ESG Management Report(Published in FY2024)

Period subject to activities: January 1 – December 31, 2023

Published: May 31, 2024

INDEX
１

Basic Management Philosophy on ESG

２ Organizational Overview

・・・2

・・・3

３

ESG Management Organizational Chart and Roles,
Responsibilities, Authority

・・・4

４

Main ESG Quantitative Results

・・・5

５ ESG Management Targets and Results

・・・5

６

Initiative Results and Evaluations of ESG
Management Plan

７

Initiative in Promoting Sustainable Management

８ ESG Initiatives
９

Results of Checking and Evaluating Compliancewith ESG-related Laws, Regulations, etc.

・・・6
・・・９

・・・10
・・・22

Purpose10 Results of Evaluation of ESG Internal Audit

・・・22

IDEAL to REAL

11 Overall Report from the Chief ESG Officer andComments from the Representative

・・・23

Bringing ideals into reality to create a new future１Basic Management Philosophy on ESG
Management Philosophy on ESG
Our IDEAL to REAL purpose calls for the creation of a new culture by making ideals reality.
Based on this working slogan, as a lifeways developer committed to creating ideal modes of life that meet today’s changing needs,
we will seek to build a sustainable society and achieve sustainable growth by addressing social issues through our ESG initiatives.

Basic Philosophy on ESG

Established: March 23, 2018

We strive to grow as a company needed by society by promoting ESG initiatives in strict compliancewith laws, regulations, and our pledges related to the environment, society, and self governance.

Revised: November29, 2023

Takatoshi Ito

President & Representative Director

Environment

Social

1. Creating new environmental value throughnext generation urban development andother measures to realize a carbon-neutral
society by 2050

1. In addition to contributing to community
vitality through urban development, creating
new futures by promoting local community
building

2. Promoting real estate development andcorporate activities that give fullconsideration to the environment

2. In addition to developing workplaces where
employees can demonstrate their abilities tothe fullest while doing rewarding work,
promoting diversity to enable diverse humanresources to thrive

3. Taking on the challenges of new businessdomains based on the key theme of theenvironment, thereby creating both
environmental value and business value

3. Supporting safe and comfortable lives in our
many communities by contributing tosolutions to social challenges posed byhealth and welfare, including low birth rates
and aging populations

Governance
1. Enhancing timely, appropriate, and fairdisclosure of management information
2. Promoting governance structures
capable of securing management
stability, soundness, and transparency
3. Enhancing risk management
capabilities in response to growing
risks accompanying businessexpansion and diversification
4. Pursuing business activities based on
the Corporate Ethics Charter andrespect for the human rights of all

4. Promoting business development to achieve
SDGs on a global basis throughinternational business development

2

Organizational Overview
Name and representative
Prime Market, Tokyo Stock Exchange

Certified/registered organization/lines of business

ES-CON JAPAN Ltd.

President & Representative Director: Takatoshi Ito
LocationsTokyo Head Office: 2-10-4 Toranomon, Minato-ku, Tokyo, 105-0001

Registered organization:

ESCON JAPAN Ltd.

Subject locations:Tokyo Head OfficeOsaka Head OfficeOsaka Head Office: 4-1-1 Fushimimachi, Chuo-ku, Osaka-shi, Osaka, 541-0044

Nagoya Office

Nagoya Office:2-4-1 Sakae, Naka-ku, Nagoya-shi, Aichi, 460-0008

Kyushu Office:Hokkaido Office:13-15 Kamikawabatamachi, Hakata-ku, Fukuoka-shi, Fukuoka,
812-0026
4-1-1 Kita 3-jo Nishi, Chuo-ku, Sapporo-shi, Hokkaido, 060-0003

Okinawa Office:1-12-12 Kumoji, Naha-shi, Okinawa, 900-0015 *Opened in April 2024

Kyushu Office

Name of Chief ESG Officer and contact information for person in charge

Hokkaido OfficeLines of business:

Real estate development,
leasing, planning,brokerage and consultation

Period subject to activities: January 1 – December 31,
2023

Director: Minoru Nakanishi tel. 03-6230-9303
Person in charge: Toru Tanaka, ESG Promotion Group, tel. 06-6223-8056
Lines of businessCondominium business, Real estate development business, Real estate leasing business,
Asset management business, Other business*We changed our reporting segments starting from the first quarter of the fiscal year ending March 2025.

Scale of businesses
22nd term 23rd term 24th term 25th term 26th term
Fiscal year
2016
2017
2018
2019
2020
January 1 – December 31
Net sales (millions yen)

27th term 28th term 29th term
2021
2022
2023

33,55644,10853,97370,09673,90373,40789,999104,757

Number of employees at end of
fiscal year (employees)

91

123

142

159

192

221

256

282

Number of for-sale condominiums
supplied (units)

491

476

539

648

652

1,020

1,185

1,216

*For the 29th term only, the business period is from January 1, 2023, to March 31, 2024.

3

ESG Management Organizational Chart and Roles,
Responsibilities, Authority
ESG Management Organizational Chart

Representative

Board of Directors
President and Representative
Director

Nomination and Remuneration
Committee

Compliance OfficeSustainability Promotion
Development

ESG Promotion Department
E TeamS TeamRoles, Responsibilities, Authority

G TeamCoordinate

President Office

Chief ESG
Officer

Health & Culture FosteringTeam
Coordinate

Related departments

Under our Management Philosophy on ESG, we have identified
solutions to social challenges by promoting ESG as part of ourmanagement strategies. The officer responsible for the
President’s Office is assigned responsibility for promoting ESG
initiatives. The ESG Promotion Department, whose
membership consists of staff chosen from each department, isdivided into the E Team, S Team, and G Team. These teams
are charged with promoting efforts to achieve annual targets inthe categories of the environment, society, and governance.

ESG
Secretariat

Facility or
sectionemployees
andresponsible
individuals
Internal
Auditing Office• Responsible for overseeing ESG management• Appointment of Chief ESG Officer• Formulation of Basic Philosophy on ESG
Management• Formulation of ESG implementation structure• Evaluation and review of ESG management• Operational management of ESG management
implementation structure• Formulation of ESG management targets and ESG
management plans• Overall evaluation of state of initiatives related to ESG
management and rectification of issues• Implementing ESG education and training• Maintenance of structures for emergencies andresponding to emergencies• Reporting to the representative on the results of ESG
activities• Assisting the Chief ESG Officer and serving as
secretariat for ESG-related matters• Drafting ESG management targets and ESG
management plans• Companywide promotion of ESG activities• Promoting internal implementation and awareness of
SDGs• Data collection and evaluations of results of ESG
activities• Evaluation of compliance with ESG-related laws,
regulations, etc.
• Serving as a liaison for external communications
regarding ESG• Preparation of ESG Management Reports• Promoting awareness of ESG management policies infacilities and sections• Implementing ESG activity plans in facilities andsections• Promoting ESG and the SDGs in business activities• Identifying, rectifying, and taking preventive measures
for issues in facilities and sections• Planning internal audits related to ESG management• Implementing and reporting on internal audits related
to ESG management

4

Main ESG Quantitative Results
Unit

2019

2020

2021

2022

kg-CO2

148,838

157,280

154,152

155,814145,942

General waste emissionskg

13,05813,934

16,157

16,278

20,119Industrial waste emissions

㎥

74.0

3.8

7.5

1.7

3.1

Buildings

1

0

1

1

1

Persons

15

19

70

106

145

Item
Total CO2 emissions

2023(Period of activity)

Total waste emissions

Development of ZEH-M Condominiums
Cumulative total number of employees who haveundergone dementia support training sessions

ESG Management Targets and Results
2019

2020

2021

2022

2023

Reducing CO2 emissions from1electricity*

Reducing CO2 emissions fromvehicle fuelTotal CO2 emissions reduced

kWhkg-CO2
YoY change
kg-CO2
YoY change
kg-CO2

Reducing general waste

Reducing industrial waste
Developing one ZEH-M
condominium building/period
Cumulative total number of
employees w ho haveundergone dementia support
training sessions*3

Kg
YoY change
kg/person*2㎥
YoY change
Buildings
YoY change
PersonYoY change(Target)(Target)(Target)332,726
138,071
17,743
155,814316,090131,16795%
16.85695%
148,023

334,201
129,698
94%
16,24492%
145,942〇〇〇〇〇

123,21395%
15,432
95%
138,645

117,05395%
14,66095%
131,713

673

600

513

522

〇

451

390

13,93470
3.8
019

16,15771
7.5
170

16,278
63
1.7
1
106

15,465
95%
54
1.6
95%
1
100%
145

20,119
124%
72
3.1
182%
1
100%
145

✕
✕
✕
✕
✕
○
○
○

19,113
95%
54
2.9
95%
1
100%
180

18,158
95%
41
2.8
95%
1
100%
215

-

-

-

137%

137%

○

124%

119%

Results

Results

Results

280,553
132,818
16,021
148,838

332,604
138,932
18,349157,280

336,350
137,446
16,706
154,152

969

793

13,058
85
74.0
1
15
-

kg-CO2/person*22025

Period ofactivity Evaluation(Results)

Fiscal year
item

2024

Results

1.Bases for CO2 emissions coefficients from electricity (kg-CO₂/kWh): Tokyo 0.390, Osaka 0.434, Nagoya 0.459, Kyusyu 0.475, Hokkaido 0.541
2. “Per person” units are calculated based on the average number of employees during the period. Water and natural gas use are excluded from the quantitative
targets because they cannot be identified separately
3. The cumulative total number of employees w ho have undergone dementia support training sessions includes employees of Group companies

5Initiative Results and Evaluations of ESG Management Plan
・Reducing CO2 emissions from electricity use
Reducing CO2 emissions from electricity

Current status

Initiative results and evaluations and plans for the next fiscal year

Numerical target〇

Business growth resulted in slightly greater power consumption at certain facilities.
This was despite various efforts to reduce power consumption, including turning off
lights when not in use. Nevertheless, by switching to 10% renewable power at theTokyo Head Office, we achieved our target: to reduce CO2 emissions from all
facilities by at least 5%. Next fiscal year, in addition to continuing efforts to reduce
power consumption, we will expand renewable power purchases for facilities
beyond the Tokyo Head Office.

• Promoting work from home△

• Turning off unneeded lights○• Promoting no-overtime days (every Wednesday)△

CO2 emissions from electricity (kg-CO2)
15,000

2022

2023

2022
2023

10,000
5,000

2022
2023

0
1

2

3

4

5

6

7

8

9 10 11 121
11,855
10,3598
11,447
11,5752
12,737
12,256
9
11,821
11,712

3
11,194
10,161
10
10,508
10,818

4
12,69010,342
11
11,106
10,9585
6
7
9,883
11,621 11,531
9,149
10,777 10,925
Consumption per person
1211,670
1,282
10,667
1,196

・Reducing CO2 emissions from use of vehicle fuel
Reducing CO2 emissions from vehicle fuelCurrent status

Initiative results and evaluations and plans for the next fiscal year

Numerical target〇

Targets were achieved. In particular, the Osaka Head Office, which has the largest
number of company vehicles among all offices, greatly surpassed its target of 95%
by reaching a level of 81%. While we anticipate more frequent use of company
vehicles with activities such as opening of new offices in the future, we will continue
using them appropriately while putting business needs first. We will tackle theMedium-Term Management Plan target of switching to low emission vehicles (novehicles qualified in FY2023).

• Promoting use of public transportation andbicycles△• Eco-friendly driving△

Gasoline (kg-CO2)

1

2022

3,000

2023

2,000
1,000

2022
2023
2022
2023

0
1

2

3

4

5

6

7

8

9 10 11 12

997
1,206
8
1,390
1,449

2
1,327
1,388
9
1,708
1,393

3
1,107
1,415
10
1,484
1,380

4
1,767
1,097
11
1,718
1,243

5
6
7
1,208
1,500
2,055
1,502
1,404
1,666
Consumption per person
12
1,484
29.46
1,102
25.06

6

Initiative Results and Evaluations of ESG Management Plan
・Reducing general waste emissions
Reducing general waste emissions

Current status

Initiative results and evaluations and plans for the next fiscal year

Numerical target✕

We believe increased staffing had the largest impact on this indicator. We also
made progress on paperless initiatives, including switching to digital files for event
materials and adopting DocuSign. We will analyze why emissions per person
increased and maintain our internal awareness promotion activities.

• Thorough waste segregation○• Shifting from disposable to reusable〇• Promoting paperless offices○• Promoting the Three Ss〇

General waste (kg)
2022

4,000

2023

2022
2023

2,000

2022
2023

0
1

2

3

4

5

6

7

8

9 10 11 12

1
1,267
1,548
8
1,263
1,959

2
790
2,011
9
1,428
1,444

3
1,231
1,805
10
1,565
1,582

4
1,696
1,729
11
1,263
1,467

5
6
7
1,079
1,447
1,465
1,576
1,652
1,576
Consumption per person
12
1,785
63
1,770
72

・Reducing industrial waste emissions
Reducing industrial waste emissions

Current status

Numerical target• Ascertaining waste volumes○• Promoting reuse, including waste sales○• Promoting awareness of the need to reduce
waste in everyday operations〇

Industrial waste (m3)2022

2

Initiative results and evaluations and plans for the next fiscal year
Various factors prevent the elimination of all waste generation. The sections incharge check for potential reuse of waste and sales or return of waste materials
to vendors, handling as industrial waste only materials that cannot be handled insuch ways. We make use of electronics devices to the end of their useful lives ormaintenance periods. We will maintain our efforts to promote awareness.

1
2023

1

2
0
0

2022
2023
8

0

1

2

3

4

5

6

7

8

9 10 11 12

2022
2023

3
0
0

0
0

10
1.5
0

9
0
0

4

0
0

5
0
0

11
0
1.1

0.2
1.5
12
0
0.5

6

7
0
0

0
0

7

Initiative Results and Evaluations of ESG Management Plan
・Promoting green procurement
Promoting green procurement

Current status

Initiative results and evaluations and plans for the next fiscal year○

On an annual basis, we achieved the laudable figure of 68.2%, based on units
purchased. We will continue consulting with requesting sections on switching togreen products.

• Adopting energy-efficient, eco-friendly fixtures in realestate under development• Purchasing highly energy-efficient electric appliancesand hardware• Using fuel-efficient vehicles△△• Promoting green procurement of office supplies

2023(January-December)○

Osaka HeadTokyo
OfficeHead Office

Total

KyushuOfficeNagoyaOfficeHokkaido
Office

633

113

393

32

59

36

Green

1,359

381

688

76

129

85

Total (units)

1,992

494

1,081

108

188

121

Green procurement rate

68.2%

77.1%

63.6%

70.4%

68.6%

70.2%

Green procurement rate (2022)

63.8%

71.2%

58.5%

75.0%

60.1%

74.0%

Non-green・Initiatives to solve problems and make the most of opportunities
Initiatives to solve problems and make the most ofopportunities• Developing at least one ZEH-M condominium per
year• Increasing development of Green Building-certified
properties• Increasing the durability, safety, and environmental
performance of properties purchased and developed• Encouraging employees to undergo dementia
support training sessions• Work-style reforms• Expanding industry-government-academia
partnership initiatives (Tokyo University of Science,
ZEH, EA21, etc.)* Percentage of all office supplies

Current status

Initiative results and evaluations and plans for the next fiscal year○

We obtained ZEH-M building certification for four properties—Le JADE
Kanayama Grande, Le JADE Bishoen, Le JADE Hashimoto III, and Le JADE
Nagoya—all of which are now on sale. Thirty-nine personnel received dementia
support training sessions. For workstyle reforms, we implemented activities toreduce overtime work based on monitoring within each section. We also
implemented activities to promote awareness of childcare leave among male
employees. Since the one eligible employee took childcare leave, thepercentage of eligible male employees taking leave was 100%. We also
promoted employee health awareness by increasing the number of regularcheckup items paid for by the Company under the leadership of the Health &Culture Fostering Team, established in 2021. We won recognition from the2024 Certified Health & Productivity Management Outstanding Organizations.

○
〇
○
〇
○

For an introduction to related initiatives, see “ESG Initiatives,” starting on p. 10.

8

Initiative in Promoting Sustainable Management
To more effectively promote the 'Sustainability Management' principle, established in November 2023,
we have identified materiality as a key focus area within our sustainability management efforts.

Materiality specification process

1

Step

2

Step

3

Identify key issue elements related to
the Company’s business activities.

Evaluate importance.

Confirm validity.

We identified 74 key issue elements at theCompany based on workshops for department
heads, referring to international frameworks(ISO 26000, GRI standards, etc.) and ourparent company Chubu Electric Power’s list of
materiality issues.

For the key issue elements identified, members
selected from the various departments
evaluated importance based on importance to
the Company and to stakeholders and sorted
and organized key issues.

The validity of the key issues was internallyverified based on discussions with stakeholders(parent company, financial institutions, etc.).
They were also discussed by the Board of
Directors and decisions made based on these
discussions.

Specify

Step

Materiality and initiatives.
Materiality (key issue)

Harnessing diverse humanresources

Achievement target

Achievementfiscal year

FY2023

Female hiring ratio of 35% of higher

Each fiscal year

Around 48%

Certified as Health & Productivity Management
Outstanding Organization

FY2030-

Improve engagement survey.
⇒Firm improvement once survey starts (FY2024)

Each fiscal year

Certified as Health & Productivity Management Outstanding
Organization for 2024 (large corporation category)

Carry out compliance promotion measuresin collaboration with Chubu Electric Power.

Each fiscal year

Carried out training and seminars in collaboration with
Chubu Electric Power
Compliance declaration made by top management

Attendance at compliance training 100%

Each fiscal year

100%

Strengthening governanceand risk management,
including Group companies

Raise the effectiveness of the Board of
Directors and make continual improvements.

Each fiscal year

100% attendance at board meetings

Promoting a decarbonizedsociety

Reduce GHG emissions by 40%* (vs. FY2022).
*Scopes 1 and 2
Contribute to regional revitalization and improved
quality of life by promoting urban development thattakes into account the environment and society.

Rigorous compliance

Achieving a society
characterized by well-being

FY2030

FY20308,000 tons-CO2[Result in FY2022][Hokkaido Ballpark F Village]
Completed construction on seniorresidence and medical mall9

ESGへの取組
ESG Initiatives
10▮ Real estate development and other initiatives reflecting
consideration for the environment and society

Environment(1) Le JADE Kanayama Grande condominium project earns
ZEH-M Oriented certification
Comfortable and economical next-gene ration housing

Comfortable and economical next-generation housing

Continuing to pursue active ZEH-M development
Le JADE Kanayama Grande obtained ZEH-M Oriented certification in October 2023.
The certification recognizes reductions in annual primary energy consumption
through high-performance thermal insulation and high-efficiency energy-saving
equipment. This is our fourth ZEH-M condominium project.
Featuring an elegant exterior design characterized by a subdued color scheme that
harmonizes with the relaxed Iseyama townscape, this project was designed toprovide a bright open feel. It features south-facing overhangs in all units using theout-frame construction method. As a ZEH-M condominium project, it delivers a
comfortable residential environment that reflects consideration for the environment
through low-e double-glazed windows with high insulating performance, ECO-JOZU
energy-saving water heaters, and food waste disposers.
We plan to continue to leverage our development expertise as a comprehensive realestate developer to build eco-friendly ZEH-M condominiums that satisfy residents.

Healthfriendly
The three “friendlies” of a ZEH-M
condominium
Budgetfriendly

Ecofriendly

Le JADE Kanayama Grande(87 total units)

Staff interview: Sub-Manager Kobayashi, West Japan Architectural
Planning Department
Despite its proximity to Kanayama Station, the second largest transit terminal in
Nagoya, the area around this project is elegant and has few high-rise buildings. The
project design is based on the idea of fusing a quiet atmosphere with aesthetic forms.
The plan evokes the bustle and vitality of Kanayama Station through aspects of its
exterior design, handrail types, and other elements while expressing the serenity of the
Iseyama area through its subdued color scheme and exterior wall materials. Plans
called for a convenient property in which residents can live for many years. Features
include digital front door locks, food waste disposers, and microbubble taps.

11▮ Real estate development and other initiatives reflecting
consideration for the environment and society

Environment(2) SAKURA MIRAI SHIN ǑMURA multipurpose development project in Omura, Nagasaki Prefecture
Developing an attractive city center* This project is currently underway.

Built on land purchased from the city of Omura by a three-company consortium consisting of ES-CON JAPAN, Daiwa House
Industry CO., LTD. and Izumi CO., Ltd. the project involves the integrated development of condominiums, retail space, and otherfacilities on a station-front site of roughly 25,400 square meters. The development goal is to make the most of the area’s sceneryand to create an area with a lively atmosphere welcoming for both residents and visitors.
The name SAKURA MIRAI SHIN ǑMURA evokes the city’s symbol of Omura cherry blossoms (sakura) and the motive behindthe project—that all visitors will have bright futures (mirai).
We plan to develop two condominium projects on the project site: one in front of the station and one on a site adjacent to a park.
We believe this site will deliver new vitality alongside the opening of Shin-Omura Station and serve as a new symbol for Omura.
As a life developer seeking to deliver better lives based on a vision of happiness for all residents, we will contribute to the vitality
and progress of the entire community by providing an ideal living environment.

SDG initiatives

 Revitalizing the area and helping to build an event-based community through area management
 CO2 emissions reductions through on-site power generation
Installing solar panels on the roof of the on-site supermarket
 Local production and local consumption of materials
Reuse of stones excavated during construction
 A living environment that values plants
Posting names of the plants on site
 Holding food drives
 Adopting car sharing and installing EV charging facilities Use of water-saving toilets
Station-front symphony

Relaxing park-side living

Artist’s rendition of the completed project
Le JADE Shin-Omura Station Front(119 total units)

Le JADE Shin-Omura Parkside(72 total units)

12▮ Real estate development and other initiatives reflecting
consideration for the environment and society(3) ”TSUNAGU GARDEN Senri Fujishirodai”
Town Opening in November 2023
One of the Largest Urban Development Project in Senri New Town
This property is a 'multigenerational co-living new district' developed on the site of the National Cerebral
and Cardiovascular Center. It includes condominiums, single-family homes, commercial facilities, aclinic mall, a licensed daycare center, and a park. We in collaboration with Chuden Real Estate Co.,
Inc., are currently selling 'Le Jade City Senri Fujishirodai,' a condominium with a total of 244 units,scheduled for delivery in November 2024, in the new district. We have been involved in multiple urban
development projects and will continue to contribute to regional revitalization by striving to realize 'newforms of community.

Site Layout Image

Sustainable Smart City
In developing this project, we will establish the foundations for a smart community by adopting state-ofthe-art digital, Internet of things (IoT), and other technologies to help realize the United Nations
Sustainable Development Goals (SDGs) via real-world measures. We will create an environment thatlinks residents, the management association, and local businesses to enhance their quality of life. By
integrating multiple areas, we aim to improve sustainability and increase the overall value of the district.

(4) 2 Star and Green Star ratings earned in GRESB Real Estate Developer
Assessment
Taking on the challenge of GRESB participation
Since 2018, we’ve participated in GRESB, an annual benchmark evaluation program to gauge
consideration for ESG in the real estate sector. In FY2023 (from January 1 to December 31, 2022), we
earned an evaluation of Two Stars in the five-level GRESB ratings, based on relative evaluations of overall
scores. We also earned high marks for both management and development components, earning a GreenStar for the fifth consecutive year.
We will continue to actively engage in ESG activities to improve our evaluations.

13▮ Developing living environments and communities toconnect people to people and communities to the future

Social(1) tonarie retail facilities with roots in the community[tonarie Utsunomiya]
Owned by ES-CON JAPAN and operated by the subsidiary ES-CON PROPERTY Ltd., tonarie
Utsunomiya is a retail center with roots in the community, and was recently renovated and has new
tenants. The renovation project began in 2022 with the aim of delivering even higher satisfaction tocommunity residents by making it an even more convenient facility along with the introduction of alight-rail transit system in the vicinity of Utsunomiya Station, the closest railway station to the facility.

tonarie Utsunomiya[tonarie Hoshida]tonarie Hoshida opened in March 2023 as the 10th property in the tonarie series. Developed jointlywith MIRARTH HOLDINGS, Inc. tonarie Hoshida has been operated since its completion bysubsidiary ES-CON Property Ltd. whose goal is to make this a beloved community-based retail facility
among local residents.

[tonarie Kitahiroshima]
We selected the name tonarie Kitahiroshima for the first retail facility in the JR Kitahiroshima Station
West Area Vitalization Project, which seeks to create a gateway that welcomes numbers of visitors to
the city of Kitahiroshima, Hokkaido, through a public-private partnership with the city. This
multipurpose project will result in the development of retail facilities and a hotel at the west entrance
to JR Kitahiroshima Station, which is expected to undergo further development as a key access point
for ES CON Field Hokkaido, the Nippon Ham Fighters’ new home stadium. Plans call for this retailfacility to open on the first through third floors of the 14-story building in March 2025. The facility willcontribute to Kitahiroshima by providing a comfortable space that combines dining, residences,entertainment, beauty, and health.
The ES-CON JAPAN Group will continue to leverage its accumulated retail facility development andoperational expertise to strengthen and stimulate local communities through tonarie retail facilities
rooted in their proximal communities.

tonarie Hoshidatonarie Kitahiroshima

14▮ Developing living environments and communities toconnect people to people and communities to the future

Social(2) Clinic mall with roots in the community【tonarie medical Himeji Yumesakigawa】*Pre-opened in September 2023
We have developed the community-based clinic mall "tonarie medical Himeji
Yumesakigawa," located just about a 3-minute walk from Sanyo Electric Railway's
Yumesakigawa Station, making it conveniently close to the station.
This project planned for part of the former site of the Steel Memorial Hirohata Hospital will
involve the development of welfare facilities and other properties as a health and long-termcare zone, centered on the Saneikai Hirohata Hospital, which opened in February 2023.
Additionally, Himeji City is working on improving the surrounding roads in the area andmaking the nearest station barrier-free, as part of efforts to enhance the medical service
system. This facility aims to collaborate with the general hospital that has supported local
healthcare and establish itself as a clinic mall that is more accessible and convenient for local
residents, serving as their primary care provider.
*An otolaryngology clinic, a pediatrics clinic, and a pharmacy are currently open, and the remaining sections will be opened as soon as they are confirmed.

Staff interview: Staff Member Hirano, Commercial Development Business Department

Based on a mixed structure of reinforced concrete and wood construction, thisproperty, the ES-CON Japan Group’s first clinic mall, strongly reflects the SDGs in
spatial values and structural performance. Use of wood materials in common areas
helps protect the environment by reducing CO2 emissions.
Featuring a cafe terrace where visitors can enjoy the sense of nature nearby andinteriors featuring the natural warmth of wood, the clinic mall leverage the calming
effects of natural wood and the environment.
This property aims to collaborate with nearby general hospitals, welfare facilities, andother institutions to ensure a robust medical service system for local residents. We
are delighted that many people use our facility daily. We look forward to continuing
our contribution as a community-based facility in the future.

tonarie medical Himeji Yumesakigawa

15▮ Developing living environments and communities toconnect people to people and communities to the future

Social(3) ES CON FIELD HOKKAIDO, integrated development project
centered on the new Hokkaido Nippon-Ham Fighters baseball stadium
Hokkaido Ballpark F Village: Community Development Concept
We are participating in development of F Village around ES CON FIELD HOKKAIDO, the new Hokkaido Nippon-Ham Fightersstadium that opened in March 2023. We have secured naming rights to the new stadium.
Development is currently proceeding in F Village with Le JADE Hokkaido Ballpark (all units delivered in March 2023), Masters
Varus Hokkaido Ballpark, a senior residence combined with a medical mall (occupancy planned for June 2024) and a hotel near
the ballpark.
This initiative will help us maintain the health of young and old alike and contribute to community health care. It will create
residential spaces where people can enjoy sports and other activities amid the blessings of nature and promote a sustainablecommunity that invites multi-generational interaction.

ES-CON Sports & Entertainment Ltd. established
In December 2023, we joined with Fighters Sports & Entertainment Co., Ltd. (FSE) and DeNA Co., Ltd. (DeNA) to establish ESCON Sports & Entertainment Ltd., a new company whose business goals include real estate development with a focus on
sports and entertainment and participation in and support for community development projects in Japan centered on stadia andarenas.
To realize a society and community in which sports and entertainment are familiar presences, we’re combining the real estateand community planning and development capabilities of ES-CON JAPAN with FSE’s ballpark knowledge and insights andDeNA’s track record with sports-oriented community development and capabilities related to the integration of digital domains
like the Internet and AI.

Artist’s rendition of Masters Varus Hokkaido Ballpark

Le JADE Hokkaido Ballpark (118 total units)16▮ Empowering diverse human resources to succeed;
supporting safe and comfortable living in the community

Social(1) Promoting health management
Efforts to enhance health management
Three years have passed since July 2021, when we established the Health &Culture Fostering Team to promote health management. This team works with
the Compliance Office and Sustainability Promotion Department to raiseawareness of health management through means including health-related elearning and Groupwide surveys focused on harassment.
In December 2022, we formulated and released our corporate action plan
(covering the period from January 1, 2023 to December 31, 2025) under the Act
on Advancement of Measures to Support Raising Next-Generation Children and
the Act on Promotion of Women’s Participation and Advancement in the
Workplace. This plan will help employees caring for children and family members
who need long-term care to balance home and work life and develop workplacesin which all human resources, including women, can continue with and thrive intheir careers.

(2) Efforts to achieve a rewarding work environment
Surveys on working environments and health
We hold surveys to learn about employee viewpoints
and thoughts on the details of the personnel system,
rules of employment, and employee benefits.
We’ve also established a basic policy on education
under which we provide compliance training andtraining for specific posts, with a focus on development
and promoting awareness for each and every employee.

Work-life balance
We monitor employee overtime hours to make themvisible and to reduce them. We also actively post andannounce information on site to ensure that all
employees are aware of no-overtime days.

Staff comments: Chief Staff Okuda, Health & Culture
Fostering TeamTo our regular checkups, we added abdominal ultrasoundexams for those 40 and older and PSA testing for men 50 andolder. Groupwide, 230 employees were eligible for abdominal
ultrasound exams, while 115 were eligible for PSA testing.
Our efforts since 2022 to earn recognition by the CertifiedHealth & Productivity Management Outstanding Organizations
Recognition Program were rewarded in March 2024 withrecognition for the second consecutive year. Our steadypromotion of health management is part of our pursuit ofsustained growth in corporate value.

17▮ Promoting governance structures capable of securing
management stability, soundness, and transparency

Governance(1) Revising the management philosophy structure
Since February 2015, we’ve pursued sustained growth by providing true value to customers and society through proactive
business efforts based on a philosophy structure consisting of a Management Philosophy, Management Policies, Vision,
Mission, and Concept, all under the corporate slogan IDEAL to REAL: Bringing ideals into reality to create a new future.
The environment in which the Group does business is currently an era of dramatic change, including the transformation ofmodes of life and lifestyles and significant changes to the foundations of our business activities. To continue to grow over thelong term, come what may, we have revised the framework of the management philosophy that serves as the basis of businessactivities for all Group employees by taking a new look at the Group’s reason for being.

New management philosophy structure
The new management philosophy structure consists of three elements: the Purpose, Vision, and Action Principles. Our
Purpose, which expresses the Group’s meaning to society, maintains the overarching principle of IDEAL to REAL. Whilemaintaining the spirit of the preceding management philosophy structure, which remains essentially unchanged, the entire
Group will work as a team united under the new management philosophy structure to continue contributing to society and toensure sustained growth.
IDEAL to REAL
PurposeThe Group’s meaning and value to society

A Life Developer
VisionPrinciples of Action

The vision for achieving the Purpose
Provision of new value, sustainability
management, growth and stability,
management awareness, compliance,
gratitude
Actions for realizing the Vision18

▮ Based on the Corporate Ethics and Conduct Charter,
Business activities that respect the human rights of all people

Governance(2)Thorough Compliance with Laws and Regulations
Compliance Declaration
Based on the Corporate Ethics and Conduct Charter, which declares our intentions to implement corporate ethics and to fulfill
our corporate social responsibilities (CSR), we revised the existing 'Compliance Code of Conduct' and established the'Compliance Declaration' in March 2023, to ensure that executives and employees adhere to laws, articles of incorporation,and social norms. As an organization under the direct supervision of the President and headed by the officer in charge ofcompliance (Director and Head of President’s Office Kenji Fujita), the Compliance Office will enhance promotion of compliancemanagement while clarifying management approaches related to legal and regulatory compliance throughout the Company
and the Group.

Conducting Training

Organization chart

In 2022, we posted harassment training materials forall employees. In February 2023, we conductedharassment training using e-learning. In April, we
held a web-based live training session, and in July,
we conducted compliance training through elearning. In November, we carried out a survey
specifically focused on harassment. In January 2024,
as part of our initiatives aligned with the Chubu
Electric Power Group's Human Rights Basic Policy,
we implemented human rights training. We willcontinue these training initiatives to raise awarenessfurther among all employees.

Board ofDirectors

President

Compliance Office

Strategic
Business Division

Development
DivisionManagement
DivisionManagement
Planning Division

We also established a compliance hotline (internalreporting / whistleblowing program).

19▮ Other initiatives(1) Donating to the Kyoto University iPS Cell Research Fund
Purpose of donations
Capable of transforming into nearly all cell types, induced pluripotent stem cells (iPS cells) are expected to see growing use
in regenerative medicine to restore tissue and organs harmed by accidents or disease and in new drug development.
Since FY2020, we’ve contributed to this fund to support early and inexpensive treatment based on iPS cells for those
suffering due to diseases or accidents.
[Summary of donations]
RecipientResearch overview
Donation amountKyoto University iPS Cell Research Fund
Pursuing the potential of iPS cells and contributing to their use in medicine
1,000,000 yen/year(2) Sponsoring the Osaka Great Santa Run
Organizer: Osaka Great Santa Run Organization (part of the Osaka Akaru Club)In this charity event, participants run or walk dressed as Santa Claus. The entry fees help fund Christmas presents forchildren battling disease. ES-CON JAPAN supports the charity concept of gifting Christmas presents to children fighting
diseases, and cosponsors the event as part of its ESG and SDG initiatives.

Staff comments: Staff member Izumi, Administration GroupWe supported this event for the second year in a row in 2023. I hope employees willlearn more about the Great Santa Run as it continues to grow from year to year.

20▮ Other initiatives(3) Support for the city of Kitahiroshima, Hokkaido through the corporate hometown tax program
Purpose of this initiative
The city of Kitahiroshima has devised a general strategy consisting of four basic goals along the axes of hope, exchange, growth,and taking on challenges to ease the impact of depopulation and to maintain a vital community into the future. It uses funding fromthe corporate hometown tax program to help reach these targets.
We have concluded a partnership agreement with the city of Kitahiroshima on a project to promote the vitality of the area around
Kitahiroshima Station. The activities currently underway include improvements of the station plaza and the development of amultipurpose hub for community exchange, including retail facilities and a hotel. Through this project, we will pursue urban
development to stimulate vitality and exchange throughout the city of Kitahiroshima.

(4) The Eye City Eco Project collects used contact lens cases
Eco ProjectThis activity will contribute to society by recycling empty cases for disposable contact lens to reduce
CO2 emissions. Disposable contact lenses are often incinerated as waste. The Project will also
donate to employment support programs and to the Japan Eye Bank Association.
We have continued to collect used contact lens cases since we began supporting this activity in
October 2018.
We will continue contributing to our local communities through various SDG initiatives.

Participating sites
Osaka Head Office (ES-CON JAPAN, ES-CON PROPERTY, ES-CON LIVINGSERVICE), management offices of the tonarie Minamisenri and tonarie Yamato-Takada
retail facilities
Staff comments: Staff Member Matsumoto, CS Committee
At the Osaka Head Office, staff members bring used contact lens cases from homeand deposit them into the collection box. I am pleased that items which would
normally be discarded in the trash can contribute to social good through the conscious
actions of each employee.

ES-CON JAPAN
Osaka Head Office

We will continue to promote ESG management from the perspectives of Environment, Social,and Governance, and enhance corporate value through our commitment to social contribution.

tonarie Minamisenri

21

Overall Report from the Chief ESG Officer and Comments from theRepresentative
Activities to check and evaluate compliance with ESG-related laws and regulations show we are in compliance.
Date of compliance evaluation: May 31, 2024
No violations or cases involving litigation were found related to ESG-related laws, regulations, etc.
Name of legal system
Waste Disposal and Public Cleansing Act
Act on Rational Use and Appropriate Managementof Fluorocarbons*No response required, since building owners
are responsible for management.

Matters identified (facilities, substances, business activities)
General waste (paper waste, textile waste, wood waste, raw waste, etc.), industrial waste

Commercial air conditioning equipment

Fire Service Act

Appointing fire prevention managers, preparing fire prevention plans, holding fire drills (participation in drills
conducted by building owners)

Home Appliance Recycling Act

Air conditioners, televisions, refrigerators/freezers, washers/dryers

Small Home Appliance Recycling Act
28 types of small electronic devices
Act on Promotion of Procurement of Eco-Friendly
Items purchased/procured, suppliers/subcontractors
Goods and Services by the State and Other Entities
Act Concerning Recycling of Materials
from Construction Work

Building Energy Conservation Act

Construction work at or above a certain scale- Demolition: 80 m2- New construction/expansion: 500 m2- Repair, remodeling: 100 million yen- Fixture disassembly/new construction: 5 million yen(i) Regulatory measures such as the obligation to comply with energy conservation standards for large nonresidential buildings (2,000 m2)(ii) Obligation to report new construction or expansion of residential and non-residential buildings withfloor areas of 300 m2 or more

Results of Evaluation of ESG Internal Audit
No issues were identified in the ESG internal audit.
 Staff view: General Manager Suzuki, Internal Audit Office
The Group’s ESG activities continue to grow steadily in areas above and beyond reducing waste generation and CO2
emissions (energy conservation). They include ZEH condominium development, efforts to encourage staff to undergo dementia
support training, and continuing recognition in 2024 by the Certified Health & Productivity Management Outstanding
Organizations Recognition Program.
However, we were unable to achieve the quantitative targets set for CO2 emissions and general waste volumes. While our
audit verified communications within the secretariat, we may need to return to the fundamentals and consider how to inform all
employees of the ESG targets and activity plans. I hope to see efforts to ensure the firm establishment and permeation of the
ESG management system among all employees as we strive to refine and enhance our related activities.
This audit took place during a period that involved scheduling conflicts with other operations, including administration related toaccounts settlement made necessary by the shift in the end of our fiscal year from December to March in FY2023. Thishindered scheduling arrangements with the sections audited and pushed the completion of the audit past the scheduled date.
22
We will strive to complete future audits on schedule by sharing information on these circumstances with related parties.

Overall Report from the Chief ESG Officer and Comments from theRepresentative
Overall report from the Chief ESG Officer(i) 2023 annual report
Eco Action 21 activities have taken firm root as initiatives for quantitatively checking on and evaluating oursustainability promotion efforts. Employee environmental and social awareness is improving.
This fiscal year, of various related topics, we identified key priority materiality issues and set targets for FY2030,
including reducing GHG emissions. These are medium- to long-term targets to identify solutions. In this way, we are
seeking to clarify the roadmap toward sustainable growth.
We were unable to achieve certain quantitative targets due to various factors, including staffing growth and theresumption of out-of-office activities as COVID-19 was brought under control. We will continue with our efforts tostrengthen awareness and understanding of these goals within the organization.
(ii) Next fiscal year
In the next fiscal year, we will make progress on the real-world implementation of efforts to reduce GHG emissions inline with the zero emissions corporate activities promoted by the Chubu Electric Power Group. In addition topromoting the development of Net Zero-Energy House (ZEH) condominiums and active use of renewable energy, we
will promote everyday activities at the workplace, including making operations more paperless and turning off lights
when not in use.

Comments from the representative

May 31, 2024
Senior Managing Director
Minoru Nakanishi(i) 2023 annual report
The movement towards carbon neutrality has accelerated in Japan following the Japanese government’s statementof the goal of carbon neutrality by 2050. In FY2023, we revised our management philosophy structure to clearly
identify sustainability management as one of our Principles of Action. In March 2024, we established our Long-Term
Vision 2030, which includes the identification of priority business strategy themes and key materiality issues forsustainability management. We will seek to establish a virtuous cycle of sustained growth in earnings while
contributing to a sustainable society.
As part of these efforts, we have identified Promoting a decarbonized society as a priority and have set the target of
reducing GHG emissions by 40% from FY2022 to FY2030.
(ii) Next fiscal year
In the next fiscal year, to achieve the GHG emissions reduction targets stated in Long-Term Vision 2030, we will aim
for steady reductions in emissions from our offices and company vehicles, as called for in Eco Action 21. Througheco-friendly urban development, we will strengthen employee awareness while promoting business activities to movecloser to a decarbonized society and the Sustainable Development Goals (SDGs).

[Environmental Policy] Need to change:[Targets/Plans]* Need to change:[Implementation System] Need to change:[Other] Need to change:

□Yes
Yes
□Yes
□Yes

No
□No
No
No

*Targets will need to be revised in connection with the April 2024 opening of the Okinawa Office.

May 31, 2024
President &Representative Director
Takatoshi Ito23