Compass 2030

TOKYO GAS INTEGRATED REPORT 2020

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Tokyo Gas Group Management Vision

Compass

2030
Providing energy and solutions for future lifestyles,
society and the earth
VISION - What we aim to be in 2030 -Our goal will be a business group which continues
to create value together with our customers,
business partners and society as a whole while
becoming a leader in future energy systems.
On November 27, 2019, we announced a new management vision called“Compass 2030”, in which we presented what we aim to be in a decade fromnow, as a leading domestic company dealing in natural gas (a fossil fuel).

Our thoughts
incorporated
in Compass

In the half-century since we introduced LNG in Japan, we have promoted
more widespread use of this new source of energy, leading the way tothe age of natural gas. At present, with decarbonization, digitalization,customer diversification, and deregulation in the energy market, we areon the cusp of a new age of innovation. We believe that the properroles of energy and energy suppliers will be questioned over the nextten years leading up to 2030. Looking toward the next half-century, we
have formulated the “Compass 2030” management vision outlining thecourse that we should pursue in this age of uncertainty.

Management guidelines and key figures
FY2019 forecast*1

2030

200 billion

Profit level¥ 118.5 billion

Approx. ¥Contribution to CO2 emission
reductions-5 million tons

-10 million tons

0.59 million kW

5.0 million kW(base year: FY2013)

Renewable power source
transaction volume (FY-end)

No. of customer accounts (FY-end) 12.2 million

20.0 million

Natural gas transaction volume

20 million tons

(FY)

16.7 million tons

*1 At time of 3Q results

Company portfolio in 2030: Profit levelOverseas*2
Solutions, etc.*3
Energy*4 (Gas + Power)*2 Overseas: All overseas businesses*3 Solutions, etc.: Ongoing service agreements,
engineering, real estate etc.
*4 Energy: Domestic gas and power businessApprox.
¥120 billion

Approx.

200 billion

¥

25%
25%
50%

Current2030

Compass 2030

TOKYO GAS INTEGRATED REPORT 2020

A value co-creation ecosystem*1

Q

Lifestyle setting

What do you mean by“a business groupwhich continues tocreate value”?

A

We envision abusiness group that
establishes a “value
co-creation”
ecosystem andprovides a variety ofsolutions.

Business setting
Stable supply

Environmental
awareness

Enhanced resilience

Introduction of
decarbonization
technologies

ComfortEconomic
efficiency

Creation of comfort
tailored to thecustomer

Provision of solutions for the home
•Comfortable living spaces•Lifestyles solutions that match life cycles

Advanced energy
management

Local
community

Expansion of management service•Air conditioning control for office spaces•Inter-area energy exchange between redeveloped
or industrial parks and the local community

Customer participation

Strengths of the Tokyo Gas
GroupBusiness partner participation•Volume of energy use andequipment operation•Data on spaces and living
environments•Excess energy from prosumers•Life cycle and lifestyle preferences•Data and connections withcustomers (primarily through Tokyo
Gas Lifeval)•Provision of gas, electricity andsolutions•Equipment/appliances, construction
and maintenance•Energy technologies (IoT equipment,
storage batteries)•Digital technologies (blockchain)•Data analysis (AI)•Connections with individualcompany customers

Toward our goal in the management vision of becoming a“business group which continues to create value together withour customers, business partners and society as a whole while
becoming a leader in the future energy systems,” we will strive
to establish a value co-creation ecosystem. We will realize thisby leveraging the strengths of our group, such as Tokyo Gas
Lifeval, which functions as our last mile*2, alliances withbusiness partners, including companies in different industries
and venture firms, use of open-innovation, and cooperation
with local governments. Moreover, by having customers
participate in the ecosystem, we will flexibly combine diverse
products, technologies and services, and provide a variety ofsolutions that resolve various issues in areas ranging fromindividual lifestyles to the local community.

*1 Ecosystem: Business environment in which many companies combine their technologies, expertise, and knowledge in their specific areas of strength in order to create new value.
*2 Last mile: Site operations that require human intermediation in the final process of the value chain.

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TOKYO GAS INTEGRATED REPORT 2020

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Establishment of a value co-creation ecosystem: the strengths of the Tokyo Gas Group

Lifeval—the last mile
ASSETS
operator of Tokyo Gas

INVISIBLE

Bonds with customers* 1
Communitybased

Directcontacts

Our bonds and relationships of trust with our customers,
developed over the past 135 years, are our greatest strength.
Tokyo Gas Lifeval acts as the face of Tokyo Gas in each
community. We precisely meet customers’ needs and serve
as a one-stop provider of products and services that help
improve the quality of life, in order to build close ties withindividual customers.
Speedy response to customers and various efforts
made in direct contact with them
I am in charge of repairing gas appliances in an area ofaround 150,000 households in Izumi-ku, Totsuka-ku, andSakae-ku in the city of Yokohama and I visit 5-10 customers
per day. When a customer requests a repair, I try my best to
visit the customer as soon as possible and promptly
complete the repair, so as not to cause inconvenience to thecustomer’s life. I also have to tailor my visit to the lifestyleof the customer who will be present for the repair andefficiently and safely complete the repair. In order toaccomplish this, I make continuous efforts to obtainknowledge and know-how needed for the repair, and toprepare in advance and bring all parts which may possibly
be needed, depending on the type of repair.
Communication aimed at obtaining new business
opportunities
I am in my eleventh year with the company. When I was
assigned to repairs, I had little specialized knowledge ofrepairs. I have therefore absorbed knowledge and knowhow from my seniors and steadily accumulated experience.

I have also accompanied my sales associates and learned
how to communicate well with customers. I now can makeproper greetings and explanations to customers by myself,
depending on their situation. I try to speak slowly andclearly to elderly customers, while I explain repair details
concisely and accurately with fewer words to customers
who are busy. To every customer, I make sure to say after
the repair, “Please feel free to let me know if you have any
problems related to your residence, other than gas
appliances.” This has led to consulting about customers’
plumbing problems and receiving a designated order forrenovations in many cases. I will continue to make various
improvements so that I can receive new requests.

Outlets

174 outlets

Employees

13,000

Repairs, etc.*2 andperiodic safety
inspections*3*1 Including Enesta and Enefit*2 Repairs, etc. include opening/closing of gas fixtures.
*3 FY2019 result

As the last-mile operator of Tokyo Gas, we arecommitted to helping support customers’ lives
Our job is to closely ascertain the needs of customers
through direct contact with them and provide solutions thatare actually necessary. This cannot be possible unless weestablish bonds and relationships of trust with customers. In
addition to conducting thorough and reliable repairs, I try
to remember the customer’s name and the conversation I
had in the past and to show up at their residence when I
am in the neighborhood. Such small encounters, when they
accumulate, enhance relationships of trust with customers,
capture their needs in a timely manner, and lead to new
business opportunities. I am determined to continue toenhance my technical skills, cherish the contacts withcustomers, and help them to create a safe, reliable, andpleasant lifestyle.

Maintenance Group,
Izumi Outlet
Yokohama Totsuka
Tokyo Gas LifevalTokyo Gas Ecomo Co., Ltd.

Abe Masaru

5.2

million contacts

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TOKYO GAS INTEGRATED REPORT 2020

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Coordination of renewable energies and natural gas
Acquisition of renewable power sources

New businesses utilizing decentralized power sources

Expand renewable power source transaction
volumes both at home and abroad

Promote new businesses utilizing PV*1,
storage batteries, EV*2, etc. as well as VPP*3

5 million kW
OverseasQ

How do you plan to“lead the futureenergy systems”?

A

We will coordinate
renewable energies
and natural gas.

0.49

million kW

Domestic

2019

2030

Domestic and overseas renewableenergy resource transaction volume

PV

Onshore/offshore
wind power

Hydroelectric
power

Biomass

Stable supply through the combination of renewableenergies and natural gas, using digital technology

Adjustment of fluctuating renewable energy output
using gas-fired power generation and gas
cogeneration systems

Gas-fired power plant

Gas cogeneration systems

ENE-FARM

Effective use of natural gas*1 PV: Photovoltaic power, *2 EV: Electric vehicles,*3 VPP: Virtual power plant. A mechanism that uses IoT to manage and control decentralized power sources, batteries, etc. as if they were a single power plant.

Tokyo Gas Group is striving to coordinate
renewable energies and natural gas
In order to achieve decarbonization, the Tokyo Gas Group isaccelerating efforts to acquire renewable power sources bothin Japan and global markets while striving to combine
renewable energies with clean natural gas, which offers
excellent controllability. Toward the same goal, Tokyo Gas will
also expand the transaction volume of renewable energy
sources by making use of the strengths of domestic andoverseas business partners. However, renewable energy’s
susceptibility to the weather is an issue. In contrast, natural
gas-fired power plants can be flexibly operated andcomplement fluctuation in the generation volume ofrenewable energy. The role of natural gas-fired power plants
will therefore expand along with an increase in the use ofrenewable energies. We are therefore promoting effective useof natural gas that leverages its strength.
We are also developing a service to purchase excess PV
electricity, targeting customers whose Feed-in Tariff (FIT)
purchase period is to be terminated, and a new business to use
PV, storage batteries, and other decentralized power sources.
Further, we are promoting Virtual power plant or VPP, whichuses digital technology to automatically integrate and control
renewable energies, gas cogeneration, and decentralized powersources, such as batteries, as if they were a single power plant.
By combining decentralized power sources with large-scale
power sources, which include renewable energies and natural
gas-fired power plants, we intend to achieve a stable andinexpensive supply of energy, and to enhance environmental
awareness, comfort, stable supply, and economic efficiency.

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TOKYO GAS INTEGRATED REPORT 2020

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Coordination of renewable energies and natural gas: the strengths of the Tokyo Gas GroupA track record of achievements and unique
ASSETS latest technologies in district heating andcooling and smart energy networks

INVISIBLETokyo Gas Group’s SEN and DHC
project record in the Tokyo
metropolitan area

The Tokyo Gas Group will evolve its track record ofachievements in the district heating and cooling (DHC) businessof over 40 years into smart energy networks (SEN), using ICTdriven energy management. We have established the most
optimal energy network of heat and electricity for a district andhelped create a low-carbon, low-environmental-burden city.
From district heating and cooling (DHC) to Smart
Energy Networks (SEN)For over 40 years, the Tokyo Gas Group has been engaged in
the DHC service, in which heat for steam and chilled and hot
water used in a certain area are produced together anddistributed to multiple buildings for heating, cooling, and hot
water supply. DHC is now evolving to SEN, which mainly uses
cogeneration that locally generates heat and power, consumes
heat and electricity, and also effectively utilizes renewable andunused energy to enhance energy saving and energy security.
By constructing a network for heat, electricity, andRealizing thesame-time,same-volume asplannedinformation, and using ICT in energy management, an optimalenergy system for an area is established.
Combining SEN with VPP to establish the next
advanced energy business
Using the Tokyo Gas Group’s unique know-how, accumulated
in the establishment and management of SEN, and theadvanced digital technologies of its remote automatic control
system Helionet Advance and central management system
SENEMS, a combination of SENs that have renewable energies,
gas cogeneration, and other decentralized power sources with
VPP*, will lead to the next advanced energy business. Recently,
we commercialized and began operation of VPP, which uses
Helionet Advance and automatically integrates and controls PV
power, batteries, and gas cogeneration, which are installed indecentralized locations of multiple facilities of the Tokyo Gas
Group.
* VPP: Virtual power plant. A mechanism that uses IoT to manage and control decentralized
power sources, batteries, etc. as if they were a single power plant.

Uses its unique logic to forecast electricity load and determine
power transmission and reception volume
Monitors the supply-demand balance and automaticallycontrols volume to realize same-time, same-volume as needed
Information
Electricity

PV power output

Yokohama
Research
Institution

Remaining battery
capacity
Building power load

control

PV power output

Hiranuma
Building

Building power load

Power transmission

Makuhari CGS output
District
Heating and Operation based on the
Cooling
power generation plan
CenterSmart Energy Networks (SEN)

District Heating and Cooling (DHC)

Saitama Pref.

Chiba Pref.
Tokyo

Kanagawa Pref.

Compass 2030

TOKYO GAS INTEGRATED REPORT 2020

Q

How do you “continue tocreate value”?

A

We plan to continue
to create value by
taking the following
four measures.

20

1

2

Transformation of the LNG
value chain to maximize
each of its functions

Resolving problems indaily life and businesses

Our existing business model provides value in retail sales,
which is the final function of the LNG value chain. Throughtransformation of the LNG value chain, we intend to create
and provide various types of value in each of the functions—from trading to production and power generation, networks,
and customer solutions— so as to expand our customer base.

We will confront customers’ needs and problems and provide
various solutions, beginning with “Energy as a Service(EaaS)”. A digital infrastructure for value co-creation will also
be established and the range of solutions to be created andprovided will be broadened. This should be facilitated byadvanced digital marketing, as well as the expansion of thenumber of business partners, the amount of data used, andproducts and technologies.

3

4

Leading the transition toa decarbonized society

Overseas expansion

The Tokyo Gas Group is promoting effective use of naturalgas, expansion of renewable energy sources, and developmentof core element technologies for decarbonization, as we aretaking up the challenge to achieve Net-Zero CO2 emissions,
including customer emissions, in our overall business activities.
Our target is to contribute to a reduction in carbon emissions
on a scale of 10 million tons by 2030 (which exceeds Japan’s
target ratio*) and to lead the way to reducing CO2 emissions
on a global scale.

We will develop LNG infrastructure that utilizes the Group’s
strengths in the LNG value chain, such as LNG engineering
capability, exploit shale gas and other resources, invest in
renewable energy businesses, and expand LNG transaction
and LNG trading by making use of our related asset holdings,
such as LNG vessels and receiving terminals. By taking theseactions, we aim to triple overseas profits.

* Japan’s reduction target ratio: The greenhouse gas reduction target in the Intended Nationally Determined Contribution submitted to the United Nations (26% reduction in FY2030 as compared to FY2013).

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Transformation of the LNG value chain
Trading

Production & power generation

Networks

Customer solutions

Pursuit of “safety, security and reliability” through diverse procurement, increased resilience
Persistent improvement in productivity and cost efficiency through innovation of work processes
Crystallize

Stable, inexpensive andflexible purchasing throughthe use of AOT*1

Achievement of world classdigitalized terminals

Streamlining and increased efficiency
for pipeline maintenance work

Deepening of the “last mile”
services*3

Use of digital technologies (AI and IoT)
ExploreFull fledged deployment of LNG
and power trading

Global deployment of Construction of
LNG receiving terminals, power plants,
engineering and O&M*2

Deployment of new services,
including those that utilize
smart meters“Energy as a Service” to expand thedomains in which value is provided indaily life and businesses*4

Expand the customer base for whom value is created and provided
For markets, energy providers and service providers

Transformationof the LNG
value chain to
maximize eachof its functions

Customers in the Tokyo metropolitan area

Nationwide and internationally*1 AOT: Asset Optimization & Trading (use of digital technology for optimal linkage of LNG
transactions, LNG vessels and receiving terminals)*2 O&M: Operation & maintenance*3 Last mile: Site operations that require human intermediation in the final process of the value chain.
*4 Energy as a Service: Sale not of energy alone but of a menu of services combining energy,
equipment, control technologies and maintenance, etc.

We will “crystallize” the business expertise accumulated up
to now through the pursuit of “safety, security andreliability”, which has been realized by diversity inprocurement and increased resilience, as well as persistentimprovement in productivity and cost efficiency throughinnovation of work processes. In addition, we will “explore”
new domains for each function with customers, society,and business partners in order to expand the customer basefor whom value is created and provided, and expand themacross Japan and abroad.

Enhanced resilience functions through the use of natural gas
Enhanced resilience of natural gas infrastructure

2020

Four LNG receiving terminals
interconnected through a main
trunk pipeline network by openingof the Ibaraki LineIn the periodleading up to 2030
Cooperation with local
governments andinfrastructure companies(interconnected pipeline,
etc.)

1999

Three LNG receiving terminals
interconnected through a main
trunk pipeline network in order
to increase and expand natural
gas useLNG terminal
Power plant( = Currently under study)

Natural gas has increasingly become an important energy
source along with its diffusion and expansion, which were
facilitated by the establishment of LNG receiving terminals andpipelines. With the aim of allowing customers to use ourinfrastructure with ease of mind, the Tokyo Gas Group is
working to strengthen the resilience of the natural gas
infrastructure in the Tokyo metropolitan area through theDisaster resilient lifestyles and urban design
Urban design that not only provides electricity in the event of an emergency
but also ensures the stable use of heat, water, and IT and data systems

Redevelopedbuilding

Existing area

Plant
System power

Electrical equipment

City gas

Gas cogeneration
system(medium pressure)Electricity

Heat

Electricity

50% supply of electricity
even during an emergency

Nihonbashi Smart Energy Project

opening of its second circular trunk pipeline network— theIbaraki Main Pipeline— and stronger cooperation with local
governments and other infrastructure companies. By
expanding decentralized energy systems, we will also promotedisaster-resilient lifestyles and urban design that enable
customers to use information telecommunication and data in
addition to energy, even in the event of an emergency.

Compass 2030

TOKYO GAS INTEGRATED REPORT 2020

Transformation of the LNG value chain to maximize each of its functions: the strengths of the Tokyo Gas Group

Safe and stable energy
ASSETS
supply infrastructure

INVISIBLE

In order to help our customers use gas with ease of mind, we
are working on various safety measures. They include
earthquake-resistant measures for production and supply
facilities, development of a disaster-readiness system for a large
earthquake, and safety inspection of customers’ gas equipment.
In order to fulfill our public duty as an integrated energy
company, we intend to further enhance the resilience of our
natural gas infrastructure in the Tokyo metropolitan area, whichis the center of politics, the economy, and industries.
Measures to help customers use gas with ease of mind
Earthquake-resistant production and supply facilities
We adopted structural designs with superior anti-seismic properties
for LNG terminals, and introduced materials that are resilient
to ground deformation to our pipeline network. As a result,
our city gas production and supply facilities are highly resistant
to seismic activity, even in the case of major earthquakes, suchas the Great Hanshin-Awaji (Kobe) Earthquake, or the Great
East Japan Earthquake.
Development of a disaster-readiness system
We have developed a disaster-readiness system, which
subdivides our low-pressure pipeline network into
approximately 300 blocks and remotely stops the supply ofgas, in block units, depending on the extent of the damage.
This enables minimization of the impact of supply stoppages
and prevention of secondary damage.
Monitoring and control of production and supply
facilities, and safety inspection of gas facilities
We conduct inner-pipe leakage testing and periodic safety

inspections of gas appliances for all customers at least once
every four years. The Supply Command Center performs 24/7
monitoring and control of the status of operation of city gas
production and supply facilities. When the Safety CommandCenter receives gas leak reports from customers, personnel at
Gaslight 24 will immediately visit the reporting customer totake swift action even on holidays or at night.
Enhancement of resilience functions
We are accelerating enhancement of the resilience of our natural gas
infrastructure in the Tokyo metropolitan area by creating oursecond circular trunk pipeline network through the opening of
the Ibaraki Main Pipeline in 2020 and by enhancing cooperation
with local governments and other infrastructure companies.
Safety know-how and measures toprevent earthquake disasters
Division of the mediumpressure pipeline network
25 medium-pressure blocks

Division of the lowpressure pipeline network
Approximately 300
low-pressure blocks

Resistance to seismic
activityHigh level of resistance to seismic activity, evenin the case of major earthquakes, such as theGreat Hanshin-Awaji (Kobe) Earthquake, or theGreat East Japan Earthquake
Subdivided the medium-pressure pipeline

Subdivision of units for
network into 25 blocks
supply stoppage in the
Subdivided the low-pressure pipeline network
event of an earthquake or into approx. 300 smaller blocks
other disasters

Installation of 4,000 seismometers (SI sensors)

Periodic safety inspection

2.7 million (FY2019)22

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Resolving various customer needs and problems
Accelerate the creation of new solutions including the establishment of new companies

Living security
Smart homes

Needs and problems in daily life
Shift from “owning thingsin daily life” to “using
things in daily life”

Reduced housework /improved diet

Proposal for residencesthat match life cycles

Instantly offering wide-ranging
values tailored to customers

Creating and offering wide-ranging solutions
tailored to customers’ needs and problems
Various kinds of solutions are required today, along withchange and diversification in customers’ values, such as achange in their consumption behavior from “things” to“experiences” and “value”. With the aim of speedily creating
new businesses, the Tokyo Gas Group has started to create
and provide new services which are beyond the existing
business framework of Tokyo Gas. This includes theestablishment of new business-creating companies in FY2019.
We also plan to establish a digital infrastructure for value
co-creation and advance efforts to instantly combine asolution proposal with an energy supply to each individual
customer. This will be realized by using our customer dataobtained from the Tokyo Gas Group’s direct contacts andweb marketing and the data held by our business partners,
and by forecasting a potential need or problem that evencustomers are not aware of via AI analysis and other means.

Establishment of a digital infrastructure for value co-creation
Behavioral data(from meetings, Web, IoT and smart meters)

Expanded rangeof data used

Providing even value thatthe person does not notice
Providing value whendesired and at a time ofthe person’s choosing

Expandedproducts andtechnologies

Wider rangeof solutions
CustomerAI
Predicted
needs
Combined

Expanded number ofpartner companies

Resolvingproblems indaily life andbusinesses

Expanded utilization ofrenewable energyCompass 2030

TOKYO GAS INTEGRATED REPORT 2020

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Toward resolving problems in daily life and businesses: the strengths of the Tokyo Gas Group

Establishment of new business-creating
ASSETS companies that help solve customers’various needs and problems

INVISIBLETokyo Gas Liv Solutions Co., Ltd. and its subsidiary Hinatao
Energy Co., Ltd., as well as Sumilena Co., Ltd. were
established in December 2019, with the aim of speedily
creating new businesses as a part of establishing a value cocreation ecosystem. Putting emphasis on the “Customer
First” concept, we intend to defy the boundaries of theexisting business of Tokyo Gas and to help solve customers’
needs in daily life through speedy decision-making,promotion of flexible, dynamic corporate alliances, and theuse of external human resources.

Responding to customers’ desires to contribute to thecommunity through their purchase behavior, Hinatao
Energy provides in its gas and electricity retail energy
service business an option plan to support the community.
The first plan of its kind is “F.C. Tokyo Electricity.” Throughpayment of a service charge in addition to the electricity

bill, the customer can participate in community support in
the form of F.C. Tokyo’s football promotion activities andhometown activities. Another business we will expand is toprovide a PV energy service and combine it with anelectricity and gas retail business, given customers’ rising
expectations for renewable energy and greater requests toenhance energy resilience.
In addition, we are developing services to fulfill thechanging needs of customers from owning to using“things”. In June 2020, Sumilena launched a monthly fixedcharge service that enables customers to use the latest
household equipment with no initial cost but by means ofmonthly payments, including installation expenses as wellas emergency visits and repair warranties. Sumilena’s lineup of household equipment is carefully selected based on
its proposal-making capabilities. The company is also offering
a good-value electricity rate plan and a campaign in alliancewith a start-up company in a different industry among
others in order to aggressively expand service offerings.

Customer

Customer

Accelerating creation and offering of EaaS andvarious other solutions

Easy-to-understand website
Simple application methodby multi access

Energy X Service

Hinatao Energy (energy retail service)
Service

Additional service

EnergyService that fulfills
Good-value additional
Hinatao Electricity
needs in daily life service for each energy plan
& Gas

Business partner

One-stop provision

Simple Web application

Sumilena (total lifestyle service)
Housing equipment

Service

EnergyHousing equipmentthat satisfies
customers’ needs

Long-term
maintenance warranty

Sumilena plan

Business partner

Hinatao Energy

Speed creation of new businesses
April 2019
The new business creation project department was established.

December 2019
Three companies were establishedMarch 2020
Hinatao Energy began sales activities.

June 2020
Sumilena began sales activities.

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TOKYO GAS INTEGRATED REPORT 202025

Efforts to achieve Net-Zero CO2 in the Tokyo Gas Group’s style-2030

Efforts
domestically andinternationally1

Zeroemissions2
Zeroemissionsachievedthrough
offsetting-around 2050
Emissions reductions not only in the Tokyo metropolitan area but on a global scale

Expanded use of renewable power sources
Development of decarbonization technologies for gaseous energy
Effective use of natural gas

Decarbonization in theelectricity and heat sectors

energy consumption through efficient use of natural gas,
(reduced
coordination with the fluctuating output of renewable energy sources )Use of CCUS*1 technologies (capture of emitted CO2)

The combinationof these activities
will lead to
Net-Zero CO2

Incorporation of successful reduction efforts overseas*1 CCUS: Carbon Capture, Utilization, and Storage

Roadmap to Net-Zero CO2
Development of essential coretechnologies using open-innovation

CO 2 separation andcapture technologies

Highefficiency fuelcell technology

Partner companies,
universities andresearch institutions

Leading thetransition to a
decarbonizedsociety

Hydrogen production
technology

Degree ofcontribution
to Net-Zero CO 2
Achievement

To NetZero CO2

Combination and use ofvarious means

Introduction and use of hydrogen,methanation technology*2 etc.
Introduction of ultra-high efficiency fuel cells
Introduction and use of CCUS

Optimal use and control of renewable power sources
Advanced use of natural gas
Current

2030

2050

*2 Methanation technology: Producing carbon-neutral methane by combining hydrogen and CO 2

Leadership in the effort to achieve Net-Zero CO2
We believe that a realistic approach toward getting closer
to a decarbonized society is to make use of the propertiesof natural gas, such as its limited environmental impact
among fossil fuels and excellent controllability, andcombine it with renewable energy. We thus mainly focus
on the effective use of natural gas and are working on the
expanded use of renewable power sources, the use of
CCUS (Carbon Capture, Utilization, and Storage)
technologies, and the curbing of CO 2 emissions. Our target
is to achieve a 10 million ton reduction in CO 2 emissions inJapan by 2030. In addition, we will use technologies andexpertise for the effective use of natural gas in promoting
decarbonization in the electricity and heat sectors andCCUS, and implement initiatives aimed at Net-Zero CO 2

emissions (by offsetting the emission amount with theabsorption amount). Our ultimate aim is Net-Zero CO2emissions of the Tokyo Gas Group’s style.
Decarbonization technology innovations
With regard to the development of core element
technologies (i.e., hydrogen production, CCUS, and highefficiency fuel cell technologies) for decarbonization leading
up to 2030, we will promote the open innovation type oftechnology development by incorporating technologies andideas of other companies, universities, and research
institutions in addition to our own. From 2030 onward, we
will introduce and use hydrogen, methanation*2 and othertechnologies and combine various means which may
contribute to Net-Zero CO2 emissions via IoT and AI.

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Leading the transition to a decarbonized society: the strengths of the Tokyo Gas Group

Innovation of core element
ASSETS technologies, that contributeto decarbonization

INVISIBLEThe Tokyo Gas Group aims at achieving Net-Zero CO2emissions through all of our business activities, including
customer emissions. We will develop CO2 separation andcapture technologies in addition to using various
technologies and know-how for effective uses of naturalgas, with the aim of achieving low carbon in the electricity
and heat sectors. The development of high-efficiency fuelcells will contribute to the reduction in energy consumption
and CO2 emissions and ultimately to the achievement of
Net-Zero CO2 emissions.

Approach to introduction of SOFC systems
Since the developed SOFC system is mono-generation
type, which does not use waste heat, we are thinking of
introducing it to the untapped segment of small-scalebuildings and stores, such as offices and convenience
stores with no demand for hot water. In the future, byadding a function of self-sustaining operation, thesystem can be used in evacuation centers in the case of adisaster and is anticipated to enhance the resilience
function that utilizes the city gas network.

Development of high-efficiency fuel cells
Tokyo Gas and Miura Co., Ltd. have jointly developed
high-efficiency solid oxide fuel cells (SOFC) in the 5kWclass with power generation efficiency of 65%*1 LHV andstarted demonstration tests in April 2020. This is theworld’s first innovative development in realizing highefficiency power generation by combining multiple
technologies, such as the system design of two-stage
SOFC cell stacks and fuel regeneration process so as toutilize supplied fuel effectively. This development will
enable a 53% reduction*2 in CO 2 emissions.

Challenges of innovation in future hydrogengeneration technology
In addition to reducing CO 2 emissions through thedevelopment of high-efficiency fuel cells, we will utilize
our know-how accumulated in these developments totake on the challenge of innovation, such as innovationin hydrogen generation technology, and to lead thetransition to a decarbonized society.

Innovation in element technology
AC power generation efficiency in the world’s
first 5kW-class fuel cell system

Achieved

65% LHV*1

CO 2 emission

53% reduction*2*1 Data by Tokyo Gas and Miura, as of March 3, 2020
*2 Estimate based on using a prototype. Grid power’s emission coefficient of 0.66kg-CO 2 /kWh (emission coefficient of thermal power generation in FY 2030, in the Plan for Global Warming, May 2016)26

Compass 2030

TOKYO GAS INTEGRATED REPORT 2020

Utilization of LNG value chain functions
Expansion into renewable energy business

Overseas
Expansion

Expansion of LNG trading

Photovoltaic power generation (Mexico)

TripledRenewableenergybusiness

LNG
and gasinfrastructure

Resource
development

Current

EuropeAsia/Australia

North America

Use in each LNG value chain function
Provided to customers both at home and abroad(Southeast Asia, etc.)
Expansion of trading scale to 5 million tons

2030

The Tokyo Gas Group will utilize its LNG engineering
capability cultivated in the LNG value chain for a half
century and develop the LNG infrastructure business mainlyin Southeast Asia, where the shift to natural gas isadvancing. With regard to investment in shale gas andother resource development in North America andrenewable energy businesses in Europe and North America,
we intend to expand operations at an accelerated pace bymeans of growth engine type investment*1 that utilizes our
expertise cultivated through project investments.

We will also cooperate with business partners, makeuse of respective strengths and different geographicalexposures, and develop full-fledged trading in the LNG
markets. Our target is to optimally combine LNG trading(LNG purchasing contracts, actual demand) and assets(owned LNG vessels, receiving terminals, power generation
facilities, etc.) with digital technologies so as to expand
LNG transaction volume. Trading can be further expanded
by use of transportation and other operations as addedvalue of LNG.

*1 Growth engine type investment: Initiative to invest in an operating company, get involved in its management, and help it growWind power generation (Mexico)27

Compass 2030

TOKYO GAS INTEGRATED REPORT 2020

28

Overseas expansion: the strengths of the Tokyo Gas GroupLNG infrastructure
ASSETS
engineering capability

INVISIBLEThe Tokyo Gas Group plans to leverage its LNG
infrastructure engineering capacity, cultivated in the LNG
value chain from upstream to downstream for a half
century, and aims at overseas business expansion mainly in
Asia, where demand for natural gas is increasing.
Accumulated “user know-how” regarding LNG
engineering
Since 1969, when we first imported LNG in Asia, Tokyo Gas
Engineering Solutions Corporation (TGES) has been
engaged in the LNG value chain from upstream todownstream. The company is accumulating “user knowhow”, thanks to its technologies, knowledge, andexperience, obtained from design, construction, andconsulting services for close to one half of the LNG
terminals in Japan (20+), including LNG receiving terminals
owned by Tokyo Gas (Sodegaura, Negishi, Ohgishima and
Hitachi), and their operation and maintenance (O&M).
World top-class LNG engineering capability
We have accumulated “user know-how” regarding LNG
facilities—from tanks and other main facilities to peripheral
ones of LNG terminals— as we became an expert onvarious and numerous LNG facilities in Japan and overseas
and mastered “what works” and “what does not work”
through abundant design experience and O&M practiceover many years. We thus provide numerous engineeringsolutions to improve reliability, reduce risks, and raise
efficiency and achieve labor saving in O&M from thecustomer’s viewpoint. With regard to pipelines for the

stable, safe supply of gas, we are also experienced in awide range of engineering services, from feasibility studies
and planning to design, construction, and O&M.
Overseas achievements
Being accredited for advanced LNG technologies cultivatedin Japan and our abundant experience, we have been
engaged in LNG engineering services overseas since the late1970s. Our list of achievements includes more than 20 LNG

terminals and over 100 projects in 20 countries and regions.
We are further advancing our engineering capability andknow-how by utilizing our network of engineers andengineering companies in various countries, which wasestablished through overseas projects. Such a businessgrowth spiral has helped us to receive a large-scaleconsulting service project that required about 60 personnel
and to acquire an entire management order forconstruction of a large LNG terminal in recent years.

TGES’ Overseas Project Achievements
RussiaU.K.
Spain
Portugal
CyprusUAE

TaiwanPhilippines
VietnamSingapore
Indonesia

Pakistan
India
Bangladesh
MyanmarSouth Korea
China

ThailandAustralia

MexicoCompass 2030

TOKYO GAS INTEGRATED REPORT 2020

29

Toward realization of Compass 2030: the strengths of the Tokyo Gas Group1

Personnel
ASSETS
Strategy

We will produce workthat will have a major
impact on society.

INVISIBLE

We commend a spirit oftaking on challenges andthe ability to learn
from mistakes.

Through the realization of the Three Promises defined in
the Compass 2030, we aim to develop personnel who work
energetically, make maximum effective use of their abilities,
and consistently deliver strong results.
To this end, we are working on promoting workstylereforms and diversity so that each and every employee canmake maximum use of their knowledge, ability, and experience.
Personnel hiring and development
In order to continue to create value with customers,
business partners, and society while becoming a leader inthe future energy system, we strive to hire and foster
personnel who can flexibly cope with the changing businessenvironment and play a core role in diverse fields.
Hiring personnel withhigh levels of expertise

Strategic shift to
growth domains

Developing
business leaders

In addition to hiring new
graduates for specificjob types (in humanities,
sciences and theprofessional domain),
we also engage in
flexible hiring ofexperienced andhighly-specialized
mid-career personnel.

In addition to our gas
business, we alsoprioritize assignment of
personnel tostrategically-importantfields such as ourelectric power andoverseas business
operations. In this way,
we are promoting
growth and expansion
in a diverse range offields.

We train businessleaders who will lead
the Tokyo Gas Group in
the future, with a
training program that
focuses primarily on
development through awide range of on-thejob training (OJT)
experiences gained bymeans of transfers androtations, combinedwith additional
off-the-job educationand training (OFF-JT).

Hiring, fostering and placing of personnel who
realize “Compass 2030”
Selected as aNadeshiko Brand

External
Evaluation

Tokyo Gas was selected forthe fourth consecutive year as
an attractive corporate brandin terms of its proactive efforts
to encourage and empower
women.

2 Three Promises 3
We will create a venue
for encounters withdiversity and friendly
competition.
The Tokyo Gas Group will bea gathering place fordiverse thinking andexperience.

We will emphasize
the self-fulfillment ofeach person.
We believe in the potentia
of each individual and will
support each employees
activities.

Workstyle reform

Promoting diversity(Improving productivity and achieving a healthy work-life balance)(Promoting active roles for diverse personnel)

In order to enable each and every one of our employees towork energetically and make maximum effective use of
their abilities, we are working proactively to rectify andreduce long working hours, and to implement workstylereforms with awareness of “the value of time,” which weregard as important issues for management involvement.

The Tokyo Gas Group is promoting diverse workstyles andthe empowerment of diverse personnel in order to create
an invigorated organization in which each and every Group
employee can make maximum effective use of theirknowledge, skills and experience. With the aim of realizing
the President’s “Diversity Top Management Commitment,”
we are promoting diversity based on various themes,
starting with women’s empowerment, and including more
employment of disabled people and support for the careerdevelopment of employees in their 50s and over.

Specific initiatives
Promoting workstyles withawareness of the value of time
Premium Friday (a program to leave work early on thelast Friday of the month), Day to leave office on time, etc.

Environmental improvement to allow
Collaborative work space ofa new office of the Digitaldiverse personnel to display their full potential
Innovation Division•Introducing a “Work Anywhere” program which eliminates
restrictions on working location (Work at home, mobile work)•Building satellite shared offices•Improving the office environment toward further improvement in productivity•Working to create workplaces that enable innovation to occur•“Work in a Free-form Animated Manner” (Online video conferencing, office reforms, etc.)•Promoting automation / mechanization using ICT, and more sophisticated use ofdata (utilizing RPA, audio AI, etc.)

Granted Kurumin certification
Tokyo Gas was certified by the Ministryof Health, Labour and Welfare as acompany that formulated an action
plan, achieved targets, and met certain
criteria in accordance with the Act on
Advancement of Measures to Support
Raising the Next Generation of Children.

Selected as a Health &Productivity Stock
Tokyo Gas was selected as a
Health & Productivity Stock, inrecognition of its strategic
efforts regarding its employees’
health from a management
perspective.

Specific initiatives
Promotingempowerment of
women in workplace

2016: First female executive officer appointed
2018: First female senior executive officer appointed
Almost 100% return-to-work rate for female
employees returning from childcare leave
Almost no difference in gender in terms of average
years in service of the company

Promoting
employment of people
with disabilities

Employment rate of 2.55%, exceeding the mandatory
rate (as of June 2020)
Established a liaison committee to promote
employment of disabled people as a group
Working to create safe and comfortable working
environments

Career development
support for employees
in their 50s and overEstablished the “Grand Career System” to support
career development for employees in their 50s and over,through training sessions and interviews with career
consultants, etc.

Compass 2030

INVISIBLEASSETS

More diversity to create a new Tokyo Gas
Experience in diverse kinds of work andencounters with many people are my treasure
I joined Tokyo Gas in a research position and carried out
research on gas cookers and rice cookers. Back then, theconcept of diversity was not well established but I was able
to manage both my work and my private life and experience
major life events, such as marriage, childbirth and childrearing. This was because Tokyo Gas had begun to establish
programs for childcare leave, shorter working hours forchildcare, and a flextime system. In addition, I was blessedwith good forward-thinking superiors and was supported
by my family and colleagues as well.
I have kept in mind to “set priorities and prioritize thework that only I can do.” While both work and child rearing
were no easy task, they both allowed me to reset myself,
focus on the task at hand, and keep moving forward. I cannow see that in retrospect.
This consciousness also helped me when I was assigned
to various work and workplaces, such as PR as well as
personnel affairs, general affairs at a group company, andsales. Experience in diverse kinds of work and encounterswith many people in and out of the company have become
my treasure.

Executive Officer
General Manager of Wholesale & Regional Service Dept.,
Regional Development Div.

Konishi Masako
April 1988
April 2012
April 2014
April 2015
April 2016
April 2019
April 202030

TOKYO GAS INTEGRATED REPORT 2020

Joined Tokyo Gas Co., Ltd.
Manager, Residential Sales PR Sect, Residential Sales Planning Dept.
Manager, General Administration Sect, Affiliated Companies Dept
Assistant General Manager, Sales Marketing II Dept
General Manager, Sales Marketing II Dept
General Manager, Wholesale & Regional Service Dept.
Executive Officer
General Manager, Wholesale & Regional Service Dept., Regional
Development Div. (current)

increasingly need more diversity in personnel, such as innationality and career background, in addition to gender.
Fostering various values means developing different
opinions, which may bring disorder or friction within thecompany. This can be overcome if we willingly accept it.
This may not be easy to do but I firmly believe that such
experiences or struggles will result in corporate growth.
Diversity is such an appealing buzzword but it is no easytask to realize diversity and to actually lead it to someaccomplishment.
According to our management vision, Compass 2030,
the company promises to employees that it will enhance thepersonnel strategy and initiatives on diversity. I would liketo encourage employees to have various experiences
through work, develop their strengths gained through theseexperiences, and work without pressure or reserve. Each
employee should have his or her own unique strength. I
believe that is what diversity is.
Ratio of women in management at Tokyo Gas(as of April 1 of each fiscal year)
Management
Women in management
Ratio of women in management(persons)

4,000
3,500

Diversity brings new values– a source of corporate growth

3,000

We are on the cusp of a new age of innovation. The Tokyo
Gas Group aims to creating diverse values in each of its
value chains and offer them across Japan and overseas. To
achieve this, it is important to promptly respond to customers’
needs, be flexible, and appreciate various sets of values.
I think Tokyo Gas has established a great working
environment for women, as evidenced in the return rate of
employees from childcare leave and their years in service ofthe company. In order to create various values, we will

500
0

(%)

10

First female senior executive officer appointed
3,614

5.1%

3,547

3,395

5.3%
5.8%

3,231

6.5%

6.3%

3,106

7.1%
3,033

7.6%

2,960

8.0%

8.7%

7.5
2,920

5

2,897

First female officer appointed

2.5

183

189

197

202

203

214

226

233

251

0

2012

2013

2014

2015

2016

2017

2018

2019

2020

(FY)

* Managerial staff are those who have subordinates or those in equivalent position.

Average Years in Service by Gender:
Almost no difference
PeriodMen
FemaleNon-consolidated
Consolidated
Non-consolidated
Consolidated

Year2018.3
19.3
16.7
19.3
14.8

2019.3
19.5
17.0
18.5
14.5

2020.3
19.7
16.8
18.5
14.1

Compass 2030

Support for TCFD
recommendations
and information
disclosure

TOKYO GAS INTEGRATED REPORT 2020

Climate-related risks and opportunities could significantly affectmany companies’ financial positions and destabilize financial
conditions. In order to reduce such risk, in response to therequest from the G20, the Financial Stability Board (FSB)
established the Task Force on Climate-related Financial
Disclosure (TCFD) in December 2015 and the TCFD released its
recommendations in June 2017.
We recognize climate change as one of the priority issues
that the Tokyo Gas Group is facing today and regard the TCFD
as an effective framework in promoting information disclosureand dialogue with stakeholders on climate-related issues. We
therefore signed the statement of support for the TCFD in May
2019. We intend to disclose information on the impact ofclimate change on the Tokyo Gas Group’s business activities
and the measures we are taking.
Governance
The Tokyo Gas Group forms in-house committees asappropriate for studying, coordinating or promoting actions toaddress important management issues. These include theSustainability Committee, which is intended to promote climatechange research and other sustainability issues and chaired by
the President, and the Sustainability Promotion Committee, asubordinate body of the previous committee chaired by the
Officer in charge of sustainability. They deliver reports onimportant matters to the Board of Directors.
(See also Corporate Governance System on page 43.)
Strategies
In preparation for the next half-century, the Tokyo Gas Grouphas formulated its “Compass 2030” management vision
outlining the course that should be pursued in this age of
uncertainty.
Natural gas, one of the pillars of the Tokyo Gas Group’sbusiness, is expected to play an even larger role due to its
stability, environment-friendly nature, and economic viability, as
well as its affinity for use in combination with inherently
unstable renewable energy sources. In the meantime, as a

31leading company dealing in natural gas, (a fossil fuel), we feel it
is our responsibility to deal forthrightly with the issue of climatechange, look beyond CO2 emission reduction, and promotedecarbonization.
While maintaining S+3E*1 as the bedrock of our businessactivities, we are striving to help reduce CO2 emissions bycustomers by continuing to promote a shift to natural gas infuel conversion and advanced use of natural gas, such as indiversified energy systems. Over the longer-term toward 2030,
we plan to effectively use natural gas as an adjusting function
for renewable energy, which is expected to be increasingly
used. We also intend to globally promote our technology andknow-how regarding natural gas. By doing so, we willcontribute to the stable supply of energy and a reduction in
CO2 emissions in Japan and overseas.
We will promote decarbonization technology innovationfrom a long-term perspective. At the same time, we will
combine various means, including natural gas and renewableenergy, and aim to achieve Net-Zero CO2 emissions by ourentire group, including customer emissions, while leading thetransition to a decarbonized society.
Major risks and opportunities driven by climate change,
and the Tokyo Gas Group’s initiatives
In identifying the Tokyo Gas Group’s risks and opportunities
related to climate change, we referred to two representative
scenarios*2 of the International Energy Agency (IEA) and theIntergovernmental Panel on Climate Change (IPCC)—the below
2C scenario and the 4C scenario. Considering the medium- tolong-term time span of 2030 and after, we comprehensively
summarized important factors that may affect our group’sbusiness and evaluated (mainly qualitatively) the impacts from
two aspects—magnitude of impact and possibility to beaffected—for both scenarios. We then identified major factors
and put together our initiatives for each factor.
We are determined to steadily implement these initiatives
and to realize our business sustainability as well as themeasures against climate change even after 2030.

*1 S+3E: Safety plus 3Es for Energy security, Energy efficiency, and Environment*2 Scenarios for reference:•Scenario of limiting the global average temperature to well below 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 temperature to 4C above pre-industrial levels: IEA Stated Policies Scenario (STEPS) (IEA WEO 2019/RTS (IEA ETP 2017)/RCP8.5 (IPCC AR5)

Compass 2030

Opportunities
and risksTOKYO GAS INTEGRATED REPORT 2020

Factors

Details of opportunities
and risksTokyo Gas Group’s Initiatives

Markets

Global increase in demand fornatural gas

Resources development and expansion of LNG/gas infrastructure and otheroverseas business to increase the natural gas transaction volume

Opportunities

Energy source

Affinity of renewable energy
with natural gas

Effective use of natural gas to adjust fluctuation of output of renewableenergyIncrease in renewable energy transaction volume in Japan and overseas
Use of PV, storage batteries, EV, etc. to promote new decentralised
power source business and VPP

Opportunities and risks

Resource
Efficiency;
Technology

Decarbonization technology
innovation

Development of decarbonization technologies for gaseous energy, suchas hydrogen and methanation
Introduction and use of CCUS technologies

Introduction of carbon tax

Fuel conversion, etc. to accelerate shift to natural gas
Effective use of natural gas to adjust fluctuation in output of renewableenergyIncrease in renewable energy transaction volume in Japan and overseas
Use of PV, storage batteries, EV, etc. to promote new decentralised
power source business and VPPDiversified energy systemusing natural gas to enhance
resilience

Enhanced resilience in the natural gas infrastructure
Expanded use of diversified energy system, such as smart energy
networks, co-generation, ENE-FARM, etc. that are highly resilient andreduce energy consumption

Impact on operations,associated with severer
abnormal weather

Enhanced establishment of water hazard-resilient Life Line, such as andfull preparation for BCP., disaster countermeasures of LNG terminals andpower stations

Risk management
The company has established an enterprise risk management(ERM) system, and drawn up risk management regulations
that include documented rules concerning major risks facedby the group.
The Risk Management Committee was established withthe aim of improving the management level of the ERM
system. The Committee checks progress regarding theestablishment and operational status of the ERM system,
including periodic risk assessments. It also reports to the
Corporate Executive Committee and obtains thenecessary approvals.
As for specific initiatives, the environment management
system (EMS) has been established for the entire group, led
by the top management, and we conduct not only
compliance with laws and regulations but also various
initiatives regarding climate change by promoting a PDCA
(Plan-Do-Check-Act) cycle.

Key figures and targets
The Tokyo Gas Group management vision Compass 2030 has
set the management guidelines and key figures for realizing
corporate growth.

4C scenario

Below 2C scenario

Opportunities

Opportunities and risksMarkets;
Policy and Legal

Opportunities

Resilience

Risks

Acute

(Introduction of appropriatelydesigned carbon tax may promote
shift to energies with less CO 2
emissions but excessive taxation
may raise energy cost and negatively
affect the company’s business)(disruption to the operation offacilities for production and supply)

Contribution to
CO 2 emission
reductions-

Renewable powersource transaction
volume5 million kW

No. of customer
accounts

10 million tons

*3(domestic and international, including purchasing)

20 million
Natural gas
transaction volume 20 million tons
*4

*5

*3 Base year: fiscal 2013, including contribution of emission reduction during consumption
by customers*4 Total no. of gas, power, and service agreements (domestically and internationally)*5 LNG equivalent Including overseas business and trading

See TCFD materials for details.

32