as well as experience in CCS facility design and construction.
Here, the Group will focus on the four segments of CCS, energy-saving technologies, carbon credits,and "blue" hydrogen/ fuel ammonia.7
The business development plan is as follows.
Contributing to carbon reduction/decarbonization in Oil & Gas through carbon
management
The Group will build on expertise and experience from past CCS facilities at LNG plants andthe Tomakomai CCS demonstration project to support carbon reduction/decarbonization in Oil& Gas. Not only EPC, the Group will also actively provide solutions from the businessplanning stage and participate in business that generates carbon credits.

Helping facilities scale up for blue hydrogen/fuel ammonia market growth through its
technologies
Production of blue hydrogen/fuel ammonia (CO2-free energy derived from fossil resources) will
require producers to introduce the CCS technology mentioned earlier and expand facilities tomeet higher demand. The Group will support widespread adoption of blue hydrogen/fuelammonia by applying accumulated expertise and risk management capabilities from LNG
operations, investing in technology development, and promoting strategic partnerships.

6.1.2 Energy transition – clean energy
In the global trend toward carbon neutrality by 2050, renewable energy is expected as a key solution
and the market growth is expected to this area. Building on technologies cultivated in solar andbiomass power generation, construction management expertise, and process engineering
7 Hydrogen/fuel ammonia derived from fossil resources with a carbon footprint reduced by means such as CCS
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technologies, the Group will proactively venture into clean energy and meet these decarbonizationneeds.
The Group will focus on the three segments of offshore wind power, "green" hydrogen/ fuelammonia8, and small modular reactors (SMRs). The business development plan is as follows.
Entering offshore wind power, starting in Japan and building on expertise in construction
management
The Group has taken on offshore wind power generation by setting up a dedicated business unit
in 2018. Applying construction management expertise, the Group will form alliances toparticipate – initially in Japan, where the market is expected to take shape over the next several
years. In addition to construction, the Group will fund special-purpose companies for its
offshore wind power generation business.

Demonstrating technologies supporting green hydrogen/ fuel ammonia from renewableenergyThe Group will apply expertise gained in pilot programs to date as we demonstrate thefeasibility of using green hydrogen/fuel ammonia from renewable-powered water electrolysis
as an energy carrier, anticipating participation in new energy value chains for the benefit ofsociety.



Making advance investments in the potential of SMRs
As for nuclear power, safety remains the first priority, and there are expectations for the role
nuclear power can play as a non-greenhouse gas energy source as well as a potential source ofhydrogen. The Group anticipates establishing a track record of achievements in the overseas
construction of smaller, safer, next-generation nuclear reactors called SMRs as the Group
explore the feasibility of practical adoption.

8 Hydrogen/fuel ammonia derived from renewable energy
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6.2 Growth business: Healthcare/Life sciences
Applying its domestically developed pharmaceutical engineering, client base, and expertise in
hospital construction and management, the Group will meet the growing needs in personalized andpreventive medical care mainly in Japan and respond to market expansion overseas as medical
standards further improve in emerging economies.
Here, the Group will focus on the three segments of pharmaceutical plants (including forregenerative medicine), hospitals (traditional and smart), and digital healthcare.
Expanding domestic and overseas pharmaceutical plant EPC operations, including
regenerative medicine
The Group will expand operations to meet growing pharmaceutical needs, including global
vaccine demand, as the Group consider domestic and international strategic partnerships. The
Group will acquire and refine advanced production technologies in line with the technicalrequirements of domestic clients, including in the field of new modalities such as regenerative
medicine, which continues to expand as needs emerge in personalized medical care.

Expanding business through early adoption of digital technologies at hospitals and clinics,
expanding digital healthcare businessIn hospitals, the Group will apply open innovation to acquire smart medical technologies.
Advance investments will be made in digital technologies for hospitals and clinics, for the
expansion of smart hospital business. The business the Group intend to establish can contributein preventive medical care by collecting health and medical data to drive digital healthcare
operations with the potential to improve the quality of treatment. Overseas, the Group will
actively build an operating framework focused on local community and seek strategic
partnerships.

6.3 Growth business: High-performance functional materials
The Group will take on the development and production of unique high-performance functional
materials in growth segments, applying its conventional core technologies (in materials development
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JGC Group Long-Term Management Vision
2040 Visionand production techniques).
The Group will focus on the four new segments of high thermal conductivity silicon nitride
substrates and semiconductor polishing nanoparticles, catalysts for carbon and chemical recycling,materials used in energy storage and new energy applications, as well as materials used in life
science applications.
Business development will be accelerated as follows, drawing on the Group strengths of its base ofoperations for catalyst development, its nanoparticle preparation and control technologies, and its
fine ceramic development and production.
Strengthening frameworks to develop new products, accelerating this process
The Group will venture into new as well as related segments by applying core technologies.
Product development will be reinforced and accelerated.

Improving Production technology and capability
The Group will actively invest in order to develop technologies and expand facilities in growth
segments such as high thermal conductivity silicon nitride substrates and semiconductor
polishing nanoparticles. Production capacity of high-performance functional materials will be
expanded.



Expanding sales and market share of existing products
The Group will further refine core technologies, enhance cost-competitiveness, and strengthenmarketing. Supply chains for products in growth segments will be reinforced and expanded tooverseas markets, to capture a larger market share.

6.4 Future business: Circular economy
By drawing on process engineering expertise cultivated in oil refining and petrochemicals processes
and networks with its clients and partners, the Group will show leadership in market formation andecosystem-building to support a circular economy for a sustainable society.

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JGC Group Long-Term Management Vision
2040 VisionCreating recycling value chains through partnerships
The Group will fulfill a role in creating value chains by applying chemical recycling
technologies in areas including plastic and fiber waste recycling, next-generation aviation fuel(SAF9), and CO2 mineralization. The Group will provide licensing as well as operational
consulting that applies operational expertise gained from its commercial demonstrations andpilot programs.

6.5 Future business: Industrial & Urban infrastructure
Applying expertise in managing overseas projects, the Group will respond to demand forconstruction of industrial and urban infrastructure as economies grow in emerging markets byproviding environmentally conscious industrial facilities and urban infrastructure.


Becoming a major player in the industrial & urban infrastructure market, venturing into
integrated infrastructure development
In the short term, the Group will build on experience to expand its track record in industrial
facilities. In urban infrastructure, including railways and water treatment facilities in Asia, theGroup will forge relationships of trust with new clients centered on EPC business. Over thelong term to 2040, the Group will provide comprehensive services from conceptual design andconstruction to operation and maintenance for industrial parks and urban development as
integrated infrastructure that applies solutions from energy transition, circular economy, andother business areas.

9 Sustainable aviation fuel (SAF)21

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7

Business model transformation

Transformation of the EPC model, diversifying to expand into non-EPC models
For the Group to continue to fulfill valuable roles in society, our belief is the Group must generate
more stable revenue and achieve sustained growth. Thus, the Group will apply digital technologies
in transforming the EPC business model itself, expand from this model into non-EPC models
upstream and downstream of value chain, and seek new business models that are unrelated to EPC,
as the Group diversify the revenue structure.

7.1 Transformation of the EPC business model: Initiatives applying digital technologies
Transformation of the EPC business model for greater income stability will call for maintaining andstrengthening its EPC execution capabilities, a strength of the Group. Essential are digitaltechnologies, which are rapidly evolving.
Future goals for 2030
To enhancing the Group's EPC capabilities, digital technologies will be adopted as the Group pursue
the goal of the IT Grand Plan 2030 (long-term information strategies established in 2018): namely,
executing EPC projects twice as rapidly, with one-third the current man-hours, by 2030. Specifically,
the plan charts a roadmap consisting of the following five innovation programs.
・ Innovation in engineering capabilities through AI design
・ Project digital twins and predictive simulations (Project Simulator)
・ Dramatic improvements at construction sites from 3D printers and automated construction
・ Improved productivity through standardized, modular plants
・ Development of smart community technology
The Group has been working toward these goals since the IT Grand Plan was first established. These23

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efforts have gained momentum through various measures, such as the formation of the EPC DX
Department in 2020. The Group will be investing to develop digital technologies and verifying
actual results in projects to ensure the JGC Group remains competitive in EPC execution.
In the digital twin innovation program, the Group is developing an EPC Execution Platform
integrating project execution information, converting from conventional workflow to a data-centric
form and used in conjunction with Advanced Work Packaging (AWP) methods. The platform is
expected to be developed by 2025 and will be phased in, starting with compatible projects.
Establishing this platform will enable centralized storage and management of all data relevant to
EPC project execution and practical adoption of a "project simulator" to forecast future status on
project costs and schedules.
Several other initiatives will also be implemented over this time frame, including optimal plot plan
design applying AI, innovative, generative equipment design, use of new materials for plantstructures, on-site manufacturing by large-scale 3D printers, and plants delivered on the basis small
standardized modules. Through these advanced technologies, the Group will be seeking further gains
in EPC execution.
EPC business scenarios projected for 2040
The Group believes that it will become standard practice to conduct EPC business on the EPC
Execution Platform by 2030. The significance lies in its potential to make project status moretransparent to stakeholders, reduce the risks of EPC execution and, when the Platform is shared withclients and other stakeholders, even transform traditional lump-sum contracts. This may also enable
new business models, with services such as providing SaaS (“software as a service”) used in project
execution, offering associated consulting services, and/or delivering collaborative system services
with engineers around the world, as in gig opportunities.
With these scenarios in mind, the Group will continue to anticipate the emergence of new digitaltechnologies and invest proactively as the Group transform its EPC business.

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7.2 Business model diversification
To date, the Group has engaged in EPC business under a lump-sum EPC business model in which
the Group undertake a full scope from engineering to procurement and construction. Looking ahead
to 2040, the Group expect a greater need for value co-creation, to take on new and unprecedented
technologies and business. To meet these needs and provide highly value-added solutions, the Groupwill expand its business model upstream and downstream in the value chain, building ontechnologies cultivated in its traditional EPC business model. The Group also intends to establish
new business models applying digital technologies.
In developing non-EPC business models, the Group will reinforce existing the manufacturing of
high-performance functional materials and expand this model. Primarily, the following new businessis currently envisioned.
Non-EPC business model expansion based on EPC
・ Licensing: Technologies used in hydrogen/fuel ammonia applications, chemical recycling, and thelike・ Consulting, PMC: Low-carbon/decarbonization consulting, basic/master planning for hospitals,
circular economy consulting, PMC for urban development, among others
・ Maintenance services, digital O&M: CO2 emission optimization support, smart O&M, smart
hospital O&M, urban infrastructure O&M, and others
Diversification into new business models
・ Platform business: Platforms for generating/monitoring carbon credits, energy supply/demand
optimization, digital healthcare (medical information banks), circular economy supply chain
platforms, and the like・ Business participation: CCS/CCUS business, offshore wind business, hydrogen/fuel ammonia
business, hospital management, commercial demonstration of chemical recycling, and the like25

JGC Group Long-Term Management Vision
2040 Vision

8

Organizational transformation

Ensuring that the Group attains the goals of its 2040 Vision will also require transformation into thekind of organization that can support transformation in business areas and models. As specificinitiatives in this organizational transformation, the Group will strengthen its framework for regional
management and foster a culture of innovation.
8.1 Stronger framework for regional management
As an organization whose purpose is to enhance planetary health, the Group sees many potential
segments in which the Group can contribute in emerging economies where further increases in
population and energy demand are expected. To contribute to solutions for social issues, instead ofits existing approach of taking the initiative from a head office in Japan, the Group believe aframework will be needed to uncover needs and create project opportunities by working closely withlocal clients and proposing and executing solutions promptly in line with local conditions.
Supplementing the current organizational structure, which approaches clients in each country or
region from a headquarters in Japan, the Group believe it will be essential to establish regional
headquarters as a framework for management with stronger sales and project execution functions.
Besides reorganizing current group companies overseas, the Group will make these business units
more agile by delegating authority, as the Group reinforce this framework for regional management
focused on local projects by a national workforce that builds closer ties with local clients.

8.2 More vibrant culture of innovation
The Group has traditionally been organized in the form of a pyramid, which has advantages in
execution of mega-size projects. Leveraging organizational strengths from this arrangement, theGroup have sought to streamline execution and perfect its core technologies.
On the other hand, external collaboration and resource allocation for new business exploration have

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JGC Group Long-Term Management Vision
2040 Vision

been limited compared to those for mega-size EPC projects. Attaining the 2040 Vision calls on theGroup to transform into an "ambidextrous" organization, agile in workstyle, to undertake both
existing and new business. The Group we aspire to become through transformation has a corporate
culture of constant innovation, repeating a cycle of creating new business and applying provenexecution capabilities to nurture it to maturity.
Employees who wish to fulfill valuable roles for society, true to the Group purpose of enhancing
planetary health, will be encouraged to launch new business and take the initiative in nurturing it.
This is the corporate group we will transform into – one with a culture of innovation where new
operating companies are successively born.
Achieving this transformation will involve measures in recruitment and training, innovation
processes, and organizational/administrative programs, as we create an environment where
innovators gather and play active roles.

9 Commitment to carbon neutrality by 2050
As a key element in considering the new purpose of the Group, enhancing planetary health, theGroup is committed to the ambitious target of reducing the Group's CO2 emissions to net zero by2050 and helping stakeholders reduce emissions to achieve a global consensus on carbon neutrality
by 2050.

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JGC Group Long-Term Management Vision
2040 Vision

10 Group message: Creating an environment of high motivation
We believe one of the most important factors enabling the Group to play a valuable role in society
and fulfill our purpose is to continuously create an environment of satisfaction for all who cometogether in the Group as well as encouragement to enjoy creative work.
With this in mind, we make the following three commitments to all stakeholders.
We will foster a culture that takes on the challenge of the unknown and encourages innovation
To realize the 2040 Vision, we will recognize any initiatives to shape the future, without being boundby precedent, and create opportunities to do so.
We will work toward a shared purpose and maintain a tradition of mutual respect
Pursuing the three aspects of transformation will see some decentralization of personnel and agreater diversity of personal qualities and working styles. Values that have been easily shared bymany members to date may be more difficult to share universally in the future. However, even underthese new conditions, we will continue to share the spirit behind the 2040 Vision and purpose of theGroup, as we continue our fine tradition of mutual respect.
We will create an environment where exchanges of the diverse ideas of a vibrant workforce
lead to positive outcomes and new value
To progress toward our 2040 Vision, professionals in a variety of fields must come together andintegrate their diverse knowledge to inspire new innovation. We will create an environment of
exchange of knowledge and ideas and promote the creation of new values.
We make the above three commitments because “our highly talented colleagues are the JGCGroup's greatest treasure”.

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JGC Group Long-Term Management Vision
2040 Vision

We conclude our 2040 Vision with these three commitments to our colleagues who will join us inforging a new JGC Group.

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