December 22, 2021
TOKAI Holdings Corporation
Katsuhiko Tokita, President & CEO(Code No. 3167 Tokyo Stock Exchange First Section)

TOKAI Group Sustainability Declaration
TOKAI Holdings Corporation today announced that it has adopted the TOKAI Group Sustainability Declaration.

Under its corporate philosophy, which states “For customers’ livelihood, and together with local communities andthe earth, we will continue to grow and develop,” the TOKAI Group has been striving to provide customers withsafety and security, convenience and comfort, and joy and meaningfulness of life.
At present, society faces diverse issues, including climate change, growing concern about safe, secure lives, furtherprogress in technological innovation, changes in the social structure attributable mainly to the declining birthrate
and the aging of the population, and changes in lifestyle that have resulted from the COVID-19 pandemic. TheTOKAI Group has been proactive in taking initiatives on Sustainable Development Goals (SDGs) andenvironmental, social, and governance (ESG) measures. The Group has taken the 10th anniversary of its transition
to a holding company structure as an opportunity to discuss social issues it should address, solutions that areexpected, and other steps for building a sustainable society in the future, by once again reviewing its past activities.
Based on the above, the Group has adopted the TOKAI Group Sustainability Declaration. By following thisDeclaration, the Group will strive to solve social issues through its business activities.
TOKAI Holdings Corporation has set the following six material issues (priority issues):
1) Decarbonization and clean energy2) Building a smart society3) Creating the foundation of life4) Harmonious coexistence with local communities and social contribution5) Highly motivating workplace environment with a high level of job satisfaction6) GovernanceThe company has set action assignments and targets to achieve by 2030 for the respective material issues.
The company also passed a resolution today to set up a Sustainability Promotion Committee as an advisory body toits Board of Directors, so as to evaluate and review initiatives taken to achieve the targets.

Outline of the TOKAI Group Sustainability Declaration is as follows.

1Outline of the TOKAI Group Sustainability Declaration
1. Basic Sustainability Policy
Passing down safety and security, convenience and comfort,and joy and meaningfulness of life as the foundation of life to future generations
As a corporate entity that provides comprehensive support for lifestyles, we contribute to building a society inwhich all people can feel safety and security, convenience and comfort, and joy and meaningfulness of life and inwhich the younger generation can develop themselves by pursuing their dreams, while being actively involved insolving social issues, including global environmental challenges, in our efforts to improve our corporate value.

2. TOKAI Group’s material issues (priority issues)
The TOKAI Group has identified six material issues (priority issues) for driving its sustainability initiatives.
1) Decarbonization and clean energy

Take on challenges in pursuit of achieving carbon neutrality by 2050.

2) Building a smart society

Create people’s lifestyles through DX and collaborative creation.

3) Creating the foundation of life

Help people lead lives with safety and security
as well as convenience and comfort.

4) Harmonious coexistence with local
communities and social contribution

Bring joy and meaningfulness of life to local communities.

5) Highly motivating workplace environment
with a high level of job satisfaction

Build an environment where anyone can enjoy working.

6) Governance

Ensure sound corporate management.

● Process of identifying material issues (priority issues)
Step 1: Identifying candidate material issues
Selecting candidate issues based on reporting guidelines from SASB, etc. and sector-specific material issues of the TOKAI Group’s
main businesses that are deemed important by MSCI and other major ESG research companies, by attaching importance to ESG
investors’ perspective and in light of regional characteristics and industry trends

Step 2: Evaluating the candidate issues based on corporate value and stakeholders’ perspective
Evaluating items identified in Step 1 from the two perspectives of the impact on the Group’s medium- to long-term corporate value
and the impact that the Group gives on society

Step 3: Creating a materiality map
Creating a scatter plot (materiality map) based on evaluations made in Step 2.
Positioning items in the range with the highest level of materiality as top priority ESG issues.

Step 4: Identifying material issues
Moving forward, the material issues will be reviewed on a regular basis in consideration of changes in industry trends and new ESG
issues, after the Board of Directors’ resolutions.

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● Basic policy for sustainability and positions of material issues

Evolving into a corporate group that
continues to grow sustainably andcreate people’s lifestyles

Medium-Term
Management Plan

Material Issues

Basic Sustainability Policy

At the same time as its transition to a holding company structure in April 2011, the management and employees ofthe TOKAI Group worked together and formulated the TOKAI-WAY as its corporate philosophy. TheTOKAI-WAY consists of four layers: Corporate Philosophy, Mission, Vision, and Values. All employees of theGroup share it and strive to put it into practice.
Based on this TOKAI-WAY, the Group has formulated its Basic Sustainability Policy and identified material issues(priority issues). The TOKAI Group will reflect the material issues (priority issues) in its medium-term
management plan (Innovation Plan 2024 “Design the Future Life”) and take a direction that is in step with the times,
aiming to be a corporate group that continues to grow sustainably and create people’s lifestyles.

●TOKAI-WAYExpansion

CorporatePhilosophy

The TOKAI Group’s credo

MissionThe mission that the TOKAI Group should fulfill forthe good of society, customers, and shareholders

VisionLong-term business goal the TOKAI Group should
targetValuesShared values of TOKAI Group employees thatthey should value in taking actions

https://www.tokaiholdings.co.jp/corporate/philosophy.html

33. Major targets (non-financial indexes)
The company has set the following major targets for proceeding with the above initiative.
2030 targets■ Reduce CO2 emissions generated from our operating activities by the equivalent of 70% (compared withFY2020 levels)■ Reduce household gas CO2 emissions by the equivalent of 50% (compared with FY2020 levels)■ Reduce paper usage by 90% (compared with FY2020 levels)■ Reduce the turnover rate of long-term care to 0%■ Maintain zero serious industrial accidents■ Increase the ratio of female managers to 10% (FY2020: 1%)

4. Establishment of Sustainability Promotion Committee
The company has set up a Sustainability Promotion Committee as an advisory body to its Board of Directors, sothat the management of the TOKAI Group will plan, propose, implement, evaluate, and review initiatives based on
the material issues.

The Group will continue to drive sustainability initiatives to help solve social issues, including climate change, as abusiness operator that offers local communities support for comfortable lifestyles.

Contact: Toshinori Nakamura
Representative Director and Managing Executive Officer
TEL: +81-(0)54-273-4804
Email: overseas_IR@tokaigroup.co.jp

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TOKAI Group's material issues (priority issues)

1
2
3

Materiality (priority issues)

Decarbonization and clean energy

Take on challenges in pursuit of achieving carbon neutrality
by 2050.

Building a smart society

Challenges to address
1

Reduction of CO2 emissions

2

Spread of clean energy

Switch electricity consumption related to our own business activities to renewable energies
at 100%. Install household solar power systems to 48 thousand households.
Expand solar power generation project through additional installation of mega-solar powersystems. Expand sales of carbon-neutral city gas.

3

Promotion of resource recycling

Maintain the 100％ reuse rate of aqua servers and returnable bottles.

4

Development of digital workplace

Promote paperless * Reduce paper usage by 90% (compared with FY2020 levels).
Reduce the attendance rate by 50% and the oﬃce ﬂoor area by 40% through promotion ofteleworking.

5

Sophistication of digital marketing

Pursue customer understanding and improve customer experiences by using D-sapiens(number of customers: 3.56 million; number of TLC members : 1.5 million * In 2024)

6

Creation of open innovations

Providing new value through collaborations and co-creation with start-ups, etc.
Expand investments in new areas. Enrich new services as the foundation of life.

7

Stable procurement and supply of gases
and aqua

Decentralize gas suppliers. implement 100% earthquake resistance of city gas pipes.
Decentralize water sources and aqua manufacturing facilities. Maintain and strengthen
disaster preventive measures and BCP countermeasures.

8

Satisfaction of overseas energy demands

Expand our business to Southeast Asia such as Vietnam.

9Optimization of information communication
networks

Extend optical ﬁber trunk cables.
Promotion optical CATV networks (FY2020: 90%)

Create people's lifestyl es through DX and collaborative creation.

Creating the foundation of life

Help people lead lives with safety and security as well as
convenience and comfort.

10 Provision of a dwelling environment in which

Popularize OTS houses. Form a smart community village where people live by using naturalenergy + autonomous distributed energy.
Expand the business of reform for earthquake resistance and caretaking.

11 Protection of privacy and data security

Keep certiﬁed by the ISO27001 standards
Maintain zero information-related incidents (level 3) that aﬀect individual projects.

people can live for a long timecoexistence with local
4 Harmonious
communities and social contribution

Bring joy and meaningfulness of life to local communities.

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Highly motivating workplace environment
with a high level of job satisfaction
Build an environment where anyone can enjoy working.

Governance

Ensure sound corporate management.

Goal to be achieved by 2030
Reduce CO2 emissions generated from our operating activities by the equivalent of 70%(compared with FY2020 levels)
Reduce household gas CO2 emissions by the equivalent of 50% (compared with FY2020levels). Achieve carbon neutrality (2050)

12 Dialogues with local communities andcontribution to development

Expand cooperation with autonomous bodies in our projects to a total of 150 bodies tocontribute to local communities (FY2020: total 95 autonomous bodies in 17 projects)

13 Social contribution activities

Promote welfare and clean-up activities through cooperation with local organizations.
Contribute to education, cultures, and arts, etc.
Enhance the scholarship system by TOKAI Group Fujisan Scholarship Foundation.

14 Creating pleasant workplaces

Reduce the turnover rate of long-term care to 0%. Maintain zero serious industrial accidents.
Enhance responses to changes in labor environment (e.g. ﬂex, remote, and short-time working).
Strengthen promotion of healthy management

15 Diversity & inclusion and equal opportunity

Increase the ratio of female managers to 10% (FY2020: 1%). Actively promote women.
Actively employ foreign nationals.

16 Human resource development

Enhance stratiﬁed human resource development training and E-learning.
Improve qualiﬁcation allowance.

17 Enhancement of corporate, group

Establish advisory boards when needed. Assign outside directors at 1/3 or higher of theboard members.
Diversify the directors.

governance18 Compliance, risk management, andcorruption prevention, etc.

19 Implementation of ethical procurement

based on environmental conservation, etc.

Implement regular training for management provided by the Group Compliance & Risk
Management Committee.
Establish and comply with the Human Rights Policy and CSR Procurement Policy, etc. by theend of FY2022.

Dec. 2021