SUSTAINABILITY
DATA
BOOK

2023
April 1, 2022–March 31, 2023

SUSTAINABILITY DATA BOOK 2023

Editorial Policy
Positioning of Sustainability Data Book
Tokyo Century discloses information on its values and strengths and on the sustainability initiatives that contribute toongoing improvements in corporate value through its integrated reports and other materials and venues. Through thesemeans, we hope to facilitate a deeper understanding among stakeholders.
Sustainability Data Book 2023 consolidates the environmental, social, and governance (ESG) information disclosed via
our integrated reports, website, and other venues. Through this approach, we aimed to develop a data book that catalogs
information based on ESG areas to be used as a reference for stakeholders, particularly those with high levels of interest in
ESG investment. Please also consult our integrated reports and website.
Furthermore, we hope to make our sustainability data books easier to understand by incorporating reader feedback inorder to evolve these data books into more effective communication tools for engagement with stakeholders.

Scope of Reporting

Scope of Data
Collection

Report Period

Publication

In principle, this data book includes data from Tokyo Century Corporation and its consolidated subsidiaries.
Should certain data pertain to Tokyo Century Corporation on a non-consolidated basis or a different scope,
notification will be provided.

April 1, 2022–March 31, 2023
(Information on some activities from outside of this period is included.)

December 2023

Independent Practitioner’s Assurance
To ensure the reliability of its environmental performance information, the Company has received independent practitioner's
assurance from Deloitte Tohmatsu Sustainability Co., Ltd., with regard to Scope 1, Scope 2, and Scope 3 (categories 1, 4,
13, and 15) greenhouse gas emissions as well as for the annual electricity generation volumes and CO2 emissions reductions
associated with the solar power generation business of Kyocera TCL Solar LLC (see Independent Practitioner’s Assurance on
pages 2–4 for more information).

LegendEMS: 10 companies applicable under Tokyo Century’s environmental management system(Tokyo Century Corporation; TRY Corporation; TC Agency Corporation; TC Business Service Corporation*; TC Business Experts Corporation*;
TC Property Solutions Corporation; S.D.L. Co., Ltd.; FLCS Co., Ltd.; ITEC Leasing Co., Ltd.; and IHI Finance Support Corporation)* Effective April 1, 2023, TC Business Service Corporation and TC Business Experts Corporation were absorbed by the Company.

TC: Tokyo Century Corporation (non-consolidated)

Gr: 90 Tokyo Century Group companies(48 domestic companies and 42 overseas companies): Items for which Independent Practitioner’s Assurance has been received− 01 −SUSTAINABILITY DATA BOOK 2023

Independent Practitioner's Assurance

To ensure the reliability of its environmental performance information, the Company has received independent practitioner’s
assurance from Deloitte Tohmatsu Sustainability Co., Ltd., with regard to Scope 1, Scope 2, and Scope 3 (categories 1, 4,
13, and 15) greenhouse gas emissions as well as for the annual electricity generation volumes and CO2 emissions reductions
associated with the solar power generation business of Kyocera TCL Solar LLC.

Independent Practitioner’s Assurance Report（TRANSLATION）

Independent Practitioner’s Assurance Report
October 26, 2023

Mr. Koichi Baba,
President & CEO, Representative Director,
Tokyo Century Corporation.

Tomoharu Hase
Representative Director
Deloitte Tohmatsu Sustainability Co., Ltd.
3-2-3, Marunouchi, Chiyoda-ku, Tokyo

for theWe have undertaken a limited assurance engagement of the environmental performance data indicated withyear ended March 31, 2023 (the “Environmental Quantitative Information”) included in the “SUSTAINABILITYDATA BOOK 2023 (the “Report”) of Tokyo Century Corporation. (the “Company”).
The Company’s Responsibility
The Company is responsible for the preparation of the Environmental Quantitative Information in accordance withthe calculation and reporting standard adopted by the Company (the Report P.3-4). Greenhouse gas quantification is
subject to inherent uncertainty for reasons such as incomplete scientific knowledge used to determine emissions
factors and numerical data needed to combine emissions of different gases.
Our Independence and Quality Management
We have complied with the independence and other ethical requirements of the Code of Ethics for Professional
Accountants issued by the International Ethics Standards Board for Accountants, which is founded on fundamental
principles of integrity, objectivity, professional competence and due care, confidentiality and professional behavior.
We apply International Standard on Quality Management 1, Quality Management for Firms that Perform Audits or
Reviews of Financial Statements, or Other Assurance or Related Services Engagements, and accordingly maintain acomprehensive system of quality management including documented policies and procedures regarding compliancewith ethical requirements, professional standards and applicable legal and regulatory requirements.
Our Responsibility
Our responsibility is to express a limited assurance conclusion on the Environmental Quantitative Information basedon the procedures we have performed and the evidence we have obtained. We conducted our limited assurance
engagement in accordance with the International Standard on Assurance Engagements (“ISAE”) 3000, Assurance
Engagements Other than Audits or Reviews of Historical Financial Information, issued by the International Auditing
and Assurance Standards Board (“IAASB”), ISAE 3410, Assurance Engagements on Greenhouse Gas Statements,
issued by the IAASB and the Practical Guideline for the Assurance of Sustainability Information, issued by theJapanese Association of Assurance Organizations for Sustainability Information.
The procedures we performed were based on our professional judgment and included inquiries, observation ofprocesses performed, inspection of documents, analytical procedures, evaluating the appropriateness of quantification
methods and reporting policies, and agreeing or reconciling with underlying records. These procedures also included
the following:
・ Evaluating whether the Company’s methods for estimates are appropriate and had been consistently applied.
However, our procedures did not include testing the data on which the estimates are based or reperforming theestimates.
・ Undertaking site visits to assess the completeness of the data, data collection methods, source data and relevant
assumptions applicable to the sites.
The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent
than for, a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance
engagement is substantially lower than the assurance that would have been obtained had we performed a reasonableassurance engagement.
Limited Assurance Conclusion
Based on the procedures we have performed and the evidence we have obtained, nothing has come to our attention
that causes us to believe that the Environmental Quantitative Information is not prepared, in all material respects, inaccordance with the calculation and reporting standard adopted by the Company.
The above represents a translation, for convenience only, of the original Independent Practitioner’s Assurance report issued in
the Japanese language.
Member of
Deloitte Touche Tohmatsu Limited− 02 −

Calculation Standards
Assured Items

Fiscal 2022 Scope and Calculation Methods
Scope of Data Collection
Tokyo Century Corporation and major Group companies (90 companies)

Scope 1
greenhouse gas
emissions

Domestic companies (48): Tokyo Century Corporation; TRY Corporation; TC Agency Corporation;
TC Business Service Corporation;*1 TC Business Experts Corporation;*1 TC Property Solutions
Corporation; S.D.L. Co., Ltd.; FLCS Co., Ltd.; ITEC Leasing Co., Ltd.; 18 group companies of Nippon
Rent-A-Car Service, Inc.; three group companies of TC Kobelco Real Estate Co., Ltd.; Nippon Car
Solutions Co., Ltd.; Orico Auto Leasing Co., Ltd.; Orico Business Leasing Co., Ltd.; IHI FinanceSupport Corporation; Amada Lease Co., Ltd.; Kyocera TCL Solar LLC; KCT Koyo LLC; Energy Gate2
LLC; Energy Gate4 LLC; Suiden Mizuumi Ni G.K.; Suiden Mizuumi San G.K.; T&J Power Plant Co.,
Ltd.; T&J Eco Energy Co., Ltd.; A&Tm Corporation; Shunan Power Corporation; TC Hotels & Resorts
Karuizawa Co., Ltd.; TC Hotels & Resorts Beppu Co., Ltd.; and CSI Leasing Japan K.K.
*1 Effective April 1, 2023, TC Business Service Corporation and TC Business Experts Corporation were absorbed by the Company.

Overseas companies (42): Tokyo Century Leasing China Corporation; Tokyo Century Factoring
China Corporation; Tokyo Century Leasing (Singapore) Pte. Ltd.; Tokyo Century Asia Pte. Ltd.; Tokyo
Century Capital (Malaysia) Sdn. Bhd.; PT. Century Tokyo Leasing Indonesia;*2 AIBISHI ENERGY CO.,
LTD.; CHAOHUI ENERGY CO., LTD.; TISCO Tokyo Leasing Co., Ltd.; TC Car Solutions (Thailand) Co.,
Ltd.; HTC Leasing Co., Ltd.; 16 group companies of CSI Leasing, Inc.; six group companies of EPC
Inc.; Tokyo Century (USA) Inc.; AP Equipment Financing Inc.; Work Truck Direct Inc.; Fiber Marketing
International Inc.; TC Aviation Capital Ireland Limited; Aviation Capital Group LLC; Aviation CapitalGroup Singapore Pte. Ltd.; ACG Aircraft Leasing Ireland Limited; and BPI Century Tokyo Lease &Finance Corporation*3
Scope 2greenhouse gas
emissions*2 Effective May 30, 2023, PT. Century Tokyo Leasing Indonesia changed its name to PT. Tokyo Century Leasing Indonesia.
*3 BPI Century Tokyo Lease & Finance Corporation is scheduled to change its name in fiscal 2023.

Applicable emissions: Greenhouse gas emissions from energy use
Calculation Method
Scope 1: Fuel use volume × CO2 emission factor*1*1 L
 ist of Calculation Methods and Emissions Factors for Calculation, Reporting and Announcement Systems specified in the Act on
Promotion of Global Warming Countermeasures

Scope 2: Electricity use volume × CO2 emission factor*2*2 Japan: List of Emissions Factors by Electric Power Utility specified in the Act on Promotion of Global Warming Countermeasures
Overseas: Coefficients from International Energy Agency’s Emissions Factors 2022

Scope 3greenhouse gas
emissionsCategory 1—
Purchased goods and services

Scope of Data Collection
Tokyo Century Corporation

Calculation Method
Lease property acquisition costs × Emission basic unit based on industry tables** Database of emission basic unit for calculating organizational greenhouse gases across the supply chain provided by the Ministry of
the Environment (Ver. 3.3)

Scope of Data Collection
Scope 3greenhouse gas
emissionsCategory 4—
Upstream transportation anddistribution

Aviation Capital Group LLC

Calculation Method
Jet fuel use volume for ferry flying of unleased and repossessed aircraft of Aviation Capital Group LLC
× CO2 emission factor** Database of emission basic unit for calculating organizational greenhouse gases across the supply chain provided by the Ministry of
the Environment (Ver. 3.3)

− 03 −

Assured Items

Fiscal 2022 Scope and Calculation Methods

1. Computers, office equipment, telecommunications equipment
Scope of Data Collection
Tokyo Century Corporation

Calculation Method
Energy consumption of high-representation equipment × Estimated annual operating time × CO2
emission factor*1 × Unit number of applicable equipment*1 F iscal 2022 substitution values from List of Emissions Factors by Electric Power Utility specified in the Act on Promotion of Global
Warming Countermeasures

Scope 3greenhouse gas
emissionsCategory 13—
Downstream leased assets

2. Aircraft
Scope of Data Collection
Tokyo Century Corporation; TC Skyward Aviation U.S., Inc.; TC Skyward Aviation Ireland Limited;
TC Aviation Capital Ireland Limited; Aviation Capital Group LLC

Calculation Method
Based on data extracted from IBA’s Carbon Emissions Calculator, which calculates CO2 emissions
based on flight data of the aircraft managed by the above companies

3. Ships
Scope of Data Collection
Tokyo Century Corporation

Calculation Method
Annual use of class A and class C fuel oil × CO2 emission factor*2*2 List of Calculation Methods and Emissions Factors for Calculation, Reporting and Announcement Systems specified in the Act on
Promotion of Global Warming Countermeasures

Scope of Data Collection
Scope 3greenhouse gas
emissionsCategory 15—

Tokyo Century Corporation
Applicable investments: Cross-shareholdings

Investments

Scope 1 and Scope 2 CO2 emissions of cross-shareholding counterparty as disclosed by CDP or inmaterials provided by counterparty × Ownership ratio

Calculation Method

Scope of Data Collection
Annual electricity
generation volumes
and CO2 emissions
reductions from solar
power generation
business of Kyocera
TCL Solar LLC

Solar power generation facilities of Kyocera TCL Solar LLC

Calculation Method
Annual generation volume: Total annual generation volume (transmission basis) for all solar power
generation facilities
CO2 emissions reductions: Annual solar power generation volume (transmission basis) × CO2 emission
factor** 387.5 g-CO2/kWh (arrived at by subtracting figure of 45.5 g-CO2/kWh for crystalline silicon solar cells [solar power generation systemelectricity consumption] from figure of 433 g-CO2/kWh for per-generation CO2 emissions from preliminary greenhouse gas emission
figures released by the Ministry of the Environment in fiscal 2020, as described in CO2 reduction standards in fiscal 2022 Japan
Photovoltaic Energy Association guidelines)− 04 −SUSTAINABILITY DATA BOOK 2023

Contents
Editorial Policy01

Independent Practitioner's Assurance02

Sustainability
Corporate Information

06

Financial Information

07

Sustainability Philosophy and Policies

08

Medium-Term Management Plan 2027

22

Environment
Environmental Policies

25

Environmental Performance

29

Climate Change Response Strategy

31

Environmental Market Opportunities

34

SocialHuman Rights

37

Diversity40

Human Resource Utilization

42

Health and Productivity Management

44

Social Contribution Activities

45

Human Resource Data

47

Engagement with Shareholders, Investors, and Customers

50

GovernanceCorporate Governance53

Risk Management

58

Compliance

62

Information Security

67

Personal Information Protection

68

OthersExternal Evaluations / Inclusion in ESG Indices69

Participation in External Initiatives

71− 05 −SUSTAINABILITY DATA BOOK 2023

Sustainability
Corporate Information
Company Profile
Company nameTokyo Century Corporation

Business activities

Equipment leasing, mobility and fleet management,*1 specialty financing,*2 international
business operations

Head office

FUJISOFT Bldg., 3 Kanda-neribeicho, Chiyoda-ku, Tokyo 101-0022, JapanFoundedJuly 1, 1969

Company representatives

Masataka Yukiya, Chairman & Co-CEO, Representative Director
Koichi Baba, President & CEO, Representative Director

Capital¥81,129 million

Stock listing (securities code)

Tokyo Stock Exchange, Prime Market (8439)

Major shareholders

ITOCHU Corporation; Chuo-Nittochi Co., Ltd.; and Nippon Telegraph and Telephone
Corporation

Global network coverage

More than 30 countries and regions

Operating Segments
Equipment Leasing

Leasing and finance (moneylending and investment) including ancillary services and otherbusinesses dealing with information and communications equipment, office equipment,
industrial machinery, transportation equipment, and equipment for commercial and service
industries

Mobility & Fleet Management*1

Automobile leasing for corporate customers and individuals, car rental and car-sharing
businesses, etc.

Specialty Financing*2

Leasing and finance (moneylending and investment) including ancillary services and otherbusinesses focusing on product fields, such as shipping, aviation, real estate, and theenvironment and energy, in Japan and overseas

International BusinessLeasing and finance (moneylending and investment) including ancillary services and fleet
service businesses, among others, mainly in East Asia, the ASEAN region, and North, Central,and South America

Operating Segments(

Number of Employees*3

Equipment Leasing(As of March 31, 2023)

697

(132)

Mobility & Fleet Management*1

3,471(3,205)Specialty Financing*2

1,314(1,351)

International Business

2,114

(17 )

Others52(20)

Corporate (shared) / Administrative

230

(29)

Total

7,878

(4,754)*1 The Mobility & Fleet Management segment was renamed the Automobility segment in April 2023.
*2 The Specialty Financing includes the Environmental Infrastructure segment, which was established in April 2023.
*3 Number of employees represents full-time employees. Figures in parentheses represent the average number of temporary employees over the respective fiscal year
and are not included in the number of full-time employees.

− 06 −

Financial Information
1. Consolidated Financial Results
Item

Unit

Fiscal 2020

Fiscal 2021

Fiscal 2022

Revenues

Millions of yen

1,200,184

1,277,976

1,324,962

Operating income

Millions of yen

77,154

82,67591,221

Ordinary income

Millions of yen

78,10590,519106,194

Net income attributable to owners of parent

Millions of yen

49,14550,2904,765

Net income per shareYen

402.57411.56

38.95

Return on equity

%

8.7

8.1

0.7

Return on assets

%

1.4

1.6

1.8

Operating income to revenues

%

6.4

6.5

6.9

2. Consolidated Financial Position
Item

Unit

Fiscal 2020

Fiscal 2021

Fiscal 2022

Total assets

Millions of yen

5,602,897

5,663,787

6,082,114

Net assets

Millions of yen

688,345795,580

888,985

Shareholders’ equity ratio

%

10.2

11.9

12.5

Net assets per share

Yen

4,670.45

5,507.50

6,222.16

3. Consolidated Cash Flows
Item

Unit

Fiscal 2020

Fiscal 2021

Fiscal 2022

Net cash provided by (used in) operating activities

Millions of yen

51,331

227,383

31,429

Net cash provided by (used in) investing activities

Millions of yen

97,405

16,075

31,308

Net cash provided by (used in) financing activities

Millions of yen

18,946

201,421

6,926

Cash and cash equivalents at end of year

Millions of yen

216,901

240,047

201,280

4. Segment Information (Fiscal 2022)
Millions of yen

Adjustments inconsolidated
financialstatements

Total inconsolidated
financialstatements

Equipment
Leasing

Mobility & Fleet
Management*1

Specialty
Financing*2

International
Business

Revenues

481,467

353,515

344,103

144,883993

1,8701,324,962

Segment income (loss)

31,74027,97757,398

948

4,669

14,642

106,194

1,312,037

611,558

2,743,531

655,683

40,964

718,338

6,082,114

2.4%

4.6%

2.3%

−

−

−

2.1%

Item

Segment assets*3

Return on assets*1 The Mobility & Fleet Management segment was renamed the Automobility segment in April 2023.
*2 The Specialty Financing includes the Environmental Infrastructure segment, which was established in April 2023.
*3 Return on assets = Ordinary income ÷ (Segment assets at beginning of year + Segment assets at end of year ÷ 2)

− 07 −

OthersSustainability Philosophy and Policies
Management Philosophy

The Tokyo Century Group will work alongside customers
in pursuit of their growth as a highly specialized and unique financial services company
and will contribute to the creation of an environmentally sound,sustainable economy and society.

Management Policy

We will provide the best products and services around the world to contributeto the success of our customers’ businesses while pursuing all possibilities
by collaborating with customers and uniting the overall strengths of the Group.

We will strive to raise our corporate value over the medium
to long term by pioneering new business fields and realizing sustainable growth.

We will cultivate a corporate culture that allows diverse human resources
to fully demonstrate their skills and personalities, andwe will build a company in which all officers and employees can hone their expertiseand experience growth as well as a sense of pride.

We will always be mindful of our social responsibility
as a corporation and conduct our business activities with vigor
and sincerity as we fulfill our role of creating a sustainable economy and society.

Corporate Slogan

Solutions to your Pursuits− 08 −

Corporate Code of Conduct

1.

Dedication to Customers
The Tokyo Century Group is dedicated to the success of its customers’ businesses by accurately responding to their needs withquality products and services and thereby forging solid relationships of trust.

2.

Sound and Fair Corporate Activities
The Tokyo Century Group engages in sound and fair corporate activities by complying with all laws, regulations, and rules andconforming to social norms.

3.

Corporate Responsibility and Contribution to Society
The Tokyo Century Group seeks to fulfill its social responsibilities through honest business management and contributes to society
by meeting public expectations as an upstanding corporate citizen.

4.

Respect for Human Rights
The Tokyo Century Group respects the human rights of all people and promotes diversity to nurture a corporate culture thatencourages personnel with diverse characteristics to thrive.

5.

Preservation of the Environment
The Tokyo Century Group seeks to preserve the environment in all areas of its business activities by endeavoring to create anenvironmentally sound, sustainable economy and society.

6.

Response to Global Standards
The Tokyo Century Group acts from a global perspective that is highly transparent and sincere, by respecting the cultures andcustoms and complying with the laws, regulations, and relevant systems of the countries and regions in which it operates.

Our Action Guidelines

1.

We will continue creating solutions that earn customer trust and recognition.
We will strive to resolve the issues faced by our customers by harnessing our high level of expertise and foresight to provide
optimal products and services that earn their trust and recognition.

2.

We will act in compliance with laws and regulations and in accordance with our social conscience.
We will comply with laws and regulations to conduct fair and proper business activities, and we will act on our own initiative inaccordance with our social conscience as dignified individuals. We will distinguish between the Company’s interests and our
individual interests and will strictly refrain from actions that impair the interests of the Company.

3.

We will respect human rights and human dignity and create a rewarding working environment.
We will respect our mutual human rights and human dignity and strive to create a vibrant, rewarding working environment wherediscrimination and harassment have no place.

4.

We will stringently manage personal information and customer information.
We will stringently manage the personal information and customer information we obtain through our operations to prevent bothleakage outside the Company and use for unintended purposes.

5.

We will pursue activities to preserve the environment.
We will maintain a high awareness of environmental issues and actively work to preserve the environment, which includes actions
to prevent global warming and promote energy conservation.

6.

We will avoid contact with antisocial forces and criminal organizations.
We will act decisively to avoid any contact with antisocial forces that obstruct the course of social order and safety or with criminalorganizations inside or outside Japan that hamper legitimate economic activity.

− 09 −

Sustainability Management Policy
Tokyo Century’s commitment to sustainability is driven by its pursuit of further sustainable development and higher corporate value along withstakeholders as a financial services company, and it thereby contributes to the creation of an environmentally sound, sustainable economy andsociety. In promoting sustainability management, we envision, with due consideration of the United Nations Sustainable Development Goals(SDGs), a society 10 to 20 years into the future and then take a backcasting approach toward creating financial services that will meet theneeds of that time.

Process for Identifying Materiality (Key Issues)
For Tokyo Century, sustainability management constitutes a management strategy for both resolving social issues and achieving sustainable growthand improvements in corporate value by contributing to the creation of an environmentally sound, sustainable economy and society, as described in
its Management Philosophy, through its business activities.
To guide its practice of sustainability management, Tokyo Century has defined materiality (key issues). In the process of defining these issues, theCompany created a materiality map based on the United Nations Sustainable Development Goals (SDGs) that considers the degree of priority for its
stakeholders (indicated on the vertical axis) as well as the degree of priority for the Company itself (indicated on the horizontal axis). Priority issues
for the Company include the development of diverse businesses (such asaviation and solar power generation) that take advantage of its highly free
operating environment and business characteristics grounded in the valueof its assets.
The process of creating this map involved first assessing the importanceof issues for stakeholders based on major environmental, social, andgovernance (ESG) evaluation and non-financial information disclosure
standards as well as the 169 targets for the 17 SDGs. We then proceeded
to identify the issues of importance for the Company by looking at theconnection between the SDGs and our Management Philosophy andfinancial information. The important issues defined in these two categories
formed the axes used when preparing our materiality map, and this map
was used to identify the five materiality items described on page 11, basedon meetings with relevant divisions and discussions by the Sustainability
Committee and the Board of Directors.
In addition, protocols have been introduced regarding materiality
notifications in agendas for meetings of the Transaction Evaluation Meeting,Management Meeting, and the Board of Directors. The Company has also
created a sustainability contribution award program. These measures aremeant to help improve awareness regarding materiality initiatives among* Major ESG evaluation and non-financial disclosure standards referenced in
employees. Moreover, we have defined key performance indicators (KPIs)
determining the degree of materiality of key issues to stakeholders:along with a PDCA (plan–do–check–act) cycle for our materiality (key issues).
Dow Jones Sustainability Index, FTSE4Good Index, MSCI Index, and SASB

− 10 −

Tokyo Century’s Materiality (Key Issues) Linked to the SDGs
Materiality

Priority materiality initiatives

Initiative examples

Contribution to
decarbonized society

Contribute to widespread use of clean energy throughclimate change response and environmental efforts

Renewable energy business including
solar power generation, popularization ofelectric vehicles via leasing

Creation of new
businesses driven bytechnical innovation

Create new businesses by integrating new technologies
into financial services and contribute to the digital
economySubscription services, fintech, and newrental car services utilizing smartphone
apps

Contribution to social
infrastructuredevelopment

Respond to advances in global mobility services andcooperate with local communities to contribute to social
infrastructure development

Regional revitalization through rental carsand car sharing, Drive Doctor telematics
driving control service that supports safe
driving, and hotel business

Sustainable resource use

Contribute to development of a circular economy focusedon the value of assets

IT equipment leasing, refurbishment,
aircraft life-cycle management, andautomobile leasing

Enhancement of work
environment, leading tostrengthening of humanresources

Promote human resource development, diversity, andworkstyle reforms that improve job satisfaction and fostera sense of personal growth

Introduction and implementation of
telecommuting, employee awarenesssurveys, and 360° evaluations

Shared platforms

SDGs

Utilize diverse partnerships to create new value

Structure for Promoting Sustainability Management

The Sustainability Committee (established in April 2018) is responsible for deliberations related to sustainability management at Tokyo
Century. This committee meets twice a year, in principle. Important matters deliberated on by the Sustainability Committee are reported to anddiscussed by the Management Meeting and the Board of Directors to allow for oversight by the Board of Directors. The Sustainability Committee
is chaired by the president of the Corporate Planning Unit, and this committee promotes initiatives positioning sustainability as an importantmanagement issue.
Members and Meetings of the Sustainability Committee
Members
Chairperson

Director and president of the Corporate Planning Unit

Members

Operation Headquarters: Unit heads (IT Unit, Business Process Management Unit,
Personnel Unit, General Affairs Unit, and Risk Management Unit), deputy presidentof the Corporate Planning Unit, general manager of the Corporate Planning Division,and general manager of the Sustainability Management Division

Auditors

Standing corporate auditors

Business Headquarters: Five business unit general managers (Equipment Leasing,Automobility, Specialty Financing, International Business, and Environmental
Infrastructure) and observers (invited as necessary)

Meetings in Fiscal 2022
Meetings held

3

Major agenda items• Information disclosure based on recommendations of TCFD
• Trial introduction of internal carbon pricing system• Progress of medium- to long-term sustainability management initiatives (road map)

− 11 −• Carbon-neutrality policy and action plan
• Joining of GX League (fiscal 2023)

Non-Financial Materiality KPIs
Tokyo Century has established non-financial key performance indicators (KPIs) related to its materiality in order to promote sustainability
management.
The following pages contain information on the principal non-financial KPIs defined for each materiality (key issue).
(Some non-financial KPIs overlap with the ESG-related non-financial KPIs described on page 25 and thereafter.)

Contribution to Decarbonized Society
Tokyo Century recognizes that combating climate change is an important management priority. Our efforts to contribute to a decarbonizedsociety include environmental activities in offices, the development of solar power and other renewable energy businesses, the promotionof the Financing Program for Joint Crediting Mechanism (JCM) Model Projects for reducing greenhouse gas emissions through collaboration
with developing countries and for sharing emissions reduction benefits between involved countries, and other efforts for addressing climatechange through our business activities. In fiscal 2022, Tokyo Century established A&Tm Corporation as a joint venture together with Tokyo Gas
Engineering Solutions Corporation and KYOCERA Communication Systems Co., Ltd., that provides asset and technical management services
for solar power generation projects. The company is combining the technological strengths of joint business partners to provide services for
improving the generation efficiency and profitability of solar power plants.
We are also working to reduce Scope 3 emissions. For example, consolidated subsidiary Aviation Capital Group LLC (ACG) has ordered 60
new Airbus aircraft, including Airbus A220 aircraft that use 25% less fuel than prior models. Furthermore, we have set the target of amassing afleet of 100,000 electric vehicles by fiscal 2030 in the Automobility segment. Through an organizational change undertaken effective on April 1,
2023, the Group’s domestic and overseas renewable energy and other environment and energy businesses were separated from the Specialty
Financing segment to form the Environmental Infrastructure segment. The goal of this move is to strengthen and expand these businesses tobetter support business strategies for contributing to decarbonization.
Moreover, Tokyo Century announced its endorsement of the recommendations of the Task Force on Climate-related Financial Disclosures(TCFD) in April 2021. In addition, we identified climate change risks and opportunities under multiple scenarios and conducted qualitativeand quantitative business impact assessments in line with TCFD recommendations. Information in this regard is disclosed on our corporatewebsite.* A scenario analysis on the automobility business (corporate and individual auto leasing) was performed in fiscal 2022, the results ofwhich have been disclosed.
Response to Climate Change and TCFD Endorsement https://www.tokyocentury.co.jp/en/sustainability/esg/environment/tcfd.html

KPI
Reduction of electricity use(environmental contributions throughoffice activities)

Reduction of gasoline use(environmental contributions throughoffice activities)

MetricUnit

Targetyear

TargetFiscal 2020

Electric use

kWhFiscal2023

Less than 1,800,000 kWh

1,578,546

1,539,011

1,593,216

CO2 emissions

t-CO2

Fiscal2023

Less than 318 t-CO2

770

723

546

Gasoline use

L

Fiscal2023

Less than 60,000 L

43,76845,36049,937CO2 emissions

t-CO2

Fiscal2023

Less than 139 t-CO2

102

105

116

Fuel efficiency

km/L

Fiscal2023

More than 14.0 km/L

14.3

14.5

16.1

Fiscal 2021 Fiscal 2022

Reduction of paper use (environmental
contributions through office activities)

Paper use
(A4 size equivalent)Thousandsof sheets

Fiscal2023

Less than 11 million sheets

9,262

8,278

9,457

Reduction of head office electricity use(intensity target)

Per-area electricityuse

kWh/m2

Fiscal2030

Less than 70.00 kWh/m2(23% reduction incomparison with FY2009)

59.75

64.84

67.69

Reduction of annual CO2 emissions
associated with head office electricity
use (intensity target)

CO2 emissions
from per-area
electricity use

t-CO2/m2

−

−

0.029

0.030

0.017

Annual generation
volumeMWhFiscal2023

More than 508,600 MWh

414,047

482,795

536,591(compared withstandard thermal
power generation)

t-CO2

Fiscal2023

More than 198,100 t-CO2

172,864

192,877

207,929

Rate of electrified vehicle use(EVs, FCEVs, PHEVs, HVs)

Mobility and fleet
management*2

%

−

−

18.4

19.3

20.6

Rate of fuel-efficient aircraft*3 use

Ratio offuel-efficient
aircraft assets*4

%

−

−

40.4

45.7

51.8

Projected aggregate greenhouse gas
emissions reductions from JCM Model
Projects

Projected aggregate
greenhouse gas
emissions reductions

t-CO2

Fiscal2025

34,54735,45738,343

Reduction of CO2 emissions
through solar power businesses of
consolidated subsidiaries*1CO2 emissions

56,000 t-CO2*1 Fiscal 2023 targets are for Kyocera TCL Solar LLC and eight other solar power business companies.
*2 Mobility and fleet management: Nippon Car Solutions Co., Ltd.; Nippon Rent-A-Car Service, Inc.; and Orico Auto Leasing Co., Ltd.
*3 Fuel-efficient aircraft: A220, A320neo, A321neo, A350, 737MAX, 747-8F, and 787*4 Ratio of fuel-efficient aircraft assets: Ratio of fuel-efficient aircraft to all aircraft (including those of Aviation Capital Group LLC)

− 12 −

Carbon Neutrality Policy
The Tokyo Century Group has defined “contribution to decarbonized society” as one part of its materiality (key issues), based on which it isworking to popularize the use of clean energy through initiatives for combating climate change and preserving the environment. In conjunction
with the start of the commercial operation of a biomass–coal co-firing power plant of Shunan Power Corporation in September 2022, the Groupunveiled its carbon-neutrality policy for fiscal 2040. This policy describes our goal of achieving effectively zero greenhouse gas emissions while
also presenting a transition road map for the aforementioned power plant.
The biomass–coal co-firing power plant of Shunan Power is projected to produce around 98% of the Group’s greenhouse gas emissions
going forward. For this reason, we look to achieve effectively zero greenhouse gas emissions as soon as possible, with fiscal 2040 being ourtarget year for the accomplishment of this goal. To this end, we will increase the biomass co-firing ratio at this plant while adopting blackpellets, which feature high combustion efficiency, prefaced on assumptions of future technological developments. At the same time, we willtransition to the burning of ammonia, which does not emit greenhouse gas emissions. We are also increasing our use of renewable energy for
purposes such as powering domestic and overseas consolidated subsidiaries. Through these efforts, the Tokyo Century Group will work toward
its goal of achieving carbon neutrality by fiscal 2040.

The Tokyo Century Group’s Carbon-Neutrality Policy

The Tokyo Century Group*1 promotes the reduction ofgreenhouse gas (GHG) emissions*2 andaims to achieve carbon neutrality by fiscal 2040.
As the interim target for achieving carbon neutrality,

the Tokyo Century Group aims to achieve a 50% reduction in GHG emissions by fiscal 2030 (vs. FY2021*3).
*1 Major consolidated subsidiaries where personnel are located (including the biomass co-firing power plant of Shunan Power Corporation)*2 Direct emissions from Company-owned and controlled resources (Scope 1) and indirect emissions from the consumption of purchased electricity, heat, and steam (Scope 2)*3 Greenhouse gas emissions of 1,365,000 t-CO2 in fiscal 2021
(Emissions volume as calculated in relation to carbon-neutrality target = Fiscal 2021 greenhouse gas emissions + Estimated annual greenhouse gas emissions from hotel businessand biomass co-firing power plant of Shunan Power)

Image

The Tokyo Century Group’s Greenhouse Gas Emissions Reduction Plan

GHG at the biomass co-firing power
plant

Other greenhouse gas
emissions

25,000 t-CO2

Strategic actions for achievingcarbon neutrality taken at biomass
co-firing power plant in light ofoperating environment

Down
50 %

1,340,000
t-CO2

Fiscal 2021

Fiscal 2030

(Base year)(Year of interim
target)POINT

In consideration of the projected increase in the biomass
co-firing ratio and the anticipated use of next-generation
technologies, including ammonia co-firing, the Groupestablished the “Transition Roadmap for Achieving
Carbon Neutrality by 2040,” which is aimed at reducing
GHG emissions by 50% by fiscal 2030 and achievingcarbon neutrality by fiscal 2040.

Down
50 %
50%
reduction

Challenges

0Commercial Operations Begin at Shunan Power Corporation’sPower Plant

Fiscal 2040
(Target year for
carbon neutrality)− 13 −

Overview of Transition Road Map for Shunan Power
Corporation’s Power Plant (in Japanese only)
Evaluation Report by Japan Credit Rating Agency, Ltd. (inJapanese only)Creation of New Businesses Driven by Technical Innovation
Tokyo Century seeks to create new businesses by integrating new technologies into financial services and to contribute to the digital
economy through collaboration with partner companies and investment in companies boasting promising technologies. In the Equipment
Leasing segment, where we possess a broad customer base and are developing numerous joint ventures together with prime partners, weare reinforcing our foundation for supporting the digital economy through investment in and a business alliance with Bplats, Inc., a provider
of comprehensive subscription service business platforms, while also developing subscription service businesses. Also in this segment,
we have established IBeeT Corporation, a joint venture with ITOCHU Corporation, to supply subscription services for household electricity
storage systems, decentralized power sources that contribute to decarbonization, and peripheral equipment. Meanwhile, in the Automobility
segment, where we develop a comprehensive range of industry-leading automotive businesses, Tokyo Century is co-creating new businesses
that promote digital transformation in the mobility field. For example, we have concluded a capital and business alliance agreement with
Mobility Technologies Co., Ltd. (currently GO Inc.), which operates the GO taxi dispatch app covering the largest number of affiliated taxis inJapan. Also, we are engaged in mobility-as-a-service (MaaS) and smart city businesses through a business alliance with major map solutions
provider ZENRIN CO., LTD., in which we combine the resources of this company with our own. In the Specialty Financing segment, which drives
Tokyo Century’s growth with highly specialized operations, we have concluded an investment contract with Germany’s Volocopter GmbH,a company developing flying cars as a form of next-generation aerial mobility. Moreover, a business and capital alliance agreement was
concluded with XMart Inc. in fiscal 2022. The company’s XOrder software-as-a-service ordering platform uses the LINE messaging service tosignificantly improve the efficiency of order processing between restaurants and food product wholesalers, which was previously performed ona paper basis. This simple yet innovative solution has been garnering a great deal of attention. Meanwhile, SecondSight Inc., a joint venturecompany established with JFE Engineering Corporation, provides diagnosis solutions that combine cutting-edge technologies such as sensing
technologies for replicating people’s senses of sight, hearing, and smell as well as the muscular movements of human bodies. These are justsome of the initiatives we are advancing to create new businesses for the next era.
In December 2020, the DX Strategy Division was established within the Corporate Planning Unit to plan and promote Companywide digitaltransformation strategies. In addition, Tokyo Century was the first leasing-based financial services provider to be recognized as a DX-certified
operator advancing superior initiatives under the DX Certification system organized by the Ministry of Economy, Trade and Industry (METI), andwe were recognized under this program once again in March 2023. Furthermore, Tokyo Century participated in the corporate kickoff-day panel
discussion arranged by Plug and Play Japan in fiscal 2022. We used this opportunity to explain our open innovation initiatives for engaging in
co-creation with start-up companies.
The Company is also focused on fostering a corporate culture in which employees feel empowered to boldly tackle new challenges without
fear of failure. It was for this purpose that we introduced the TC Biz Challenge Project, a new business proposal initiative. In the first iterationof this project, an integrated aquaculture–agriculture cultivation facility project was selected from among the numerous proposals received
for advancement to the verification testing phase. It was decided that this proposal would not be developed into a business, but we remaincommitted to tackling new challenges going forward.

KPI

Certification under METI’s DX Certification system** Outline of the DX
Certification System

Supplement

Certification achieved in March 2021 and renewed in March 2023

The DX Certification system is an initiative implemented under the Act on Partial Revision of the Act on Facilitation of Information Processing, which came into force on May
15, 2020. In line with the guidelines set by the Japanese government that present to companies ideal approaches for making use of strategic systems in their business
management and for creating such systems, an authority certifies companies engaging in outstanding efforts, if companies eligible for certification file a request accordingly.
Under the DX Certification system, beyond being poised to promote digital transformation, it is important that companies have taken measures related to the fundamental
items of management goals, strategies, performance, KPIs, and governance systems that are defined in the digital governance code compiled by METI in November 2020.
Moreover, Tokyo Century was included in the Digital Transformation Stock Selection (DX Stocks) announced in May 2023. DX Stocks is a selection of Tokyo Stock
Exchange-listed companies that have established internal frameworks for promoting digital transformation aimed at improving corporate value and which have beensuccessful in highly utilizing digital technologies. Between one and two companies are chosen from each industry. The Company has also been included in this program ineach of the nine years since the establishment of the Competitive IT Strategy Company Stock Selection program—the predecessor of the DX Stocks program—in 2015.

− 14 −

Contribution to Social Infrastructure Development
In the Automobility segment, where we develop industry-leading automotive businesses, Tokyo Century provides mobility-related services
through its auto leasing and car rental businesses. These services play a crucial role in contributing to social infrastructure while also having
material importance to supporting safety. Moreover, we are promoting the use of vehicles equipped with automated brakes and other safety
features in order to contribute to the achievement of target 3.6—By 2020, halve the number of global deaths and injuries from road traffic
accidents—of SDG Goal 3: Good health and well-being. In addition to these equipment-related initiatives, we are proactively offering support
through software-related initiatives, namely, safe driving lessons that utilize telematics systems. Moreover, GO and Nippon Car Solutions Co.,
Ltd., formed an agreement in September 2022 that entails introducing customers to DRIVE CHART, a next-generation AI drive-recording serviceof GO. DRIVE CHART, which is supplied to lessees and other business partners of Nippon Car Solutions, automatically detects dangerous
situations highly likely to result in an accident based on drive recorder and other data. This service is used to analyze driving patterns topropose improvements to one’s driving practices and thereby help reduce traffic accidents.
In a business environment free of regulatory constraints, Tokyo Century is branching out from leasing and financing to develop and growunique business models based on the concept of “Finance × Services × Business Expertise” through co-creation with partners. For example, we
recognize that the revitalization of local communities through the tourism industry is an important task as the depopulation of areas outside ofmajor urban centers becomes an increasingly serious social issue. In this regard, ANA InterContinental Beppu Resort & Spa, an establishmentthat Tokyo Century played a part in attracting, was opened in Beppu City, Oita Prefecture, in August 2019. This facility garnered attention as
Japan’s first InterContinental resort hotel and is functioning as a piece of social infrastructure that promotes tourism and contributes to regional
revitalization. Calling upon the expertise gained through this undertaking, we were able to conclude an operation subcontracting agreementwith InterContinental Hotels Group PLC, based on which we opened Hotel Indigo Karuizawa—located in Karuizawa, a popular Japanese highland
resort area—in spring 2022.
Tokyo Century is also involved in real estate operations in Tokyo. In these operations, Mitsubishi Estate Co., Ltd., and Tokyo Century
have selected Dorchester Collection, the ultraluxury hotel brand, to operate the hotel on the upper floors of Torch Tower—which will be thetallest building in Japan once completed—in the TOKYO TORCH district facing the Nihombashi Exit of Tokyo Station, which we are developing
together with relevant rights holders. The hotel is scheduled to open in 2028 and expected to become a key component of the TOKYO TORCH
district, which is being developed with the goal of creating an urban tourism hub that acts as a gateway to Tokyo and Japan. Together withthe office section previously acquired by Mitsubishi Estate and the Company, these assets are expected to function as important parts ofsocial infrastructure in this urban center. In addition, the Tokyo Cross Park Vision project has been announced by a group of 10 participatingcompanies, including Tokyo Century. This next-generation smart city project calls for the development of the area of the Uchisaiwaicho 1-chome
district of Tokyo. With an aggregate floor space of 1.1 million m2, this will be one of the largest development projects in Tokyo. Connected to the
16-hectare Hibiya Park, the Tokyo Cross Park Vision project will develop office buildings, commercial facilities, and residential housing while
contributing to the shared goal of operating in a carbon-negative manner in order to help realize a sustainable community and society.
Furthermore, we announced a business and capital alliance with Nippon Telegraph and Telephone Corporation (NTT) in February 2020.
The need for high-speed processing and collection of large quantities of data is growing on a global scale, stimulating a rise in data centers.
In response to this trend, we will advance social infrastructure business initiatives through our alliance with NTT as we seek to make othercontributions together with partners.
In our first collaborative real estate project to be advanced together with NTT TC Leasing Co., Ltd.—a publicly certified wholesale market
redevelopment project in Toyama City, Toyama Prefecture—the buildings, developed and owned by NTT TC Leasing and Tokyo Century, wereleased to Toyama City in March 2022. Together with this partner, we seek to respond to demand for rebuilding aged public facilities acrossJapan, contribute to local infrastructure development, and advance initiatives with significant social meaning that help revitalize local
communities.

KPI

Applicable
companies*1

Unit

Number of vehicles equipped with telematics services

NCS, NRS, OAL

Number of safe driving lessons conducted using
telematics services*2

Ratio of rental cars equipped with safety features(automated brakes, etc.)

Fiscal 2020

Fiscal 2021

Fiscal 2022

Vehicles

67,757

74,18082,051

Lessons

459

923

1,132

Participants

7,095

13,261

18,774

%

94.3

96.0

97.2

NCS

NRS

*1 NCS: Nippon Car Solutions Co., Ltd.; NRS: Nippon Rent-A-Car Service, Inc.; OAL: Orico Auto Leasing Co., Ltd.
*2 The number of safe driving lessons declined substantially in fiscal 2020 in response to the COVID-19 pandemic, and this reduction led to a decrease in the number of participants.

− 15 −

Sustainable Resource Use
The leasing business Tokyo Century has developed since its founding is built on the 3Rs (reduce, reuse, and recycle), meaning that theCompany has been contributing to the realization of an environmentally sound, sustainable economy and society since its inception. Leasing
businesses necessarily involve assets, and focuses on the value of assets and on effectively utilizing these assets are thus of crucial
importance to such businesses. By further honing the propensity for judging the value of the assets we have refined throughout our history,
we look to broaden the scope of assets we handle to branch out from traditional financing and leasing to engage in life-cycle management
operations related to automobiles and aircraft. At the same time, we will work together with our partners to combine our specialties and areasof expertise to address social issues. In this manner, Tokyo Century will seek to evolve business models in fields where it can contribute to therealization of an environmentally sound, sustainable economy and society and in which it is possible to achieve economic growth while using
resources efficiently.
Information and communications equipment is a major offering of our leasing business. In recent years, greater importance has beenplaced on the environment and on information management with regard to the disposal of end-of-lease IT equipment. This trend is anticipatedto spur rapid growth in demand for IT asset disposition (ITAD) services such as data erasing and disposal for IT equipment, which can be used
to ensure the safe and appropriate disposal of these IT assets. We anticipate that this demand will be seen centered on global companies
seeking to provide services that are standardized on a worldwide basis. In this regard, U.S.-based IT leasing subsidiary CSI Leasing, Inc., isa major source of strength. The company is able to supply high-quality global-standard services through its IT equipment leasing and ITAD
service operations in more than 50 countries across the globe. In fiscal 2022, CSI Leasing posted ordinary income approximately 4.7 times
the level seen in fiscal 2015, when Tokyo Century commenced investment. Moreover, CSI Leasing acquired companies in Germany, Denmark,and Sweden in fiscal 2022 to establish local bases in these markets for propelling the development of its IT equipment life-cycle management
service businesses.
In the aviation business, major U.S. aircraft leasing company ACG is engaged in self-driven forays into the operating lease business for new
and other aircraft. Going forward, we will continue to pursue intra-Group synergies capitalizing on the strengths of the Group’s aircraft value
chain, which includes such companies as aircraft parts and service business operator GA Telesis, LLC, and allows for strategic aircraft life-cycle
management.
Tokyo Century’s automobility business contributes to sustainable resource use through a value chain that encompasses maintenancefactories. In this area, Nippon Rent-A-Car Service, Inc., offers car rental services that deliver improved customer convenience and which
contribute to sharing economies, as exemplified in the trend toward transitioning from ownership to use, amid the rising focus on realizing
an environmentally sound, sustainable economy and society. In addition, Tokyo Century has concluded a capital and business alliance withMIRAI-LABO, which possesses electric vehicle (EV) battery diagnosis and evaluation and reuse technologies. The goal of this alliance is toexpand its EV leasing and rental businesses. Through this alliance, the used EV battery diagnosis technologies of MIRAI-LABO, which is acting
based on its expressed goal of becoming an environmental platform holder, will be utilized to strengthen these businesses. At the same time,
we will work with MIRAI-LABO’s partners to bolster and supply environment-friendly mobility services related to the reuse and recycling of
EV batteries. In fiscal 2022, Tokyo Century concluded a business alliance agreement with Kansai Electric Power Company, Incorporated, in
relation to a stationary storage battery business utilizing used batteries from EVs, such as electric forklifts and motorcycles. In this alliance,
we are examining the possibility of combining used batteries to provide larger-than-ever stationary batteries as grid-scale storage batteries.
Furthermore, we are assessing the feasibility of collecting used batteries from end-of-lease electric motorcycles and other EVs to be reused asstationary storage batteries.

MetricUnit

Targetyear

TargetRefurbishment businessAnnual salesof secondhand
computers

Computers

Fiscal2025

ITAD data erasure services(CSI Leasing subsidiary Executive
Personal Computers, Inc.)*

Number of units
processed withITAD services

Units

Promotion of car rental services(Nippon Rent-A-Car Service, Inc.)

Number of rental
cars

Cars

KPI

Fiscal 2020

Fiscal 2021

Fiscal 2022

More than 241,000
computers

405,055

247,456

327,017−−829,815

1,208,184

1,713,011−−

33,09831,157

33,201* Executive Personal Computers, Inc., of the United States and seven other new companies were included in the scope of calculation from fiscal 2022.

− 16 −

Enhancement of Work Environment,
Leading to Strengthening of Human ResourcesTokyo Century continues to invest in the human resources who support its growth and to develop workplace environments in which all officers
and employees feel empowered in their work. These undertakings will be imperative to ensuring that the Company can keeping growing andevolving in the current era of rapid change.
We conduct employee awareness surveys to help focus our efforts to develop workplace environments in which all employees respect one
another and are able to fully exercise their talents. The results of these surveys are analyzed to identify issues and shape future initiatives, andthis information is incorporated into officer training and discussed on an ongoing basis by the Management Meeting and the Board of Directors,
so that identified issues can be addressed as top management priorities. Various measures for improving employee engagement have been
implemented based on these surveys. For example, we have introduced an hourly paid leave program and a teleworking system, along with the
Career Challenge Program internal recruitment system, which is designed to provide employees with an opportunity to chart their own careercourses. Surveys have also been used to facilitate the enhancement of work–life balance support systems for assisting employees giving birth,raising children, or providing care to family members. In fiscal 2022, Tokyo Century launched TC-Mee+, an internal exchange forum aimed atenhancing communication among employees. In a TC-Mee+ forum featuring the president as a guest, a discussion was held about the type ofcompany people want Tokyo Century to be a decade from now.
Moreover, the Diversity Promotion Office and the Career Design Office have been established within the Personnel Division to guide mediumto long-term growth initiatives. Under the guidance of these organizations, we are fostering a corporate culture in which diverse employees
are able to proactively exercise their talents and individuality through efforts such as recruiting and developing diverse human resources
and promoting diversity, equity, and inclusion. Moreover, we act in accordance with the Basic Diversity Policy by recruiting, developing, andpromoting diverse human resources regardless of their race, religion, gender, age, sexual orientation, disability, or nationality. At the same time,
diversity, equity, and inclusion training and educational programs targeting officers and employees are implemented with the goal of fostering
a workplace environment built on mutual respect in which everyone is able to fully exercise their skills. Our Tokyo Century NEWS owned media
outlet, meanwhile, is used to communicate information to external shareholders through means such as the planning and broadcasting ofwebinars on the theme of diversity, equity, and inclusion. These efforts have led to Tokyo Century’s receipt of the silver rating in the 2022
iteration of the PRIDE Index, which evaluates companies’ efforts to create workplaces that are accommodating to members of the LGBTQ+
community and other sexual minorities.
We also provide employees with a plethora of training opportunities. In addition to annual training and other designated training programs,
we offer online learning programs in which employees can select courses on business and other skills as well as practical and specialized
training for specific business areas. By supplying opportunities for enhancing skills from a variety of angles, we aim to develop human resources
capable of supporting the growth of the Company and contributing to management in the future.
Furthermore, Tokyo Century recognizes the health of officers and employees as an important management priority and has thus established
its Basic Policy on Health and Productivity Management to outline its intent to increase its focus on the promotion of the health of its officers
and employees. It is important to develop an environment in which all of our human resources—who represent our greatest assets—can work
vigorously in good health, both physically and mentally, and fully exercise their individuality and all their abilities. We therefore strive to maintainand improve the well-being of our officers and employees and their families with the recognition that health and productivity management is a
corporate management issue. In addition, coordination in said regard is pursued with industrial physicians, occupational health nurses, healthinsurance associations, and external experts to incorporate various health-related themes into e-learning programs targeting all officers andemployees in order to foster health awareness. In addition, we provide health apps and cafeteria plan benefit systems with the goal of helping
employees improve their lifestyle habits. We also allow officers and employees aged 35 or above to undergo complete medical check-ups aspart of their regular health examinations.
In recognition of this diligence, Tokyo Century was included in the 2023 Certified Health & Productivity Management Outstanding
Organizations Recognition Program (large enterprise category) and received the highest rank in the DBJ Employees’ Health Management Rated
Loan Program of Development Bank of Japan Inc. in fiscal 2022.

Unit

Targetyear

TargetAnnual paid leave acquisition rate

%

2027

Maintain rate of
70% or moreChildcare leave acquisition rate

%

2027

KPI

TargetFiscal 2020 Fiscal 2021 Fiscal 2022
employees
−

72.7

75.6

78.8

Maintain rate of childcare
leave acquisition by male
employees of 100%

Women

100.0

100.0

100.0

Men

100.0

100.0

100.0

Ratio of employees with disabilities

%

2027

Maintain rate above
legally mandated level

−

2.61

3.22

2.86

Ratio of women among new-graduate hires

%

2027

Maintain rate of
40% or more

−

30.8

52.9

42.1

Ratio of women in management positions

%

2030

30% or more

−

9.1

9.7

11.8

Ratio of women in assistant manager position orequivalent

%

−

−

−

50.7

48.1

49.6

Gender-based wage disparity*1

%

−

−

All employees

−

−

58.7

− 17 −KPI

Unit

Targetyear

TargetRatio of employees remaining at the Company for
10 years or more (by gender)

%

−

−

Employee turnover rate

%

−

−

Targetemployees

Fiscal 2020 Fiscal 2021 Fiscal 2022

Women

48.6

42.9

61.5

Men

53.7

58.3

65.4

Women

0.7

0.9

0.9

Men

3.7

4.5

3.6

Number of people leaving work for nursing carereasons

People2027

Maintain a nursing careturnover rate of zero

−

0

0

0

Rate of employees undergoing regular healthcheck-ups%

2027

100% rate of employees
undergoing regular healthcheck-ups

−

100.0

100.0

100.0

Rate of employees undergoing stress checks

%

2027

100% rate of employees
undergoing stress checks

−

94.3

98.6

100.0

Ratio of employees receiving specific healthguidance%2027

80% or more

Officers andemployees
subject to specifichealth guidanceover 40 years old

76.4

81.7

80.4

Training expenses*2

Thousandsof yen−−−37,442

51,03670,921

Training expenses per employee*2

Thousandsof yen

−

−

−

40

55

74

Training hours per employee

Hours

−

−

−

13.7

22.5

46.5

Employees relocated through Career Challenge
Program internal recruitment system*3

People

−

−

−

14

13

18

%

2027

Maintain and improve ratioof positive responses in
employee engagement
index

All employees(Excluding dispatchedemployees andindividuals seconded
from other companies)

Employee engagement index

−

−

63.0

Note: KPIs, targets, and numerical results contained in this chart are for Tokyo Century on a non-consolidated basis.
*1 Supplementary explanation regarding gender-based wage disparity
・There are no differences in the wage frameworks or systems between men and women.
・The Company sets different wage levels based on the career courses and qualifications of employees. There is a difference in the numbers of men and women in terms of the courses andqualifications, which creates a disparity in wage levels between genders.
*2 Figures for training expenses and training expenses per employee include venue rental expenses and transportation expenses.
*3 The Career Challenge Program internal recruitment system was introduced in fiscal 2020.

− 18 −

Shared Platforms

Creation of New Value through Diverse Partnerships
Exercise of Management Philosophy
Tokyo Century has continued to support the ambitions ofvarious companies and businesses while growing together
with these partners● Converted IHI Finance Support Corporation
into a consolidated subsidiary2009● Century Tokyo Leasing Corporation establishedthrough a merger between Century Leasing System,
Inc., and Tokyo Leasing Co., Ltd.

2010

2011

● Conducted merger between Tokyo Auto Leasing

Co., Ltd., and Nippon Car Solutions Co., Ltd., andconverted Nippon Car Solutions into a consolidated
subsidiary2012● Acquired shares in GA Telesis, LLC, and converted it into an
equity-method affiliate● Established solar power generation company Kyocera TCL
Solar LLC with Kyocera Corporation as a joint venture● Converted Nippon Rent-A-Car Service, Inc.,
into a consolidated subsidiary

2013

2014

of the Philippine Islands, a leading bank in thePhilippines, and converted it into an equity-method
affiliate before converting it into a consolidated
subsidiary in 2020

● Converted CSI Leasing, Inc., a leading U.S.-

based independent leasing company, into an
equity-method affiliate before converting it into
a wholly owned subsidiary in 2016

● Acquired shares in a leasing subsidiary of Bank2015

● Established Orico BusinessLeasing Co., Ltd., which
specializes in vendor
leasing, with Orient
Corporation

2016● Converted Aviation CapitalGroup LLC, a major U.S.-based
commercial aircraft lessor,
into an equity-method affiliate
before converting it into awholly owned subsidiary in
2019

2017

2019

leasing company AP Equipment
Financing, Inc., and converted it
into a wholly owned subsidiary● Acquired shares in ITOCHU

Construction Machinery andchanged its name to ITOCHU TC
Construction Machinery

equity-method affiliate● Acquired shares in Shinko

Real Estate Co., Ltd. (currently
TC Kobelco Real Estate Co.,
Ltd.), and converted it into a
consolidated subsidiary● Acquired shares in Amada● Acquired shares in U.S.-based

Century● Converted Bplats, Inc., into an
2018

Lease Co., Ltd., and converted
it into a consolidated subsidiary● Changed corporate name to Tokyo● Concluded a capital andbusiness alliance agreementwith Nippon Telegraph andTelephone Corporation (NTT)コーポレートシンボル

Aタイプ（英語版）

データは、アイソレーションの枠（透明）を設定しています。

2020● Established NTT TC Leasing
Co., Ltd., as a spin-off ofthe leasing and financing
operations of NTT FINANCECORPORATION
カラー● Acquired shares in NITTSU Lease & Finance Co.,
Ltd. (currently NX∙TC Lease & Finance Co., Ltd.),
and converted it into an equity-method affiliate

2021

モノクロ

− 19 −

Approach, Communication, and Other Activities Pertaining toSpecific Stakeholder Groups

Customers
andbusiness
partners

Shareholders,investors,
and financial
institutions

National
and othergovernment
agencies,
localcommunities,
and NPOs

Approach Pertaining to Specific Stakeholder Groups

Communication and Other Activities

The Tokyo Century Group believes that resolving socialand ethical issues through its business activities will help
it achieve sustainability and lead to further growth. We will
fulfill our responsibilities to customers in accordance with
the Group’s Management Policy, which stipulates that “wewill provide the best products and services around the world
to contribute to the success of our customers’ businesses
while pursuing all possibilities by collaborating withcustomers and uniting the overall strengths of the Group.” To
this end, we will further improve our management system toprovide the best possible products and services that satisfy
our customers.
With Tokyo Century and its partners both acting as
proponents behind the development of businesses, we
intend to advance a wide variety of businesses by spreading
beyond conventional leasing to enter new business areasthat will serve as growth drivers.
By integrating the respective strengths and expertiseof Tokyo Century and its partners, we will contribute to thecreation of an environmentally sound, sustainable economy
and society and strive to enhance our corporate value andachieve sustainable growth over the medium to long term.

● Strengthening of partnerships (promotion of co-creative
projects in various operating segments that address
partner needs)

Tokyo Centur y releases appropriate and unbiased
information in a timely manner to stakeholders such as
shareholders and investors and has established a system
to ensure the transparency of Company activities from a fairdisclosure perspective.
Tokyo Century advances its investor relations (IR)activities with a focus on generating a cycle of proactive
dialogue with shareholders and other investors andcommunicating the input and requests solicited thereby
to management and employees. The input gained during
the course of IR activities is used to improve information
disclosure and respond to management issues in order tobuild trust with shareholders and other investors and ensurethat capital markets accurately appraise the Company, which
in turn is anticipated to contribute to higher corporate value
over the medium to long term.

● Shareholders’ Meeting

Based on the recognition that thorough adherence tocompliance is essential to the continued existence of acompany, the Tokyo Century Group strives to establish
systems of management that will be trusted by society
at large and based on which all officers, managers, andemployees act in keeping with a just and high sense of
ethics.
As stated in “4. Legal Compliance” of our Basic Environmental
Policy, we comply with environmental laws and regulations,ordinances, and treaties, as well as international environmental
standards and stakeholder agreements to which the Tokyo
Century Group agrees.

● Prevention of corruption (non-association with antisocialorganizations, prevention of money laundering and ofprovision of funds for terrorism, appropriate meansof offering entertainment to public officials, politicalcontribution control, etc.)● Co-creation of value through open innovation (investment
in start-up companies with proprietary technologies indigital and mobility areas● Tracking of customer and business partner issues throughKnowledge Lab program for sharing knowledge related tofinancial service planning and other initiatives● I mprovement of management system to provide thebest possible products and services that satisfy ourcustomers (implementation of internal management andsales management for solicitation and sale of financial
products and response to complaints)● I mplementation of training and educational programs(e-learning and other programs for officers and employees
on responsible business activities and compliance)● A nnual securities reports and consolidated financial
results● Earnings calls (four times a year)● I R meetings with analysts and institutional investors(approx. 200 times a year)● Company briefings for private investors (approx. two times
a year)● Business strategy briefings● Overseas roadshows (approx. two times a year)● Information disclosure via integrated reports, sustainability
data books, and corporate website● Fund procurement through sustainability-linked loans● H uman rights initiatives (human rights due diligence,
information disclosure, grievance mechanisms, etc.)● A dherence with Basic Environmental Policy (legal
compliance, etc.)● Support provided by Kyocera TCL Solar, a joint venturewith Kyocera Corporation for COOL CHOICE global warming
prevention awareness poster contest organized by Ohmi
Environment Conservation Foundation (Shiga Prefecture
global warming prevention organization)● Endorsement of TCFD recommendations and participationin United Nations Global Compact and other initiatives● Contribution to reductions in greenhouse gas emissions
via participation in JCM Model Projects− 20 −

Approach Pertaining to Specific Stakeholder Groups

National
and othergovernment
agencies,
localcommunities,
and NPOs

The Tokyo Century Group contributes to the public goodand donates money to non-profit organizations and groups
as part of its social contribution activities. The Group also
actively strives to engage in communication with local
communities, including by conducting clean-up activities inthe vicinity of Group offices and holding industry seminars atuniversities.
Promoting tourism and contributing to regional economic
development are important themes of the growth strategiesof the Japanese government, and Tokyo Century has animportant role to play in the advancement of these strategies.
To help advance the development of Japan’s tourism industry
and regional economies, Tokyo Century is proactively
assessing opportunities to engage in projects for promoting
tourism and contributing to regional economic development,such as the hotel businesses we are developing together withpartner companies.

Communication and Other Activities● Clean-up and other community outreach activities● Tree planting and other biodiversity initiatives● Employment of people with disabilities through TC Work
Happiness Farm
● Free-of-charge provision of rental cars for disaster relief
purposes● Donations to environmental, welfare, education, disaster
relief, and other priority fields● Collaboration with certified NPOs (Japan Rescue Association,
Second Harvest Japan, etc.)● S upport for education of the next generation throughcareer design seminars and pro bono activities● Support for sports● Support for the arts
● Regional revitalization through the hotel business (ANA
InterContinental Beppu Resort & Spa, Hotel Indigo
Karuizawa)● Promotion of mobility-as-a-service (MaaS) tourism service
verification test in Nagasaki City through coordination
between ZENRIN and Nippon Rent-A-Car

Employees

Aiming to be an organization filled with vitality anddynamism, the Tokyo Century Group maintains a workplaceenvironment that enables each and every employee todemonstrate their abilities to the fullest.
Tokyo Century aspires to develop a workplace environment
in which every employee is respected and able to fully
exercise their talents, and we are actively working to heighten
employee engagement. Moreover, the input gained from
employee awareness surveys is used in discussions by theManagement Meeting and the Board of Directors for analyzing
issues and planning future initiatives. Responding to such
input is positioned as an important management priority.
By entrenching a cycle of appropriately incorporating
employee input into management, we will endeavor tobolster employee engagement by building trust with
employees and improving our workplace environment.

● Regular health check-ups and stress checks for employees● Employee awareness surveys● 360° evaluations● Internal reporting system● Career Challenge Program● TC Biz Challenge Project● TC-Mee+ employee exchange forum● Career consultation through Career Design Office● Training and skills development support for career building● Work–life balance systems for supporting childbirth,childcare, and nursing care
● Conclusion of Agreement on Overtime Work and Working
on Holidays (so-called “36 Agreement”) with labor union● Employee shareholding association● Family Day events and Working Mothers’ and Fathers’Community− 21 −

Medium-Term Management Plan 2027

Information on Medium-Term Management Plan 2027:
https://www.tokyocentury.co.jp/assets/pdf/ir/00_en.pdf

Focus Areas and Approaches for Business Strategies
Focus areas: Decarbonization, social infrastructure, and circular economy
Approach: Strengthen connections across operating segments without being bound by organizational boundaries

Major Growth Strategies of Five Operating Segments
Invest in growth areas and aim for earnings
growth of affiliated companies throughcollaboration with partners

Equipment
Leasing

Automobility

Reinforce earnings power, such as increasing
the value of the leasing business
Enhance integrated group management
Expand in growth markets and areas with high potential
for collaboration with close partners, such as logistics
facilities, storage batteries, and renewable energies
Pursuit of partnerships and alliance strategies
Further improve asset efficiency

GrowthStrategies

In addition to the recovery of ACG, expand investments ingrowth areas such as real estate and business investment,
and also promote asset turnoverSpecialty
Financing

Existing
Business
Area

Further deepen the auto business for corporations
by increasing the value of existing businesses
Take overwhelming market share in the auto businessfor individuals
Achieve dramatic increase in profit margin through further
improvement in the quality of car rental services and priceoptimization

NextGeneration
Area

Increase handling of EVs and strengthen the EV value chain, suchas charging services and battery reuse
Expand into new areas such as data business, advanced
maintenance, logistics, and parking services

International
Business

Earnings growth of ACG
Promote asset turnover

Aviation

Flexible investment and development in response to market changes
Establish a cycle of investment/payback for overseas projects

Investment
Collaboration
with AP

Promote collaboration with Advantage Partners (AP), etc.
Investment in growth areas, such as carve-outs by large
companies and renewable energies

Environmental
Infrastructure

Global expansion based on CSI and promote autoand niche businesses in North America and Asia
Pacific

Expand operational bases into new markets throughM&A and maximize profits
Promote managed services through collaboration
with partners< ACG builds a good portfolio to improve ROA >Promote the introduction of new technology aircraft andflexible aircraft sales to secure earnings and improve theportfolio risk profile
Build profitable assets striking a balance between risk andreturn diversified in terms of credit and areasRealestateAim for “Top Mobility Service Company” by deepening
existing areas and promoting next-generation
businesses

CSI

North
America
Asia-PacificStrengthen auto and niche businesses in North Americaand Asia PacificPromote data center business

Strengthen the profitability of existing businesses, expand new ones, and drive environment-related
businesses throughout the TC Group

Storage
Battery

Build and operate new storage battery power plants
Install storage batteries in existing solar power plants

Overseas
Business

Solar and wind power generation centering on North
America, Europe, and Australia
Consider flexible options on possession and sale

− 22 −

Human Resource and Organizational Strategies Underpinning Business Strategies

Task Forces for Supporting Business Strategies
GX Task Force Create carbon-neutral-related businesses in each operating segment and promote cross-organizational collaboration− 23 −

GX Task Force Development of a business base adaptable to the environmental changes that the Company, partner companies and customers will facein the future through effective use of digital technologies
 Launch of a DX Task Force to progress to achieve the target beyond the bounds of the operating segments− 24 −SUSTAINABILITY DATA BOOK 2023

Environment
Environmental Policies

Basic Environmental Policy
The Tokyo Century Group recognizes that addressing environmental issues is a key
management concern and will seek to contribute to the creation of an environmentally sound,sustainable economy and society and a decarbonized society based on the United Nations
Sustainable Development Goals (SDGs). To this end, the Tokyo Century Group will act withdue consideration for environmental issues, including prevention of environmental pollution,
reduction of greenhouse gas emissions, mitigation and adaptation to climate change impacts,
and conservation of biodiversity and ecosystems, in all areas of its operating activities.
1. Global Environmental Preservation through BusinessWe will strive to contribute to reducing environmental impacts, conserving forests, oceans, andwater resources through our operating activities by developing and providing environmentallysound products and services around the world. We also track the impact of our operating
activities on ecosystems and engage in activities that contribute to biodiversity conservation.

Policies
related to theenvironment

Basic Environmental
Policy2. Contribution to Creating an Environmentally Sound, Sustainable Economy and Society
From the standpoint of life cycle management, we will seek to create an environmentallysound, sustainable economy and society through our efforts for promoting waste reduction,
reuse and recycling, and renewable energy.
3. Promotion of Resource and Energy Conservation Activities
We will promote resource and energy conservation activities in recognition of theenvironmental impact caused by the consumption of resources and energy and the dischargeof wastes and other materials associated with our operating activities, including in our supply
chain.
4. Legal Compliance
We comply with environmental laws and regulations, ordinances and treaties, as well asinternational environmental standards and stakeholder agreements to which the Tokyo
Century Group agrees.
5. Efforts for Continuous Improvement
We will seek to prevent environmental pollution and engage in environmental activities
along with providing environmental education and ensuring its dissemination by setting
environmental objectives and goals. Furthermore, by constantly reviewing the results of these
activities, we will strive to continuously improve our environmental management system andraise awareness of environmental issues.
6. Information Disclosure
We will strive to disclose information on this policy and our environmental initiatives to ourvarious stakeholders and encourage their understanding and cooperation.

Chief executive

President & CEO, Representative Director

Oversightorganization

Environmental Management Committee

Climate changerelated oversightby the Board of
Directors

Tokyo Century takes steps to address climate change-related issues through management
reviews conducted via an environmental management system based on ISO 14001. These
reviews are used to evaluate environmental performance and provide guidance for future
directives. In addition, twice-annual meetings are convened for the Environmental Management
Committee, which is chaired by the president of the Risk Management Unit, who is also theenvironmental oversight representative.
The Environmental Management Committee reports to the Management Meeting on theenvironmental activities implemented in a given fiscal year and receives evaluations of these
activities as well as guidance for future directives.
The Company’s governance system is designed so that important matters, such as theestablishment, revision, or abolition of the Basic Environmental Policy, are resolved after beingbrought to the attention of the Board of Directors for discussion.

Management
system− 25 −

The Tokyo Century Group recognizes that it has a social responsibility to help addressenvironmental issues. Accordingly, it has acquired ISO 14001 certification, the international
standard for environmental management systems, for the following companies (certification
was received from BSI Group Japan K.K.).

Scope of ISO 14001 Certification

ISO 14001 certification has been acquired for the following
Tokyo Century Group entities.
■ Tokyo Century Corporation(head office, Okachimachi office, Akihabara UDX office)■ TRY Corporation■ TC Agency Corporation■ FLCS Co., Ltd. (head office)In addition, the following three consolidated subsidiaries have received certification on an
individual basis.
■ Nippon CarSolutions Co., Ltd. (head office)■ Amada Lease Co., Ltd.
■ Executive Personal Computers, Inc. (subsidiary of CSI Leasing, Inc., of the United States)

Acquisitionof ISO 14001
certification

Scope of Application of Environmental Management System

Tokyo Century Corporation; TRY Corporation; TC Agency Corporation; TC Business Service
Corporation;* TC Business Experts Corporation;* TC Property Solutions Corporation; FLCS Co.,
Ltd.; S.D.L. Co., Ltd.; ITEC Leasing Co., Ltd.; and IHI Finance Support Corporation* Effective April 1, 2023, TC Business Service Corporation and TC Business Experts Corporation were absorbed by the Company.

Environmental Management System
Board of Directors

Management
system(Sustainability Committee)

Sustainability Management
Division
Coordination

President(Management Meeting)(Internal environmental
management system audits)
Audit Unit

(Environmental manager)
President of the Risk
Management Unit

(Environmental Management
Committee)(Environmental Management
Office)Risk Management Division(Persons in charge of environment)
Head of each division and branch
Office(Eco leaders)
Responsible person of each divisionand branch office

In August 2023, Tokyo Century subsidiary TRY Corporation acquired certification under ISO
9001, the international standard for quality management systems.
For information on the basic quality management policy of
TRY Corporation, please refer to the following website (in Japanese only).
https://www.tokyocentury.co.jp/assets/pdf/company/try_quality.pdf

Quality Management System of TRY Corporation
Board of Directors

Acquisition of ISO
9001 certification

PresidentInternal Audit Team

Processing Center*

Head of Business Division(Quality Management
Representative)

Quality Management Committee(Quality Management Office)Administration Department** The ITAD Group of the Processing Center and the Digital Transformation Strategy Group of the Administration Department are notincluded within the scope of ISO 9001 certification.

− 26 −

Environmental
auditsManagement
systemEnvironmental
education

Long-term
quantitative
greenhousegas emissions
reduction targets(intensity targets)Internal environmental audits of organizations at companies applicable under the environmental
management system are performed to confirm that their operations are conducted inaccordance with the stipulations of the environmental management system. The fiscal 2022
audit found no nonconforming organizations.
Tokyo Century participates in the Japan Leasing Association’s plan for achieving a low-carbon
society and has set proprietary targets for contributing to the accomplishment of association’s
long-term targets for fiscal 2030. Figures for fiscal 2022 cover the period from April to October
2022 in reflection of the switch to renewable energy for our head office building undertaken in
November 2022.
Long-Term Targets

Per head office floor space electricity use
Fiscal 2030: 70.00 kWh/m2(23% reduction compared with fiscal 2009)

Item

Unit

Fiscal 2020

Fiscal 2021

Fiscal 2022

Per head office floor space electricity use

kWh/㎡

59.75

64.84

67.69

Annual CO2 emissions from per head office floor
space electricity use

t - CO 2 /㎡

0.029

0.030

0.017

• Environmental education is provided through e-learning programs for the purpose of raising environmental awareness at
Tokyo Century Corporation and Group companies.
• We have issued our in-house newsletter, eco news, three to four times a year since fiscal 2011, renaming it Sustainability
Communication in January 2020. The newsletter has been used to communicate on environmental issues andsustainability topics pertaining to management strategies. The redesigned sustainability newsletter is currently
distributed to Tokyo Century Corporation and to Group companies, being issued four times in fiscal 2022, in both
Japanese and English.
• In divisions engaged in operations closely related to the environment, such as those responsible for disposal of endof-lease properties and renewable energy business initiatives, environmental regulation tables are used to periodicallyconfirm the regulations and ordinances related to the activities of these divisions. In addition, division members
participate in internal and external lectures and training to gain deeper insight in this regard.
• Tokyo Century has been making ongoing contributions to environmental education for elementary and junior highschool students through donations to local environmental preservation organizations in the regions where it operates
solar power generation businesses. As a result of these efforts, the Company received a letter of appreciation from anenvironmental preservation organization in Shiga Prefecture.

Biodiversity-Related Guidelines
See Basic Environmental Policy on page 25

Woodland Banking Project
Tokyo Century is participating in a woodland banking project in partnership with Tsubaki Farm, an organization that
conducts verification tests of woodland preservation (woodland banking) activities in Shisui Town, Chiba Prefecture. These
woodland banking activities use a framework designed to offset the negative environmental impacts of development
and other economic activities with the positive effects of conservation activities based on market principles to create aJapanese version of biodiversity preservation.

Biodiversity
initiatives

For more information, please refer to the following press release (in Japanese only).
https://www.tokyocentury.co.jp/jp/newsroom/news/pdf/58105ee0d259efdd95ea649543643920.pdf

Coastal Forest Restoration Project Planting area: 103.05 ha; Aggregate number of trees planted: 370,198 (As of March 31, 2023)• Tokyo Century is involved in a project that supports the restoration of coastal forests damaged by the tsunamis that
followed the Great East Japan Earthquake through seedling cultivation and reforestation activities.
• We are supporting the Great East Japan Earthquake Reconstruction Support–Coastal Forest Restoration Project throughongoing donations to OISCA (The Organization for Industrial, Spiritual and Cultural Advancement-International).

Mangrove Tree Planting Scope: 5 countries; Planting area: 8,670.4 ha (As of March 31, 2023)• Tokyo Century is advancing mangrove tree planting projects in the Asia Pacific region to protect coastal environments andthe lifestyles of people in coastal areas by preventing erosion caused by high waves and the loss of coastal mangrove
trees.
• We also began supporting a mangrove tree planting project as a new donation-driven venture by OISCA in fiscal 2022.

− 27 −

Kodomo no Mori Plan Scope: 5,468 schools in 37 countries and regions (As of March 31, 2023)
Biodiversity
initiatives• The Kodomo no Mori Plan is a project that promotes greening and teaches children to love nature and value greenery byhaving them plant and take care of trees at their schools or in other locations in their communities.
• We make regular donations to OISCA to support the Kodomo no Mori Plan, which gives children the opportunity to plant
and take care of trees at their schools or in the surrounding areas.

PaperLabTokyo Century has installed the PaperLab A-8000, an office papermaking system developed by Seiko Epson Corporation.
This system uses the waste paper collected in recycling boxes at the Company’s offices to produce new paper.
Using this system, we aim to reduce our environmental impact by cutting down on waste paper, including shredded
waste paper, and by recycling used office paper.

Refurbishment Businesses
In our refurbishment businesses, we erase the data of end-of-lease computers, servers, and other IT equipment so thatthey can be resold rather than discarded, thereby contributing to the creation of an environmentally sound, sustainableeconomy and society.

FMV Leasing and ITAD Services

Sustainable
Resource UseTokyo Century engages in fair market value (FMV) leasing, a highly flexible form of leasing that offers customers options
such as returning an asset, purchasing an asset, or extending the lease term at the end of the original lease period basedon FMV derived from the assessed residual value of the asset in question.
Meanwhile, our IT asset disposition (ITAD) services can be used to dispose of IT equipment in a safe and appropriatemanner compliant with information management, environmental preservation, and other legislation.
Note: The above services are supplied by consolidated subsidiary CSI Leasing, Inc., and its wholly owned subsidiary EPC, Inc.

− 28 −

Environmental Performance

Scope

Unit

Fiscal 2020

Fiscal 2021

Fiscal 2022

Gr

t-CO2

3,613

10,963

1,082,758*1

Gr

t-CO2

7,964

9,177

14,784*1

Gr

t-CO2

ー

ー

15,368*1 *2

t-CO2

1,043,996

6,195,446

7,727,580

Total of Scope 1 and Scope 2 (location-based) and Scope 3

t-CO2

1,055,573

6,215,586

8,825,123

Total of Scope 1 and Scope 2 (market-based) and Scope 3

t-CO2

ー

ー

8,825,706*2

Scope 1 (direct emissions)
Scope 2 (location-based indirect emissions originatedfrom energy use)
Scope 2 (market-based indirect emissions originatedfrom energy use)
Scope 3 (emissions from supply chain, etc., not includedin Scope 1 or Scope 2)

Scope 3 Emissions by Category

Greenhouse gas
emissionsCategory 1 Purchased goods and services

TC

t-CO2

843,494

617,405

650,423

Category 2 Capital goods

TC

t-CO2

100

71

42

Category 3 Fuel- and energy-related activities(not included in Scope 1 or Scope 2)

t-CO2

1,739

3,820

97,728*3

Category 4 Upstream transportation and distribution

t-CO2

0

0

2,341*4

Category 5 Waste generated in operations

TC

t-CO2

1,247

593

309

Category 6 Business travel

TC

t-CO2

120

121

122

Category 7 Employee commuting

TC

t-CO2

221

222

225

Category 8 Upstream leased assets

TC

t-CO2

0

0

0

Category 9 Downstream transportation and distribution

TC

t-CO2

0

0

0

Category 10 Processing of sold products

TC

t-CO2

0

0

0

Category 11 Use of sold products

TC

t-CO2

5,452

19,10439,086

Category 12 End-of-life treatment of sold products

TC

t-CO2

148

575

808

t-CO2

181,292

5,544,166

6,923,346

Category 13 Downstream leased assets
Category 14 Franchises

TC

t-CO2

0

0

0

Category 15 Investments

TC

t-CO2

10,183

9,369

13,150 *5

Electricity use andrelated CO2 emissions
Environmental
contributions
through officeactivities
EMS

Other
environmental
performancedata

Paper use

Gasoline use, CO2
emissions, and fuelefficiency for businessvehicles and rent-a-car
fleet

Renewable energy
generation operations
Environmental
contributions
through businessactivities

CO2 emissions reductions
associated with solar power
generation business ofKyocera TCL Solar LLC

Refurbishment
operations (Annual
number of secondhand
computers sold)
EMS

Unit

Fiscal 2020

Fiscal 2021

Fiscal 2022

Environmental
targets

kWh

1,550,000

1,650,000

1,600,000

Use volume

kWh1,578,546

1,539,011

1,593,216

Emissions volume

t-CO2

770

723

546

Environmental
targets

Thousandsof sheets

13,50013,00010,000Use volume

Thousandsof sheets

9,262

8,278

9,457

Environmental
targets

L

72,00069,00065,000Use volumeL43,76845,36049,937

Emissions volume

t-CO2

102

105

116

Fuel consumption
volumeEnvironmental
targets

km/L

14.3

14.5

16.1

MWh

355,000

400,000

410,000

Annual generation
volumeMWh

388,084

447,619456,008

CO2 emissions
reductions

t-CO2

162,025

178,824

176,703

Environmental
targets

Units

230,000

260,000

209,000

Unit sales

Units

405,055

247,456

327,017− 29 −

Unit

Other
environmental
performance
data

Waste

Water resources

2,670

1,350

1,693

Valuable materials (material recycling volume)

t

985

526

1,127

Industrial waste emissions

t

1,685

824

566

22

18

17.7

16.43

12.87

11.9

Cases

0

0

0

Fiscal 2020

Fiscal 2021

Fiscal 2022

Water intake(only head office and Okachimachi Bldg.)

Number of environmental law violations

Item

EMS

Thousands
of m3

m3

TC

Specific Expenses

Unit

1. Costs within business area

Costs for transition to ecofriendly
vehicles and network equipment
upgradesMillions of
yen

33

147

107

2. Upstream and downstream
costs

Waste disposal expenses

Millions of
yen

98

50

27

3. Administrative costs

ISO 14001 certification
maintenance and related costs
Secretariat, environmental, andCSR expenses

Millions of
yen

28

35

41

159

231

175

Fiscal 2020

Fiscal 2021

Fiscal 2022

Billions of
yen

14.7

18.4

18.6

%

80.2

81.6

84.7

t-CO2

34,54735,45738,343

%

40.4

45.7

51.8

%

18.4

19.3

20.6

Millions of
yen

Total

Breakdown

Green revenueGreenpurchasing rate

Sales of solar power generation
businesses

Rate of green purchasing of
office supplies

Greenhouse gas
emissions through Projected aggregate greenhousegas emissions reductions when
JCM Modelchoosing JCM Model Projects
Projects

Aviationbusinessfuel-efficiency
initiatives
Introductionof eco-friendly
vehiclesFiscal 2022

t

Environmental preservation costs

Environmental
accounting

Fiscal 2021

Total waste emissions

Water intake (per unit of production)

Compliance

Fiscal 2020

Ratio of fuel-efficient aircraft
assetsSeven aircraft models with highfuel efficiency compared withconventional models

Rate of electrified vehicle use(EVs, FCEVs, PHEVs, HVs)

10 solar power generation
business companies
Total for Kyocera TCL Solar LLC
and nine other companies

Unit

Ratio of purchase of Tokyo
Century-recommenced items
Items compliant with Act on
Promotion of Procurement of EcoFriendly Goods and Services by theState and Other Entities

Projected aggregate greenhousegas emissions reductions

Ratio of fuel-efficient aircraft
assetsRatio of fuel-efficient aircraft to all
aircraftThree auto business companies
Nippon Car Solutions Co., Ltd.;
Nippon Rent-A-Car Service, Inc.;and Orico Auto Leasing Co., Ltd.)

Changes to the Scope of Data Collection
The following changes to the scope of data collection were implemented in fiscal 2022 (see pages 3 and 4 for more information on the scope of data collection).
*1. The scope of data collection for Scope 1 and Scope 2 emissions comprises eight domestic companies, including Shunan Power Corporation and TC Hotels & Resorts
Beppu Co., Ltd. (down three companies year on year due to mergers and reorganizations of subsidiaries), and 25 overseas companies, including 15 group companiesof CSI Leasing, Inc. (excluding those in Japan and the United States), and five group companies of EPC Inc. (excluding those in the United States).
*2. Figures for Scope 2 (market-based) greenhouse gas emissions are after deduction of 152.4 t-CO2 in emissions associated with purchase of non-fossil certificates.
*3. Shunan Power Corporation has been included in the scope of data collection following the start of commercial operation of its biomass–coal co-firing power plant.
*4. Ferry flying of unleased and repossessed aircraft of Aviation Capital Group LLC has been included in the scope of data collection.
*5. The Scope 1 and Scope 2 CO2 emissions of cross-shareholding counterparties disclosed by CDP or in materials provided by the respective counterparties areincluded in the scope of data collection.

− 30 −

Climate Change Response Strategy

Tokyo Century has identified climate change as one of the operational risks covered by its risk management system, and we
manage this risk as a non-financial risk. Climate change presents significant risks to Tokyo Century’s business while also
creating substantial business opportunities. Various initiatives are being advanced based on this perspective.
Tokyo Century announced its endorsement of the recommendations of the Task Force on Climate-related Financial
Disclosures (TCFD) in April 2021. In addition, based on a risk severity assessment related to climate change, we haveconducted scenario analyses in accordance with the TCFD recommendations for environment and energy businesses (solar
power generation, May 2021), the aviation business (aircraft leasing, April 2022), and the automobility business (corporate
and individual auto leasing, April 2023). These scenario analyses used multiple scenarios to identify climate change-relatedrisks and opportunities and to assess the potential qualitative and quantitative impacts on our business.
For more information on Tokyo Century’s response to climate change and endorsement of TCFD recommendations, please refer to the following
website.
https://www.tokyocentury.co.jp/en/sustainability/esg/environment/tcfd.html

Scenario Analysis of Environment and Energy Businesses (Solar Power Generation, excerpt)
Risk Severity Assessment

Climate-relatedrisks andopportunities

Definition of Countermeasures■ Scenario Analysis of the Solar Power Generation Business
https://www.tokyocentury.co.jp/assets/pdf/sustainability/sa_solarpower_e.pdf− 31 −

Scenario Analysis of Aviation Business (Aircraft Leasing, excerpt)
Risk Severity Assessment

Definition of Countermeasures

Climate-relatedrisks andopportunities S cenario Analysis of Aircraft Leasing Business
https://www.tokyocentury.co.jp/assets/pdf/sustainability/sa_aircraft_e.pdf

Scenario Analysis of the Corporate and Individual Auto Leasing Business (excerpt)
Risk Severity Assessment
Risks

Opportunities

National carbon emissions
targets and policies

Items

Further shifting to EVs may result in lower prices forused gasoline and diesel vehicles.

Regulations and subsidies could encourage
replacement of older vehicles with newer vehicles
and increase demand for new vehicle leases.

Changes in customer behavior

Increased environmental awareness amongcustomers may reduce demand for gasoline anddiesel vehicles.

Increased environmental awareness amongcustomers could strengthen demand for EV leasing.

Products and services

Widespread use of EVs, which have fewer parts
than gasoline and diesel vehicles, may reduce
maintenance revenues.

The shift to EVs could generate new earnings
opportunities, such as those related to recharging
services and businesses for second-life EV batteries.

Definition of Countermeasures
Issues

Shift to EVs

Sale of assets

Major ongoing initiatives

Countermeasures for future consideration

Promote the introduction of EVs to customers, suchas by providing EVs to the NTT Group, which has
declared its commitment to transition completely toEVs (participation in EV100 initiative)

Strengthen the value chain to launch new
EV-related services for corporate and individual
customers

Propose BCP measures to use EVs as emergency
power sources in the event of a natural disaster

Establish an appropriate maintenance system for
EVs

Accumulate know-how on EV leasing by startingto handle EV taxis, EV buses, and electric micromobility

Expand the use of preferential interest rates for
procuring EVs through the issuance of green bonds

Set residual values after considering fluctuations in
the price of used gasoline and diesel vehicles anddiversify prospective buyers

Strengthen monitoring of changes in the used vehicle
market for gasoline, diesel, and electric vehicles andset appropriate residual values S cenario Analysis of the Corporate and Individual Auto Leasing Business
https://www.tokyocentury.co.jp/assets/pdf/sustainability/sa_autoleasing_e.pdf− 32 −

Environmental
impact assessments

Tokyo Century’s Management Philosophy and Basic Environmental Policy state that it willcontribute to the creation of an environmentally sound, sustainable economy and society.
Contributing to the environment through our business activities is imperative to accomplishing
this goal. Accordingly, we began conducting environmental impact assessments in fiscal 2019using environmental impact assessment worksheets to evaluate and track the impact ofindividual projects on the environment.
It is important for the Company to take the environment into account in the investments it
conducts. For this purpose, we are expanding the scope of environmental impact assessments,
and in fiscal 2020 we started using the abovementioned environmental impact assessment
worksheets to evaluate the environmental policies of investment candidates and the potential
environmental impacts of their businesses.
Item

Unit

Fiscal 2020*

Fiscal 2021*

Fiscal 2022*

36

48

64

Number of environmental impact

assessment checks* Figures for fiscal 2020 only include projects in Japan. Trial overseas projects are included in the figure forfiscal 2021. The full-fledged operation of overseas projects was commenced in fiscal 2022.

Tokyo Century is conducting the following energy conservation initiatives on a Companywide
basis.

Reduction of Electricity Use

Reduction ofenvironmental
impacts

Employees are asked to turn off their computer monitors when they are away from their seatsand to turn off lights in unused meeting rooms and during lunch breaks. We also encourage
employees to dress cooler in the summer and warmer in the winter to cut back on airconditioning use. In addition, we are working to reduce overtime hours through increased
operational efficiency. These are just some of our efforts for reducing energy use.
Companywide
energy conservation
initiatives

Purchase of Energy from Renewable Sources
In January 2023, three buildings in the Akihabara area of Tokyo that house offices of theCompany and of Group companies adopted energy from renewable sources for 100% of theelectricity they use.
For more information, please refer to the following press release (in Japanese only).
https://ssl4.eir-parts.net/doc/8439/tdnet/2216908/00.pdf

Reduction of Gasoline Use
Reductions in gasoline use from driving for business purposes are being pursued by improving
the fuel efficiency of business-use vehicles through eco-friendly driving techniques, utilizing
trains and rental cars, and employing telematics systems installed in business-use vehicles.

Reduction of Paper Use
We are reducing paper use by employing paperless applications and other documents andelectronic applications and by holding paperless meetings through the utilization of thin-clientcomputers and tablets.

Tokyo government’s
global warming
response plansystemTokyo Century’s head office (FUJISOFT Building) qualifies as a specified tenant as definedby Tokyo ordinances. For this reason, we have submitted a specified tenant global warming
response plan to the Tokyo government.
The names of specified tenants with an overall ranking of A or above are disclosed
as excellent business operators. On the six-level ranking scale (C–S), Tokyo Century has
consistently received an AA ranking, indicating that we are a tenant implementing superiorenergy conservation initiatives and systems.
For more details, please refer to Tokyo’s list of disclosed tenants.

Tokyo Bureau of Environment
Evaluations and list of global warming response measures of specified tenants can be found via
the link below (in Japanese only).
https://www.kankyo.metro.tokyo.lg.jp/climate/large_scale/tenant/tenant_karte.html− 33 −

Environmental Market Opportunities

Energyconservation
subsidy services

Tokyo Century uses various subsidy programs to help customers introduce cuttingedge equipment that help to lower their environmental impacts. The resulting
reductions in lease payments effectively drive the spread of low-emissions
equipment, thereby helping preserve the environment while supporting small to
medium-sized companies in achieving carbon-free operations.

Major Subsidy Programs• ESG lease subsidization program for contributing to a carbon-free society• Cutting-edge energy-saving investment support subsidy• Advanced factory and workplace decarbonization support programs

Corporate
power purchaseagreements(in-house
generation
support services)

Sustainablefinancial
products

Financialservices
contributing
to socialsustainability

In June 2022, Kyocera Corporation, KYOCERA Communication Systems Co.,
Ltd., and Tokyo Century launched a donation-oriented corporate power purchaseagreement (in-house generation support) service as a new initiative for contributing
to the accomplishment of the SDGs.
This service will use a framework in which the initial investment andmaintenance costs and work will be handled by KYOCERA Communication
Systems and Tokyo Century in order to supply customers with options for corporate
power purchase agreements (in-house generation support) that allow them tointroduce solar power generation systems with no upfront investment. Moreover,the service supplements conventional corporate power purchase agreement
contracts with donations to public welfare organizations and NPOs that contributeto accomplishment of the SDGs. Customers that introduce solar power generation
systems through this service are able to designate the organization of their choice
to receive a donation of a portion of the revenues of Tokyo Century.
For more information, please refer to the following press release (in Japanese only).
https://ssl4.eir-parts.net/doc/8439/tdnet/2150317/00.pdf

Leases with
attached carbon
credits

Tokyo Century has begun offering leases with attached carbon credits to support
the decarbonization and corporate value improvement initiatives of customers.
Leases with attached carbon credits entail providing carbon credit offset services
through programs such as the J-Credit Scheme together with the auto and otherleases offered by the Company and Group companies. These services make itpossible for customers to offset the CO2 emissions from the production equipment,
IT equipment, vehicles, and other items they lease.
For more information, please refer to the following press release (in Japanese only).
https://ssl4.eir-parts.net/doc/8439/tdnet/2240405/00.pdf

Forestry FundTokyo Century has invested and participated in Eastwood Climate Smart Forestry
Fund I, a forestry fund organized and operated by Eastwood Forests, LLC, a U.S.based forest asset management company under the control of Sumitomo ForestryCo., Ltd. As a major investor in this fund, Tokyo Century acts as a member of acommittee that makes decisions regarding important matters such as the purchaseand sale of forest assets. Through our involvement in the management of this fund,
we expect to acquire insight pertaining to forest management that can be used forthe development of new forestry businesses.
For more information, please refer to the following press release (in Japanese only).
https://ssl4.eir-parts.net/doc/8439/tdnet/2310035/00.pdf− 34 −

Since 2018, Tokyo Century has been promoting fund procurement through green
bonds, sustainability-linked loans, positive impact finance, and the DBJ Employees’
Health Management Rated Loan Program. A total of ¥453.8 billion has beenprocured through these activities as of March 31, 2023.
Fund procurement vehicle

Amount procured(billions of yen)

Instances

Green bonds

1

10.0

Sustainability-linked loans

7

233.7

Positive impact finance

3

200.1

DBJ Employees’ Health Management
Rated Loan Program

1

10.0

Total

12

453.8

Green Bonds

Green bonds are issued by companies for the purpose of procuring funds forgreen projects around the world, and conditions are defined stating that thefunds procured through these bonds can only be used for green projects. Anothercharacteristic of green bonds is the effective traceability management of the
procured funds. Tokyo Century has issued green bonds, and the procured funds
were allocated to the leasing of solar power generation equipment by consolidated
subsidiary Kyocera TCL Solar LLC.

Sustainability-Linked Loans

Financial
products
contributing
to socialsustainability

Fund
procurement
contributing
to socialsustainability

Green bonds,
sustainabilitylinked loans,positive impact
finance, andDBJ Employees’
HealthManagement
Rated Loan
Program

Sustainability-linked loans entail setting sustainability performance targets
linked to sustainability goals. Borrowing conditions are then determined basedon performance with regard to the sustainability performance targets in order toencourage economic activities and growth founded on environmental and social
sustainability.

Positive Impact FinancePositive impact finance is an approach toward financing based on the Principles for
Positive Impact Finance established by the United Nations Environment Programme
Finance Initiative as well as on the related guidelines. Under a positive impact
finance approach, the positive and negative environmental, social, and economic
impacts of projects are comprehensively analyzed and assessed to ensure thatfunds are used to provide ongoing support to activities that generate positive
impacts. Tokyo Century practices positive impact finance by using the degree ofcontribution to the accomplishment of the United Nations Sustainable Development
Goals as an evaluation indicator and conducting monitoring based on disclosed
information.

DBJ Employees’ Health Management Rated Loan Program

The DBJ Employees’ Health Management Rated Loan Program is the world’s first
financing menu to incorporate health management ratings. Using a proprietary
screening system created by Development Bank of Japan Inc., this program rates
and selects companies that exhibit excellence in caring for employee health.

Third-Party Assessment Concerning ComplianceTokyo Century receives third-party opinions regarding the compliance of its green
bonds, sustainability-linked loans, and positive impact finance initiatives with therespective principles and guidelines as well as regarding the rationality of theindicators it has defined.
For sustainability-linked loans, for example, the following sustainability
performance targets were chosen based on Tokyo Century’s materiality key issuesof “Contribution to decarbonized society” and “Enhancement of work environment,
leading to strengthening of human resources.”• Annual power generation volume and CO2 emissions reductions associated withsolar power generation business of Kyocera TCL Solar LLC• Accomplishment of targets for aggregate greenhouse gas emissions reductions
when choosing Joint Crediting Mechanism (JCM) Model Projects• Maintenance of status as DX-certified operator under the DX Certification systemorganized by the Ministry of Economy, Trade and Industry• Annual paid leave acquisition rate of 70% or more
• Rate of childcare acquisition by male employees of 100%
For more information, please refer to the following press release (in Japanese only).
https://www.tokyocentury.co.jp/jp/ir/− 35 −

Sustainablefinancial
products

Projects forrealizing adecarbonizedsociety

JCM system*J oint Crediting
Mechanism

The Joint Crediting Mechanism (JCM) system facilitates the diffusion of Japan’s
superior decarbonization technologies to partner countries with support in theform of subsidies for part of the installation costs toward contributing to theestablishment of sustainable social infrastructure and in the form of reduced
greenhouse gas emissions in these partner countries. At the same time, the systemallows for the crediting of some of the reduction in greenhouse gases under Japan’semissions.
Over the period from fiscal 2017 to fiscal 2022, Tokyo Century has engaged in
12 projects in four countries (Indonesia, the Philippines, Thailand, and Myanmar)that have been selected for the JCM system. In fiscal 2022, we took part in two
such projects, one pertaining to a 1.6 MW solar power generation system for use
by plastic container and cosmetics manufacturers in Thailand and another related
to an 0.8 MW solar power generation system for aluminum product, packaging
material, and automotive parts manufacturers in the Philippines.
The two of the projects undertaken in fiscal 2022 were recognized under the
new JCM Eco Lease Scheme, which Tokyo Century was involved in designing.
For more information, please refer to the following website.

https://www.tokyocentury.co.jp/en/sustainability/materiality/decarbonized-society.html
TargetProjected aggregate
greenhouse gas emissions
reductions when choosing
JCM Model Projects

Environmentrelated
awards

Receipt of
special award
in Chiyoda
Ward Global
Warming
Awareness
Program

Unit

2021

2022

2023

2024

2025

t-CO2

39,00045,00049,00053,00056,000In recognition of its efforts to contribute to energy and resource conservation, environmental education,and communities through its business, Tokyo Century was presented with a special award in the fiscal 2022
Chiyoda Ward Global Warming Awareness Program. This is our second time being recognized under thisprogram as an award of excellence was received in the 2016 program.
The Chiyoda Ward Global Warming Awareness Program is designed to encourage and recognize
excellence in the efforts of business operators located in Chiyoda Ward to address climate change. In thisprogram, awards are presented for superior examples of environmental, educational, community outreach,and other climate change response initiatives and plans at applicable business sites.
Our receipt of this honor is in part a reflection of the high evaluation of our efforts to respond to climatechange. These efforts include contributing to the popularization and spread of clean energy through thedevelopment of solar power generation businesses together with partners and through the adoptionof corporate power purchase agreements that entail the supply of renewable energy to customers.
Other praised efforts were our environmental education and awareness-raising activities, which include
coordination with organizations to which we donate to arrange global warming prevention seminars as well
as solar car workshops for elementary school students at the Yabasekihanto megasolar power plant owned
by a Group company in Shiga Prefecture.

− 36 −SUSTAINABILITY DATA BOOK 2023

SocialHuman Rights

Position on
Human Rights

The Tokyo Century Group’s position on human rights is expressed in its Human Rights Policy as well as its Corporate
Code of Conduct (4. Respect for Human Rights) and Our Action Guidelines (3. We will respect human rights andhuman dignity and create a rewarding working environment.). We have declared our commitment to promoting
respect for human rights in our business activities and expect our customers, suppliers, and other stakeholders to
do so as well.
In our Credit Policy, which defines our basic approach to assessing transactions, we strive to uphold the Public
Good Principles and examine whether or not providing credit in a specific case contributes to resolving social
issues, such as by promoting respect for human rights, as a condition for doing business, and we requireconfirmation in this regard for each transaction.

Tokyo Century Group Human Rights Policy

We are mindful of corporate social responsibility, offer high expertise and a wide range of unique financial services
by leveraging our flexible business domain, and have set out in our management philosophy that we will contributeto the creation of an environmentally sound, sustainable economy and society that enables economic development
through the effective use of resources.
We have formulated this Human Rights Policy in accordance with our management philosophy and promoterespect for human rights throughout our business activities. Recognizing respect for human rights as a key issue,
we will cultivate a corporate culture that allows diverse human resources to fully demonstrate their skills andindividual characteristics to become a company where all officers and employees can hone their expertise andexperience growth as well as a sense of pride.
1. Scope
This Human Rights Policy applies to all officers and employees of the Tokyo Century Group. We expect all of our
stakeholders, including customers and suppliers of Group companies, to respect human rights.
2. Affirmed international standards
We endorse and have signed the United Nations Global Compact. We also refer to the International Bill of
Human Rights (Universal Declaration of Human Rights and International Covenants on Human Rights), the UN
Guiding Principles on Business and Human Rights, and the ILO Declaration on Fundamental Principles andRights at Work* in implementing initiatives for respecting human rights.
* Freedom of association and the right to collective bargaining, elimination of all forms of forced or compulsory labor, the effective abolition of childlabor, elimination of discrimination in respect of employment and occupation, and equal remuneration for work of equal value

Policies

3. Legal compliance
We comply with the relevant laws and regulations in each country or region where we operate. Where there isa conflict between internationally recognized standards and regional laws or regulations, we will find a way torespect international standards.
4. Where the policy stands
This Human Rights Policy was established after deliberation by the Management Meeting followed by approvalby the Board of Directors.
5. Human rights of all officers and employees
We respect the human rights of all officers and employees and strive to create a vibrant, rewarding working
environment where everyone’s human rights and human dignity is respected. Furthermore, we promote diversity
and inclusion in accordance with the separately established Basic Diversity Policy and foster a corporate culturethat enables diverse talent to thrive in an environment free from discrimination based on race, religion, gender,
age, sexual orientation, disability, and nationality.
6. Human rights due diligence
We recognize that our businesses and services have the potential to cause or contribute to adverse impacts
on human rights in any domain, and we conduct appropriate due diligence to prevent or mitigate such impacts
associated with our business activities.
7. Remedy
If we find that our business has caused or contributed to adverse impacts on human rights, we will strive toprovide a remedy to those affected.

− 37 −

8. Dialogues with stakeholders
We will conduct dialogues with stakeholders on our human rights initiatives.

Policies

9. Communication and education
We engage in communication and education to ensure that all officers and employees understand theimportance of respecting human rights and that the Human Rights Policy is incorporated in all aspects of ourbusiness activities. Additionally, we will conduct compliance-related training to confirm that we will not tolerate
any discrimination or harassment and that our officers and employees will fully comply with related laws.
10. Information disclosure
We strive to ensure that shareholders understand our initiatives based on the Human Rights Policy by disclosing
information on our website and other media.

The following provisions related to respect for human rights can be found in Tokyo Century’s Corporate Code of
Conduct and Our Action Guidelines.

Corporate Code of
Conduct and Our
Action Guidelines(human rights)

Corporate Code of Conduct

4. Respect for Human Rights
The Tokyo Century Group respects the human rights of all people and promotes diversity to nurture a corporate
culture that encourages personnel with diverse characteristics to thrive.

Our Action Guidelines

3. We will respect human rights and human dignity and create a rewarding working environment.
We will respect our mutual human rights and human dignity and strive to create a vibrant, rewarding working
environment where discrimination and harassment have no place.

Signing of the United
Nations Global
Compact

Tokyo Century is a signatory to the United Nations Global Compact and endorses the compact’s Ten Principles* inthe four areas of human rights, labour, environment, and anti-corruption. Through ongoing efforts to live up to theseprinciples, we aim to contribute to the creation of an environmentally sound, sustainable economy and society.
* The Ten Principles of the United Nations Global Compact are based on the Universal Declaration of Human Rights, the ILO Declaration on
Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development, and the United Nations Convention against
Corruption.

All officers and employees submit a Compliance Confirmation Form each year, pledging their commitment to the
Corporate Code of Conduct and Our Action Guidelines, which include our human rights policies. In addition, theCompliance Handbook, which has been published in Japanese, English, and Chinese, can be read at any time by
all domestic and overseas officers and employees on the Company intranet. We also conduct the following training
and educational activities to foster awareness of respect for human rights.

Human rights
training
and educational
activities

Management of
Human Rights Risks

TargetMajor Themes

All officers and employees■ Human rights risks in business activities, business and human rights, and humanrights initiatives■ Prohibition of harassment (sexual harassment; abuses of power; harassment
for pregnancy, childbirth, childcare leave, family care leave, etc.; harassment
associated with teleworking)Members of divisions and branch offices(individual workplaces)

Prohibition of harassment, related laws and regulations, prevention guidelines, basic
stance on prevention of occurrence, etc.

Staff responsible for human rights at
Group companies

Basic knowledge of human rights

Tokyo Century manages human rights risks as part of comprehensive risk management through a system forunderstanding and evaluating risks associated with the Group as a whole, including human rights risks, andfor responding appropriately from both a qualitative and quantitative perspective as needed. The system isimplemented by the Comprehensive Risk Management Committee, which periodically reports on the status of its
activities to the Management Meeting and to the Board of Directors.
We monitor human rights risks as a facet of this system by classifying them as “human rights and workplaceenvironment risks” under “operational risks” and verify the appropriateness of our response thereto.

− 38 −

1. Officers and Employees of Group Companies

System for addressing
human rights
violations (grievancemechanism)

As a means of addressing actual compliance violations, including harassment and human rights violations, orconcerns over possible compliance violations, the Tokyo Century Group operates an internal reporting system
available to all officers and employees at Group companies in Japan and overseas (directors, executive officers,
employees, contract employees, temporary employees, seconded employees, part-time employees, and others), as
well as to former employees up to a year after their resignation.
Moreover, we make the utmost effort to ensure the anonymity of whistleblowers and maintain the confidentialityof their reports, and we will take remedial measures for victims in cases where human rights violations are foundas a result of investigations into the cases reported.
We conduct an annual compliance survey of all officers and employees, which features questions regarding
compliance concerns including about human rights violations, and conduct hearings depending on the content of
the responses to prevent problems from occurring.

2. Customers and External Stakeholders

As part of our efforts to promote respect for human rights in our business activities, we have established contact
points for human rights consultation for customers and other external stakeholders.
Regardless of whether you do business with the Group or not, if you have noticed any human rights violations
by Group companies or their officers or employees, please notify the following contact points. We will look into thematter and reply to you with the results of our investigation.
Contact Point for Human Rights Consultation
Compliance Office in the Risk Management Division of Tokyo Century
For consultations, please refer to the following website.
https://www.tokyocentury.co.jp/en/contact/humanrights/

We implement PDCA (plan–do–check–act) cycles to effectively analyze, identify, and assess the negative humanrights impacts associated with the Tokyo Century Group’s business activities and take corrective action to preventor mitigate such impacts.
In fiscal 2022, Tokyo Century and all of its consolidated subsidiaries in Japan carried out human rights due
diligence activities.

Fiscal 2022 Due Diligence Process

With third-party assistance, we began by generating a long list of human rights risks, and after considering thenature of our business and our stakeholders, we identified key risks in this area.
To gain an understanding of the current status of these key risks, we conducted a survey and interviews at
Tokyo Century and its consolidated subsidiaries in Japan while also analyzing the content of consultations andreported cases as well as the results of employee awareness and compliance surveys.

Identified Issues
Human rights
due diligenceNo material risks were revealed through this process of risk identification, which confirmed that Tokyo Century
has properly established and maintained its human rights policies, its internal reporting system as a grievancemechanism, its systems for reporting not only compliance violations during contingencies but also incidents andaccidents, and its e-learning and other educational systems.
Conversely, we did acknowledge the need for improvement in our efforts to maintain an understanding ofconditions pertaining to awareness of issues related to harassment, occupational health and safety, working hours,
and other human rights risks at Group companies under normal circumstances as a parent company. There isalso room for improvement in how we disseminate our policies across the Group and the regularity with which wemonitor Group companies.

Future Actions

In fiscal 2023, we will conduct human rights due diligence activities at overseas consolidated subsidiaries andbegin doing likewise at investee companies on a trial basis with the goal of developing a mechanism for evaluating
the human rights risks associated with our business partners.
Tokyo Century will continue its efforts to ensure respect for human rights and to realize sustainable businesses byverifying human rights issues as they arise in the course of corporate activities and by consistently implementing
PDCA cycles to prevent or mitigate any negative impacts to human rights, with the guidance of expert consulting
organizations.

− 39 −

Diversity

Basic Diversity Policy

The Tokyo Century Group will work alongside customers in pursuit of their growth as a highly specialized and uniquefinancial services company and further expand its business domains and develop its global business. We will
promote diversity to enable employees with diverse capabilities and personalities to demonstrate flexible thinking
and dynamic action to better serve the varied needs of our customers by consistently providing services with highadded value.

Policies

1. Nurturing Our Corporate Culture
Each employee will understand the importance of diversity and nurture a corporate culture that encourages
personnel with diverse characteristics to thrive.
2. Promoting the Active Participation of Diverse Human Resources
We will promote the hiring, development, and appointment of human resources from diverse backgrounds,
regardless of race, religion, gender, age, sexual orientation, disability, or nationality.
3. Supporting Career and Ability Development
We will support the career and ability development of each employee to encourage each individual to fully
demonstrate their ability and individuality.
4. Enhance Balance Between Work and Private LifeWe will enhance support for balancing work and private life so that each employee can work flexibly as
appropriate to their life circumstances.

Promotion system

The Diversity Promotion Office has been established within the Personnel Division to plan and promote Companywide
diversity initiatives.

Diversity training is conducted to foster greater understanding of diversity among all officers and employees. Topics
related to diversity are incorporated into basic onboarding training for new-graduate and mid-career hires, anddiversity-related e-learning programs are administered to all officers and employees. In addition, diversity seminars
are arranged at which external instructors are invited to hold lectures and lead discussions.
TargetTopicsAll officers and employees

Basic diversity knowledge, fostering of understanding regarding diversity
Diversity promotion and management strategies
Tokyo Century’s Basic Diversity Policy
Flexible workstyles
Balancing of work and long-term care for family members and Tokyo Century’s
support systems
Understanding of the LGBTQ+ community

Female employees

Fostering of understanding regarding diversity
Women’s career development
Understanding of importance of viewing issues from a broader perspective
Development of action plans for addressing issues

Employees with up to nine years ofservice (rank-based training)

Workstyle reforms (high-productivity workstyles)

Non-Japanese staff

Fostering of mutual understanding and enhancement of communication

Diversity training

Support for the
LGBTQ+ community

The Tokyo Century Group distributes its Compliance Handbook to all officers and employees. This handbook
clearly indicates our stance against all forms of harassment, including sexual harassment, abuse of power, andthe negative treatment of women in relation to pregnancy or child-rearing. It also describes our prohibition of
discrimination of members of the LGBTQ+ community. Factual awareness in this regard is promoted throughconcrete examples, and training is conducted for all officers and employees to foster an accurate understanding of
the LGBTQ+ community.

Promotion of active
participation of
globalhuman resourcesTokyo Century has expanded its overseas network to more than 30 countries and regions around the world throughan alliance strategy in collaboration with prime local partners overseas. As developing global human resources
is essential for its continued growth, Tokyo Century continues to proactively hire non-Japanese employees withthe aim of developing and appointing diverse human resources who thrive around the globe. In addition, Tokyo
Century is working to develop human resources who can play an active role globally in the future by establishingan international course for new graduates and actively promoting an overseas trainee system and overseas
assignment for junior employees.

− 40 −

Tokyo Century seeks talented individuals from an extensive array of backgrounds and actively employs people withdisabilities in order to provide a workplace where highly motivated people can flourish. The Company also meetsthe requirements for the ratio of employees with disabilities, as established in the Act to Facilitate the Employmentof Persons with Disabilities (non-consolidated ratio of employees with disabilities of 3.40% as of June 1, 2023).

Employmentof people withdisabilities

As an effort to further promote the employment of people with disabilities, in April 2019 Tokyo Century hired six
staff members (people with mental disabilities) and opened the TC Work Happiness Farm in Funabashi City, Chiba
Prefecture, with two teams. In conjunction with the expansion of this plantation, Tokyo Century hired an additional
three people with disabilities in February 2021, and this plantation is currently operated by five teams from theCompany (as of June 2023).
The TC Work Happiness Farm provides a secure and fulfilling working environment for people with disabilities on along-term basis. Specifically, the plantation grows vegetables in a farm house designed under the motto of safety
and cleanliness and donates the harvested vegetables to the Second Harvest Japan (2HJ) as part of our social
contribution activities.
Established in March 2002, 2HJ was Japan’s first food bank. A food bank is a charitable organization that
distributes food to those who are going hungry. In the case of 2HJ, this organization redistributes a variety offood donated from food manufacturers, wholesalers, farmers, and individuals that would normally be disposedof, despite still being edible, to welfare agencies, orphanages, and women’s shelters; people with disabilities;
impoverished individuals; and others in need. Amid the COVID-19 pandemic, 2HJ supplied food to householdswith children who were suffering from a lack of school lunches resulting from school closures and to impoverishedindividuals who had lost their jobs because of the pandemic.

Based on the Act on the Promotion of Female Participation and Career Advancement in the Workplace, Tokyo
Century empowers its female employees and has drawn up an action plan designed to enable each and every
employee to work flexibly and in a diverse number of ways.

Action Plan for the Promotion of Women’s Active Participation*
Plan Period

Quantitative Targets

April 1, 2023–March 31, 2028

● Maintain a ratio of women among new hires of at least 40%● Increase the ratio of women in management positions toat least 30% by 2030
● Maintain a ratio of childcare leave acquisition by menof 100%● Maintain a ratio of annual paid leave acquisition ofat least 70%

Empowerment offemale employees* This plan has been disclosed through the Ministry of Health, Labour and Welfare’s database of companies actively empowering
female employees (in Japanese only).
http://positive-ryouritsu.mhlw.go.jp/positivedb/detail?id=985

Tokyo Century established its Action Plan on the Promotion of Women to Officer and Management Positionsin October 2014 in order to steadily increase its number of female officers and managers through the active
employment, training, and promotion of highly motivated and talented women.

Action Plan on the Promotion of Women to Officer and Management Positions*
Promotionof women to
management andofficer positions

Targets● Maintain a ratio of women among new hires of at least 40%● Increase the ratio of women in management positions to at least 30% by 2030

Furthermore, in order to ensure that all employees can work comfortably through every stage of life, we arecontinuously striving to reform our workplace culture, support career and ability development, and enhance andpromote the use of systems that aid in balancing work and private life.
(Two female directors and 57 female managers, making for a ratio of women in management positions of 11.8%,
as of March 31, 2023)* The Action Plan on the Promotion of Women to Officer and Management Positions is also disclosed on the website for
Keidanren (Japan Business Federation) (in Japanese only).
http://www.keidanren.or.jp/policy/woman/ap10425.html− 41 −

Human Resource Utilization

Approach toward Human Resource Development
Human resource
development
approach

Tokyo Century is committed to fostering human resources who can refine their fundamental skills for interactingwith society while also growing and transforming to bring about change.
1. Propensity for self-transformation: Exceptional ability to evolve and transform into the type of person one aspires to be
2. C reativity: An excellent capacity to overcome one’s past limitations to create new value
3. A
 mbition: A force propelling one forward based on a robust sense of curiosity and drive

Approach toward Workplace Development
Workplacedevelopment
approach

Support for
CareerTokyo Century endeavors to develop a workplace environment that ensures highly capable organizations whileallowing employees to work based on unrestrained ideas.
1. Development of a workplace environment in which diverse human resources can feel energized, motivated, andoptimistic in their work
2. Provision of opportunities for education and reskilling based on changes in social trends, employee life stages,
and the operating environment
3. Cultivation of an atmosphere conducive to smooth communication among employees
Tokyo Century believes that personnel are the real assets and driving force for sustainable growth in a company. In
order to encourage each and every employee to demonstrate their abilities and individuality, we support voluntary
career and ability development and conduct various training programs.

Types of Training

Training for junior employees by year of employment, management training, career design training, global humanresource cultivation (external training, overseas trainee dispatch), skills development support, etc.

PromotionsystemTo support employees in developing their careers throughout their professional lives, Tokyo Century has established
the Career Design Office within the Personnel Division to help employees be the principal proponent in planning,
designing, and developing their careers. In addition, Tokyo Century provides helpdesks for employees of specificage groups that can be used for training, interviews, or voluntary training as part of its efforts to support employee
career development.

Skills development
supportTokyo Century aids employee learning through a bonus system for employees who have completed distancelearning courses and through a subsidy system for employees who have obtained qualifications relevant to theirwork.

360° evaluations

We implement 360° evaluations as part of our efforts to improve employee engagement, which is imperative
to reinforcing our management foundation, and to develop section managers who underpin organizational
management with a focus on smooth workplace relationships. The results of these evaluations are communicatedto the individuals in question and to their supervisors.

Career Challenge
Program

The Career Challenge Program is an internal recruitment system designed to provide employees with opportunities
for charting their own career course.

TC Biz Challenge
Project

The TC Biz Challenge Project is a new business proposal initiative. In the first iteration of this project, many
proposals were received, from among which a proposal for an integrated aquaculture–agriculture cultivation facility
was selected for advancement to the verification testing phase. It was ultimately decided that this proposal would
not be developed into a business, but we remain committed to tackling new challenges going forward.

Employeeawareness surveys

Tokyo Century aims to create an environment in which individuals can fully demonstrate their talents based on
mutual respect. To facilitate the creation of such an environment, we administer employee awareness surveys.
The results of these surveys are analyzed to identify issues and shape future initiatives, and this information isincorporated into officer training and discussed on an ongoing basis by the Management Meeting and the Boardof Directors so that issues can be addressed as top management priorities. At the same time, Tokyo Century
is developing workplace environments that are conducive to the enhancement of our human resource-related
capabilities in pursuit of ongoing improvements in employee engagement, and regular reports are issued to theBoard of Directors with regard to the progress of these activities. Medium-Term Management Plan 2027, which waslaunched in fiscal 2023, puts forth the non-financial target regarding the employee engagement index* of “maintainand improve ratio of positive responses.”* Based on the employee awareness survey conducted at Tokyo Century in 2022

− 42 −

Based on the results of its first employee awareness survey, Tokyo Century has introduced the Career Challenge
Program*1 and the TC Biz Challenge Project*2 to further improve employee engagement. The results of the second
employee awareness survey will also be analyzed to facilitate effective measures going forward. By entrenchinga cycle of appropriately incorporating employee input into management, we will endeavor to bolster employee
engagement by building trust with employees and improving our workplace environment.

Improvementof Employee
Engagement

Tokyo Century promotes work–life balance so that all employees can work flexibly to suit their life circumstances.

Major Work–Life Balance Support Systems
SystemTargetChildbirth andchildcare

Work–life balance
supportNursing

Excessive overtime
prevention andwork–life balance
support

PeriodPre-childbirth leave

Six weeks prior to childbirth

Post-childbirth leave

Eight weeks after childbirthChildbirth leave for fathers

Four weeks during first eight weeks after childbirthChildcare leave

Until child reaches the age of two years and six months

Special leave to visit a hospital, suchas for physical examinations

Until one year after pregnancy and childbirth (only days required)

Special leave for childbirth by a spouse

One month prior to childbirth until two weeks after childbirth (five days in total)

Nursing leave

Until child starts elementary school (five days per year per child; leave should betaken per day, half a day, or hour)

Exemption from overtime

Until child reaches the third year of elementary school

Bringing forward of work start/end
time

Until child reaches the third year of elementary school (up to two hours)

Pushing back of work start/end time

Until child reaches the third year of elementary school (up to two hours)

Shortened working hours

Until child reaches the third year of elementary school (up to 75-minute reduction)

Family care leave

Up to one year in total (the number of applications is not limited)

Nursing leave

Up to five days per family member who is under care; leave should be taken perday, half a day, or hour

Exemption from overtime

Until the care for the family member in question ends

Bringing forward of work start/end
time

Three years from the start date(up to two hours, but the number of applications is not limited)Pushing back of work start/end timeThree years from the start date(up to two hours, but the number of applications is not limited)

Shortened working hours

Three years from the start date(up to two hours, but the number of applications is not limited)Tokyo Century promotes work streamlining and strives to improve work–life balance through such means as
ensuring sufficient time for self-development, family, and friends by reducing overtime hours. Particularly during
summer (July–August), a time when the government urges electricity conservation, Tokyo Century encourages
employees to leave the office on time and to dress cooler, in order to cut back on air-conditioner use.
In addition, based on the Labor Standards Act, Tokyo Century has concluded an Agreement on Overtime Workand Working on Holidays (so called “36 Agreement”) with its labor union. In relation to other working conditions,Tokyo Century complies with the Labor Standards Act. Tokyo Century fully complied with the act throughout fiscal
2022, and no penalties were imposed.
Complying with the laws of each country of operation, the Tokyo Century Group pays a living wage that exceeds
the legally mandated minimum wage and does not practice unreasonable wage reduction.

− 43 −

Health and Productivity Management

Basic Policy on Health and Productivity Management

Tokyo Century will work alongside customers in pursuit of their growth as a highly specialized and unique financial
services company and will contribute to the creation of an environmentally sound, sustainable economy andsociety. Under this management philosophy, we intend to achieve further growth and increase our corporate value
by promoting partnership strategies to continue creating new businesses. To this end, it is important to develop an
environment in which all of our human resources, who represent our greatest assets, can work vigorously in good
health, both physically and mentally, and fully demonstrate their individuality and all their abilities. We therefore
strive to maintain and improve the well-being of our officers and employees and their families with the recognition
that health management is a corporate management issue.

Policies

1. Fostering health awarenessWe will provide information on mental and physical well-being and support the self-sustaining efforts of each
officer and employee to foster awareness of prioritizing health.
2. Identifying health issues
We will strive to understand issues identified from the results of physical checkups and stress checks.
3. Health management and measures
We will take action to improve and rectify each health issue and properly manage health-related information.
4. Supporting the balance between work and treatment of disease
We will promote initiatives for preventing and detecting diseases at an early stage while supporting the balance
between work and treatment of disease.

Health and Productivity Management Initiatives

1. Fostering health awareness(1) Collaborate with health insurance associations to help form sound habits by providing applications thatencourage healthy activities(2) Establish a basic policy on health and productivity management and publicly disclose health management
initiatives both inside and outside the Company(3) Work with industrial physicians and occupational health nurses to continue to provide information throughe-learning and other means to raise health awareness(4) Introduce a basic policy for affiliated companies to share information on the details of health management
initiatives(5) Disseminate information on said initiatives both internally and externally through our corporate website
2. Identifying health issues(1) Conduct regular health check-ups, aiming for 100% participation(2) Implement stress checks, aiming for 100% participation(3) Disclose the results of regular health check-ups and stress checks both internally and externally

Health andproductivity
management
initiatives

3. Health management and measures(1) Provide specific health guidance to officers and employees diagnosed with metabolic syndrome through regular
health check-ups(2) Provide opportunities to see industrial physicians for employees who have been diagnosed with high stress via
stress checks(3) Establish and publicize a health consultation service offered by the Human Resources Department, industrial
physicians, and occupational health nurses for employees to consult about their mental and physical healthconcerns or questions(4) Properly manage the working hours of all employees to prevent long working hours(5) Recommend that employees telework, stagger their working hours, or take hourly leave to prevent COVID-19
infections(6) Subsidize the cost of medical examinations for officers and employees identified as needing a re-examination
or more thorough examination through regular health check-ups(7) Set KPIs to improve dietary habits and reduce smoking rates and release the results both internally andexternally
4. Supporting the balance between work and treatment of disease(1) Recommend that employees telework, stagger their working hours, or take hourly leave so they can continue towork while receiving treatment for disease(2) Establish and help with a return-to-work support system for employees on mental health leave so they caneasily return to work(3) Adopt an orphans’ pension program to provide educational funds for the children of employees in the event ofdeath or severe disability so they can confidently work for their families without concern(4) Recommend and subsidize voluntary medical examinations such as complete medical checkups and cancer
exams to detect and treat diseases at an early stage(5) Expand the special reserve leave system to help employees continue to work insofar as possible while
undergoing infertility treatment− 44 −

Social Contribution Activities

Leave system forvolunteer activities

In 2009, Tokyo Century introduced a system that can be used by employees to acquire special leave for volunteer
activities that fall into one of the following four categories: 1. Environmental preservation activities, 2. Community
outreach activities, 3. Social welfare activities, and 4. Other activities authorized by the Company.
In accordance with its Management Policy and Management Philosophy, the Tokyo Century Group makes
donations targeting the priority areas of the environment, social welfare, education, and disaster relief. The goalsof these donations are to fulfill our social mission and responsibilities and to contribute to the development andadvancement of society.

Social Contributions
through Donations

The organizations in each priority area to which donations were made in fiscal 2022 are as follows.
1. Environment:	Nature Conservation Society of Japan (forest preservation, biodiversity preservation, marine
environment preservation, and other nature preservation activities across Japan)
2. Social welfare: Japanese Foundation for Cancer Research (cancer research)
3. Education:	Katariba (programs for supporting and providing spaces for children, classes performed atschools, and support programs for children who are reluctant to attend school)
4. Disaster relief: Central Community Chest of Japan (disaster relief volunteer and NPO support fund)Note: Descriptions in parentheses represent the primary activities of each organization.

For information on initiatives advanced together with local communities, please refer to the following website.
https://www.tokyocentury.co.jp/en/sustainability/esg/social/community.html

Disaster relief

Disaster
preparedness
measures

Tokyo Century donated a set of disaster stockpiles for 1,274 people that had been stored at its head office, in
accordance with the Tokyo Metropolitan Ordinance on Measures for Persons with Difficulty Returning Home,
to a total of eight food bank organizations nationwide through Kuradashi Co., Ltd., which operates the social
contribution shopping site Kuradashi. These disaster stockpiles were distributed to underprivileged households,
welfare facilities, refugee support groups, and other institutions through the respective food bank organizations to
be used for good purposes.
Meanwhile, the Automobility segment has been expanding its electric vehicle (EV) initiatives. One facet of these
efforts is supplying business continuity products that utilize EVs as a source of emergency power. This approach
has already been used to support post-disaster reconstruction, as we supplied such EVs to Chiba Prefecture during
a prolonged blackout resulting from Typhoon Faxai in 2019. These EVs were used as an emergency power source
for social welfare facilities. In July 2023, Nippon Rent-A-Car Service, Inc., concluded a disaster relief support
coordination agreement with Yakushima Town, Kagoshima Prefecture. Under the agreement, the EV fleet of Nippon
Rent-A-Car Service’s office in Yakushima Town will be mobilized in the event of a large-scale earthquake, storm,
flood, or other natural disaster to provide power to disaster response headquarters and evacuation sites. Other
forms of coordination will also be pursued in times of disasters.
Furthermore, Tokyo Century is supporting the Great East Japan Earthquake Reconstruction Support–Coastal
Forest Restoration Project through ongoing donations to OISCA (The Organization for Industrial, Spiritual andCultural Advancement-International).
Tokyo Century was named a model company in Tokyo for limiting instances of all employees
leaving work at the same time during a natural disaster in fiscal 2021. This honor was
bestowed on Tokyo Century and 36 other companies among the 132 companies certified
under Tokyo’s system for recognizing companies at which all employees leave work at thesame time during natural disasters prior to 2022 to recognize the highly effective andinfluential initiatives of these companies.
For more information, please refer to the following website (in Japanese only).
https://www.bousai.metro.tokyo.lg.jp/kitaku_portal/1000048/1006510/index.html

Contributions
through shareholder
incentive systems

As a form of contribution through its shareholder incentive systems, Tokyo Century donates an amount equivalent
to 5% of the value of shareholder incentives (Quo Card prepaid cards) each fiscal year to organizations engaged
in social contribution activities. In fiscal 2022, Tokyo Century donated amounts equivalent to 2.5% of the value ofshareholder incentives to the Japan Service Dog Association, which is engaged in the training of service dogs, andto the Japan Rescue Association, which facilitates the training and deployment of disaster search dogs.
The Tokyo Century Group takes part in the education of the next generation around the world through pro bono andother activities.

Support for
education of thenext generation

Initiatives in Japan• Dispatch of employees as lecturers to teach universities’ industry research seminars (finance, leasing, etc.) and career
design and other seminars• Internship programs for junior high school students

Overseas Initiatives• Arrangement of financial literacy lectures for elementary and high school and university students in Indonesia, etc.

Another part of our efforts to support the education of the next generation is the provision of children’s reading
subsidies and the promotion of digital library services through donations to the ITOCHU Foundation.

− 45 −

Support for sports

Tokyo Century’s sports support activities include acting as an official sponsor for the KAWASAKI FRONTALE J.League
soccer team. Another such activity involves, via utilization of the corporate version of Japan’s tax donation system,
the Company’s donating to a project tasked with constructing a soccer stadium for the FC. IMABARI soccer cluband to the city, people, and work invigoration project (project in preparation for World Aquatics Championships Fukuoka 2023) of Fukuoka City. In addition, we offer special sponsorship to the 13th annual Fukushima Prefecturalswimming school competition and the 10th Tomoko Hagiwara Cup swimming competition, events aimed at
improving the swimming skills of children in Fukushima Prefecture ranging from elementary school to high school
students.

Support for the arts

The Company maintains a corporate membership to the Mitsubishi Ichigokan museum as part of its efforts to
support the arts.
In addition, we are supporting cultural activities through ongoing donations to the Shibusawa Eiichi Memorial
Foundation, among other initiatives.

Tokyo Century Group officers and employees take part in clean-up activities as part of our efforts to coexist inharmony with local communities.

Activities in Japan

Early-morning volunteer clean-up activities around our head office (Chiyoda Ward) and our Okachimachi office(Taito Ward)

Clean-up activities,
etc.

Overseas Activities

Participation in coral reef preservation and coastal clean-up activities at beach located inside naval base by
employees of Thailand subsidiary and other voluntary clean-up activities in overseas countries of operation(clean-up activities at wildlife protection facility in Nakhon Nayok province, located in central Thailand, conductedin fiscal 2022, and coastal and river clean-up activities conducted by Aviation Capital Group LLC and CSI Leasing,Inc., subsidiary EPC Inc. in the United States)

For information on other sustainability topics, please refer to the following website.
https://www.tokyocentury.co.jp/en/sustainability/topics/− 46 −

Human Resource Data

KPI

TC

Ratio of women among new hires (As of March 31
of each fiscal year; does not include contractors
and temporary staff)

Ratio of women among new-graduate hires

Ratio of women among mid-career hires

Ratio of women among newly hired employees(including mid-career hires)

Target(Target year)−

Maintain rateof 40%(Fiscal 2027)−−

Subcategory

11

26

Total of men and
women

33

43

88

Ratio of women

12.1%

25.6%

29.5%

Women

4

9

16

Total of men and
women

13

17

38

Ratio of women

30.8%

52.9%

42.1%

Women

0

2

10

Total of men and
women

20

26

50

Ratio of women

0%

7.7%

20.0%

Career track employees

12.1%

23.8%

29.5%

Administrative
employees−

100.0%−

Contractors

50.0%

100.0%

0.0%

Total

17.9%

28.9%

29.2%

Career track
employees

11.2 years

11.2 years

9.8 years

Administrative
employees

18.8 years

19.6 years

20.6 years

−

Total

16.6 years

17.1 years

16.7 years

Career track
employees

17.3 years

17.3 years

16.9 years

Administrative
employees−−−

17.3 years

17.3 years

16.9 years

Total

Ratio of women officers(As of March 31 of each fiscal year)(Includes non-full-time directors, corporate auditors,
and executive offices)

Ratio of women in assistant manager position orequivalent(As of March 31 of each fiscal year)

Average overtime hours per month(labor outside legally designated hours)

30% or more
(Fiscal 2030)

−

−

−

Women

42

45

57

Total of men and
women

460

466

482

Ratio of women

9.1%

9.7%

11.8%

Women

1

2

2

Total of men and
women

43

42

38

Ratio of women

2.3%

4.8%

5.3%

Women

113

115

119

Total of men and
women

223

239

240

Ratio of women

50.7%

48.1%

49.6%

Career track employees

14.9 hours

16.5 hours

17.2 hours

Administrative
employees

3.2 hours

2.6 hours

2.5 hours

Total

Women

Ratio of successful job applicants by gender(including mid-career hires)Fiscal 2022

4

Men

Ratio of women in management positions(As of March 31 of each fiscal year)

Fiscal 2021

Women

Women
Average years of continuous employment by gender(As of March 31 of each fiscal year)

Fiscal 2020−

Men

− 47 −

10.2 hours

11.2 hours

11.8 hours

Career track
employees

167.5 times

72.1 times

21.8 times

Administrative
employees−

1.0 times−

Contractors

1.0 time

2.5 times

−

Total

96.1 times

55.9 times

21.8 times

Career track
employees

44.7 times

41.8 times

18.6 times

Administrative
employees−−−

Contractors

1.7 times−

17.0 times

Total

40.6 times

42.3 times

18.6 tmes

KPI

TC

Ratio of men to women among new hires(including mid-career hires)

Ratio of women among employees(As of March 31 of each fiscal year)

Employee turnover rate

Target(Target year)

Subcategory

Fiscal 2020

Fiscal 2021

Fiscal 2022

Career track employees

3.8

1.7

1.2

Administrative employees

−

−

−

Contractors

0.6

−

−

Total

2.4

1.3

1.2

Career track employees

11.3%

12.0%

14.6%

Administrative employees

100.0%

100.0%

100.0%

Contractors

24.3%

29.4%

31.3%

Temporary staff

81.3%

86.8%

90.5%

Total

30.6%

30.7%

32.0%

Women

0.7%

0.9%

0.9%

Men

3.7%

4.5%

3.6%

Total

4.4%

5.3%

4.4%

−

−

−

Maintain a nursing
care turnoverrate of zero
(Fiscal 2027)

−

0

0

0

Ratio of employees with disabilities(As of June 1 of each fiscal year)

Maintain rate
above legally
mandatedlevel of 2.7%
(Fiscal 2027)

−

2.61%

3.22%

2.86%

Rate of employees undergoing regular healthcheck-ups

100%(Fiscal 2027)−

100.0%

100.0%

100.0%

Rate of employees undergoing stress checks

100%(Fiscal 2027)

−

94.3%

98.6%

100.0%

Rate of employees receiving specific healthguidance

80% or more
(Fiscal 2027)

Officers and employees
subject to specific healthguidance over age 40

76.4%

81.7%

80.4%

Career track
employees

36.8%

37.5%

60.0%

Administrative
employees

62.5%

50.0%

66.7%

Number of people leaving work for nursing
care reasons

Ratio of employees remaining at the Company
for 10 years or more (by gender)(Fiscal 2020: Newly hired employees between
fiscal 2009 and fiscal 2011)(Fiscal 2021: Newly hired employees between
fiscal 2010 and fiscal 2012)(Fiscal 2022: Newly hired employees between
fiscal 2011 and fiscal 2013)

Rate of childcare leave acquisition by gender

Women

−
Men

Maintain rate ofchildcare leaveacquisition bymale employeesof 100%(fiscal 2027)

Total

48.6%

42.9％

61.5%

Career track
employees

53.7%

58.3%

65.4%

Administrative
employees

−

−

−

Total

53.7%

58.3%

65.4%

Career track
employees

100.0%

100.0%

100.0%

Administrative
employees

100.0%

100.0%

100.0%

Total

100.0%

100.0％

100.0%

Career track
employees

100.0%

100.0%

100.0%

Administrative
employees−−−

100.0%

100.0%

100.0%

Career track employees

71.4%

73.6%

75.4%

Administrative employees

76.5%

80.3%

88.1%

Contractors

77.7%

92.4%

103.0%

72.7% (14.0 days)

75.6% (14.5 days)

78.8% (14.8 days)

Women

Men

Total

Annual paid leave acquisition rate
(Figures in parentheses represent average numberof days of annual paid leave taken)

Maintain rate of
70% or more(fiscal 2027)

Total− 48 −KPI

TC

Gender-based wage disparity*1

Target(Target year)

Subcategory−

All employees

58.70%

Nationwide →
Tokyo

−

−

−

Tokyo →
Nationwide−−

1 (woman)Nationwide →Administrative
staff

−

−

−

Tokyo →
Administrativestaff

1 (woman)−−

Temporary →Administrative
staff

−

1 (woman)

−

Total

1

1

1

Women

3

4

10

Men

23

24

41

Total

26

28

51

¥37,442,000¥51,036,000¥70,921,000¥40,000¥55,000¥74,000

13.7 hours

22.5 hours

46.5 hours

−

*2

−

Fiscal 2022−

Employment
type change

Re-employment and mid-career employment
data by genderFiscal 2021−

Occupational
categorychangeOccupational category and employment typechange data by genderFiscal 2020

Training expenses−

Training expenses per employee*2−

Training hours per employee−

Diversity training data−

Number of e-learning
programs2

3

5Career Challenge Program internal recruitment
system data
Note: Launched in fiscal 2020−

Number of relocations

14

13

18

Maintain andimprove ratio of
positive responses
in employee
engagement index(fiscal 2027)

All employees(Excluding dispatchedemployees and individuals
seconded from othercompanies)

−

−

63.0％

Employee engagement index

All employees*1 Supplementary explanation regarding gender-based wage disparity
・ There are no differences in the wage frameworks or systems between men and women.
・ The Company sets different wage levels based on the career courses and qualifications of employees. There is a difference in the numbers of men and women in terms of the courses andqualifications, which creates a disparity in wage levels between genders.
*2 Figures for training expenses and training expenses per employee include venue rental expenses and transportation expenses.

− 49 −

Engagement with Shareholders, Investors, and Customers

Basic Policy Regarding Information Disclosure

The Company will actively and consistently disclose its management strategy, status of business activities,
financial condition, and other information to shareholders, investors, and other stakeholders in a timely,
fair, and accurate manner.

Standards on Information Disclosure

The Company will disclose information based on the Companies Act, Financial Instruments and ExchangeAct, and other laws and regulations as well as the Securities Listing Regulation defined by the Tokyo
Stock Exchange (hereafter “the listing regulation”). In addition to information based on the above laws
and regulations, we will disclose information that is useful for encouraging a clearer understanding of theCompany. We may, however, withhold information that is deemed inappropriate for disclosure based on
due consideration.

Method of Information Disclosure
IR Policy

We will disclose information relevant to the listing regulation based on designated procedures by holding abriefing at the Tokyo Stock Exchange, after which the information will be disclosed through the exchange’s
Timely Disclosure Network (TDnet) as well as to media organizations. Following disclosure, the information
will be promptly made available on the Company’s website. In view of the objective of timely disclosure, wewill also disclose other information not covered by the listing regulation in an appropriate manner.

Future Outlook

Information disclosed by the Company may include content concerning future forecasts and outlooks. Suchinformation is based on the Company’s judgment as of the time the reference material was compiled.
Such forecasts and outlooks involve risks and uncertainties, and the Company does not guarantee they
will come to pass as described.

Silent Period

To prevent leakage of financial information and to ensure fairness, the Company designates the period
between the settlement date and the reporting date, including those for quarterly disclosures, as a silent
period. During this period, the Company will, in principle, refrain from commenting or replying to queries
related to financial information. However, in the event that the Company expects any change, as defined by
the standards of the Securities Listing Regulation, to occur with regard to its current earnings forecast, theCompany will disclose such information as required in a timely manner, even during the silent period.

IR

Shareholder
returns

In principle, the Company issues dividend payments twice a year in the form of an interim and year-end
dividend.
Tokyo Century’s basic dividend policy is to provide stable, long-term returns to shareholders, and we are
pursuing increases in the payout ratio founded on continuous earnings growth.
Dividends per Share
Annual dividend
Payout ratio

Fiscal 2017

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

¥114

¥124

¥136

¥138

¥143

¥143

23.5%

25.1%

25.9%

34.2%

34.7%

367.1%

Tokyo Century advances its investor relations (IR) activities with a focus on generating a cycle of proactive
dialogue with shareholders and other investors and communicating the input and requests solicited thereby
to management and employees. The input gained during the course of IR activities is used to improveinformation disclosure and respond to management issues in order to build trust with shareholders andother investors as well as to ensure that capital markets accurately appraise the Company, which in turn isanticipated to contribute to higher corporate value over the medium to long term.

Communication
activities− 50 −

The following provisions related to customer trust can be found in Our Action Guidelines.

Our Action
Guidelines(customer trust)

Our Action Guidelines• We will continue creating solutions that earn customer trust and recognition.

We will strive to resolve the issues faced by our customers by harnessing our high level of expertise andforesight to provide optimal products and services that earn their trust and recognition.

• We will stringently manage personal information and customer information.

We will stringently manage the personal information and customer information we obtain through ouroperations to prevent leakage outside the Company and use for unintended purposes.

Solicitation Policy for Financial Products
1. Legal Compliance
We will comply with social norms and with laws and regulations, including those governing the sale offinancial products and the Consumer Contract Act, and appropriately conduct business operations thatsatisfy our customers.
2. Proper Solicitation
We will recommend appropriate financial products for customers based on their knowledge, experience,
purpose of purchase (investment), financial condition, and other considerations. When explaining our
products, we will endeavor to do so at a time and place and in a manner convenient for our customers.

Solicitation Policy
for Financial
Products

3. Explanation of Important Matters
We will make every effort to provide explanations that enable our customers to fully understandimportant matters, such as the nature of the product and associated risks, so that they can exercise
their own judgment regarding the transaction.
4. Protection of Privacy
We will properly and strictly manage information related to our customers.

Customers

5. Education and Training
Our employees will strive to acquire and improve their knowledge and skills so as not to fall short of thetrust and expectations of our customers.
This is our solicitation policy based on Japan’s Act on the Provision of Financial Services.

Responsibilities to Customers
1. Policies and Basic Concept
The Tokyo Century Group, which is engaged in corporate activities centering on financial services
businesses in many regions around the world, believes that resolving social and ethical issues throughits business activities will help it remain sustainable and lead to further growth.

Responsibilities
to customers

We will fulfill our responsibilities to customers under the Group’s Management Policy, which stipulates
that “we will provide the best products and services around the world to contribute to the success of
our customers’ businesses while pursuing all possibilities by collaborating with customers and uniting
the overall strengths of the Group.” We will also further improve our management system and conduct
educational and training programs based on the Corporate Code of Conduct, Our Action Guidelines, andSolicitation Policy to provide the best possible products and services that satisfy our customers.
Due to the nature of the leasing business, the Tokyo Century Group’s transactions are mainly withcorporate customers. With regard to products and services directly provided to consumers, such asindividual auto leasing and individual car rentals, we comply with the laws, regulations, and quality
standards related to safety and strive to continuously improve safety and quality. In the unlikely eventthat a quality issue should arise with a product or service that the Group provides, we will act promptly
to identify the cause and prevent a recurrence.
The Tokyo Century Group advocates sustainability management and will fulfill its responsibilities tocustomers in accordance with its Management Philosophy and Management Policy.

− 51 −

2. Provision of Appropriate, High-Quality Products and Services
The Tokyo Century Group complies with all laws and regulations related to the products and services
that it handles, and it provides appropriate, high-quality products and services for the success of its
customers’ businesses.
With regard to the provision of financial products as defined by Japan’s Act on the Provision of Financial
Services, we have established a Solicitation Policy for Financial Products and will act in accordance
therewith.
As for the provision of products and services other than the hitherto mentioned, we will act inaccordance with our Corporate Code of Conduct, which compels us to accurately respond to customer
needs with high-quality products and services.
To ensure proper conduct during the course of such activities as the solicitation and contracting offinancial products, customer management, and the reliable delivery of products and services andto thereby earn customer trust and recognition, we conduct educational and training programs forofficers and employees on responsible business activities and compliance through e-learning and other
instructional formats.
As an example of a financial product sale, Tokyo Century, as a Type II Financial Instruments Business
Operator, offers customers the opportunity to invest in its Japanese-style operating lease projects.

Customers

Responsibilities
to customers

3. Responsible Advertising and Marketing
With regard to businesses that directly provide products and services to consumers, such as individual
auto leasing and individual car rentals, we are fully aware of the impact that advertising expressions
may have on consumers. We therefore give the highest priority to customer confidence and safety andengage in responsible advertising and marketing by fully considering our social responsibilities. Paying
due respect to the consumer’s standpoint, we use fact-based expressions and never use statementsthat may mislead consumers about the characteristics or quality of our products and services. We also
engage in dialogues with stakeholders to understand the expectations and demands of society andreflect them in our business activities.
4. Management System for the Solicitation and Sale of Financial Products(1) Internal Management System
The Internal Management Unit monitors, verifies, and provides guidance on the overall day-to-day
operations of the financial instruments business to ensure appropriate operations in accordance with
the Financial Instruments and Exchange Act, other relevant laws and regulations, and internal rules.
This unit also formulates and implements improvement measures as necessary.
(2) Sales Management System
Activities such as the solicitation and contracting of financial products and customer management areplaced under the guidance and supervision of the sales manager to ensure proper implementation.
The sales manager directs and supervises sales personnel, oversees sales operations in the financial
instruments business, and reports to the Management Meeting on matters related to said business asnecessary.
(3) Response to Complaints
When a customer submits a complaint regarding a transaction, officers and employees respond inaccordance with complaint-handling procedures. When calling upon a dispute settlement body, we willcomply with the rules the body stipulates and strive to resolve the dispute in accordance with complainthandling and mediation procedures.
To submit opinions and complaints, please refer to the following website.
https://www.tokyocentury.co.jp/en/contact/
5. Targets and KPIs
The Tokyo Century Group is dedicated to the success of its customers’ businesses by accurately
responding to their needs with high-quality products and services and thereby forging solid relationshipsof trust therewith. Furthermore, the Group conducts employee training programs to continuously provide
appropriate, high-quality products and services.
For information on training program attendance, please refer to the following website.
https://www.tokyocentury.co.jp/en/sustainability/esg/social/responsibilities.html#anc_kpi− 52 −SUSTAINABILITY DATA BOOK 2023

GovernanceCorporate GovernanceManagement Structure

Basic policy

Tokyo Century recognizes that effective corporate governance is an important management issue to be addressedin order to maximize corporate value. We therefore strive to maintain a sound and highly transparent management
system that enables swift and accurate decision-making in response to changes in the operating environment. We
also work to enhance the soundness and transparency of corporate management through the implementation ofeffectively functioning internal control and risk management systems.

Tokyo Century’s management structure centers on the Board of Directors and the Board of Corporate Auditors. In
addition, an executive officer system has been introduced to accelerate management strategy decision-making andstrengthen supervisory and operational execution systems.
The Company has two female directors among its 13 directors and one female officer among its 24 executive
officers (as of June 26, 2023).
Internal Control System and Corporate Governance System (As of June 26, 2023)

Internal control
system andcorporate
governance system

Corporate
Governance Report

Board of Directors

Corporate Governance Report (Last Update: June 30, 2023) (234 KB)
https://www.tokyocentury.co.jp/assets/pdf/sustainability/governance_en230630.pdf

The Board of Directors deliberates on and makes decisions about the policies, strategies, business plans, andother key management issues of the Company and Group companies as well as matters specified by prevailinglaws and regulations, the Articles of Incorporation, and rules governing the Board of Directors. It also supervises
the execution of operations by directors and executive officers.
Chairperson

Number of Members (after Shareholders’ Meeting held in June 2023)

Koichi Baba
President & CEO,
Representative Director

Directors: 13(including 5 external directors)− 53 −

Meetings Held in Fiscal 2022
15

The Board of Corporate Auditors meets regularly and executes independent and fair audits of the compliance andappropriateness of corporate activities, including the performance of duties by directors and executive officers.
Board of Corporate
Auditors

Chairperson

Number of Members (after Shareholders’ Meeting held in June 2023)

Futoshi Okada
Standing Corporate Auditor(External Corporate Auditor)

Corporate auditors: 4(including 2 external corporate auditors)

Meetings Held in Fiscal 2022
8

The Management Meeting deliberates on particularly important matters concerning the execution of operations
and makes decisions for the Tokyo Century Group.
Management
Meeting

Chairperson

Number of Members

Koichi Baba
President & CEO,
Representative Director

8

Meetings Held in Fiscal 2022
Once a week, in principle

The Transaction Evaluation Meeting discusses and makes decisions about major business transactions being
considered by Tokyo Century and Group companies as well as transactions that warrant complex risk analysis.
Transaction
Evaluation Meeting

Committees

Chairperson

Number of Members

Ko Nakagawa
Managing Executive
Officer8

Meetings Held in Fiscal 2022
Once a week, in principle

Meetings Heldin Fiscal 2022

Name

PurposeNomination Committee

As an advisory body to the Board of Directors primarily consisting of external directors, the Nomination
Committee deliberates on the nomination of candidates for director and corporate auditor positions
and reports to the Board of Directors.

4

Compensation Committee

As an advisory body to the Board of Directors primarily consisting of external directors, theCompensation Committee discusses matters such as director compensation systems and policies
and reports to the Board of Directors.

5

Internal Control Committee

The Internal Control Committee discusses general internal control matters, including the evaluation of
the effectiveness of the financial reporting system and the scope of evaluation, in order to ensure theinternal control system functions effectively, and reports to the Management Meeting.

4Comprehensive Risk
Management Committee

The Comprehensive Risk Management Committee discusses matters such as the construction of
the risk management system and approaches to measuring risk while periodically assessing theCompany’s risk exposure and reporting to the Management Meeting.

4

Credit Risk Management
Committee

The Credit Risk Management Committee discusses matters including the Tokyo Century Group’s
credit portfolio as a whole and credit risk management and reports to the Management Meeting.

2

Asset Liability Management
Committee

The Asset Liability Management Committee discusses matters relevant to managing market, liquidity,
and other risks—in order to identify and minimize the exposure of assets and liabilities to risks, including
fluctuations in interest and foreign currency exchange rates—and reports to the Management Meeting.

4

IT and Administration
Strategy Management
Committee

The IT and Administration Strategy Management Committee discusses matters including the IT
strategies, IT investment plans, and administrative system plans of Tokyo Century and Group
companies and reports to the Management Meeting.

3

Sustainability Committee

The Sustainability related to the Tokyo Century Group’s sustainability activities to the Board of
Directors; plans, promotes, and oversees said sustainability activities; discusses important issues
related to sustainability; and reports to the Management Meeting.

3

Investment Management
Committee

The Investment Management Committee facilitates appropriate investment management by deliberatingon matters related to the development and implementation of investment management structures andthe assessment of large-scale investment projects and reports to the Management Meeting.

15− 54 −

Director Skills Matrix (As of June 26, 2023)

67
62
74
67
70

Director skills
Matrix

48
63
63
63
60
58
55

74

Policies andmethod for
determining officer
compensation

Director compensation is decided by a resolution of the Board of Directors based on recommendations from theCompensation Committee, primarily consisting of independent external directors, on the policy for determining the content
of compensation for individual directors. The board also receives advice from outside experts.
Regarding director compensation, the Company maintains a framework linked to sound incentives toward its
sustainable growth and the medium- to long-term development of its businesses. It has established a director
compensation system to align the interests of the directors with those of the shareholders, raise the awareness of
directors regarding enhancing shareholder value, attract outstanding talent, and secure and develop human resources
who can drive the improvement of the Company’s corporate value.
Draft proposals on matters such as the policy, systems, and levels of officer compensation are referred to
the Compensation Committee, and the Board of Directors makes the final decision based on the committee’s
recommendations.
Officer compensation comprises basic compensation, officer bonuses, and stock options as stock-based, nonmonetary compensation. Basic compensation, which is fixed compensation, is determined through a comprehensive
consideration of the duties, roles, and responsibilities and other factors of each officer.
Compensation for directors responsible for business execution comprises performance-based compensation including
basic compensation, officer bonuses, and stock options as stock-based compensation. The ratio for the amount of basic
compensation to performance-based compensation is set at approximately 1.0 to 1.0-2.5, determined by comprehensively
accounting for achievements and performance based on each director’s expected duties.
The content of compensation for each director is referred to theCompensation Committee, which deliberates on aspects including
adherence to the policy on determining officer compensation, and thepresident, CEO, and representative director approves the content due
consideration for the committee’s recommendations; and with this final
decision, the content is formally deemed to adhere to the policy by the
Board of Directors.
The compensation of external directors and corporate auditors, who
are in a position independent from business execution, consists entirelyof basic compensation based on their roles, and the compensation of
corporate auditors is determined through deliberations by the corporate
auditors within the prescribed limits.

− 55 −

Major Items Raised at Meetings of the Board of Directors in Fiscal 2022
General Management
Policies of Medium-Term Management Plan 2027, profit target formulation and progress management, discussions
on stock acquisitions and sales and investments exceeding predefined amounts, reports on results of investment
management framework monitoring, and investor relations activity reports
ESG
Evaluation of Board of Directors’ effectiveness and report on evaluation, details of meetings of the Nomination
Committee and the Compensation Committee, progress and results of medium- to long-term sustainability
management initiatives (Sustainability Road Map), and carbon-neutrality initiatives
Other Matters
Compliance initiative plans and progress reports, audit plans and implementation reports, and risk management
reports

Evaluation of the Effectiveness of the Board of Directors and Issues
Tokyo Century has established the Board Effectiveness Review Council as an advisory body to the Board of
Directors. The council conducts an analysis and review of the Board of Directors once a year, in principle, on
aspects such as the effectiveness of its supervisory functions, status of deliberations, systems, and proceedings,
taking into account the self-evaluations submitted by each director.
Evaluation ofBoard of Directors’
effectiveness− 56 −

Objective and Independent Audit System
The Audit Unit has been established as an independent organization under the direct control of the president andis tasked with performing internal audits of Tokyo Century and Group companies. Internal audits are aimed atensuring the appropriateness of the Company’s systems, organizations, and rules; whether all business activities
comply with relevant laws and regulations and internal rules; and whether operating processes and the risk
management system work appropriately and rationally. Based on these audits, improvements are proposed andadvice is provided as necessary. As the Group expands its areas of business, risk profiles are becoming morediversified and complex. Accordingly, Tokyo Century aims to conduct internal audits that are effective as part of arisk-based approach. Timely and appropriate audits are also conducted of companies newly consolidated throughinvestment or acquisition. Through such auditing activities, we strive to enhance the risk management capabilities
and improve the corporate value of the Company and Group companies. Annual internal audit plans are reported
to the Board of Directors after approval by the president (Management Meeting), and the results of the audits arereported to the president (Management Meeting) and to the Board of Directors.

Audit System for Major Group
Companies
Audit System

Major domestic Group companies as well as
major overseas Group companies Aviation
Capital Group LLC and CSI Leasing, Inc.,
have in place independent audit units
that perform audits at their respective
companies. Audit plans and results arereported to the Audit Unit of the Company,
which provides instruction and support asnecessary. The Audit Unit directly audits
subsidiaries that do not have their own
auditing functions.

Basic Audit Policies
Reliable Third Line of Defense Supporting Quest for Growth Furnished by Audit Unit
1. Identification of latent risks to provide proposals and advice for improving operations and preventing
misconduct
2. Enhancement of risk identification, analysis, and verification capabilities through ongoing skills improvement by
Audit Unit staff
3. Support for and coordination among Group companies to strengthen the Groupwide audit system− 57 −

Risk Management

Policies

The Tokyo Century Group has established the Basic Risk Management Policy for its risk management activities.
In addition, we have defined the Comprehensive Risk Management Rules for comprehensive risk management
activities as well as various other individual risk-specific rules based on the Basic Risk Management Policy. Risk
management is promoted in accordance with these rules. Our risk management approach focuses on strengthening
visual risk management, controlling non-financial risks, and enhancing consolidated Group governance in Japanand overseas through the use of consolidated enterprise risk management (ERM) and management information
system (MIS) measures.

Comprehensive Enterprise Risk Management
The Tokyo Century Group will continue to practice comprehensive ERM in accordance with its management guidelines
for capital use rates based on quantitative risk control on a consolidated basis. The capital use rate is used toassess risk resilience, an important criterion for rating financial institutions. We have therefore sought to keep therisk amount within a certain level of capital buffers by adhering to the aforementioned management guidelines. As
our business domain continues to expand, the relationship between the amount of capital and level of risk receives
greater attention from investors and other interested parties. For this reason, the capital use rate has become a key
indicator for objectively determining prospects for our sustainable growth and investment capacity.
We refer to the targeted level of the capital use rate only as a guideline, since the regulations regarding capitaluse levels for financial institutions are not applied to us. In operating a business, seizing business opportunities, suchas the opportunity to take part in M&A activities, is also an important factor considered under the risk management
framework. Rather than adopting a passive approach to the soundness of corporate management, we pay due
consideration to the magnitude of increase in the amount of risk over a medium-term period of about three years, theprojection for organic increases in the shareholders’ equity ratio from profit growth, and the level of tolerance of ourcapital policy.
Medium-Term Management Plan 2027 prescribes the enhancement of our risk control framework aimed at theefficient allocation of management resources through an ERM approach. In fiscal 2023, the first year of the plan, we
will introduce, on a trial basis, risk exposure guidelines (soft limits) for the categories that account for a large portionof our risk profile (aviation, investment, and real estate). These guidelines will be used to drive the diversification of
the Company’s business portfolio and otherwise enhance portfolio management (portfolio transformation).
The main objective of risk management at the Tokyo Century Group is to support growth and value creation by
allowing for bold risk taking. We will continue to control the capital use rate to maintain it at the appropriate guideline
level. At the same time, we will constantly improve on the level of our risk management framework in conjunction withthe expansion of our business domain and changes in the operating environment in order to sustainably improve
corporate value.
Management

Visual Risk Information Tracking at the Management Level
In addition to measuring risks on a consolidated basis and controlling the capital use rate, we implement a visual
management information system (MIS). Under the system, the Credit Risk Management Committee and theComprehensive Risk Management Committee take the lead in regularly monitoring risk information on multiple
criteria and report the results to the Management Meeting and the Board of Directors.*
In our global operations, we pay particular attention to Aviation Capital Group LLC (ACG) and CSI Leasing, Inc. (CSI),
our U.S.-based subsidiaries that specialize in leasing and for which the scale of investments and assets is quite large.
ACG has achieved success as a textbook example of a resilient company made so through a unique risk management
approach that includes introducing a risk appetite framework to clarify the risks to be accepted, such as aircraft asset
risks, and the risks to be avoided (mitigated or transferred), such as interest, liquidity, and foreign exchange rates.
In light of the extraordinary losses recorded in relation to operations in Russia, ACG has implemented a new risk
management framework to be used in dispersing previously concentrated risks on a country and airline basis andensuring an appropriate risk and return balance based on the characteristics of a given project. This framework will
be introduced for managing individual projects on a trial basis in fiscal 2023.
* For information on the monitoring activities by the Company’s committees, please refer to page 60 “Major Risks and Management Approaches”− 58 −

Non-Financial (Non-Quantitative) Risks
As our business domain grows and we branch out from the financial sector to provide business services, it
is becoming increasingly important to account for non-financial operational risks that cannot be measured
quantitatively. Based on this recognition, Tokyo Century has established key risk indicators (KRIs) for non-financial
risks. Regular monitoring of these KRIs is performed, and the results are reported to the Board of Directors
and other relevant bodies. KRIs have been set pertaining to human resources, information security, accidents,
compliance, climate change, legal affairs, and corruption. We are also expanding our range of environmental KRIs
in relation to renewable energy, CO2 emissions, and the portion of our portfolio accounted for by fuel-efficient
aircraft and electrified vehicles and have broadened the scope of personnel and labor risk (from non-consolidated
to consolidated) amid the rising importance of tracking and managing human rights and climate change risks.
Nevertheless, stakeholder concern for non-financial risks is constantly rising. From the perspective of sustainability,
Tokyo Century will continue to bolster its range of effective indicators related to human rights and climate changerisks as well as to other environmental, social, and governance (ESG) factors and to the United Nations Sustainable
Development Goals (SDGs).

Environmental and Climate Change Risks
The Tokyo Century Group recognizes that responding to climate change is an important task. We have therefore
endorsed the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and are
advancing climate change response measures including scenario analyses and information disclosure based onthese recommendations.

Scenario Analyses through Risk Materiality Assessments
Management

Given that it operates in five business fields, the Tokyo Century Group has chosen an approach for selecting
businesses subject to scenario analyses entailing risk materiality assessments. These assessments involve
industry-specific evaluations of the impacts of climate change risks and comparative analyses of the greenhousegas emissions and asset portfolios of different operating segments. To date, scenario analyses have been
conducted targeting environment and energy businesses (solar power generation), the aviation business (aircraft
leasing), and the automobility business (auto leasing for individuals and companies). Going forward, the Company
will continue to examine the appropriate risk countermeasures and related opportunities by expanding the scopeof businesses subject to scenario analyses and improving the accuracy of said analyses based on risk materiality
assessments.

* For more information, please refer to “Climate-related risks and opportunities” in the Climate Change Response Strategy section on page 31.

− 59 −

Major Risks and Management Approaches

Major risks andmanagement
approaches

With respect to Group risk management, we mainly manage the following risks based on the characteristics of ourbusiness operations.

Relationshipbetween majorGroup companies
and main risk
categories− 60 −

For the purposes of effectively controlling diversifying investment risks and optimizing its business portfolio, the Tokyo
Century Group has instituted an investment management framework. Primary focuses of this framework include
clarifying investment screening, continuation, and withdrawal standards and developing standardized monitoringprocesses.
Under this framework, meetings of Investment Management Committee are held prior to discussions by theManagement Meeting as part of the process for screening investments of a predetermined scale, in order to confirm
the anticipated level of profitability after considering capital costs based on the inherent risks (quantitative standards)
and the compatibility with Tokyo Century’s strategies (qualitative standards). In addition, multifaceted evaluations are
conducted by business divisions with regard to business plans, investment structures, and projected risk exposureand environmental impacts. Shared standards for determining when withdrawal from an investment should be
discussed (withdrawal standards) are applied to all projects, and clear numerical values for financial indicators aredefined on an individual project basis to serve as the trigger for commencing the withdrawal process. By clarifying thestandards for withdrawal in this manner, the Company is practicing effective portfolio management.
After investment, projects will continue to be monitored through standardized processes, and the status ofprojects and their conformity to the scenarios formulated at the time of their selection will be confirmed regularly.
Should a project become applicable under withdrawal standards, the Investment Management Committee will provide
opinions and assess the appropriateness of continuation, and the Management Meeting will determine whether or
not investment should be continued based on a comprehensive evaluation of such factors.

Investment
management
framework

ROIC monitoringin five operating
segments

Tokyo Century regularly monitors the return on invested capital (ROIC) spread (ROIC less weighted average costof capital [WACC]) as a cost-of-capital-based indicator of the risk-and-return balance of specific business areas.
Business and risk characteristics are accounted for in this monitoring. Moreover, this timing-based monitoring
approach is used to promote management that emphasizes cost of capital along with sound financial discipline.
Factors examined through this monitoring include whether an appropriate balance is being maintained between
risks and returns in different operating segments and whether the necessary risks are being taken to generatevalue and stimulate growth. Under Medium-Term Management Plan 2027, the Company will continue its approach
toward managing risks and returns with an emphasis on cost of capital. At the same time, enhancements tothis approach will be pursued by reviewing methods for managing the ROIC spread by operating segment andincorporating this indicator into performance evaluations and portfolio allocation.

− 61 −

Compliance
ComplianceManagement

At the Tokyo Century Group, the Compliance Office promotes compliance measures under the supervision of the chiefcompliance officer (CCO) appointed by the president & CEO, who is also the chief compliance executive. The headsof each business division and branch office of the Company, along with the presidents of Group companies, act ascompliance officers (COs) with the responsibility of coordinating with the Compliance Office to guarantee compliancewith all relevant laws and regulations and ensure that business activities are kept in line with social norms.

Compliancestructure

Complianceactivities

We report and review the Group’s compliance structure and operation as well as identified compliance violations
at the meetings of the Management Meeting and the Board of Directors every six months. Based on the results ofthese reviews, which look at effectiveness, we formulate and implement compliance promotion plans.
Specific compliance activities include e-learning programs, face-to-face and online training sessions, distributionof compliance-related information, and compliance awareness surveys. We also arrange Groupwide forums forsharing compliance information.
In addition to the above, we oblige all officers and employees to submit a compliance pledge once every year inorder to underscore their commitment to adhering to our compliance regulations.
In fiscal 2022, there were no major compliance violations, including human-rights violations, deserving of publicannouncement.

Compliancehandbooks

The Tokyo Century Group has prepared a Compliance Handbookthat lays out the basics of compliance and makes it available onits corporate portal at all times. Themes include our Management
Philosophy, Corporate Code of Conduct, compliance-related internal
regulations, the Group’s stance toward respect for human rights,
prohibition of harassment, prevention of insider trading, and preventionof corruption, and all officers and employees can review and look backat them at any time to deepen their understanding of compliance andto share their awareness.
The Group also strives to improve the compliance mindset at its
local subsidiaries overseas and has created an English and Chinese
edition of the handbook for these subsidiaries.

− 62 −Aiming to thoroughly instill a compliance-oriented mindset, the Tokyo Century Group provides systematic andcontinuous compliance education through such means as rank-based training programs; e-learning-based training
targeting all officers, managers, and employees (including contractors and temporary staff); and workplacecompliance training conducted by compliance officers (heads of divisions and branch offices) based on complianceinformation

Introduction to Compliance• Meaning and nature of compliance• Impacts of compliance violations• Daily attitude based on compliance• Compliance in conducting business• Details and purposes of the internal reporting system• Importance of information security measures and defense against cyberattacks• Management systems, rules, and important points for information security, etc.

1

New heads of divisions andbranch offices

Roles and responsibilities of heads of divisions and branch offices concerning risk
management and compliance• Organizational risk and compliance management system and promotion thereof• Responses to crises, incidents, and accidents• Business continuity measures• Information security and information management (personal information, insider
information, etc.)• Prevention of bribery and corruption (non-association with antisocial organizations;prevention of money laundering and of provision of funds for terrorism; appropriate
means of offering entertainment to public officials, political contribution control, etc.)• Environmental initiatives

1

All officers and employees(e-learning)• Internal reporting system• Prohibition of harassment (sexual harassment; abuses of power; harassment for
pregnancy, childbirth, childcare leave, family care leave, etc.; harassment associatedwith teleworking)• Points to note on entertainment and the exchange of gifts with people working at
private companies, domestic public officials, overseas public officials, etc.
• Non-association with antisocial organizations• Prevention of money laundering and of provision of funds for terrorism• Appropriate management of personal information, My Number (social security and tax
numbers in Japan), information assets, and insider information• Attendance management (workhours, teleworking, annual paid leave, etc.)• Fraud triangle (motivation, opportunity, and rationalization)• Appropriate use of copyrighted works• Prohibition of misuse of subsidies from the government and local governments• Compliance with fair trade practices• Self-checking of basic actions and behavior pertaining to Corporate Code of Conduct,
Our Action Guidelines, etc.

2

Employees at divisions andbranch offices(workplace compliance training
conducted by complianceofficers / heads of divisions
and branch offices)• Internal reporting system (details, purposes, and appropriate use)
• Prohibition of harassment—relevant laws and regulations and prevention guidelines,
basic stance toward prevention, etc.
• Prohibition of excessive offering of entertainment and exchange of gifts• Prevention of money laundering and of provision of funds for terrorism• Act on the Protection of Personal Information• Insider trading regulations• Act on Prohibition of Private Monopolization and Maintenance of Fair Trade(Antimonopoly Act)
• Intellectual property rights• Political contribution control• Risks associated with entertainment and the exchange of gifts to public officials andquasi-public servants• Unfair Competition Prevention Act (trade secrets, misleading acts, damage to credibility,etc.)

About 4

Employees at overseas bases(training for overseas assignees,
training conducted by the headsof compliance(base heads), e-learning)• Training for overseas assignees (regulations related to compliance and risk
management at overseas bases, management systems, internal reporting system andother systems, features of assigned bases, etc.)• Workplace compliance training conducted by heads of compliance (base heads)(internal reporting system, prohibition of harassment, prevention of bribery andcorruption, non-association with antisocial organizations, prevention of money
laundering and of provision of funds for terrorism, appropriate means of offering
entertainment to public officials, personal information protection, information security,
insider trading regulations, fraud triangle, etc.)• E-learning (same as above)

New employees

Complianceeducation

As needed
4 or more

As needed

Unit

Fiscal 2020

Fiscal 2021

Fiscal 2022

No. of Training Sessions per Year

Sessions

999

No. of Participants in e-Learning Programs*2

Participants

5,213

4,532

4,751

*1

Compliance training

No. of Training
Sessions per Year

Major Subjects

Targets (Training Methods)*1 Training sessions conducted by Tokyo Century head office and e-learning programs (excluding those conducted by branch offices
and Group companies)*2 Aggregate number of participants in abovementioned e-learning programs− 63 −

The Tokyo Century Group strives to detect and address risks at the earliest possible stage, improve its
organizational corrective capabilities, and reinforce its compliance management by operating an internal reporting
system (Consultation / Whistle-Blowing System) that allows officers and employees who become aware of acompliance violation to directly report the matter without the intervention of their superiors.

1. Outline of Internal Reporting System
All officers and employees of Tokyo Century Group companies in Japan and overseas are eligible to use this internalreporting system—including directors, officers, permanent employees, contractors, temporary staff, seconded
employees, part-time staff, and others—as well as those who have retired within the past year. In order to ensure
independence, we have set up three contact points: the Compliance Office inside the Company; the legal counsel’s
office outside the Company, which is well informed in this field; and full-time corporate auditors. Reports can besubmitted through any of these channels, irrespective of content, and be submitted in any form, such as by email
or in writing as well as by phone or otherwise verbally, to the contact points listed on the Company’s intranet.
Submitted reports are included in the Group’s Compliance Handbook. Moreover, reports can be submitted in either
English or Japanese.
The system covers a wide range of issues, including violations of the Antimonopoly Act that impede faircompetition; bribery and other acts of corruption; violations of the Financial Instruments and Exchange Act that
undermine the interests of investors; harassment; violations of any laws concerning business operations, including
human rights violations; and misconduct that violates corporate ethics or internal rules. Furthermore, the internalreporting system is open for consultation when an individual becomes aware of or is concerned about a complianceviolation or when they have a question about compliance in the course of executing business.
Whistleblowers are given stringent protection. We strictly prohibit any disciplinary action, retaliation, or otherdisadvantageous treatment of whistleblowers by the Company and strive to thoroughly protect anonymity andmaintain confidentiality concerning their reports. Personnel involved in responding to these reports are designatedas being in charge of whistleblowing, as stipulated in Japan’s Whistleblower Protection Act, and are obliged tomaintain complete confidentiality with regard to the identity of the whistleblower and to eliminate the risk of their
being recognized.

2. Response to Issues Raised by Internal Reports

Internal reporting
systemWhen an issue is reported, the chief compliance officer (CCO) is consulted to determine a response with due
consideration to the whistleblower’s wishes and, if deemed necessary, an investigation is promptly conducted toestablish the facts. The Company is obliged to notify the whistleblower (within no more than 20 days following thesubmission of a report) as to whether an investigation will be conducted and to provide reasons for the decision,
except when the report has been submitted anonymously. During this process, we impose strict confidentiality
on those involved in or subject to any investigation and prohibit any disadvantageous treatment of those underinvestigation or cooperating therewith, as is the case with a whistleblower.
Timely reports on the status of an investigation are made to the CCO, who, in the event of a confirmed complianceviolation, will implement corrective measures and seek to prevent further damage based on the advice of a legal
counsel while also taking action to prevent a recurrence. The CCO will take remedial action if the case is related to aviolation of human or other rights.
Serious compliance violations will be reported to the chief compliance executive of the Tokyo Century Group(president & CEO of Tokyo Century Corporation) and corporate auditors.

3. Status of Reports Received by Internal Reporting Contact Points
The types of cases received by the contact points for internal reporting are roughly classified into such categories
as rule violations, harassment, workplace environment, and other cases. The number of cases received over
the years, including those reported by Group companies in Japan and overseas, are summarized in the graphbelow. There was a total of 17 cases reported in fiscal 2022. Appropriate corrective measures are being taken inaccordance with the content in all types of cases.
For more information, please refer to the following website.
https://www.tokyocentury.co.jp/en/sustainability/esg/governance/compliance.html#anc_whistleblower

Number of reports received(consolidated basis)

Unit

Fiscal 2020

Fiscal 2021

Fiscal 2022

Number of Reports
Received

17

16

17

Rule violations

0

1

0

Harassment

9

6

8

Workplace environment
issues739

Other cases

1

6

0

4. Revision of the Internal Reporting System and Measures to Promote Use
Use of the internal reporting system and responses to individual cases are reported once every six months to theManagement Meeting and Board of Directors and are regularly checked and evaluated by our legal counsel tomake any necessary improvements.
We also encourage all officers and employees to use the internal reporting system through an annual compliancesurvey to ascertain their awareness of how contact points have been used, biannual e-learning sessions on the
purpose and significance of the system, and various training programs that include sessions on the system.

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Prevention of Money Laundering
In accordance with its Corporate Code of Conduct and Our Action Guidelines, Tokyo Century recognizes theimportance of taking action against money laundering, the financing of terrorism, and proliferation financing (ML/FT/PF) and thus strives to prevent the Tokyo Century Group, its employees, and its customers from becoming
involved in such acts.
The Group therefore works to prevent regulatory violations associated with ML/FT/PF while continuously
strengthening its countermeasures to fulfill the requirements of international organizations such as the United
Nations and the Financial Action Task Force on money laundering as well as to adhere to the laws and regulationsof Japan and other countries, including those imposed by the U.S. Office of Foreign Assets Control.
A specific internal control framework and operation provisions are stipulated in our Regulations for Anti-Money
Laundering and Financing of Terrorism.
1. Establishment of a Framework to Prevent Money Laundering and the Financing of Terrorism
The Company recognizes that implementing measures against ML/FT/PF is an important management issue
and will establish and maintain an effective control framework.
2. Commitment by Management
The Company’s management takes a leadership role in preventing ML/FT/PF.
Initiatives forpreventing money
laundering

3. Identification, Assessment, and Mitigation of Risks Associated with Money Laundering and the Financingof Terrorism
The Company adopts a risk-based approach to identifying and verifying risks related to ML/FT/PF that are
relevant to the Company, assesses the risks identified, and takes appropriate action to mitigate said risks inlight of the assessment results.
4. Customer Verification
To ensure public security and sound economic practices, the Company takes “Know Your Customer” measuresin a timely and appropriate manner to prevent ML/FT/PF that encourages organized crime and to block any
relationships with anti-social forces. To this end, we make use of databases and other tools to perform pretransaction screening and conduct checks during transactions in addition to monitoring contractual procedures
based on internal rules.
5. Notification of Suspicious Transactions
The Company will promptly notify the authorities in the event that it detects suspicious transactions based on
checks and monitoring conducted during transactions or through reporting by sales and other divisions.
6. Training of Officers and Employees
The Company provides ongoing training so that its officers and employees can deepen their knowledge
regarding the prevention of ML/FT/PF and take appropriate action at any time necessary.
7. Compliance Auditing
To ensure appropriate operations regarding the prevention of ML/FT/PF, the Company conducts internal audits
on a regular basis and strives to improve its internal framework.

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Anti-Corruption
The Tokyo Century Group is committed to preventing corruption by conducting fair, equitable, and transparent
transactions in all of its business activities.
1. Initiatives for Preventing Corrupt Practices
The Group makes a concerted effort to ensure compliance and prevent corruption while addressing issues suchas the prevention of money laundering, the financing of terrorism, and proliferation financing; the blocking of
any relationships with anti-social forces; prohibition of insider trading; and compliance with the Antimonopoly
Act, including provisions related to cartels and bid-rigging, as well as with the competition laws of othercountries.
2. Prohibition of Bribery
Except when permitted by the relevant rules, the Group prohibits offering entertainment, cash, or any otherbenefits to domestic and foreign public officials* and engaging in behavior such as receiving, demanding, or
promising illicit or unjustifiable business profits with the intention of obtaining favors, rewarding public officials
for favors obtained, or gaining illicit profit, either directly or indirectly through agents, consultants, or any otherthird party.
* “Public officials” is understood hereafter to include public officials, quasi-public officials, foreign public officials, and officials and employees of
special-status companies.

Initiatives forpreventing
corruption

In our international business, we remain particularly committed to acting prudently and appropriately withregard to entertainment and gifts to and from foreign public officials in stringent compliance with the laws andregulations of Japan and those of other countries and regions.
(1) Key considerations for providing entertainment and gifts to public officials
i. Entertainment and gifts should not be given with the intention of obtaining favors or rewarding public
officials for favors obtained.
ii. Cost and other expenses must be within the scope of typical social norms.
iii. The location of meetings and handling of expenses must be open and transparent.
iv. Confirmation with the recipient must be made that the provided entertainment or gift does not violate
any internal rules nor any public laws or regulations.
v. If the recipient is a foreign public official, in addition to meeting the above requirements from i. to iv., itmust be clear that the purpose is not to obtain illicit business profits, and the expenses must be kept
within the customary and socially acceptable range of the country of the foreign public official.
(2) Prohibition of entertainment and other benefits that violate social norms
Exercise caution and refrain from frequently offering entertainment or gifts to specific business partners
and related parties as well as those regarded as expensive according to some social norms or industry
practices.
3. System and Response
We ensure whistleblower protection so that no disadvantageous actions are directed toward any officer or
employee who reports on, or who provides information concerning violations or potential violations of laws,
regulations, or internal rules on preventing corrupt practices.
4. Education and Training
To ensure that these anti-corruption initiatives are thoroughly understood and implemented by officers andemployees across the Group, they are clearly laid out in our compliance handbook in Japanese, English, andChinese, and they are also incorporated into e-learning and other in-house training as necessary. We havecompiled Guidelines on Offering Entertainment to Public Officials in Japanese, English, and Chinese that state
the points to be noted to ensure that they are well understood by officers and employees of overseas Groupsubsidiaries.
5. Reporting
The progress and status of initiatives for preventing corrupt practices are reported to and reviewed by theManagement Meeting and Board of Directors as part of the implementation of the Group’s compliance system.
In fiscal 2022, no fine was imposed on the Group and no officers or employees were dismissed or disciplined
for corruption.

Policy on politicalfunds

The Tokyo Century Group’s Corporate Code of Conduct stipulates that we should act from a global perspective thatis highly transparent and sincere, by respecting the cultures and customs of the countries and regions in which
the Group operates and complying with all laws, regulations, and rules, in addition to conducting sound and faircorporate activities in accordance with social norms.
Our policy on political funds prohibits donations to political parties, political fundraising groups, other politicalorganizations, and candidates for public office (e.g., politicians).
Therefore, no political contributions are recorded each year.

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Information Security

The Tokyo Century Group has acquired certification under the ISO/IEC 27001 international information security
management system standards, with the goal of protecting the information assets of its clients and those of theGroup from threats such as unauthorized access, loss, leakage, revision, and destruction. With this certification,
we practice the appropriate protection and management of information assets on a Groupwide basis. Aiming toalways be a company trusted by society, the Group will strive to ensure information security by working to further
entrench adherence to ISO/IEC 27001 standards and by engaging in continuous improvement efforts (certification
was received from BSI Group Japan K.K.).
Acquisitionof ISO 27001
certification

Scope of ISO 27001 Certification
ISO 27001 certification has been acquired for the following Tokyo Century Group
entities.
■ Tokyo Century Corporation (head office, Okachimachi office, Akihabara UDX
office)■ TRY Corporation■ TC Business Services Corporation
In addition, the following consolidated subsidiary has received certification on an
individual basis.
■ FLCS Co., Ltd. (all offices)Tokyo Century Group seeks to protect the information assets of business partners and of the Group from various
security risks by laying out guidelines and related rules and regulations to carry out the following initiatives.
1. Protection of Information Assets
We will protect all information assets related to our business activities. In particular, we will designate
information concerning our business partners and confidential information concerning the Group as vital
information, and we will appropriately handle such information to protect it against illegal access, loss, leaks,
falsification, and destruction.
2. System of Information Security Management
We will clarify the roles and responsibilities for information security through the Information Security Committee,
as the organization for deliberating on information security, and a Chief Information Security Officer, as the
person responsible for implementing related measures, and we will pursue these activities Group-wide.
Basic Information
Security Policy

3. Information Security Education
We will consistently conduct education and training on information security for officers and employees tomaintain and deepen awareness of information security.
4. Response to Incidents and Accidents
We will strive to prevent incidents and accidents related to information security, and in the event of such an
incident or accident, we will promptly respond with appropriate action, including preventive measures.
5. Legal Compliance
We will comply with laws and regulations on information security as well as rules and contractual security
requirements.
6. Initiatives for Continuous Improvement
We will evaluate the security risks of information assets based on appropriate risk assessment to promote
effective security measures. In addition, we will respond to changes in the management environment andprogress in information technology by regularly reviewing our policies, rules, and measures to make continuous
improvements.

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Information
security
initiatives

The Tokyo Century Group views information security as a crucial issue affecting corporate management. The
Company has accordingly obtained certification under ISO 27001, the international standard for information
security management systems. Under the leadership of the Information Security Committee, we periodically revise
regulations and rules regarding information management, conduct regular risk assessments to address information
security risks, and carry out security training for employees and officers.
The TC-CSIRT (computer security incident response team) has been set up within the IT Unit as a dedicatedcybersecurity organization. Under normal circumstances, the TC-CSIRT will take steps to prevent the recurrenceof past incidents and the occurrence of new incidents by monitoring security systems, assessing the security ofcloud services, and educating officers and employees. As cyberattacks grow more sophisticated and complex,
we endeavor to enhance our response capabilities by periodically having our cybersecurity measures assessedby third-party institutions, sharing information with external partners through membership in the Nippon CSIRT
Association, and participating in drills for exercising the knowledge acquired in this manner.
Developing a global business means that actions must be taken to protect personal information and strengthen
information security measures considering various cultures and regulatory environments. In 2022, the servicesof external experts were enlisted to revise the security guidelines that act as the minimum standard for security
at Group companies with the aim of reinforcing global security governance. Based on the revised guidelines,
assessments of overseas subsidiaries are performed to identify issues and implement response measures.
In addition, we encourage closer collaboration with Group companies by strengthening management of outside
subcontractors, providing information on information security, and holding regular liaison meetings. In addition tothese efforts, we conduct email drills targeting the Company and domestic and overseas Group companies withemails in Japanese, English, and Chinese several times a year. These drills have proved to be an effective training
method for improving the information security awareness of officers and employees.

Personal Information Protection

Tokyo Century recognizes that protecting personal information, including Personal Identification Number andspecific personal information, is a vital social responsibility, and we will appropriately handle personal informationin accordance with our Privacy Policy.
The personal information of customers and shareholders will be used appropriately as required for the intended
uses.
Personal information
protection initiatives

Privacy Policy
https://www.tokyocentury.co.jp/en/sustainability/esg/governance/personal-information.html#anc_privacy

Handling of Customers’ Personal Information
https://www.tokyocentury.co.jp/en/sustainability/esg/governance/personal-information.html#anc_privacy-customer

Handling of Shareholders’ Personal Information
https://www.tokyocentury.co.jp/en/sustainability/esg/governance/personal-information.html#anc_privacy-shareholder− 68 −SUSTAINABILITY DATA BOOK 2023

OthersExternal Evaluations / Inclusion in ESG Indices

MSCI ESG Ratings

FTSE4Good Index Series

MSCI ESG Research LLC rates
companies on a seven-tiered scale,from CCC to AAA, according to their
exposure to ESG risks and otherfactors. Tokyo Century received an
MSCI ESG Rating of AA in 2023.

Tokyo Century has been selected as a constituent of
the FTSE4Good Index Series, a major global index
series for socially responsible investment.
For more information, please refer to the
MSCI official website.
TERMS AND CONDITIONS

For more information, please refer to the FTSE official website.
https://www.lseg.com/en/ftse-russell/indices/ftse4good

MSCI Japan ESG
Select Leaders Index
The MSCI Japan ESG Select Leaders
Index is based on the MSCI Japan IMIIndex and composed of companies
that have demonstrated outstanding
ESG performance. Tokyo Century has
been a constituent of the index since
2017.

FTSE Blossom Japan Index
For more information, please refer to the
MSCI official website.
TERMS AND CONDITIONSThe FTSE Blossom Japan Index is designed as a tool
to measure the performance of Japanese companies
that have a track record of strong ESG practices.
Tokyo Century has been a constituent of the index
since 2017.
For more information, please refer to the FTSE official website.
https://www.lseg.com/en/ftse-russell/indices/blossom-japan

FTSE Blossom Japan Sector
Relative Index

MSCI Japan Empowering Women (WIN) Select Index
The MSCI Japan Empowering Women (WIN) Select Index comprises
Japanese companies with relatively high levels of gender diversity relative
to their peers in the same industry, as defined by the Global Industry
Classification Standard (GICS ®), selected from among the top 700
companies in terms of market capitalization. Tokyo Century was selected
for inclusion in this index in 2022.

The FTSE Blossom Japan Sector RelativeIndex is an index designed to be sector
neutral, reflecting the performance of Japanesecompanies that demonstrate outstanding ESG
practices in their respective sectors. Tokyo
Century has been a constituent of the index
since 2022.

For more information, please refer to the MSCI official website.
https://www.msci.com/our-solutions/indexes/japan-empowering-women-select-index

For more information, please refer to the FTSE official website.
https://www.lseg.com/en/ftse-russell/indices/blossom-japan

MSCI Japan 700 SRI Select Index

Morningstar Japan ex-REIT
Gender Diversity Tilt Index

The MSCI Japan 700 SRI Select Index is designed to represent theperformance of companies that are consistent with specific values- andclimate change-based criteria. Through a best-in-class approach, the intext
targets 25% of the free float-adjusted market capitalization within each GIS®
sector of the Parent Index in order to give exposure to companies with high
ESG ratings. Tokyo Century has been selected for inclusion in this index.

The Morningstar Japan ex-REIT Gender Diversity Tilt Index uses the dataand evaluation methods supplied by Equileap to facilitate investments
focused on companies that have entrenched established gender diversity
policies as part of their corporate culture and companies that have promised
to provide employees with equal opportunities regardless of gender. Tokyo
Century has been selected for inclusion in this index.

For more information, please refer to the MSCI official website.
https://www.msci.com/eqb/methodology/meth_docs/MSCI_Japan_700_SRI_Select_
Index_Methodology_Apr2022.pdf

For more information, please refer to the Morningstar Indexes official website.
https://indexes.morningstar.com/gender-diversity-indexes

S&P/JPX Carbon Efficient Index

CDP

The S&P/JPX Carbon Efficient Index comprises
companies that boast high levels of carbon
efficiency and that actively disclose information
on CO2 and other emissions. Tokyo Century has
been a constituent of the index since 2018.

CDP is a U.K. nonprofit organization thatencourages companies to disclose information
regarding climate change and other environmental
issues and that conducts surveys and analysesof such information. Tokyo Century has been
disclosing information through responses to CDP’s
climate change and water security questionnaires
since fiscal 2016.

CDP
score

− 69 −

Category

Fiscal 2020

Fiscal 2021

Climate change

B−

B

Fiscal 2022
B

Water security

C

C

C−

Digital Transformation
Stock Selection
The Digital Transformation Stock
Selection comprises listed companies
selected by METI and the Tokyo Stock
Exchange for having establishedinternal frameworks to promote digitaltransformation aimed at improving
corporate value and for having
been highly successful in utilizing
digital technologies. The Company
has been included in this programin each of the nine years since theestablishment of the Competitive IT
Strategy Company Stock Selection
program, the predecessor of theDigital Transformation Stock Selection
program.

DX Certification System
The DX Certification system is basedon the Act on Partial Revision of the
Act on Facilitation of Information
Processing. In 2021, Tokyo Century
was certified by the Ministry of
Economy, Trade and Industry (METI)
through this system, indicating that
the Company is implementing superior
initiatives based on the guidelines for
information system implementationand management. This certification
was renewed in March 2023.

2023 Certified Health &Productivity Management
Outstanding Organization

Platinum Kurumin
Certification
In 2017, Tokyo Century was accreditedwith Platinum Kurumin certificationby the Ministry of Health, Labourand Welfare as a company pursuinghigh quality initiatives for supportingchildrearing.

PRIDE INDEXThe PRIDE INDEX was established bywork with Pride in 2016 to encourage
the development of better workplaceenvironments for members of the
LGBTQ+ community. Tokyo Century
received a rating of silver in the 2022
iteration of this index.

The Certified Health & Productivity
Management Outstanding
Organizations Recognition Program
established by the Ministry of
Economy, Trade and Industry
recognizes corporations, particularly
large enterprises, small and mediumsized enterprises, and otherbusinesses, for their excellent healthand productivity management. The
program is assessed on the basisof initiatives tailored to local healthissues and health promotion initiatives
promoted by the Nippon Kenko Kaigi.

Certification as an Approved Operator
Making Excellent Efforts in the ESG
Lease Subsidization Program
Among the designated lease operatorsin the Ministry of the Environment’s
ESG lease subsidization program forbuilding a decarbonized society, theMinistry of the Environment recognizes
those operators whose ESG lease
initiatives are outstanding as approved
operators making excellent efforts.
Tokyo Century is one such recognizedcompany.

Tokyo’s Model Company for
Disaster Prevention Measures
The Tokyo Metropolitan Government
certifies companies that actively work
to prevent employees from returninghome at the same time in the eventof a disaster. The purpose of thismeasure is to prevent problems withlifesaving and rescue activities andsecondary damage. Tokyo Century
was selected as a model company
for its work on this initiative in Tokyo
in fiscal 2021, in recognition of its
outstanding efforts that have aparticularly large influence on society.

− 70 −

Participation in External Initiatives

Signing of theUnited Nations
Global Compact

Endorsementof TCFD
recommendations

Tokyo Century became a signatory to the United Nations Global Compact in May
2018. An international initiative spearheaded by the United Nations, the Global
Compact invites companies and organizations to participate on a voluntary basis.
Signatories exercise creative and responsible leadership and act as good citizens
to contribute to the development of global frameworks for realizing sustainablegrowth.
Moreover, the Global Compact requests that signatories adhere to its
Ten Principles in the four areas of human rights, labour, environment, andanticorruption. Through ongoing efforts to live up to these principles, we aim tocontribute to the creation of an environmentally sound, sustainable economy andsociety.
Tokyo Century announced its endorsement of the recommendations of the
Financial Stability Board’s Task Force on Climate-related Financial Disclosures(TCFD) in April 2021. We have since been disclosing information based on TCFD
recommendations.
■ For more information, please refer to the TCFD official website.
https://www.fsb-tcfd.org/

Membership in
the TCFD
Consortium

An initiative advanced by corporations and financial institutions that endorse
the TCFD recommendations, the TCFD Consortium was established to provide aforum for discussions on effective climate-related financial disclosure methods
and initiatives to utilize disclosed information in making appropriate investment
decisions by financial institutions.

Joining of
the GX League

Tokyo Century joined the GX League in April 2023.
The GX League was established by the Ministry of Economy, Trade andIndustry. It acts as a forum where a broad group of companies engaged in green
transformation, including players in the governmental, academic, and economic
spheres, cooperate to discuss the transformation of the overall economic andsocial system as well as to create new markets suitable for achieving carbon
neutrality by 2050.

Signing of
Principles for
Financial Action forthe 21st Century

In May 2016, Tokyo Century signed the Principles for Financial Action toward theFormation of a Sustainable Society (Principles for Financial Action for the 21stCentury), an initiative encouraging financial institutions to incorporate seven ESG
principles into their financial activities.
We take the environment and society into account in our activities based onthese principles for contributing to the realization of a sustainable society.

Support for Fun to
Share initiative

Tokyo Century has been supporting the Fun to Share initiative since March 2014.
The Fun to Share initiative is a climate change response campaign advanced by
the Ministry of the Environment to contribute to the realization of a decarbonizedsociety.
The slogan of the Fun to Share initiative translates as, “Let’s share the latest
insights on global warming response measures to create a decarbonized society.”

Membership in
Platinum Society
Network

Tokyo Century became a member of the Platinum Society Network in August2022.
The Platinum Society Network defines a “platinum society” as a “a flourishingand sustainable society in which the global environment is protected andeveryone is able to achieve self-actualization.” A characteristic of the network in
its quest to achieve such a strategy is how it aids in the formation of solutions
by establishing networks among industry, government agencies, companies,
academic organizations, and private citizens and encouraging coordination
between regions and entities that share its platinum Society vision.

− 71 −