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Introduction

ManagementMessage

How We Create Value

Compass2030
Vision and Strategy

Invisible
Assets

TCFD

CorporateGovernanceBusinessOverview

Financial Data

TCFD

TCFD
The Tokyo Gas
Group’s climaterelated initiatives

We regard the Task Force on Climate-Related Financial Disclosures (TCFD) framework as being aneffective way to promote information disclosure and dialogue with stakeholders on climate-relatedissues. We therefore signed the statement of support for the TCFD, in May 2019. We began
information disclosure according to TCFD’s recommendation in fiscal 2020 and will continue toappropriately disclose information on the impact of climate change on the Tokyo Gas Group’sbusiness activities and the measures to be taken.

GovernanceWe strive for appropriate, prompt decision-making and efficient execution of business operations bydiscussing the issue of promoting sustainability as an important matter related to business operation.
This is done by a select committee that supports the Corporate Executive Officers’ rational decisionmaking to help it to be proper and effective. When appropriate, Directors are provided with reportson the status of execution of business operations, which are based on decisions made by the Boardof Directors, and hold discussions on them as needed. Moreover, a Sustainability Committee, which ischaired by the President and aimed at promoting sustainability issues, has been established to reportimportant matters to the Board of Directors.

Tokyo Gas Integrated Report 2021
34

Sustainability promoting structure
Board of Directors
Representative Corporate Executive
Officer, President and CEO
Committee
supporting rational
decision-making
by Corporate
Executive Officers

Sustainability
Committee
Chair:President

Tokyo Gas Business Departments

Subsidiaries
As of June 29, 2021

Back To Contents

Management
Message

Introduction

How We Create Value

Compass2030
Vision and Strategy

Invisible
AssetsCorporateGovernance

TCFD

BusinessOverview

Financial Data

TCFD

Strategies

Feature: Challenge to achieve Net-Zero CO2P.03

aimed at achieving Net-Zero CO2 emissions andtake a leading role in the transition to a
decarbonized society.
While realization of a decarbonized society isa global common target, the social
implementation of decarbonization technology,
such as by use of renewable energy, may not be
sufficient to draw a viable roadmap to Net-Zero
CO2 for certain industries, countries, or regions.
The Tokyo Gas Group therefore believes that it isimportant to tailor the efforts of transition
toward decarbonization and lower carbonization,by making adjustments for the situation of each.
1.Conceptual illustration of transition

1. Conceptual illustration of transition
Carbon neutral

In our statement on future management,
Compass2030, announced in November 2019 theTokyo Gas Group declared it was to take up threechallenges, including “Leadership in the effort toachieve Net-Zero CO2.” Since then, the movetoward decarbonization has been gaining
momentum in Japan as the Japanese government
called for the nation to achieve net zero carbon
emissions by 2050 and made a commitment toraise its reduction target in greenhouse gas
emissions to 46% compared to the level in 2013.
Under such circumstances, the Tokyo Gas
Group is working to increase the volume ofnatural gas it handles, by expanding overseas
businesses and other means, expanding
renewable energy sources which have a highaffinity with natural gas, and gaining benefits
from the decarbonization technology
development of gaseous energy, such ashydrogen and methanation. We are dedicated tothereby enhance and increase the initiativesNot all inriesdust

will make the leap to decarbonized so

Examples: Electric vehicles,
renewable energy, carbon
ciety recycling, etc.

Examples: Hybrid vehicles, high-efficiency
power generation facilities, etc.

Examples: inefficient vehicles,
inefficient factories, etc.

Decarbonized society

GAS

Transition stage
Brown Economy
Present(1)Transition technology

2030(2)Non-continuous innovation technology

Japanesecompanies

2050

Prepared by Tokyo Gas based on the Climate Innovation Finance Strategy 2020 by the METI.

2.Global natural gas demand projections(Base year: 2018)

160

155
Global LNG demand(4°C warming scenario)

The International Energy Agency (IEA) isprojecting growth in global LNG demand and innatural gas demand in Asia-Pacific toward 2030
in its multiple forecast scenarios. As we believethat natural gas provides a fast-acting way to
reduce CO2 emissions, we intend to contribute to
the transition in Asia-Pacific via LNG businessdevelopment, making use of our accumulated
strengths and achievements in the LNG business.
2.Global natural gas demand projections

140

Asia-Pacific LNG demand(4°C warming scenario)

145140136

Asia-Pacific LNG demand(Below 2°C warming scenario)

120
Global LNG demand(Below 2°C warming scenario)

100
2018 results

2030 forecasts
Source: IEA World Energy Outlook 2020

Tokyo Gas Integrated Report 2021
35

Back To Contents

Management
Message

Introduction

How We Create Value

Compass2030
Vision and Strategy

Invisible
Assets

TCFD

Corporate
GovernanceBusiness
Overview

Financial Data

TCFD

Major risks and opportunities
driven by climate change, and theTokyo Gas Group’s initiatives

In identifying the Tokyo Gas Group’s risks and opportunities related to climate change, we referred to two representative scenarios*1 of the International
Energy Agency and the Intergovernmental Panel on Climate Change -- the below 2°C warming scenario and the 4°C warming scenario -- summarized
important factors that may affect our group’s business, and evaluated the impacts from two aspects -- magnitude of impact and possibility to be affected-- for both scenarios. We then identified major factors and decided on our initiatives for each factor toward 2030.

Major initiatives taken in FY2020
Opportunities
and risks

Factors

Details ofopportunities
and risksTokyo Gas Group’s initiatives toward 2030

Major initiatives taken in FY20201) Signing of a joint cooperation agreement with First Gen Corp. to construct and operate afloating LNG terminal in the Philippines

Opportunities

Markets

Global increasein demand fornatural gas

A)Resources development and expansionof LNG/gas infrastructure and otheroverseas business to increase thenatural gas transaction volume2) Investment in a gas distribution company in Indonesia

Below 2°C warming scenario

3) Acquisition of gas assets in Louisiana, U.S. and making Castleton Resources a subsidiary

Opportunities

EnergyresourcesAffinity ofrenewableenergy withnatural gas

B) Effective use of natural gas to adjust
fluctuation of output of renewableenergyC)Increase in renewable energy transaction
volume in Japan and overseas
D)Use of PV, storage batteries, EV, etc.
to promote new decentralized powersource business and VPP4) Acquisition of a large-scale solar power generation project in the U.S.
5) Acquisition of biomass power generation business, using wood pellets, in Takaoka, Toyama
Pref. and Ichihara, Chiba Pref.
6) Investment in Principle Power, a floating wind power technology company in the U.S.

7) Evolution into “advanced smart energy”

4°C warming scenario8) Issuance of the Company’s first green bondOpportunities
and risks

Resource
efficiency andtechnology

Decarbonization
technology
innovation

Opportunities
and risksMarkets, andpolicies andlaws

Introduction ofcarbon pricing*2

Opportunities

Resilience

Decentralizedenergy systemusing natural
gas to enhance
resilience

Risks

Acuteness

Impact onoperations, asassociated withseverer abnormal
weatherE) development of decarbonization
technologies for gaseous energy suchas hydrogen and methanation,etc.
F) Introduction and use of CCUS
technologies
G)Fuel conversion, etc. to accelerate shift
to natural gas
Initiatives B) to F)
H)Enhanced resilience in the natural gas
infrastructureI) Expanded use of decentralized energy
system, such as smart energy networks,
co-generation, ENE-FARM, etc. thatare highly resilient and reduce energy
consumptionJ) Disaster countermeasures for LNG
terminals and power stations toenhance establishment of water
hazard-resilient Life Line, and full
preparation for BCP.

9) Supply of carbon neutral LNG and city gas, such as by the establishment of Carbon Neutral
LNG Buyers Alliance10)Accelerated development of CCUS technology and services aimed to be launched in FY2023
11)Accelerated development of a low-cost water electrolyzer, using fuel-cell technologies andknowhow12)Launch of a methanation verification test and study of a carbon neutral alliance model in
Tsurumi-ku, Yokohama

Promoted construction of a floating LNG terminal that enables use of aFloating Storage & Regasification Unit (FSRU), with the aim of introducing
LNG to the Philippines as early as in the second half of 2022.
Promoted use of unused gas and shift to natural gas from liquid
fossil fuels with high CO2 emissions, contributing to reduction in CO2emissions in the country.
The acquisition led to an increase by approx. 1.6 times in production
volume from approx. 8 million m3/day, gas equivalent to approx. 13
million m3/day. Increase ownership interest in Castleton from 46% toover 70%.
Details on p. 37 example 1
Details on p. 37 example 1
Promoted floating offshore wind power development in Japan andoverseas by utilizing Principle Power’s technology which excels instability in maritime conditions.
Advanced smart energy by offering new value, such as use of AI andBig Data, Net-Zero CO2 by using renewable energy facilities, carbon
neutral LNG, etc., and enhanced comfort in offices, in addition tomore energy saving, less CO2 emission, and more resilience.
Plan to fund a renewable energy project with participation by theTokyo Gas Group. Total amount: ¥10 billion, term: 10 years
Details on p. 37 example 2
Details on p. 03 Feature: Challenge to achieve Net-Zero CO2Details on p. 03 Feature: Challenge to achieve Net-Zero CO2
Details on p. 03 Feature: Challenge to achieve Net-Zero CO2

Initiatives 1) to 12)13)Establishment of Ekimachi Energy Create with the JR East Group

Details on p. 37 example 314)Launch of the Ibaraki Line Service and commercial operation of the LNG tank No. 2 at Hitachi
LNG Terminal

Details on p. 37 example 415)Comprehensive disaster-prevention drilling, assuming windstorm and flood damage

Confirmed the initial response, assuming damage caused by riverflooding driven by a typhoon*1: Scenarios, for reference:• Scenario of limiting the global average warming by less than 2°C above pre-industrial levels: Sustainable Development Scenario (SDS)(IEA WEO 2019); B2DS (IEA ETP 2017); RCP2.6 (IPCC AR5)
• Scenario of limiting the global average warming by 4°C above pre-industrial levels: IEA Stated Policies Scenario (STEPS) (IEA WEO 2019); RTS (IEA ETP 2017); RCP8.5 (IPCC AR5)*2 Introduction of appropriately-designed carbon pricing may promote shift to forms of energy with less CO2 emissions but, depending on the scheme design, may negatively affect the company’s business due to a rise in energy cost and other factors.

Tokyo Gas Integrated Report 2021
36

Back To Contents

Introduction

ManagementMessage

How We Create Value

Compass2030
Vision and Strategy

Invisible
AssetsCorporateGovernance

TCFD

BusinessOverview

Financial Data

TCFD
Example1

Expansion of introduction of renewable power sources

Example 3

Aktina Solar Project (631MWdc)

Fushiki Manyofuto Biomass Power Plant (51MWdc)

The first global solar projectin which Tokyo Gas Groupwill take initiative fromconstruction to commercial
operation (Texas, U.S.)

Wood pellet biomass power
generation facilities inTakaoka, Toyama Prefecture;
to start commercial operation in October 2021

Example 2

Carbon-neutral LNG and city gas

Carbon neutral LNG (CNL) is the designation production of which is deemed as offsetting greenhousegases, which are generated in the process, from extraction to the burning of natural gas. This offset
is through the CO2 reduction effects of support of forest regeneration and other environmental
conservation projects. We are promoting improvement of the environment by this support.

Establishment of Ekimachi Energy Create Co., Ltd.

Overview of adopted environmental/energy technologies in the Shinagawa Development Project
Electricity

The Carbon Neutral LNG Buyers Alliance was established onMarch 9, 2021. The participating companies will work toincrease the recognition of carbon neutral LNG in societyand carry out initiatives to improve evaluation of the effects
of initiatives by investment institutions and thereby
encourage environment-conscious action.

Electricity and heat
Tamachi Station
Block I

Block III

Solar heat
Block IV
NorthTower

Block IV
SouthTower

A solar energy collector converts
sunshine into thermal energy tobe used for heating water

Block II

Biogas system

Example 4Food waste from the community
is converted into thermal energy
to be used for heating water

Launch of the Ibaraki
Line Service andcommercial operationof the LNG tank No. 2at Hitachi

Fuel cells
Reaction of hydrogen andoxygen generates power and theheat generated is used forcommunity central heating andair-conditioning.

Wastewater heat

On October 1, 2020, Tokyo Gas changed
its supply of city gas used for thecogeneration system of Hotel New
Otani, Tokyo, to carbon neutral city gas.

Heat

PV and wind power
generation

Difference in temperature
between reclaimed water of thecommunity and the outside air isconverted into thermal energy tobe used for community central
heating and air-conditioning

Connected a loop of
high-pressure gas pipelines in
the North Kanto area andachieved improved supply
stability and enhanced gas
transmission capacity througha mutual backup system offour LNG terminals

Takanawa Gateway Station
Shinagawa Station
Community central heatingand air-conditioning
Cold/hot water needed in thecommunity is manufactured andsupplied

Cogeneration system

Ground source heat

Beside power generation, waste
heat generated is converted into
thermal energy to be used forcommunity central heating andair-conditioning

Difference in temperature between
the ground and the outside air isconverted into thermal energy to
be used for air-conditioning
Courtesy of JR East for the rendering

Energy management with integration of supply and demand
Ensuring highly-reliable electric power supply and business continuity in case of disasters are ensured by use of diverse renewable energy
sources (i.e., PV, wind power generation, wastewater heat, ground source heat, solar heat), multiplexing of power systems, adoption ofcogeneration and emergency power generation facilities, etc.

Risk management

Metrics and Targets

We have established an enterprise risk management (ERM) system, and explicitly stated major risks in
the Risk Control Regulations.
The Risk Management Committee was established to improve the management level of the ERMsystem. The Committee regularly reviews the risks, and checks how the ERM system is being
maintained and operated. It reports to a committee that supports Corporate Executive Officers’
decision-making.

The Tokyo Gas Group management vision Compass2030 has set the management guidelines and key
figures for realizing corporate growth.
FY2020 results

FY2022Contribution to CO2emissions reduction-6.68 million tons

Renewable power source
transaction volume1.383 million kW

2.00 million kW

5.00 million kW*2

No. of customer accounts

12.31 million

14.80 million

20.00 million*3

Natural gas transaction
volume18.20 million tons

-6.50 million tons -10.00 million tons*1

17.00 million tons 20.00 million tons*4*1 Base year: fiscal 2013, including contribution of emissions reduction during consumption by customers*2 Domestic and international, including procurement*3 Total no. of gas, power, and service agreements (domestic and international)*4 LNG equivalent Including overseas business and trading

Tokyo Gas Integrated Report 2021
37

FY2030