The Value Creation ProcessStanding by every person and dedicating ourselves to the society, we shall be the energy that weaves the future.

Material issues

Compass2030
Compass Action

2 stablish a value coE
creation ecosystem

3

Realizing anorganizationthat embraces
diverse talentCompass Transformation 23-25

Goals for 2030

Medium-term managementtargets (FY2025)

Key indicators and targets related to materiality(FY2025)

Segment profits 150 bn yen

CO 2 emissions reduction contribution

12 mn tons

R OA

Approx.

4%

Enhance circularity of equipment and facilities(gas equipment, gas meters, etc.)

R OE

Approx.

8%

Maintain record of no major city gas accidents or supply disruptions

0casesD/E ratio

Approx.

 ate of participation in Supply Command Center’sRemergency response training100%

 ransform the LNG
Tvalue chain

0.9

Provide services supporting physically & mentally enriching lives

11%

Ratio of women in managementSeeking to ensure human rights are upheld throughout the supply chain

Foundationthat Supports
BusinessActivities

Economic value
Ability to generate long-term,
sustainable sources of growth

Financial strength

Technological strength

Profit level
Approx. 200 bn yen
CO 2 reduction contribution
17 mn tons
Renewable power source
transaction volume
6 mn kWNo. of customer accounts
20 mn
Natural gas transaction
volume20 mn tons

Social value
Sustainable global environment

Human resources

Vibrant communities and lives

Customer baseOrganizations and associates who
co-create the future

Stakeholder trust

Natural capital

Financial Data

Value
Creation

Respecting
human rights
across the entire
value chain

Corporate Strategy

 ead transition to NetL
zero CO2Contributing
to well-beingof people andcommunities

Business Strategy1Enhancing
safety & disasterprevention,
resilient regionaldevelopment

Securing stableenergy supply

Next Vision

Challenge 2020 Vision

VisionStrategy

Protecting
the globalenvironment

How We Create Value

Responsiblytransitioning toa decarbonizedsocietyCEO’s Message

Management
Philosophy

Based on its Group’s Management Philosophy, the Tokyo Gas Group defines material issues—the key mediumand long-term sustainability issues we need to address— and aims to create economic and social value throughits business activities. Furthermore, by strengthening the foundation that supports our business activities throughthe values created, we will further improve enterprise value.

Introduction

How We Create Value

Introduction
Contents

CEO’s Message

How We Create ValueThe Value Creation Process
Promoting Sustainability and Material issues

Business Strategy
Compass2030 & Compass Action
Compass Transformation 23-25
Introduction of Internal Companies
CFO’s Message

Corporate Strategy
Sustainability
Corporate Governance

Financial Data

Web Site
Investor Relations Website
Investors’ Guide(Financial Data and Industry Data)
Financial Results Presentation Materials
Financial Results Bulletin
Corporate Governance Report

15Tokyo Gas Group Integrated Report 2023

Sustainability FactbookIntroduction

Promoting Sustainability and Material issues
Fundamental policy

Material issues (from FY2023)

We have defined key sustainability issues (material issues) in order to embody the Group’s
management philosophy—“Standing by every person and dedicating ourselves to thesociety, we shall be the energy that weaves the future.”—and we will tackle them throughour business activities. In this way, we strive to create both social and economic value.

We have defined seven material issues corresponding to issues we aim to resolve throughour business activities over the medium-to long-term.

Sustainability Promotion System

Board of Directors, Directors
ReportReportP

Business activities
based onmaterial issues

DDisclosure

CSince the Russian invasion of Ukraine, the world has become increasingly
divided, and the Tokyo Gas Group (the “Company”), a comprehensive energy
company, is being significantly affected by geopolitical risks. In such abusiness environment, the Company has become more sensitive to societal
trends and reassessed its material issues. As a result, it is committed toaddressing climate change, including decarbonization, and supply chain riskmanagement. The Company places a central focus on providing solutions that
go beyond traditional energy businesses and aims to have an ongoing impact
on society and business growth in the long term, including beyond 2030.
I would like to commend the Company for incorporating the infrastructurebusiness into its growth strategy from a new perspective, without beingbound by the traditional “status quo.” This should prove to be a significant
strength for the Company as it transitions towards a decarbonized society andbecomes a key player in resilient energy infrastructure.
Looking ahead, I anticipate that Company will responsibly transition
toward a decarbonized society by developing and implementing a concreteroadmap. Furthermore, I look forward to the Company becoming a leader inclosing the gender gap, in addition to promoting women’s empowerment, inline with the goal of “Realizing an organization that embraces diverse talent”
from the perspective of diversity, equity, and inclusion.

Fellow (Sustainability)
Mitsubishi UFJ Research &Consulting Co., Ltd.
Visiting Professor, Collegeof Arts and Sciences, TheUniversity of TokyoYOSHITAKA Mari

Financial DataA

Stakeholders

Internal companies, major business subsidiaries, etc.

4Enhancing safety &disaster prevention,
resilient regional
development

7

Respecting humanrights across the entire
value chain

Comment from an expert

Sustainability Committee

Dialogue

Sustainability management

Management Committee
Oversee3

Securing stable energy
supply6

Realizing anorganization thatembraces diverse talent

Corporate Strategy

Representative Corporate Executive Officer, President and CEO
Corporate Executive Officers

Expectations
and requests

Supervise2

Protecting the global
environment

5

Contributing to wellbeing of people andcommunities

Business Strategy

Various organizations within the Tokyo Gas Group strive to promote business activities basedon material issues. In addition, a committee that supports rational decision-making by
Corporate Executive Officers (Management Committee) and the Sustainability Committee,
which is chaired by the President, are instrumental in promoting sustainability management
throughout the Group. Furthermore, important matters are reported to the Board of Directors.

1

Responsiblytransitioning to a
decarbonized society

How We Create Value

Key Sustainability Issues (Material issues)

CEO’s Message

Promoting sustainability

Introduction
Contents

CEO’s Message

How We Create ValueThe Value Creation Process
Promoting Sustainability and Material issues

Business Strategy
Compass2030 & Compass Action
Compass Transformation 23-25
Introduction of Internal Companies
CFO’s Message

Corporate Strategy
Sustainability
Corporate Governance

Financial Data

Web Site
Investor Relations Website
Investors’ Guide(Financial Data and Industry Data)
Financial Results Presentation Materials
Financial Results Bulletin
Corporate Governance Report

16Tokyo Gas Group Integrated Report 2023

Sustainability Factbook

Introduction

The Definition Process
Step 2

Step 3

Step 4

Sort social issues

Sort risks and opportunities

Define material issues

Resolution and announcement

Organize issues based on various
international standards and guidelines (suchas GRI standards)

Based on Step 1, and considering the progressof social problems due to Megatrends, examinerisks and opportunities for the Group in termsof both the impact of social issues on corporate
activities and the impact of corporate activities
on society, and organize important social issues

Based on Step 2, confirm alignment with themanagement philosophy, strategy and vision,and appropriate reflection of expectations
and requests from internal and external
stakeholders, and define material issues

Based on the management philosophy, afterclarifying the positioning as a prerequisite forthe strategy and vision, make a resolution
by the Board of Directors together with theFY2023–25 mid-term management plan, andannounce it in February 2023

Impact of social issues on our corporate activities

Sorting of risks and opportunities of importance tothe Tokyo Gas Group
Megatrends

GlobalGlobalIf the decarbonization of gas-based energy does not progress, the valueof gas-related assets will be lost
A decline in the competitiveness of the electric power business due toinsufficient acquisition of renewable energyDecrease in demand due to increase in prosumers
Carbon taxes and other schemes that may affect the natural gas businessIncreasing global demand for natural gas, LNG, and carbon-neutral
gas energy
Acceleration of the electric power business with green power
Business opportunities to meet emerging and expanding demandside needs, such as EVs, storage batteries, PVs, and VPPs

Responsibly transitioning toa decarbonized society

 nvironmental destruction atE
the local and global levels

 he potential for lawsuits and business injunctions in the event ofTnoncompliance with regional environmental considerations in natural gas
extraction, power development, and power plant operation

 ifferentiation of products and services through advancedD
environmental initiatives (advanced resource recycling, nature
positive measures)

Protecting the global
environment

Constraints on energy resourcesand destabilization of theinternational situationIncreasing global demand for natural gas making procurement more difficult
Impact of the worsening supply and demand tightness on supply disruptions

 otential for increased profits in upstream operations
P
Enhancement of stable supply through integrated supply and demand

Securing stable energy
supplyDeterioration of infrastructure
and buildings over time
Concentration of functions in cities

Degradation of owned assets
Worsening supply disruptions due to disasters

 ustainable urban development using various energy sourcesSE xpansion of gas demand due to the improved positioning ofdisaster-resistant gas infrastructure

Enhancing safety & disasterprevention, resilient
regional development

Shrinking domestic market
Declining regional vitality
A lack of spiritual richness

In the energy retail business, profits decrease as the population declines

Improving lifetime value by transitioning to a service model
Development of services contributing to the enrichment of the mind
Efforts to contribute to the local community as a company that hascontinued to uphold the values of “Safety, Security, and Trust.”

Contributing to well-beingof people and communities

 ecline in the productive
Dworking population
L ack of support for work styles
of diverse human resources

Difficulty securing workers at stable supply sites
Negative impact on recruitment and engagement, increase in retirement

Accelerating innovation through the diversification of human resources

Realizing an organizationthat embraces diverse
talentHuman rights violations

 rowing awareness of human rights and diversification of peopleG
involved in supply chains have led to increases in lawsuits and businessinjunctions worldwide—

Respecting human rights
across the entire value
chain

Japan

Changes indemographics
and changes anddiversification ofvalues as Japan’s
economy matures

GlobalGrowing demandfor corporate social
responsibility

Financial Data

Material issues

Corporate Strategy

Population growthand economic
development inemerging countries

OpportunitiesClimate change

Risks

Business Strategy

Climate change

Social issues*

Impact of our corporate activities on society

How We Create Value

Sort risks and opportunities

CEO’s Message

Step 1Introduction
Contents

CEO’s Message

How We Create ValueThe Value Creation Process
Promoting Sustainability and Material issues

Business Strategy
Compass2030 & Compass Action
Compass Transformation 23-25
Introduction of Internal Companies
CFO’s Message

Corporate Strategy
Sustainability
Corporate Governance

Financial Data

Web Site
Investor Relations Website
Investors’ Guide(Financial Data and Industry Data)
Financial Results Presentation Materials
Financial Results Bulletin
Corporate Governance Report

17Tokyo Gas Group Integrated Report 2023

Sustainability Factbook

Introduction

Material issues Initiatives and Value Creation
Material issues

Responsiblytransitioning toa decarbonizedsociety

Protecting
the globalenvironment

3

Securing stableenergy supply

Enhancingsafety & disasterprevention,
resilient regional
development

6

7

Respecting
human rights
across the entire
value chain

 nhance circularity of equipment and facilities (gasEequipment, gas meters, etc.)
Promote biodiversity conservation

As a company responsible for the stable supply of energy, we willcontinue to secure stable energy supply through both supply anddemand approaches so that society can use energy with peace ofmind, even in an increasingly complex business environment withheightened geopolitical risks.

 aintain record of no major city gas accidents orM
supply disruptions (0 cases)
Address procurement risks

As an energy infrastructure company, we will promote disaster-resistanturban development so that our customers can use energy safelyand securely, not only in normal times but also in the event of natural
disasters such as earthquakes and wind and flood disasters, andcontinue to earn the trust of our customers.

 ate of participation in Supply Command Center’sR
emergency response training (maintaining 100%)
Continue subdivision of disaster prevention blocks
to contribute to minimize supply outage areas in theevent of a large-scale earthquake
Promote the introduction of resilient energy systems

As a company that has built a brand of peace of mind, affluence,safety, and trust based on energy, we will continue to contribute toa society in which people live healthy lives in vibrant communities byworking together with various stakeholders to realize a fulfilling life both
physically and mentally in light of social conditions such as the declining
population and birthrate, the aging population, and the increase in
the number of dual-income households, and to revitalize regions andcommunities.

 rovide services supporting physically & mentallyP
enriching lives
Promote regional and municipal collaboration on
carbon-neutral cities

As a company that is expanding its business areas and promoting
innovation, we will continue to promote diversity, equity, and inclusion
so that each and every one of our diverse human resources can growand play an active role on their own and in their own way and giveback to society, while we strengthen recruitment and training efforts byenhancing mid-career hiring and providing employees with reskilling
opportunities.

Ratio of women in management (11%)
Percentage of male employees taking childcare
leave of at least one month (100%)
Reskilling/retraining participation rate (100%)
Measure Group employee engagement indicatorsand make improvements

As a company involved in a wide range of supply chains, we will respect
the human rights of all related people and continue to contribute toa society in which all people can secure their lives and freedom andpursue their own happiness.

 eeking to ensure human rights are upheldS
throughout our supply chain

We will lead the transition to a
decarbonization society while
ensuring the stability of society
as a whole, and contribute to theresponse to climate change. We
will also contribute to therealization of a society that is lessaffected by biodiversity loss andresource constraints.

Vibrant communitiesand lives
With safe, secure, clean energyand optimized solutions, we willcontribute to the enrichment ofphysical and mental well-being,
stable businesses, and therevitalization of regions andcommunities.

Organizations andassociates who cocreate the future
Based on the premise of respectand esteem for all people
involved throughout the Group’s
entire supply chain, humanresources who have a sense ofmission and willingness tochange the earth, society,community, and individuals will
become the driving force forco-creating the future.

Financial Data

Realizing anorganization thatembraces diverse
talentAs a company that conducts business activities using the earth’s resources
such as natural gas, renewable energy, and various mineral resources,
we will conserve the environment in our business activity areas, including
biodiversity conservation, and continue to enhance resource utilization with
an awareness of the balance with economic efficiency.

Sustainable global
environment

Corporate Strategy

5

Contributing
to well-beingof people andcommunities

CO2 reduction contribution (12 mn tons)
Renewable power source transaction volume (2.2mn kW)
Promotion of large-scale methanation overseas
Reduction of CO2 emissions from our activities(achieve 60% vs. FY2020)

Contents

Social value createdby the Tokyo Gas
GroupBusiness Strategy4(FY2025 numerical targets)

We will contribute to the transition to a decarbonization society in termsof both electricity and heat through our decarbonization of gas andelectric initiatives such as low-carbonization and the introduction ofrenewable energy and methanation through the sophisticated use ofnatural gas. In this process, we will realize a responsible transition that
does not place excessive burden on society from various viewpoints
such as economic efficiency, stable supply, and employment.

Relevant SDGs

How We Create Value

2Main targets and indicators

CEO’s Message

1

What we aim to become

Introduction

CEO’s Message

How We Create ValueThe Value Creation Process
Promoting Sustainability and Material issues

Business Strategy
Compass2030 & Compass Action
Compass Transformation 23-25
Introduction of Internal Companies
CFO’s Message

Corporate Strategy
Sustainability
Corporate Governance

Financial Data

Web Site
Investor Relations Website
Investors’ Guide(Financial Data and Industry Data)
Financial Results Presentation Materials
Financial Results Bulletin
Corporate Governance Report

18Tokyo Gas Group Integrated Report 2023

Sustainability Factbook