Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

001

C o n t e n t s
Introduction

Environmental

003 Sustainability Report Editorial Policy
004 Outline of the Daigas Group005 Daigas Group’s Businesses

030 Environment Summary
032 Environmental Management034	Environmental Impact

Management009 Message from the President
013 Daigas Group’s Values
017 Sustainability Management018	Medium-Term Management Plan 2023
and Sustainability

020	Materiality and Daigas Group Charter ofBusiness Conduct

022 Materiality
024 Stakeholder Engagement027	Initiatives and Organizations the Daigas
Group Participates In

028 Commendation from the Outside

throughout the Daigas Group
Value Chain

038 Environmental Targets
039 Actions for Climate Change045	Disclosure based on the TCFD

Recommendations: Recognition ofand Action on Risks andOpportunities

048	Contributing to the ResourceRecycling Society

051 Biodiversity055	Development of Environmental
Technology

081 Human Rights Summary
081	Respect for Human Rights

throughout the Value Chain

082 Human Rights Due Diligence
085 Action on Human Rights
087 Supply Chain Management Summary
088 Supply Chain Management
090 Customer Health and Safety Summary
091 Customer Health and Safety
096 Customer Satisfaction Summary
097 Customer Satisfaction
100 Community Summary101	Co-creation Activities with Local
Communities

105	Activities by Public Interest
Incorporated Foundations

SocialGovernance059 Innovation Management Summary
060	Promoting Business Transformation

108 Corporate Governance Summary
109 Corporate Governance
120 Compliance
123 Information Security
124 Protection of Personal Information

with DX

063	Research and Development/
Intellectual Property

064 Human Resources Summary
066 Human Resources Management067 Human Resources Development
070 Diversity & Inclusion
073 Work-Life Balance
075 Occupational Health and Safety080	Communication Between

125	E SG Data*Please refer to the links on this page forvarious environmental, social, andgovernance data.

Employees and Company

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Introduction

Environmental

SocialGovernance

ESG Data

002

003 Sustainability Report Editorial Policy
004 Outline of the Daigas Group005 Daigas Group's Businesses

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

003

Sustainability Report Editorial Policy
Principle and Outline
The Daigas Group deems that it is necessary for the Group to listen to people’s voices sincerely, and conduct its business activities based on such voices, if it is to fulfill its corporatesocial responsibility (CSR).
    In the “Daigas Group Medium-Term Management Plan 2023 ‘Creating Value for a Sustainable Future,’” we positioned the period of the plan as a period for creating“value for a sustainable future” with our stakeholders and achieve further growth as a group that can help solve social issues in building a sustainable society, and selected“materiality” for enhancing and accelerating the practice of ESG management based on the concept of “Creating Value for a Sustainable Future.” The Daigas Group identified
materiality by referring to the GRI Sustainability Reporting Standards (GRI Standards), a global standard for sustainability reports compiled by the Global Reporting Initiative(GRI), while taking into account current social issues and holding dialogue with outside experts.
    On its sustainability site, the Daigas Group reports on the status of management and progress of related initiatives for each of the identified materiality as “Priority Initiatives,”
and it also posts activities other than materiality reports to the extent possible so that the overall picture of the Group’s initiatives can be made known to parties outside andinside the Group.
This Sustainability Report is an integrated and edited PDF of the main contents previously posted on the sustainability site.
Coverage and Material

Materiality of the Daigas GroupIn selecting topics to be covered in the report and prioritizing
them, we took into consideration both the impact on society
and the environment and the future financial impact on theGroup.
    For more information on consideration to importance,
click the above link for Materiality of the Daigas Group.

Readability and Ease of Understanding
To ensure that a wide range of readers can understand theinformation provided in the report, careful consideration is
given to visual design, including the text size, use of colors,
pictures, and diagrams, and technical terms aresupplemented with annotations and other explanations.

Reliability
To ensure the reliability of the content of the report and thedata that it contains, environmental performance data isreported on this website after undergoing third-party
verification by Bureau Veritas Japan, Inc.

Scope of This Report

About the Notation

Reporting Period:
Fiscal year 2023.3 (April 1, 2022 to March 31, 2023)*Matters on other periods are partially included.

Some information, as noted in this report by phrases such as“Osaka Gas” or “the Company,” refers exclusively to Osaka
Gas Co., Ltd.

Reporting Boundary:
Osaka Gas Co., Ltd. and its consolidated subsidiaries• Financial data:
Osaka Gas Co., Ltd. (1), and its consolidated
subsidiaries (154)• Environmental data:
63 companies in total, including Osaka Gas Co., Ltd. and62 companies among 154 consolidated subsidiaries are
subject to calculation of environmental performance data.
Those housed in office buildings as tenants and whoseenvironmental data are difficult to grasp and whoseenvironmental effects are minimal are not subject to suchcalculation. Energy consumption and greenhouse gas
emissions for a total of 65 companies exclude overseas
subsidiaries, except for two overseas subsidiaries.
• Social, Governance data:
Data ranges are described in the respective articles.

Guidelines Referred to

Publication Information
This report will be published annually as an annual report.
Publication: September 2023
Last update of the sustainability website: September 2022

• ISO 26000 (Guidance on social responsibility)• Sustainability Reporting Standards of the Global Reporting
Initiative (GRI)
This report contains information corresponding to disclosure
requirements of the GRI Sustainability Reporting Standards.
• Environmental Reporting Guidelines 2018 of the Ministry of
the Environment• Recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD)• International Integrated Reporting Framework of the IFRSFoundation• Guidance for Collaborative Value Creation of the Ministry of
Economy, Trade and Industry• SASB Standards• The United Nations Global Compact COP* Policy*COP
COP stands for Communication on Progress. COP is an annual
report that provides information on the status of participants’commitment to the 10 principles of the UN Global Compact. It is
an important requirement for participation in the UN Global
Compact.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

004

Outline of the Daigas Group
Corporate Profile of Osaka Gas Co., Ltd. (As of March 31, 2023)

Daigas Group Organization (As of April 1, 2023)

Head Office
Date of Establishment
Date of Founding
Net Sales*1

Board of Directors

4-1-2, Hiranomachi, Chuo-ku, Osaka 541-0046, Japan
April 10, 1897
October 19, 1905
[Non-consolidated] 1,716.7 billion yen[Consolidated] 2,275.1 billion yen[Non-consolidated] -77.4 billion yen [Consolidated] 75.6 billion yen[Non-consolidated] -45.2 billion yen [Consolidated] 57.1 billion yen*2
132,166 million yen[Non-consolidated] 1,163

Ordinary Profit*1
Profit*1
Capital
Number of Employees

Chairman/President

Energy Resources & Int'l Business Unit
Osaka Gas USA Corporation
LNG, Power & Engineering Business UnitManagement Meeting

Daigas Gas and Power Solution Co., Ltd.

Office of Audit &Supervisory Board

Osaka Gas Marketing Co., Ltd.

Energy Solution Business Unit
Audit & Supervisory
Board Members(including executive officers, directors and temporary employees; excluding employees
temporarily transferred to affiliated companies)

Daigas Energy Co., Ltd.
Osaka Gas Network Co., Ltd.

[Consolidated] 21,017

Osaka Gas Urban Development Co., Ltd.

*1 Fiscal year ended March 31, 2023
*2 Profit attributable to owners of parent

OGIS-RI Co., Ltd.

Osaka Gas Co., Ltd. organizations
Core energy business companies,
overseas regional headquarters,gas pipeline business company,
core non-energy business companies,business process service company

Main Business Lines of the Daigas Group (As of March 31, 2023)
Business segments

Main business lines

Domestic Energy

Production, supply and sale of city gas, sale of gas appliances,
gas pipe installation, sale of LNG, LNG transport, sale of LPG,
sale of industrial gas, power generation and sale of electricity

International Energy

Development of and investment regarding natural gas,energy supply

Life & Business
Solutions (LBS)

Development and leasing of real estate properties,
information-processing services, sale of fine materials
and carbon material products

Osaka Gas Chemicals Co., Ltd.
Osaka Gas Business Create Co., Ltd.
Corporate Planning HQBusiness Units/
Core Energy
Business
Companies/
Overseas
Regional
Headquarters
Gas Pipeline
Business Company
Core Non-Energy
Business Companies
Business Process
Service Company

Corporate Strategy Dept.
ESG Office
Carbon Neutrality Promotion Office
New Business Development Dept.
Finance Dept.
Investment Risk Management Office
DX Strategy Dept.

Innovation Headquarters

Innovation Dept.
Energy Technology Laboratories
Secretariat

Corporate
Headquarter
Divisions

Corporate Communication Dept.

Net sales by segment (billion yen)
3,000

Segment profit (billion yen)

2,819.5

3,000

150

2,275.1

Human Resources Dept.

Segment assets (billion yen)

General Affairs Dept.
Property & Urban Development Office

72.9

2,000

100

2,000

1,000

50

1,000

0

0

0

Compliance Office
Purchasing Dept.
Tokyo Branch

19.3

20.3

21.3

Domestic Energy/Gas

22.3 *

23.3(FY)

Domestic Energy/Electricity

19.3

20.3

21.3

Domestic Energy

22.3 *

23.3(FY)International Energy

Auditing Dept.
19.3

20.3

21.3

Life & Business Solutions

22.3 *

23.3(FY)

Elimination, etc.

*From FY2022.3, Domestic Energy/Gas and Domestic Energy/Electricity were integrated into Domestic Energy. Osaka Gas International Transport Inc. etc.,
which were previously included in International Energy, were transferred into Domestic Energy. Osaka Gas’ operating expenses for international energy,
which were previously included in Domestic Energy/Gas, were transferred into International Energy.

ESG Committee
Safety and Disaster Prevention Committee
Cyber Security Committee
Investment Evaluation Committee

Corporate
Committees

DX Committee
Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

005

Daigas Group’s Businesses
Overseas Energy Infrastructure
In the International Energy Business, we strive to ensure the stable procurement, supply, and wider use of natural gas, a key transition fuel, and strengthen our efforts inbusinesses in the fields of renewable energy and new energy and businesses that aim to achieve carbon neutrality.
Investments in the International Energy Business (As of March 31, 2023)

Freeport LNG Terminal

CPV Fairview Energy
CenterCourtesy of Freeport LNG
Development, L.P.

Solar power plantin Maine developedby Summit Ridge
Energy, LLC (SRE)
Courtesy of SRE

Osaka Gas UK

Summit Ridge
Energy, LLC

Sagunto LNG Terminal
Osaka Gas India

Osaka Gas Thailand

Courtesy of INPEX Corporation

Osaka Gas
Headquarters

Osaka Gas USA (Houston HQ)

Osaka Gas USA(New York Office)Sabine Oil & Gas
Corporation

Osaka Gas Singapore,
Manila Representative OfficeOsaka Gas Singapore

Ichthys LNG Project

Osaka Gas USA(Silicon Valley Office)Osaka Gas
Energy Supply andTrading Pte. Ltd.

Osaka Gas Indonesia

Major base
IPP
Pipeline
Osaka Gas
Australia

LNG terminal
Upstream project
Carbon neutrality-related Project

Gorgon LNG Project

Renewable energy project

Courtesy of Chevron Corporation

Other*Please refer to the Fact Book for investments in the International Energy Business.

Sabine’s shale gas
drilling site

Fact Book

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

006

Domestic Energy Infrastructure
The Daigas Group systematically extends and expands the gas pipeline network for wider use and expansion of city gas and improved capacity for stable supply. In addition to
the city gas business centered on the Kansai region, we will work to expand the development and acquisition of renewable energy in all parts of Japan. We will also leverage thestrengths that we have built up to promote the construction of competitive infrastructure and the provision of services nationwide.
Gas Service Area of the Daigas Group (As of March 31, 2023)

M ajor Energy Infrastructure in Japan(As of March 31, 2023)

Nabari Kintetsu Gas Co., Ltd.
Business Area

Toyooka Energy Co., Ltd.
Business Area

Shingu Gas Co., Ltd.
Business Area

BIWAKO BLUE ENERGY Co., Ltd.
Business Area

Major renewable energy sources
Thermal power source
CHP (distributed power source)
Power source under planning or study
Major retail and other business

Shiga East Office
Nabari City

1km

Shingu City

2km

Service Area: Nabari City,
Mie Prefecture

Otsu City

Toyooka City

1km

Service Area: Toyooka City,
Hyogo Prefecture

2kmService Area: Shingu City,
Service Area: Otsu City,
Wakayama Prefecture
Shiga Prefecture

Shiga

BIWAKO BLUE ENERGY Co., Ltd.

(Gas retail and gas/water maintenanceand services)

Kinki Trunk LineKeiji Line

Kinki Trunk LineNo.2 West Line

Takasago LineMie

Kinki Trunk Line-No.2 West Line
Headquarters

To Okayama
HimejiOkayama Line

Mie-Shiga
Line

Shiga Office

Hyogo

Kinki Trunk LineNo.3 West Line

Himeji Office

Kyoto

Kinki Trunk LineShiga Line

Keiji Office

North Office
Keihan Office

Kinki Trunk LineHimeji Line

6

Himeji LNG
Terminal

Nara OfficeOsaka Office
Hyogo Office
Hyogo Office(Port Island)

Kinki Trunk LineBay Line
South Office8

East Office5

7

Kinki Trunk Line-No.2 East Line1

(Gas, electricity,and services)

ENEARC Group(LPG, electricity,and services)

Green Power Fuel

(Procurement and sales ofdomestic woody biomass fuel)Kinki Trunk Line-No.1 East Line

Senboku LNG Terminal II
Senboku LNG Terminal I

Wakayama Office

Osaka

2

4 3

Kinki Trunk LineAmagasaki Line

CD Energy Direct

Wakayama

Nara

Total pipeline length
Osaka Gas Network Co., Ltd.:
Approx. 63,100 km
Daigas Group: Approx. 63,600 km

1 Sodegaura Biomass Power Plant

5 Gobo Biomass Power Plant

Legend2 Aichi Tahara Biomass Power Plant

6 Tokushima Tsuda Biomass Power Plantt

3 Hirohata Biomass Power Plant

7 Hyuga Biomass Power Plant

4 Himeji Natural Gas Power Plant

8 Goto City, Nagasaki Prefecture
Offshore Wind Power Plant

Service area
High-pressure trunk line
(owned by Osaka Gas Network Co., Ltd.)
Major pipeline(owned by Osaka Gas Network Co., Ltd.)
High-pressure trunk line
(owned by another company)

Headquarters, office(74.9 MW)
Commencement of operation date: TBD(75 MW)
Scheduled to commence operations in 2024

(50 MW)
Scheduled to commence operations in 2025

(74.8 MW)
Scheduled to commence operations in 2024

Research institute
LNG terminal
Gas holders(74.9 MW)
Scheduled to commence operations in 2023

(1,245.2 MW)
Scheduled to commence operations in 2026

(50 MW)
Scheduled to commence operations in 2024

(16.8 MW)
Scheduled to commence operations in 2024

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

007

Life & Business Solutions (LBS) BusinessTo further develop the LBS business as our core business, we will promote the growth of existing fields and the expansion of business domains. Described below are major
activities in each business field.

Urban Development Business

Materials Solutions BusinessInformation Solutions Business

Providing comfortable, healthy, and high-quality
living space and productivity-boosting office space

Providing value and contributing to a sustainable
society through high-quality materials solutions

Contributing to the evolution of corporations
and individuals in the digital age

Osaka Gas Urban Development Group

Osaka Gas Chemicals Group

OGIS-RI GroupThe Urban Development Business rolls out real estatebusiness, which extends widely to include the developmentof properties such as sale and rental apartments, officebuildings, management of buildings and facilities, and so on.
    Osaka Gas Urban Development Co., Ltd. has adopted
ZEH-M Oriented*1 as standard features of its condominiums
planned from April 2022 onward. This facilitates the provisionof condominiums that save and create energy and allow
residents to contribute to the environment.
    We will continue to aim for sustainable profit growthand improvement of capital efficiency by deepening thestrength of existing businesses, expanding businessdomains, and evolving our business model. Specifically, we
will continue to develop and supply quality housing that
address social issues (SDGs, etc.) and customer needs,
accelerate new businesses such as logistics real estate andprivate-placement REIT, provide comprehensive facility
management services in the building maintenance business,
expand out-of-area projects in the research park business,and provide interaction opportunities and a businessenvironment that triggers the creation of innovations.
*1 Z
 EH-M Oriented condominiums aim to reduce primary energy
consumption by 20% or more for the entire condominium
including communal areas. This is materialized by significantly
improving outer surface insulation and other functions of buildings
and achieving significant energy saving through the introductionof highly efficient facility systems.
Osaka Gas Urban
Development
Asset Management

The Materials Solutions Business develops, manufactures,and sells a variety of highly functional materials based on
our own coal chemistry technologies and pharmaceuticaland agrochemical-related technologies. Specific businessfields include fine materials, carbon fiber materials, activatedcarbon, silica- and alumina-based materials, andpreservatives. In 2014, we acquired activated carbon
producer Jacobi Carbons AB (Sweden) and are developing
our business globally.
    Frontier Materials Laboratories of Osaka Gas
Chemicals Co., Ltd. develops new materials andtechnologies to create future-oriented materials conducive
to value creation, focusing on the three fields of organic
synthesis,*2 polymerization and compounds,*3 andbioscience.
    We will continue to aim to establish a stable earnings
base and achieve sustainable growth by developing andexpanding sales of products with high added value in adiverse product offering, while also pursuing synergies anddeveloping new markets.
*2 N ew monomers for optoelectronic materials and semiconductors
are mainly developed in the organic synthesis field.
*3 Optoelectronic materials, resin modifiers, and carbon dispersion
materials are mainly developed in the polymerization andcompounds field.

OGIS-RI traces its roots back to developing and managing
systems for the gas business of Osaka Gas Co., Ltd. It rolls
out services for general consumers as well. Through various
acquisitions, the company has organized a group of IT
companies that offer services to the manufacturing andfinancial industries or have strength in ERP,*4 thereby
expanding business domains. By sharing the expertise
within the group, we provide comprehensive IT services
ranging from consulting, design, development, andoperation of information systems to cloud data centers, andsecurity.
    In addition, the strength of OGIS-RI Group, which isthe ability to accelerate the evolution of business by asking
essential questions and finding answers without fail, is set
as the company’s PURPOSE. We strive to secure anddevelop talented human resources to resolve customers’issues by using technology.
    We will continue to help improve the competitivenessof the Daigas Group, responding to new customer needs inthe fields of energy, manufacturing, and finance; ERP; clouds;
and digital transformation.
*4 E
 RP is the abbreviation for enterprise resource planning. ERP has
been adopted in a wide range of industries as a system that
centrally manages customers’ corporate activities and contributes
to efficient management.

Mizusawa Industrial Chemicals, Ltd.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

008

009 Message from the President
013 Daigas Group’s Values
017 Sustainability Management
018 Medium-Term Management Plan 2023
and Sustainability

020	Materiality and Daigas GroupManagement

Charter of Business Conduct

022 Materiality
024 Stakeholder Engagement027	Initiatives and Organizations the
Daigas Group Participates In

028 Commendation from the Outside

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

009

Message from the President

The Daigas Group continues totake on proactive challenges invarious fields to earn our
stakeholders’ overwhelming
support.

Masataka Fujiwara
Representative Director andPresident

FY2023.3 was a year of intensified change in thesocial and economic environments, where theinternational situation became increasingly
unstable, the exchange rate experienced
heightened volatility, and inflation continued during
the COVID-19 pandemic persisting.
Faced with the accelerating trend of
decarbonization and the growing importance ofenergy security, we recognize the significance offulfilling our role required by society in contributing
significantly to resolving long-term social issues,
such as achieving carbon neutrality, while
discharging our duties to ensure a stable energy
supply.

Resolving social issues at the coreof our business since its inception
In recent years, companies’ business activities havebeen increasingly scrutinized to see whether they
contribute to resolving social issues, such as
decarbonization to counter climate change. It has
become clear that addressing those challenges tocontribute to society is at the forefront ofcompanies’ purpose today.
    At the Daigas Group, we have strived toresolve social issues through the energy businessfor over 100 years since the inception of OsakaGas. One of the company’s founding goals was topromote the wide usage of safe and economical
gas lamps to replace oil lamps, major causes offires in urban areas in the late nineteenth century.
Our company’s business is rooted in tackling social
issues.
While achieving sustained growth by fulfilling
our founding purpose of resolving social challenges,
we have reshaped the Group and reinvented its
businesses in response to changes in the times andthe business environment, such as our businessdiversification in the 1980s, return to natural gasfocused business development in the 1990s,

Daigas Group Sustainability Report 2023

Contents

Introduction

expansion into overseas markets and businesses
from the 2000s, and competition in the fully
deregulated energy markets from the late 2010s.
Throughout our long history, the company has
evolved and advanced to higher stages by building
new portfolios. Our endeavor continues as we now
face many different social issues, including thoserelated to the environment, such as climate change,
and those related to society, such as human rights
and human capital.
    Meanwhile, no matter what changes in thetimes and business situations we may face, wehave always aimed at a goal as our unwavering
anchor, which is what we aim to be in the Daigas
Group Corporate Principles, “a corporate groupthat powers continuous advancement in customers’
lives and businesses.” Under this goal, we havestrived to resolve social issues, with each and every
one of us being mindful of being of service tocustomers and society, our commitment that drives
and propels our activities. “Being of service” tocustomers is our Corporate Motto, “Service First,”
that is, to devote ourselves to putting ourcustomers first. Far and away, the most integral
part of that is to practice Sangen Shugi, or the“Three Actuals Principle,” which places emphasison genba (the actual site), genbutsu (the actual
article), and genjitsu (the actual situations).
    As a member of the Daigas Group, I havevalued the spirit of Service First and Sangen Shugi,
the importance of which I have recognized firsthandthrough my experience of intense competition withother energy players and close engagement withcustomers since I joined the company. “We are notsupplying gas to customers; our customers arechoosing to use our gas.” “To continue to be theManagement

Environmental

Socialfirst choice of customers, we must seek out ourcustomers’ real issues and resolve them.” These
values have remained unchanged from the past andat present and will continue into the future.
    In resolving social issues, we always adhere
to Service First based on Sangen Shugi. By offeringsolutions that exceed the expectations ofcustomers and society, we aim to power
continuous advancement in customers’ lives andbusinesses and evolve the business portfolio of the
Daigas Group.

Co-create value for asustainable future

Evolve our corporate group

1. Achieving a low carbon/
carbon neutral society
2. Establishing lifestyles andbusinesses adjusted to the
new normal
3. Enhancing resilience ofcustomers and society

1. Enhancing Business
Portfolio Management
2. Promoting business
transformation with DX
3. Maximizing value for each
employee

Governance

ESG Data

010

Highlights of the past two years inexecuting CVS2023
Over the past two years of the CVS2023 period, we
stepped up our efforts to develop methanation
technologies for producing and introducing
e-methane* and build its supply chains. Despite theincreased volatility in energy procurement and sales
due to growing global instability, such as Russia’s
invasion of Ukraine, we have managed to maintaina stable energy supply to customers through close
cooperation among our Group companies.
In the Domestic Energy segment, thenumber of customer accounts, which is the fruit of
our efforts, has reached 10 million, our target for2030 in the Long-Term Management Vision. In
addition, we have been expanding our businessfoundations through various measures; Starting theconstruction of the Himeji Natural Gas Power Plant:
Introducing new services into the market, such as
Sumai LINK, a life-service platform business forenhanced customers’ daily lives, and D-Lineup,
which assists commercial and industrial customers’emissions reduction and decarbonization: Entering
the fixed-line telecommunications and otherbusinesses in new domains. In the International
Energy segment, Sabine Oil & Gas Corporation in
the United States has been steadily increasing its
shale gas production, growing into a pillar ofrevenue for the Daigas Group. In Life & Business
Solutions (LBS) segment, the three core companies
in the real estate, information, and materials fields
have advanced their performances and expanded
their business domains by leveraging their*Synthetic methane produced from non-fossil fuel-based feedstocks, such as
green hydrogen

Daigas Group Sustainability Report 2023

Contents

Introduction

respective strengths even in an unstable businessenvironment.
    While we succeeded in enhancing ourbusiness portfolio last year as described above,
we experienced a major setback when the Freeport
LNG, a natural gas liquefaction business in the
United States, shut down its plant following a firethat broke out in June 2022. This incident at theFreeport LNG, where we participate as an equity
holder and LNG off-taker, posed a serious threat toour LNG procurement amid the growing importanceof energy security. We quickly acted to ensure astable energy supply by seeking alternative sourcesand exploring other options to make up for the LNG
shortfall caused by the plant shutdown. Taking thisevent as a lesson that a single accident could leadto considerable supply disruption and financial
losses, we have been re-examining the risk
management of our entire business to prevent
similar incidents.
    In addition, at the Sodegaura Biomass
Power Plant, a fire broke out in a fuel storage silo in
January 2023. This accident at the power plant,
which an affiliate of Osaka Gas had built and was in
the process of commissioning, occurred due to anissue regarding safety, a top priority for an
infrastructure business operator. In the wake of thisincident, we have been undertaking intensive andfull inspections, besides daily checks, of ouroperations and maintenance in all our infrastructurebusinesses to make improvements. We have taken
seriously to heart the great concern andinconvenience these accidents have caused our
stakeholders, and we are determined to ensure no

Management

Environmental

Socialrepeat of similar accidents.
    This fiscal year is the final year of CVS2023,
when we finish executing the current medium-termplan to achieve the targets and formulate our next
medium-term management plan. While fulfilling our
mission as an energy business operator to deliver astable energy supply, we aim to bring our efforts todate to fruition and accelerate the growth andevolution of the Group to reach our targets for2030, the year we plan to inject our first e-methane
into the gas grid, and 2050, the year we aim toachieve carbon neutrality. As the top of the Daigas
Group, I will steer the management throughdeliberations in the Board of Directors and Advisory
Committees, balancing the weight between
addressing immediate changes and taking onchallenges for our future growth.

Governance011

officers and employees to adhere to.
    In 2007, we announced our participation in
the United Nations Global Compact, which is a firstfor a Japanese public utility enterprise. We fully
support the principles to be followed by companies
as members of the international community.

The Ten Principles of the UN Global Compact

Human
RightsPrinciple 1 : Businesses should support and respect
the protection of internationallyproclaimed human rights; andPrinciple 2 : make sure that they are not complicit inhuman rights abuses.
Principle 3 : Businesses should uphold the freedomof association and the effective
recognition of the right to collective
bargaining;

ESG-focused management
In achieving the targets of CVS2023, it is vital tocreate and share value with our stakeholders. To
maintain our stakeholders’ confidence and execute
our ESG-focused management steadily, we arebuilding a resilient business foundation that willallow and encourage our members to continue
taking on new challenges even amid growing
uncertainty.
    For the realization of the Daigas Group
Corporate Principles, we have established the
Daigas Group Charter of Business Conduct, which
presents our corporate stance, and the Daigas
Group Code of Business Conduct, which provides
concrete standards of conduct for the Group’s

ESG Data

LabourPrinciple 4 : the elimination of all forms of forced
and compulsory labour;
Principle 5 : the effective abolition of child labour;andPrinciple 6 : the elimination of discrimination in
respect of employment andoccupation.
Principle 7 : Businesses should support aprecautionary approach toenvironmental challenges;

Environment

Principle 8 : undertake initiatives to promote greater
environmental responsibility; andPrinciple 9 : encourage the development anddiffusion of environmentally friendly
technologies.

AntiCorruption

Principle 10: B usinesses should work against
corruption in all its forms, including
extortion and bribery.

Daigas Group Sustainability Report 2023

Contents

Introduction    As President, I have held meetings called“Mirai Open Talk” with the Group company
employees as part of my workplace visit. In thesession, I deliver my message in person from theperspective of the Corporate Principles and theLong-term Management Vision, emphasizing theimportance of creating value for a sustainable futureand resolving social issues. These meetings areinvaluable opportunities for me to learn how ouremployees approach their daily work and address
problems. In one of the Mirai Open Talks in
FY2023.3, I held a session with our young
employees, where I was deeply impressed by theirefforts and serious attitude to improve themselves
and serve customers and society even as theystruggle.
    These conversations help identify key
management issues of enhancing value for
employees, such as creating workplaces thatencourage diverse talent to take on new challenges
to achieve personal growth through them and allow

Management

Environmental

Socialthem to tackle social issues to contribute to society.
One initiative to this end is the full-scale initiation of
the Daigas transformation or Daigas X, in which we
aim to enhance work efficiency within the Group by
sharing the Daigas Group’s ways of productive
working. We will develop a working environment topromote dynamic transformation and encourage
members to challenge themselves.
    We are also pursuing initiatives for further
improving corporate governance. In addition to theAdvisory Committees on appointment andremuneration, we established Advisory Committee
on Management in FY2023.3. This new committee
comprises the officer in charge of the Corporate
Planning Headquarters, all Outside Directors, andme as President, with Outside Audit & Supervisory
Board Members participating as observers. In thesecommittees, each chaired by an Outside Director,
members discuss critical issues, making the mostof their respective specializations. In FY2024.3, wewelcomed a new female Outside Director, and thathas made discussions even livelier.
    Through the practice of the above
ESG-focused management, we intend to build
resilient business foundations, aiming to continue
earning the unwavering confidence of our
stakeholders.

Governance

ESG Data

012

Toward the Future
There has been a tremendous shift in the social
paradigm. Even though the COVID-19 pandemic
and the recent instability of social and economic
conditions appear to have settled down somewhat,
the world will not return to the way it was. The trendof decarbonization, digitalization, and thediversification of people’s values will only grow inspeed and scale. To avoid being left behind, we will
shift our efforts into an even higher gear on
cocreating value for a sustainable future.
    Centering on activities for resolving social
issues, we will devote our every effort to realizing asustainable society by taking on new challenges invarious fields in Japan and overseas to earn the
overwhelming support of our stakeholders. Pleaselook forward to our best results.
September 2023

Discussion on the Group’s Future with the President
A video featuring scenes from the Mirai Open Talk with young employees wasposted on the in-house company website for employees.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

013

Daigas Group’s Values
Daigas Group Philosophy
The Daigas Group has established the Daigas Group Corporate Principles, the Daigas Group Charter of Business Conduct, and the Daigas Group Code of Business Conduct.
The Daigas Group Corporate Principles consist of What We Aim To Be, Our Commitment, and Our Corporate Motto.
    The Group believes that the creation of four types of value is the fulfillment of its social responsibility by creating value primarily for customers, as well as for society,shareholders, and employees, aiming to become a corporate group that powers continuous advancement in customers’ lives and businesses.
    We have also established the Daigas Group Charter of Business Conduct as a statement of our corporate stance and the Daigas Group Code of Business Conduct
as a specific code of conduct to be followed by our officers and employees, and we conduct our business activities based on them.

Daigas Group’s Corporate Principles

Daigas Group’s Corporate Principles−What the Daigas Group Aims To Be−
A corporate group that powers continuous advancement in customer’s lives andbusinesses.
−Daigas Group’s Commitment−

DaigasGroup’s
Corporate
Principles

We create four types of value.
We create value primarily for customers, as well as for society, shareholders, and employees.

−Our Corporate Motto−
Service First

Daigas Group
Charter of Business Conduct[Corporate attitude]

Daigas Group
Code of Business Conduct[Code of conduct for officers and employees]

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Daigas Group Charter of Business Conduct

Environmental

SocialGovernance

ESG Data

014

Daigas Group Charter of Business Conduct

The Daigas Group places the highest priority on creating value for customers and aims to lead creating value for customers to creating value for society, for shareholders, andfor employees through its business activities. We believe that our social responsibility lies in creating value for all these stakeholders through fair and transparent businessactivities.
    We have established the Daigas Group Charter of Business Conduct in order to demonstrate our determination to match our stakeholders’ expectations and fulfill our
corporate social responsibility toward our Group’s sustainable development. This Charter serves as the Group’s fundamental guide to achieving sustainable economic growth
and resolving social issues through its business activities in cooperation with customers, society, shareholders, and employees.
    The Daigas Group’s management members are expected to be role models in acting in accordance with the Charter. They will take strict corrective action in case of any
infringement of the Charter.
Daigas Group Charter of Business Conduct
I. Creating Value for Customers
The Daigas Group aims to enhance energy resilience through a reliable and safe supply of energy, including natural gas,
electricity, and LPG, while ensuring safety and providing services. The Daigas Group strives to create value through thedevelopment of various businesses and innovation for customers’ comfortable lifestyles and sustainable business development.

II. Contributing to the Sustainability of the Environment and Society
The Daigas Group addresses the environmental issues both at regional and global levels as a matter of paramount importance inits business centered on energy supply. In light of the impacts of its business activities on the environment, the Daigas Group
strives to tackle climate change and other environmental issues, develop innovative technologies and promote their wider use,and support the advanced use of resources and materials.

III. Engaging With and Contributing to Society
The Daigas Group ensures the transparency of its business operations and discloses information for the public’s better
understanding of its corporate activities. The Daigas Group promotes cooperation with various stakeholders through productive
dialogue and makes positive contribution to the local community as a good corporate citizen.

IV. Respecting Human Rights
The Daigas Group respects human rights as basic rights inherent to all. The Group supports the international standards onhuman rights and promotes activities and programs to protect the human rights of its stakeholders.

V. Complying with Laws and Regulations
The Daigas Group strives to earn the trust of society through its compliance with laws and regulations on all levels, including themanagement and employees. The Group’s compliance is not limited to observing laws and regulations but includes acting
sensibly as a member of society. The Group conducts business activities with fairness and integrity, respecting the culture andcustoms of each country and region where it operates.

VI. Providing Work Environment That Supports Employees’ Personal Growth
The Daigas Group provides a safe and healthy working environment for its employees while securing employment opportunities.
The Group values its employees’ individual uniqueness, respects their independence as individuals, supports their personal growth,and promotes diversity, equal opportunity, and inclusion at the workplace.

Daigas Group Policies

Daigas Group
Charter of Business Conduct[Corporate attitude]

Daigas Group
Code of Business Conduct

Daigas Group Policies

The Daigas Group has established policies to demonstrate its corporate attitude in each field. The policies,
including those related to sustainability, and declarations are as follows:• 
Daigas Group Human Rights Policy
Daigas Group Environmental Policy• 
Daigas Group Diversity Promotion Policy
Daigas Group Biodiversity• Daigas Group Procurement Policy
Promotion Policy• • Daigas Group Procurement Policy for Suppliers
Green Purchasing Guidelines(the Daigas Group Procurement Guidelines for Suppliers)

DaigasGroup’s
Corporate
Principles[Code of conduct for officers and employees]

 rivacy PolicyPProduct Safety Voluntary Action Plan
• 
Declaration of Health and Productivity
Management

•

•

•

•

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Daigas Group Code of Business Conduct

Environmental

SocialGovernance

ESG Data

015

Daigas Group Code of Business Conduct

The Daigas Group’s corporate social responsibility is to create new value through fair competition and thereby contribute to society. In fulfilling its corporate social responsibility,
compliance is of utmost importance for the Daigas Group.
    The Daigas Group Code of Business Conduct (“the Code”) sets forth the standards of conduct that all officers and employees of the Daigas Group are required to follow inorder to achieve compliance management.
    As we operate business in accordance with the Code, which also forms the basis of the Group’s other internal rules, we should always adhere to the spirit and intent of theCode even in face of any circumstances that fall outside its expected situations, which we might encounter in the rapidly changing business environment.
Daigas Group Code of Business Conduct
1. Respecting human rights
2. Providing safe and secure workplace
3. Complying with laws and regulations
4.	Avoiding use of professional positions andcompany property for personal reasons
5.	Complying with laws in each country andregion, and respecting international
standards including those on human rights
6.	Contributing to the environmental
conservation
7.	Complying with anti-monopoly laws andregulations, and conducting fair transactions
8. Providing products and services
9. Ensuring safety of products and services

10. Interacting with customers appropriately
11. Engaging with and contributing to society
12.	Building and maintaining sound relationships
with business partners
13.	Engaging business partners in following
Daigas Group Code of Business Conduct
14.	Managing proper use of information andsystems
15.	Disclosing information and engaging withstakeholders
16.	Properly handling intellectual property
17.	Avoiding association with anti-social groups
and individuals
18.	Making tax payment and performing
accounting practices proper

To make the Daigas Group Code of Business Conduct easier to understand for officers and employees
working for the Group, we have extracted the essence of the 18 items in the Code to create “Our Declaration”(10 items).
“Our Declaration,” Summarizing the Daigas Group Code of Conduct“Our Declaration,” Summarizing
the Daigas Group Code of Conduct

I.		We will achieve a workplace where human rights are respected and employees can work in comfort and with peaceof mind.
II.		We will conduct business activities with legal compliance and decency.
III.		In conducting global business activities, we will comply with all local laws and regulations, and will respect
international norms including those concerning human rights.
IV.		We will properly consider the global environment in all of our actions.
V.		We will conduct fair business transactions and competitions.
Vi.		We will provide safe and high-quality products and services at reasonable prices, with the aim of enhancing
customer satisfaction.
VII.		We will act modestly and sensibly in our relationships with those with whom we do business.
VIII. We will appropriately handle and disclose information with proper recognition of its value and importance.
IX.		We will prohibit any association with anti-social forces.
X.		We will make appropriate tax payments and properly handle our financial accounts.

DaigasGroup’s
Corporate
Principles

Daigas Group
Charter of Business Conduct[Corporate attitude]

Daigas Group
Code of Business Conduct[Code of conduct for officers and employees]

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

016

Revision of the Daigas Group Code of Business Conduct in line with the 10 principles of the UN Global Compact and ISO 26000
We fully embrace the UN Global Compact, and in June 2007, we became the first utility in Japan to join. The Global Compact encompasses 10 principles for enterprises to follow in the four
fields of human rights, labor standards, the environment, and anti-corruption.
   In May 2008, the Daigas Group revised its Code of Conduct to incorporate the 10 principles of the UN Global Compact and in doing so clearly prohibited activities such as bribes toforeign officials and the use of child labor (currently, details are described in the internal guide for understanding the Code). Because these principles also relate to the dealings that the Grouphas with its business partners, in June 2009 the “Policy for Purchasing” (currently the “Daigas Group Procurement Policy” and the “Daigas Group Procurement Policy for Suppliers (Daigas
Group Procurement Guidelines for Suppliers)” was also revised to stipulate adherence to the UN Global Compact.
   In July 2011, we revised the “Daigas Group Code of Conduct” again to reflect ISO 26000, which was published in November 2010, to add principles such as respecting international norms,
including the laws and regulations of each country/region and those concerned with human rights, and promoting the understanding and requesting the cooperation of business partners.

Activities for dissemination of the Corporate Principles
In its “Long-Term Management Vision 2030,” the Daigas Group has set its sights on evolving into “an innovative energy & service company that continues to be the first choice ofcustomers.” In the “Medium-Term Management Plan 2023,” we are committed to creating “value for a sustainable future” with our stakeholders and achieving further growth as a corporategroup that provides value that contributes to solving social issues in order to realize a sustainable society.
   These plans have been formulated based on the Daigas Group Corporate Principles (“Principles”), which the Group has valued since its founding. Based on the belief that it is important foreach and every employee to understand the Principles in order to realize value creation, we designated October, which is the anniversary of our founding, as “Group Corporate Principles
Month” in FY2022.3, and we have provided e-learning and workshops in continuous efforts to promote familiarization of the Principles among Group employees.

Setting up opportunities for direct dialogue between the President and Group employeesWith the aim of fostering a sense of unity among employees, the Daigas Group provides opportunities for the President
to visit workplaces and engage in direct dialogue with employees.
   The President communicates his thoughts on “a corporate group that powers continuous advancement incustomers’ lives and businesses,” which is clearly stated in the Daigas Group Corporate Principles as what the Groupaims to be, and engages in a frank exchange of opinions with the members at each workplace, thereby working to fostera sense of unity within the Group.
   In FY2023.3, a total of eight workshops were held for the Energy Technology Laboratories, Osaka Gas Urban
Development Co., Ltd., Osaka Gas Australia Pty. Ltd. and other organizations. Also, roundtable discussions with young
employees were held three times.

The President’s visit to a workplace

Familiarization of the Daigas Group Code of Business Conduct
To promote understanding of the Daigas Group Code of Business Conduct, we have prepared Our Declaration (10 items) as a summary version extracting the essence of the Code and havemade it known to all employees by distributing a portable card and posting it on the intranet.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

017

Sustainability Management
Principle and Outline
The Daigas Group aims to become a corporate group that helps further the evolution of customers’ livelihoods and businesses. To this end, the management and employees
act based on the “Daigas Group Charter of Business Conduct (“the Charter”),” which stipulates the basic concept of our CSR. As the Group’s business field expands, therange of stakeholders that our business affects will further expand, including customers, local communities, shareholders and investors, and employees.
In order to recognize the impact our business activities may have on society and the environment, and conduct business while taking such impact into account, the Daigas
Group has been promoting CSR activities. Specifically, in 2009, the Group introduced indicators under each chapter of the Charter to promote CSR activities and visualize theirprocesses. In FY2015, we identified important aspects for the Group (materiality) by turning to the opinions of outside knowledgeable people.
We are promoting sustainability activities to achieve sustainable economic growth and solve social issues by addressing the Sustainable Development Goals (SDGs),
including climate change and human rights issues.

Sustainability Promotion System
The Daigas Group has an ESG Committee, chaired by the Head of ESG Promotion(Representative Director and Vice President), who supervises the Group’s sustainability
activities, and consisting of the heads of related organizations and other members. In
principle, the ESG Committee meets four times a year for cross-organizational deliberationand coordination of sustainability activities. In principle, the Management Meeting, chaired by
the Representative Director and President, is held three times per year as the ESG Council,
which deliberates on established material issues (materiality), indicators and targets in ESG
management, and their progress. The Board of Directors is then consulted on key mattersrelated to sustainability activities for decision-making and supervision.
    The Environment Subcommittee, the Social Contribution Subcommittee, and theCompliance/Risk Management Subcommittee have been established to promote sustainability
activities in a cross-departmental manner.
    All these moves represent the Group’s efforts to strengthen sustainability activities to live up
to higher social expectations for the Group through communication with internal and external
stakeholders.

Sustainability Promotion System (as of April 1, 2023)
Board of Directors
Representative Director
and President
ESG Council(Management Meeting)
ESG Committee
Chairman: Head of
ESG Promotion

Environment
Subcommittee

Social Contribution
Subcommittee

Compliance/
Risk Management
Subcommittee

Meeting bodies consistent with the “Daigas Group Charter of Business Conduct”
Human Rights Committee

Health and Safety Council

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

018

Medium-Term Management Plan 2023 and Sustainability
In 2017, the Daigas Group formulated a Long-Term Management Vision that looks toward FY2031.3, aiming to be “an innovative energy and service company that continues tobe the first choice of customers” and achieve carbon neutrality by 2050.
    In our Medium-Term Management Plan 2023, “Creating Value for a Sustainable Future,” announced in 2021, we have adopted a backcasting approach from our longterm vision in formulating our plan. Our aim is to create “value for a sustainable future” together with our stakeholders and continue to grow as a corporate group that createsvalue that contributes to solving social issues, with the goal of achieving a sustainable society.

Medium-Term Management Plan 2023

Long-Term Management Vision 2030

[Creating Value for a Sustainable Future][Going Forward Beyond Borders]

2030

2021–2023

2050

Growing the Group’s business

What we aim to be

To be an innovative energy andservice company that continues tobe the first choice of customers

Business group which creates value withstakeholders for solving social issues including
decarbonization.

Business development that goes beyond
customer expectations, business boundaries,
and corporate boundaries[Concept]

Creating Value for a Sustainable Future

Value for asustainable
futureCocreation

Society

Customers

Communities/Society

Employees/Partners

Shareholders/Investors

Deregulated
energy markets

Digitization

Population decrease, declining
birthrate, aging population

New unexpected changes such as COVID-19

Acceleration of development of theinternational energy business
Expansion of LBS business and developmentof new business fields
Investment for business growth andpromotion of M&As

Fulfilling theLong-Term Management
Vision 2030

Achieving
the SDGs

Achieving a carbon
neutral society

Innovation that goes beyond customer expectations

Hopes and anxieties in rapidly changing times
Decarbonization,
climate change

Development of energy marketer
business in a new era

Realization ofa sustainable
society

Management that wins the confidence of stakeholders(Management that takes corporate value improvementand ESG aspects into account)
Promotion of work style reform and human resources
development that contributes to productivity improvement

Solving social issues

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

019

In formulating the Medium-Term Management Plan 2023 (Plan 2023), in addition to introducing ROIC as a management indicator, we newly identified important aspects(materiality) for the acceleration of ESG management and set each indicator. Please refer toP.20-21 for the results of the key performance indicators related to materiality.
Medium- to Long-term Management Indicators
FY2024.3
Targets

FY2031.3
Targets
Nearly 7%*²

Profitability indicators

ROIC*¹

Nearly 5%

Financial soundness
indicators

Debt equity ratio

Nearly 0.7%

Shareholders’ equity ratio

Nearly 50%

Shareholder returns

Payout ratio

30% or higher
500.0 billion yen*³

1,450.0 billion yen*4

Domestic Energy

174.0 billion yen*³

520.0 billion yen*4

International Energy

168.0 billion yen*³

550.0 billion yen*4Life & Business Solutions Business158.0 billion yen*³

380.0 billion yen*4

237.0 billion yen*³

550.0 billion yen*4

Investment for growth

Investment for quality improvement
Materiality key
performanceindicators (KPI)

Establishing lifestyles
and businesses adjusted
to the new normal

Number of customer accounts

Enhancing resilience ofcustomers and society

Number of serious accidents

Achieving a low-carbon/
carbon-neutral society

CO² emissions of Daigas Group

10 million or more

Customer satisfaction rate

90%
Continued zero serious accidents

Build resilient energy supply facilities

Implementation of measures for disaster prevention and aging pipes*²
27.02 million tons*5 (5 million tons reduction from FY2018.3)

Percentage of renewables in our power generation portfolio in Japan
Contribution to developing renewables capacity on a global basis

Nearly 50%*²
2.5 GW

5.0 GW*²
10 million tons*²

Avoided emissions (Baseline: FY2017.3)
Building foundations
that support therealization of value
for a sustainable future

Number of our participation in local governments’ activities

14 cases

Number of joint efforts with local communities

170 times

Appropriate new supplier ratio

100%

Number of serious violations of laws and regulations

Continued zero serious violations

Employee attitude survey

Maintained and improved employee engagement*²

Annual average hours of training per employee

Development of human resource and work environment improvement*²
6

Percentage of female officers/Percentage of female Directors*

20% or more*²

Percentage of women in members newly promoted to middle management positions

30% or more*²

Percentage of women in new recruits for career-track positions

Continue 30% or more*²*1 NOPAT (Ordinary profit + Interest expenses - Interest income - Income taxes) / Invested capital**Invested capital= (Business unit) Working capital + Non-current assets	(Group-wide) Interest-bearing debts + Shareholders’ equity (average ofthe beginning and the end of each fiscal year)
Interest-bearing debts excludes risk-free leased liabilities to us.

FY2051.3
Targets

CarbonNeutral

Striving to achievecarbon neutrality by 2050
In light of the growing demands ofsociety for responses to climatechange, the Daigas Group aims tobecome carbon neutral by 2050. We
plan to reach the goal throughdecarbonization of our gas andelectricity by introducing methanation
technology, which uses hydrogengenerated by renewable energy, andby increasing the share of renewables
in our power generation portfolio.
Further, we announced our “Carbon
Neutral Vision” in January 2021 toindicate our efforts to achieve
this goal.
    Under that Vision, we released“Energy Transition 2030 (ET2030),”
which outlines the overall path towarda low-carbon/decarbonized energy
transition, in March 2023. In ET2030,
we declared new CO2 emissions
reduction targets for FY2031.3 for
the Group.
Please refer to
P.39-40for details of“Energy Transition 2030.”*2 Targets for FY2031.3 newly set in the Medium-Term Management Plan 2023
*3 FY2024.3 targets are cumulative for FY2022.3 - FY2024.3.
*4 FY2031.3 targets are cumulative for FY2018.3 - FY2031.3.
*5 Emissions throughout the domestic supply chain (scope 1, 2 & 3). Target newly set in March 2023
*6 Target for percentage of female Directors newly set in March 2023

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

020

Materiality and Daigas Group Charter of Business Conduct
In light of the process to identify materiality, the Daigas Group has set forth “co-create value for a sustainable future” in its Medium-Term Management Plan, defining the pursuitof the creation of value for solving social issues alongside stakeholders as one of its key strategies.
    Through unified management that integrates corporate principles, the Medium-Term Management Plan, materiality, and key performance indicators (KPIs), we will work toaccelerate ESG management.
Charter of BusinessConduct

Important issues(Materiality)

Value for asustainable
futureMaintain and expand
customer base

Establishing
lifestyles andbusinesses
adjusted to the
new normal

Improvement of customer
satisfaction and quality ofservices

Ⅰ

Creating value
for customers

Customer health and safety
GRI Standards:
416-1

Stable supply of services

Ⅱ

Contributing to
the sustainabilityof the environmentand society

Climate change
GRI Standards:
302-1

305-5

Enhancingresilience ofcustomers andsociety

Achieving a
low-carbon/
carbon-neutral
society

Initiatives to create value
for a sustainable future

Ⅲ

Engaging withand contributing
to society

413-1

Building
foundations
that support therealization of value
for a sustainable
futureGoals

Fiscal year
FY2023.3 results
to beachieved

Maintain and expand
customer base

Number of customer
accounts

10 million or more

2031.310.02 million

Enhance customer
relationshipmanagement

Customer satisfaction
rate

90%

2024.390%

Maintain safety andquality levels

Number of serious
accidents

Continued zero
serious accidents

2031.3

Zero serious
accidents

Strengthen resilience ofenergy supply

Build resilient energy
supply facilities

Implementation of
measures fordisaster prevention
and aging pipes

2031.3

Ratio of strengthening ofearthquake resistance:
about 89%
Number of supply area
subdivisions: 713 blocks

CO² emissions of
Daigas GroupNet zero emissions

2051.3

Implement carbonneutral measures

25.98 million tons

tons reduction( 5frommillionFY2018.3)

2031.325.05 million tons*¹

Nearly 50%

2031.3

13.0%

5 GW

2031.3

2.5 GW

2024.3

Avoided emissions(Baseline: FY2017.3)

10 million tons

2031.33.86 million tons

Number of our participation in
local governments’ activities(i.e. community development
planning)

14 cases

2024.338 cases

Number of joint efforts
with local communities

170 times

2024.3326 times

Provide clean energy
and expand renewableenergy value chain

Promote advanced utilizationof natural gas andenvironmental products

Coexistence with local
community
GRI Standards:

Indicators

Promote communication
with local communities

Percentage of renewables
in our power generation
portfolio in Japan*²
Contribution to developing
renewable capacity on a
global basis*²

27.02 million tons*¹*1 Emission throughout the domestic supply chain (Scope 1, 2 & 3) (New targets for FY2031.3 set in Energy Transition 2030)

Contribution
to SDGs

2.11 GW*2 Including power sources under the feed-in tariff (FIT) system.

Daigas Group Sustainability Report 2023

Contents

Introduction

Charter of BusinessConduct

Important issues(Materiality)

Ⅳ

Respecting
human rights

Ⅴ

Complying withlaws andregulations

Ⅵ

Value for asustainable
futureEnvironmental

Initiatives to create value
for a sustainable future

SocialIndicators

Governance

Goals

Fiscal year
FY2023.3 results
to beachieved

ESG Data

021

Contribution
to SDGs

Supply chain management
GRI Standards:
308-1

414-1

Build a responsible
supply chain

Appropriate new
supplier ratio

100%2024.3100%

Promote the Group’s
compliance

Number of serious
violations of laws andregulations

Continued zero
serious violations

2024.3

Zero serious
violations of laws
and regulations

Attitude survey(Loyalty Score)

Maintained andimproved employee
engagement

2031.3

Four comprehensive
indicators remained at
appropriate levels

Annual average hoursof training per
employee

Implementation ofhuman resource
development andwork environment
improvement

2031.326.3 hours/person
Hours of e-Learning
courses were taken*¹:
5.83 hours*¹/person① Percentage of female
executives/Percentage
of female Directors*²② Percentage of women inmembers newly promoted to
middle management positions③ Percentage of women in new
recruits for career-track
positions① 20% or morefor eachcategory② 30% or more
③ Continue 30%
or more2031.3① 13.3%/10.0%② 14.3%③ 28.1%

Compliance
GRI Standards:
307-1
418-1

419-1

Employee engagement

Providing a work
environment that
supports
employees’
personal growthManagement

Development of
employee skills
GRI Standards:

Building
foundations
that support therealization ofvalue fora sustainable
futureCreate a workplace
where employees canfeel a sense offulfillment

404-1

Diversity and inclusion
GRI Standards:
405-1

Promote diversity andinclusion*1 Includes some temporary employees and part-time workers. Covers e-learning programs on safety, information security, environment, digital transformation, etc. *2 Target for percentage of female Directors newly set in March 2023

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

022

Materiality
In identifying materiality, the Group held discussions with the relevant organizations within the Group and extracted medium- to long-term items with an impact on society andthe environment, followed by items with future financial impacts on the Group, based on changes in the business environment and social trends related to sustainability. Afterconsidering the impacts of each item, material issues concerning the impact on society and the environment were identified with reference to the opinions of outside experts.
Based on these processes, the Group’s medium-term management plan advocates “Co-create value for a sustainable future” as it positions the pursuit of value creation forsolving social issues and achieving it together with stakeholders as one of its priority strategies.

Process of Materiality Identification
We consulted the Global Reporting Initiative (GRI) Standards for the procedure for identifying our material issues. Referring to material topics (economic, environmental, and social topics) in topicspecific GRI Standards (the 200, 300, and 400 series), we assessed the social and environmental impacts of various issues and their financial impacts on the Daigas Group’s future. Based on theassessment results, we positioned those issues according to their importance as shown by the impact evaluation chart below right. Finally, we identified issues positioned at 1 in the chart as ourmaterial issues. The identified material issues and KPI targets associated with them were discussed by the ESG Committee and the ESG Council (Management Meeting) and then approved together
with the Medium-Term Management Plan by the Board of Directors. We strive to achieve the KPI targets for our material issues while making the PDCA (plan-do-check-act) cycle function well andreport the progress every year.
Process of Materiality Identification

Step2
For “future financial impacts on the group,” weconsidered what we aim to be, issues, and risks for
FY2031.3 by each organization and business domain
within the Daigas Group. For “impacts on society andthe environment,” we had deliberations by taking into
account the opinions of external experts.
Step3
We considered the impacts of each item in both
“impacts on society and the environment” and “futurefinancial impacts on the group” in terms of risks andopportunities, scored the degree of significance, andidentified materiality.
Step4
We have revised the Daigas Group Charter of BusinessConduct and other documents based on the identified
materiality. The materiality as indicators of efforts toembody the Charter and contribute to the realization ofa sustainable society, along with the Medium-Term
Management Plan, was presented to the Board of
Directors and decided with the approval of the Board.

Impact Evaluation Chart
Step1

1

Most important

Analyzed the external environment in 2030
in areas such as economy, society, and theenvironment
Step2
Considered what we
aim to be, issues, andrisks for 2030 by eachbusiness domain

In addition to theanalysis in STEP 1, heldinterviews with external
experts

Considered “futurefinancial impacts on
the group”

Considered “impacts
on society and theenvironment”

Step3
Identified materiality in view of the impacts on both

Step4

•

Impacts on society and the environment

Step1
In terms of global risks, changes in the businessenvironment, and contributions to the SDGs via
business activities, we listed the items of “impacts onsociety and the environment” and “future financial
impacts on the Group” for the Daigas Group, using the
GRI Standards, etc. as a reference.

•

1

•

•

•

2

•

•

3

 ustomer health andCsafety aintain and expandMcustomer base oexistence with local
C
communityImprovement ofcustomer satisfaction
and quality of services
 upply chain
S
management
Compliance•Employee engagement

•

•

•

 table supply ofS
services••

Important
Most important
Future financial impacts on the Group2
Climate change evelopment ofD
employee skills••

Occupational
health and safety evelopment ofDregional economies(in emerging markets) rovision ofP
information tocustomers andconsumersPollution prevention
and chemicalmaterials

•

Tax

•

Ethical actions••

Diversity and inclusion

Securing
employment
 reedom ofFassociation andcollective
bargaining rights

3•

Approved and decided at the Board of Directors

Recycling-oriented
economy (use of
raw materials)•

Political donation•

Biodiversity•

 ppropriate use ofA
water

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

023

Why the Issue Is Material
Materiality

ReasonMaintain and expand
customer base

The Daigas Group’s business began more than a hundred years ago with gas lamps. Since then, the Group has continued to meet the various needs of its customers
by developing uses for gas in cooking, water/space, heating, power generation, and more. We also use our strong relationship with customers as a basis for expanding
into new territories such as industrial gas, real estate, information communication, new materials, and home services. The Group considers its meaning for society to be in
striving to improve the livelihoods and businesses of its numerous customers, based on its aim to become a corporate group that helps customers bothon the livelihood and business fronts for their “further evolution”.

Improvement ofcustomersatisfaction and qualityof services

We believe it is important to strive to improve our security and service quality as well as appropriately provide customers with information regarding the safety aspectsof our products and services so that they can use them in a safer and more convenient manner.

Customer health andsafetyThe Daigas Group announced the Long-Term Management Vision 2030 in March 2017 and the Medium-Term Management Plan 2023 in March 2021. Ensuring thesafety of city gas as well as gas and power generation facilities is of the utmost priority for the Group. To that end, we consider it important to work towards enhancing
safety and improving preparedness for accidents and disasters.

Stable supply of services

For the Daigas Group, which aims to enhance the resilience of customers and society, we believe that it is important to systematically upgrade our processing
facilities, maintain gas pipeline networks, and take disaster prevention measures in accordance with meticulously devised plans to ensure a stable city gas supply,
thereby strengthening our ability to secure greater stability in the gas supply.

Climate change

Tackling climate change is seen as one of the Sustainable Development Goals (SDGs) adopted by the United Nations. For the Daigas Group, climate change
represents an important management challenge, and initiatives to reduce CO2 emissions are a crucial mission.

Coexistence with local
community

The Daigas Group operates a business that is rooted in and supported by local communities. We believe that our various contributions to local communities will leadto a virtuous cycle leading to the development of both the Group and society.

Supply chain
management

Our broad-based city gas value chain is built on the cooperation of various business partners. Fulfilling our social responsibility by working with our suppliers in thevalue chain builds relationships of trust with our stakeholders and furthers the development of the entire value chain.

Compliance

The Daigas Group’s view on compliance is that it entails sensible corporate activities based on sound ethics with a particular focus on observing laws and regulations.
To maintain the trust of stakeholders, it is vital to ensure that our directors, officers, and employees uphold compliance.

Employee engagement

In the Daigas Group Corporate Principles, the Group declares its aim to create “value for society,” “value for shareholders,” and “value for employees,” as well as“value for customers,” its top priority. We believe that developing human and intellectual capital is a source of value creation. Based on the belief that developing
human and intellectual capital is a source of value creation, the Group considers it important to implement better measures to promote a workplace culture where
employees can take on challenging work.

Development of
employee skills

In the Daigas Group Corporate Principles, the Group declares its aim to create “value for society,” “value for shareholders,” and “value for employees,” as well as“value for customers,” its top priority. We believe that developing human and intellectual capital is a source of value creation. The Daigas Group’s Long-Term
Management Vision 2030 lists the promotion of work style reform and development of human resources as important goals to be attained by that year. We consider
it vital to develop personnel who are capable of working actively in a rapidly changing business environment, and to that end we offer a range of training andeducational programs aimed at developing individual capabilities.

Diversity and Inclusion

In order to expand into new fields of business, it is vital to build a corporate infrastructure that promotes diversity and allows everyone to participate. The Daigas
Group recognizes the need for the Group to foster a corporate culture that encourages the free expression of opinions and a transformation into a corporate entity that
promotes diversity in its ranks and corporate structure in a way that encourages employees to maximize their potential, irrespective of gender, age, physical ability, or
nationality. This intention is spelled out in the Daigas Group Diversity Promotion Policy.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

024

Stakeholder Engagement
Dialogue and Cooperation with Stakeholders
The Daigas Group focuses on active engagement with stakeholders through dialogue to recognize various possible issues involved in its business activities and to work
toward mutually acceptable solutions to such issues, based on the Daigas Group Charter of Business Conduct and Daigas Group Code of Conduct. For example, theGroup has been promoting dialogue with the Kansai Consumers’ Association Liaison Commission, the Osaka Voluntary Action Center, and the Osaka Gas Labor Union.
Furthermore, the Group shares information and cooperates as a member of the Global Compact Network Japan and actively takes part and makes recommendations in theformulation of various policy measures by the government and municipalities. One of the results of such engagement is that five business associations formed by partnercompanies undertaking gas-related services established a Code of Ethics in response to the Group’s policy. In addition, we are actively pursuing collaborative projects withcompanies, universities, NPOs and other organizations.
Main Opportunities and Tools for Contacts with Stakeholders, and Value Provided through the Contacts
Stakeholders

Main contact opportunities and contact tools

Value provided

Customers• Business opportunities such as safety checkand sale• “Customer Centers”• Service shops• Showrooms• Corporate PR events• Advertisements via TV and other media• Website• Catalogs for products and services

Business partners
and suppliers• Business opportunities• Various regular meetings• Joint training and drills

Consumers groups• Meetings• Tours• Seminars, study meetings

Local communities• Social contribution activities• Tours• “Energy and environmental education”

Students andeducational
institutions• Joint study• “Energy and environmental education,”“food education,” “fire education,”“education on disaster prevention”• Acceptance of interns• Recruitment meetings• Website

Knowledgeable
people• Joint study• Meetings

Administrative
authorities• Submission of various documents• Meetings• Cooperation for regional development

NPOs/NGOs• Joint research• Joint work and cooperation for solving
regional issues• Meetings

Shareholders/investors• Issuance of various reports(Securities Reports, Integrated Reports, etc.)• Briefings• Website

Creating value for shareholders
We will strive to maximize our corporate value through long-termand stable growth based on a sound financial foundation.

Employees• Labor-management meetings• Education and training sessions• Interviews• “Compliance Desks”• “Human Rights Desk”• “Harassment Desk”• Intranet, in-house publications

Creating value for employees
We will respect the diverse individualities of our employees andsupport them so that they can find their work rewarding andachieve self-development.

Creating value for customers
We will continue to meet customer expectations by co-creating
services that offer customers greater comfort, convenience andsecurity in various fields.

Creating value for society
We will strive to ensure fairness and transparency in our businessactivities and contribute to sustainable development of society
and improvement of the global environment.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Dialogue with stakeholders(FY2023.3 results of activities)

SocialGovernance

ESG Data

025

Dialogue with Customers
To provide services in excess of customer expectations, we are listening to their voices throughvarious contacts with them, with the aim of improving our products and services.

Stakeholders of the Daigas Group•P
 hone calls received by customer centers:• No. of replies to a survey on customer satisfaction:

approx. 3.43 million
approx. 33 thousand

Customer Center

Dialogue with Various Groups

Customers
Business
partners,
suppliers

Environmental

Consumers
groupsThe groups with which we held meetings included the Kansai Consumers’ Association Liaison
Commission, the Osaka Voluntary Action Center, and the Osaka Gas Labor Union.
•A total of 826 meetings were held

Regional
communities

Employees

DaigasGroup
Students,
educationalorganizations

Shareholders,investors

Dialogue with Local Communities
To realize vibrant local communities, we engage in dialog with local governments, NPOs,
corporations, experts, next-generation people, and other stakeholders.
   Through communication with local communities, we help solve social issues and realize asustainable society.

Kansai Consumers’
Association Liaison
Commission• Urban development and city planning outreach:
38 cases• Activities contributing to regional revitalization in collaboration with experts and NPOs: 326 times• Activities contributing to next-generation education:
1,505 times
Food education

Dialogue with Shareholders and Investors
NPOs,
NGOs

Knowledgeable
peopleAdministrative
authorities

The Daigas Group has been stepping up information disclosure to the general public and dialog withshareholders and investors, using a variety of media and briefing sessions, aiming to generate profit
in a stable manner by strengthening our management base and return part of it to shareholders
continuously.
   Osaka Gas responded to ESG interviews conducted by institutional investors and otherparties and exchanged views on action against climate change, corporate governance andother topics with them.
   In addition, we were given opportunities to explain ESG-conscious management in conformity
with global standards, which the Daigas Group advocates in its Long-Term Management Vision
2030 and Medium-Term Management Plan 2023, including our initiatives to contribute toachievement of the SDGs.
   We will continue our efforts to create value for shareholders through dialogues with institutional
investors and other parties.

Integrated Report• Briefings on financial results, management plans and ESG efforts• Dialog with institutional investors (Japan: approx. 110 times, Overseas: approx. 50 times)

Dialogue between Supervisors and Subordinates
Osaka Gas implements an evaluation system that leads to the growth of each and every employee.
While enhancing opportunities for meetings between supervisors and subordinates, we clarify each
employee’s strengths and areas for improvement, which leads to skill development.
•M eetings based on Management by Objectives (MBO):• Interviews based on role expectation evaluation:

twice a year
once a year

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

026

System for reflecting the opinions of stakeholders
The Daigas Group considers it a matter of course to listen and respond sincerely to
Overview of C-VOICE
Relay
questions/requests regarding our products and services, but we also hear a variety
Complaints
information
Registration in database
C-VOICE
CustomerManagement/ Sharing
Opinionsof questions, concerns and comments from numerous stakeholders in the course of
database
Customer
Service
information
Employees
Requests
Center, etc.
Reference
Registration of action taken
Compliments
conducting our business activities. We believe these opinions to be extremely
Summary
Registration of improvements
Action taken
Contact
important to enhancing the quality of the Group’s management.
Suggestions
Department Development and
Identification
Secretariat Analysis of issues
implementation of
Department in charge
Under these circumstances, we have built the “C-VOICE” database, whereby
in charge
corrective measuresthese customer voices are shared by top-management officials and rank-and-file
Response to the customers’ voices
Improvement based on customers’ voices
employees, and are put to good use in improving our business operations andenhancing our service quality. In particular, with regard to complaints, we try to share not only the factual process and the status of our response to customers but alsomeasures to prevent recurrence and improve our systems.
Mechanism for receiving stakeholder grievances
The Daigas Group responds to the opinions and requests in accordance with the Group’s Code of Business Conduct which incorporated international standards such as the
Universal Declaration of Human Rights and the United Nations Global Compact, while observing domestic laws such as the Act on the Promotion of Global WarmingCountermeasures and the Whistleblower Protection Act.
    To deal with voices on the environment, Osaka Gas operates a company-wide Environmental Management System (EMS) according to the ISO 14001. As for the voices of
local people who are concerned about the possible effects on local communities of our operations, we set up contact desks including “Customer Centers.” To address issues
associated with human rights and labor practices, we set up “Compliance Desks” at Osaka Gas’s headquarters, major affiliated companies and outside law firms representing
Osaka Gas, to receive reports and offer consultation regarding the observance of laws and in-house rules. Furthermore, we have also established a “Human Rights Desk” in the
Human Resources Department as a contact point for consultations about the human rights of employees, as well as “Harassment Desk” within respective organizations andaffiliates as contact points for consultations about harassment from employees. Other systems established for the benefit of employees include the conducting of surveys
designed to measure their work-related awareness, periodically holding meetings for the management to hold talks with labor union members, as well as meetings for
employees and their superiors.
Theme

Environment

Local
communities

International and domestic standards
ISO 14001
Act on Basic Policy on the Rationalizing Useof Energy and Shifting to Non-fossil Energy• Act on Promotion of Global WarmingCountermeasures• 
Waste Management and Public Cleansing Law

In-house policy and standards

Reponsibiities

 aigas Group Code of Business Conduct
DDaigas Group Environmental Policy
Daigas Group Procurement Policy• 
Rules for Environment Management
Systems• 
Customer Service Rules

Osaka Gas operates a unified ISO 14001-registered environmental management system (EMS) across theCompany under the supervision of the Head of ESG Promotion (Representative Director and Vice President),
and all employees work to reduce the environmental impact of business activities and ensure compliance withenvironmental laws and regulations. In addition, the Daigas Group’s domestic affiliates operate their own EMSs,
such as ISO 14001-registered systems, Eco Action 21, and the Daigas Group Environmental Management
System (OGEMS).

 aigas Group Code of Business Conduct
DCustomer Service Rules

We have improved systems that directly deal with customers, including “Customer Centers,” to enable ourcustomers to express their opinions of our services more expeditiously. We utilize the “C-VOICE” system toshare customer opinions and requests throughout the company for use in business improvement measures,product development, and other activities.

 aigas Group Human Rights Policy
DDaigas Group Code of Business Conduct• 
Customer Service Rules• 
Rules for the systems of consultation andreporting on legal compliance

For the protection of human rights we have set up “Customer Centers,” which are open to stakeholders suchas customers and local community members. We have also established the “Human Rights Desk” at the
Human Resources Department, and posted “Human Rights Awareness Promotion Leaders” at each Business
Unit and major affiliated companies. In addition, we have also set up “Compliance Desks” at Osaka Gas’s
headquarters, major affiliated companies and outside law firms representing Osaka Gas to receive reports andoffer consultations regarding the observance of laws and in-house rules.

 aigas Group Human Rights PolicyD• 
Daigas Group Code of Business Conduct• 
Rules for the systems of consultation andreporting on legal compliance

We have established “Compliance Desks” at Osaka Gas’s headquarters, major affiliated companies andoutside law firms representing Osaka Gas in order to receive reports and offer consultations regarding theobservance of laws and in-house rules. Furthermore, the “Harassment Desk” has been set up at each in-houseorganization and each affiliated company to assist employees facing harassment-related problems in theirwork. Others systems established for the betterment of employees include the conducting of surveys designed
to measure their work-related awareness, periodically holding meetings for the management to hold talks withlabor union members, as well as meetings for employees and their superiors.

•

•

•

•

•
•

ISO 26000
Basic Act on Consumer Policies

•

•
•

•

 niversal Declaration of Human RightsU• 
U.N. Global Compact• 
Whistleblower Protection Act•

Human rights

Labor
practices••• niversal Declaration of Human Rights
UU.N. Global Compact
Whistleblower Protection Act••

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

027

Initiatives and Organizations the Daigas Group Participates In
We fully embrace the United Nations Global Compact, and in June 2007, we became the first utility in Japan to join. Furthermore, we actively take part and makerecommendations in the formulation of various policy measures by the government and municipalities. Through our participation in sustainability initiatives, we will fulfill our role
toward the achievement of a sustainable society.

Initiatives and Organizations the Daigas Group Participates In
Name

Activity

UN Global Compact

The Global Compact encompasses 10 principles for enterprises to follow in the four fields of human rights, labor standards, the environment, andanti-corruption.
   Osaka Gas signed and joined the Global Compact in June 2007. We report the progress of our initiatives under the 10 principles of the UN Global
Compact on an annual basis.

Women’s Empowerment Principles(WEPs)The Women’s Empowerment Principles (WEPs), a partnership initiative of UN Women and UN Global Compact, are a set of seven principles offering
practical guidance to companies and private organizations in advancing women’s empowerment in the workplace, in the market, and in the community. The
seven Women’s Empowerment Principles are as follows: Establish high-level corporate leadership for gender equality; Treat all women and men fairly at
work - respect and support human rights and nondiscrimination; Ensure the health, safety and well-being of all women and men workers; Promote
education, training and professional development for women; Implement enterprise development, supply chain and marketing practices that empower
women; Promote equality through community initiatives and advocacy; and Measure and publicly report on progress to achieve gender equality.
The Daigas Group endorsed the objective of the Principles and expressed its support in September 2010.

Task Force on Climate-Related
Financial Disclosures (TCFD)

The recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) encourage companies to disclose climate change-related financial
information to promote appropriate investment decisions by investors.
   Osaka Gas endorsed the TCFD recommendations in May 2019, and utilize them as indicators to validate our climate change response. We also
participate in the TCFD Consortium, where discussions take place on efforts toward information disclosure on responses to climate change based on the
TCFD recommendations.

World Wide Fund for Nature Japan(WWF Japan)

The World Wide Fund for Nature is a conservation organization active in approximately 100 countries. It aims to build a future in which humans live inharmony with nature by reducing the human impact on the environment and wildlife.
Osaka Gas has been supporting WWF Japan as a corporate member since 1983.

Japan Business Initiative for
Biodiversity (JBIB)

The initiative was launched in 2008 with the aim of truly contributing to the conservation of biological diversity within and outside Japan through joint
research by a wide range of companies, thus generating results that cannot be achieved when a company acts alone.
Osaka Gas has participated in the initiative as a regular member since 2011.

Keidanren(Japan Business Federation)

As a member company of Keidanren, we respect and practice the spirit of its Charter of Corporate Behavior.

Committee on Nature
Conservation

The Committee on Nature Conservation is an organization affiliated with Keidanren. It provides its members information on donations and social
contribution activities, as well as conducting projects aimed at deepening the general public’s understanding of companies’ nature conservation activities.
Osaka Gas has participated in the committee as a member company since 2003.

Keidanren Initiative for
Biodiversity Conservation

The Keidanren Initiative for Biodiversity Conservation is open to companies and organizations that are committed to more than one of the seven items listed
in the Declaration of Biodiversity by Keidanren (Revised Edition) or that agree with the overall objectives of the Initiative. Osaka Gas has been participating in
it since 2023.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

028

Commendation from the Outside
Osaka Gas was included in the following socially responsible investment (SRI) indices and an investment universe (candidates for inclusion in indices) as of June 30, 2023.
The Company has been selected as a constituent of all six ESG indices for Japanese equities used by the Government Pension Investment Fund (GPIF).

Inclusion in SRI IndicesOutside Assessment of Sustainability Activities
MediumFTSE Blossom Japan Sector
Relative Index*1

MSCI ESG Leaders*

ECPI World ESG Equity

FTSE4Good Index Series

2

MSCI Japan ESG Select Leaders Index*

Ethibel Excellence

Dow Jones Sustainability Indexes

2

MSCI Japan Empowering Women Index*

EuroNext World 120 Index

FTSE Blossom Japan Index

2

Sompo Sustainability Index

Morningstar Japan ex-REIT
Gender Diversity Tilt Index

Evaluation of our company

CDP Climate Change Report 2022

Leadership A-

CDP Water Security 2022

Leadership A

Ministry of the Environment
Eco-First Program

Certified as an Eco-First Company

Ministry of Economy, Trade andIndustry and the Tokyo Stock
Exchange2023 Health & Productivity Stock
Selection program

Selected as a 2023 Health &Productivity Stock Selection Brand

Toyo Keizai Japan CSR Ranking
2023

44th (of about 1,350 companies)

Ministry of the Environment
ESG Finance Awards Japan

Selected as an Environmentally
Sustainable Company

S&P/JPX Carbon Efficient Index*1 F
 TSE Russell (a registered trademark of FTSE International Limited and Frank Russell Company) hereby confirms that Osaka Gas has been independently assessed according to the index criteria, and has satisfied the requirements to become a constituent of the
FTSE Blossom Japan Sector Relative Index as a result of a third-party survey and has become a constituent of this index. The FTSE Blossom Japan Sector Relative Index is used by a wide variety of market participants to create and assess responsible
investment funds and other products.
*2 T he inclusion of Osaka Gas Co., Ltd. in any MSCI Index and the use of MSCI logos, trademarks, service marks or index names herein do not constitute a sponsorship, endorsement or promotion of Osaka Gas Co., Ltd. by MSCI or any of its affiliates. The MSCI
Indexes are the exclusive property of MSCI. MSCI and the MSCI Index names and logos are trademarks or service marks of MSCI or its affiliates.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

029

030 Environment Summary
032 Environmental Management034	Environmental Impact throughout

Environmental

the Daigas Group Value Chain

038 Environmental Targets
039 Actions for Climate Change045	Disclosure based on the TCFD
Recommendations: Recognition of andAction on Risk and Opportunities

048	Contributing to the Resource-Recycling
Society

051 Biodiversity
055 Development of Environmental Technology

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

030

Environment
Summary

Why the topic is material

Contributing to regional and global environmental conservation is a pivotal mission of the Daigas Group, which conducts business mainly in the field of energy. Being seriously awareof the close linkage between all its activities and the environment, the Daigas Group will respond to environmental issues, including climate change, develop and promote innovativetechnologies, address the most critical challenge of working out low-carbon/carbon-neutral energy solutions, and achieve more efficient use of energy, raw materials, and other resources.
    In March 2017, the Daigas Group unveiled Long-Term Management Vision 2030, which shows the Group’s vision for FY2031, and Medium-Term Management Plan 2020.
Under these, we have devoted active efforts to helping increase the use of natural gas, developing and facilitating more widespread use of highly efficient equipment, including fuelcells, offering customers proposals for the use of energy-saving products and services, and introducing renewable energy.
    The Daigas Group announced the Daigas Group Carbon Neutral Vision in January 2021, and Medium-Term Management Plan 2023 in March of the same year. Thus, the Group
indicated its aim to become carbon neutral by 2050 by decarbonizing the raw materials of city gas through methanation* using renewable energy and hydrogen and by decarbonizing
power sources through introduction of renewable energy, in addition to conventional efforts to expand the use of natural gas.
    In March 2023, we announced the Daigas Group Energy Transition 2030 (ET2030), in which we presented to our stakeholders the overall picture of the transition path toward
low-carbon/carbon-neutral energy solutions and the Group’s specific initiatives and solutions for our customers toward 2030.
We have positioned climate change as one of our material issues.
* A technology for synthesizing methane, which is the main component of city gas, from hydrogen and carbon dioxide (CO2)Specific initiatives

Policy and promotion system
To achieve our medium- to long-term vision, measures, and targets in the environmental field and in line with the Daigas Group Environmental Policy and other bylaws, important environmental matters are monitored by theEnvironment Subcommittee and the ESG Committee, reported to and deliberated by the ESG Council (Management Meeting), and submitted to the Board of Directors.

Items to be addressed

Environmental management/
Environmental targets

Climate change measures/
Disclosure based on the
TCFD Recommendations•S trengthening environmental governance• Maintenance and continuation of theenvironmental management system• Follow-up and raising awareness towardachievement of environmental targets• Enhancing environmental compliance•C arbon neutrality• Reduction of CO2 emissions from theGroup’s own business activities• Reduction of CO2 emissions from
customers’ activities and their value chains• Contribution to CO2 emissions reduction insociety as a whole
Materiality Climate change

Specific initiatives
Initiatives undertaken in FY2023.3• Continued operation of the environmental management system• Monitored the environmental impacts in the value chain• Developed environmental human resources through e-learning (5,704 people)
Environmental targets KPIs based on the materiality

FY2023.3 results

CO2 emissions of the Daigas Group

25.98 million t
25.05 million t*Emissions in domestic supply chain (Scopes 1, 2 and 3)

Percentage of renewables in our
power generation portfolio in Japan

13.0%

Contribution to developing renewables
capacity on a global basis

2.11 GW

Avoided emissions (Baseline: FY2017.3)

3.86 million t

Initiatives undertaken in FY2023.3• Operating LNG carriers efficiently and increasing the use of low-emission vehicles• Accelerating low-carbon/carbon-neutral solutions by using natural gas and facilitating more widespread use of highly energy-efficientand high-value-added equipment• Providing environmental value by disseminating high-quality solutions in the fields of information, real estate, and materials

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialItems to be addressed

Governance

ESG Data

031

Specific initiatives
Environmental targets (every year until FY2031.3)

Contributing to creatinga resource recycling
society• Promoting 3R efforts in business activities• Promoting 3R efforts in the value chain• Plastic resource recycling activities• Response to water risks• Chemical substance management in businessactivities• Osaka Gas (including Network Company and core energy business companies) (1) Final disposal rate of industrial and generalwaste: 2% or less, (2) Final disposal rate of soil excavated during piping works: 1% or less, (3) PE pipe recycling rate: 100%,(4) Gas meter reuse rate: 98% or more• Affiliates (1) Finals disposal rate of industrial and general waste: 4% or less• Promoting 3R efforts concerning used equipment collected from customers or business activities
Initiatives undertaken in FY2023.3• Osaka Gas (including Network Company and core energy business companies) (1) Final disposal rate of industrial and generalwaste: 1.0%, (2) Final disposal rate of soil excavated during piping works: 0.1%, (3) PE pipe recycling rate: 100%, (4) Gas meterreuse rate: 98.7%• Affiliates (1) Final disposal rate of industrial and general waste: 3.6%
• Water usage reduced through water saving in operations• Response to CDP
Environmental targets (every year until FY2031.3)• Paying due attention to biodiversity in business activities in line with the Daigas Group Biodiversity Promotion Policy• Promoting ecosystem conservation efforts• Efforts to minimize impact on natural capital

Biodiversity

Initiatives undertaken in FY2023.3
Continued efforts to avoid or reduce impacts on biodiversity in the value chain• Management of ballast water• Conservation of native seeds, seedlings, and rare species• Utilization of native seeds and seedlings in urban development business• Reduced excavated soil due to non-excavating method• Education and training on biodiversity provided for local communities and customers
Environmental targets (every year until FY2031.3)

Development ofenvironmental
technology• Contribution to carbon neutrality• Utilization of unused energy

Facilitating the development of technologies that will contribute to realizing a low-carbon or decarbonized society and provide astrong business foundation
Initiatives undertaken in FY2023.3• Promotion of development of methanation technology, etc.
• Promotion of development of hydrogen/ammonia combustion technology, etc.
• Sale of radiative cooling materials
Environmental targets (every year until FY2031.3)

Green procurement andpurchase
Please see• Promotion of green procurement and purchase

Promoting green purchase, the Green Partner Initiative,* etc. in cooperation with business partners*A system for evaluating proactive environmental initiatives such as building an environmental management system and obtaining
certification

P.89
Initiatives undertaken in FY2023.3• 85 suppliers registered with the Green Partner Initiative

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

032

Environmental Management
Environmental Governance Promotion Structure

How the Daigas Group’s Environmental Management System Works

To carry out appropriate and robust activities toward sustainability under the leadership of theRepresentative Director and President, the Daigas Group has established the ESG Council,
which comprises executives and deliberates sustainability action plans and reports, and the
ESG Committee chaired by the Head of ESG Promotion (Representative Director andVice-President), who supervises the Group’s sustainability activities. The ESG Promotion
Committee meets four times a year to discuss and report to the Board of Directors on
important matters, including the status of performance against ESG management targets
related to sustainability and business plans that are expected to have a significant financial
impact due to climate change.
    In addition, the Environment Subcommittee has been set up to advance environmental
management in coordination with the ESG Committee. Under the supervision of the Head of
ESG Promotion, Osaka Gas operates a company-wide integrated environmental management
system (EMS) based on ISO 14001 to ensure that all employees reduce the environmental
impact of our business activities and comply with environmental laws and regulations.
    Domestic Daigas Group companies also operate under EMS standards, such as ISO
14001 and the Daigas Group Environmental Management System and others.

To reduce the environmental impact of its Group-wide business activities in line with the
Daigas Group Environmental Policy, the Daigas Group has set medium-term environmental
targets in its Long-Term Management Vision 2030 and other plans and manages progress inachieving the targets. The environmental targets include those for CO2 emissions reduction,
more widespread use of renewable energy, waste reduction and recycling, and the reductionof excavated soil for final disposal. We also annually calculate GHG emissions that affectclimate change from the activities throughout our Group’s value chain and use that data toadvance our efforts to reduce GHG emissions. These targets and the results of our efforts toachieve the targets are managed by following a PDCA (plan-do-check-act) cycle, which utilizes
the mechanism of the EMS.
   Please see
P.45, P.47 for information on the climate change-related framework.

Environmental Management Promotion Structure
Board of Directors
Representative Director and President
ESG Council (Management Meeting)
Environmental Management System (EMS) Operational Structure

Head of ESG Promotion and Representative of EMS Management (Vice-President)
ESG Committee
Environment Subcommittee
Manager of Environmental Auditing (Head of Auditing Dept.)
Environmental Manager (General Manager of the General Affairs Department)
Environmental Managers’ Meeting
EMS Secretariat (General Affairs Department)
EMS Secretariat Meeting
Corporate Headquarter Divisions, 2 Business Units, Network
Company, and Core Energy Business Companies

Daigas Group Environmental Policy

PDCA Cycle utilizing the Mechanism of EMS
Plan espond to cross-cutting environmental issues
R
Plan environmental strategies
Apply strategies in organizational activitiesDo fforts to achieve goals
ECollecting data for indicators

Check eporting and follow-up on indicators and results
Rat the Environment Subcommittee, ESG Committee,
and ESG Council (Management Meeting)Undergo third-party verification of environmental
performance data

External audit bycertification body
Periodic audit (once a year)(including renewal audits
every three years)
Certification body: Japan
Gas Appliances Inspection
Association

ActionIdentify issues
Examine countermeasures and make improvements

Remuneration system for executives with environmental value taken into account
Osaka Gas at its Board of Directors meeting held on December 23, 2021 resolved that
remuneration for the executives would reflect the ESG indicators achievement coefficient of
the previous fiscal year in order to help improve short- and medium- to long-term
improvements in corporate value. In the environmental field, the ESG indicators
achievement coefficient takes into account how much the target for CO2 emissions
reduction has been achieved for achieving carbon neutrality. The resolution took effect withremuneration for July 2023 and thereafter, paid based on the results for FY2023.3

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

Introduction of ICPOsaka Gas Certified as the Eco-First Company

Osaka Gas introduced the concept of “Environmental Management Efficiency” in 2003, which
is used to quantify the environmental impact of business activities by converting environmental
impacts per volume of gas produced into monetary values. In addition, from FY2022.3, wehave adopted internal carbon pricing (ICP) to identify the carbon impact of our invested
projects. From FY2024.3, we also reference ICP when making decisions on new investments
in business fields that have a large carbon impact.

On April 5, 2023, Osaka Gas was certified as an Eco-First company
by the Minister of the Environment. Under this certification program,companies declare Eco-First Commitments, which arecommitments to advanced and unique environmental conservation
activities that have ripple effects, and the Minister of the Environment
certifies environmentally advanced companies in each industry.
We are the first Eco-First company in theenergy industry.

ISO 14001 Certification Acquisition Status
In FY1998.3, Osaka Gas launched efforts to acquire certification of each business unit’s
compliance with ISO 14001, a set of international standards for EMSs, resulting in sevenbusiness-unit-specific EMSs covering the entire Company by FY2006.3. In FY2007.3, theCompany began to work to integrate all the different EMSs into a unified one and obtained
certification of its Company-wide compliance with ISO 14001 in December 2007. Since 2009,
the Company has undergone triennial ISO 14001 renewal audit and has continued to obtain
integrated certification in response to organizational restructuring, including the transfer offunctions to three Core Energy Business Companies in 2020 and Osaka Gas Network Co.,
Ltd. in 2022.

Press release

Environmental Communication
Environmental education

033

From left, Masataka Fujiwara,
President of Osaka Gas;
Miki Yamada, State Minister of theEnvironment (Job titles are as of thetime of the certification ceremony.)

Various events during the Environment Month
Every year in June, designated as Environment Month, employees of the Daigas Group engage invarious environmental activities. Among them are energy-saving efforts at offices, environmental
preservation activities, environmental education both inside and outside the Company, andparticipation in regional environmental events such as cleaning activities. By participating in these
activities, each and every employee comes to recognize the great connection existing between his
or her activities, and their impact on the environment. Such activities provide the Group with
opportunities to continue efforts to build an environmentally harmonious society.

E-learning and collective training programs for employees

Certificate ofRegistration
for ISO14001

External audit meeting for renewal of
ISO 14001 certification

All affiliates in Japan completed EMS building and certification
As a general, all affiliates in Japan have constructed and operate an EMS, and these efforts
are based on the Group common rules “Environmental Management Rules.”    The EMSs introduced by affiliate companies include ISO 14001 and an EMS establishedunder the leadership of local governments as well as the Daigas Group Environmental
Management System (OGEMS), a voluntary EMS that functions in a similar way to such an EMS.

Violations of Laws and Fines
During FY2023.3, Osaka Gas did not impose any administrative sanction due to the violationof environment-related laws.

The Daigas Group provides e-learning andcollective training programs as part ofoperating the environmental management
system to ensure that employees arecapable of keeping up with theenvironmental initiatives.
    In the ISO Environmental Education
Course via e-learning, employees learn
basic knowledge about the environment,
details of group initiatives, and knowledge E-learningof environmental laws and regulations.
    In addition, in collective training programs, employees learn about the latest trends inenvironmental issues and practical examples of initiatives, increasing their awareness of the environment.

Environmental awareness-raising activities
Environmental communication based on the assets we have accumulated throughbusiness activities
As a corporate group operating in a community-based manner, the Daigas Group believes thatits good relationships with local communities is an indispensable foundation for its
management. In addition to disseminating knowledge on energy conservation and information
useful for familiar energy conservation activities through media such as the “My Osaka Gas”
membership site, we are also striving to foster the next generation through “energy andenvironmental education” and other programs that leverage the resources the Group has
cultivated through its business activities.
Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialVerified by a third party

Governance

ESG Data

034

A third-party verification has been conducted by Bureau Veritas Japan Co., Ltd.

Environmental Impact throughout the Daigas Group Value Chain
Main materials and fuels

Amount of energy used

6,488 thousand tons
Amount of LNG
procured

The figure above includes theamounts of the items listed below:
Materials of city gas
Fuels at LNG terminals
F uels for power generation byGroup companies•••

LPG used for calorificadjustment of city gas

210 thousand tons

City gas(including gas whose calorificvalue has yet to be adjusted)

493 million kWh

Purchased electricity
Other energy sources(Business activities by companies outside the Group)

Gasoline

31 thousand m³

Diesel699 kl4 thousand m³

Business activities by Osaka Gas

Sales, waste disposal

Business office

Waste disposal

City gas use/power
generation use/
marketing use

City gas use/
marketing use

Commuting,business trips

Power generation

Heat supply

Product
shipment

Leasing ofassetsOther purchased goods

LBS business

Others*Coal, biomass

Materials/consumable goods/
capital goods/gas equipment
for sale/electricity/gasoline
and others

Outlets providing sales
support to Osaka Gas

192

Other procurement items

1,051

Total

4,606

GHG (scope 3* 2)

Emissions (1,000 t-CO2e)

Emissions (1,000 t-CO2e)

LPG, coal, biomass

City gas production
Business office (including supply)Power generation

Scope 1

Scope 2

34

82

16

15

3,869

21

Heat supply

56

34

LBS and others

431

172

4,406

324

Total

Gas appliances

Electricity

Chemical products

LNG

Services

General waste
Industrial waste
Excavated soil
PE pipe
Used gas appliances recovered

Generated
1,103 t101,654 t
580,000 t
137 t
1,569 tGHG (scope 3* 3)

Emissions (1,000 t-CO2e)

99
GHG emissions due to energy consumption arising fromvarious activities, including commuting of employees, businesstrips, transportation of products, business activities at outlets
that provide sales support to Osaka Gas, disposal of own
waste, disposal of product waste, and leasing of assets.

Waste
Breakdown of Scope 3 categories*1 Category 1− 4 (purchased products, capital goods, fuelprocurement, upstream transportation)*2 Category 5-7, 9, 12−14 (waste, business trips,
commuting, leased assets, product shipment, end-of-life
treatment of sold products, franchises)*3 Category 11 (use of sold products)

City gas* Engineering/energy services/renovation/maintenanceservice/R&D etc.

GHG (scope 1 and 2)
3,362

Use at customer site

(Business activities by companies outside the Group)

City gas production/
supply

LNG, natural gas

15,883 million kWh

1,553 kl

City gas

LPG

GHG (scope 3* 1)

6,845 million m³

Electricity

Amount of vehicle fuel used

LNG, natural gas

Power generation use

Gas

13,568 TJ

LPG

Procurement of materials and fuels

Sales volume of main products

1,232 million m³

Combustion of LNG
Total

15,675867

16,542Companies subject to the calculation of GHG emissions:
63 companies in total, including Osaka Gas Co., Ltd. and62 companies among 154 consolidated subsidiaries.
Those housed in office buildings as tenants and whoseenvironmental data are difficult to grasp and whoseenvironmental effects are minimal are not subject to suchcalculation. Also excluded from the calculation are
overseas companies, except two companies.

Recycled
96%
96%
100%
100%
86%

Amount of water intake and water discharge Stated on

Emissions (1,000 t-CO2e)
Combustion of city gas

P.49

Please refer toP.35 for CO2 emission factors used.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Calculation of environmental impacts in the value chain

Environmental

SocialGovernance

ESG Data

035

P.34

CO2 emission factors used (GHG scopes 1 and 2)• Electricity: 0.65 kg-CO2/kWh (Average emission factor of thermal power plants in FY2014.3, stipulated in the Plan for Global Warming Countermeasures issued by the government in 2021)• City gas: 2.29 kg-CO2/m³ (based on Osaka Gas data)• Others: Factors listed under the Law Concerning the Promotion of Measures to Cope with Global Warming

Sources of emission factors used for calculating CO2 emissions (GHG scope 3)• Production and transmission of city gas: “Life cycle evaluation of city gas” on the website of the Japan Gas Association• Production and shipment of LNG: Calculation of life cycle greenhouse gas emissions of LNG and City Gas 13A (papers presented at research presentation meetings of the 35th Meeting of theJapan Society of Energy and Resources, June 2016)• Production and shipment of LPG and coal: Future forecast for life cycle greenhouse gas emissions of LNG and City Gas 13A (Energy and Resources, Vol. 28, No. 2, March 2007)• Other main emission factors: Emission factors for calculating supply-chain greenhouse gas emissions, etc. (Database Ver. 3.3) published in March 2023 by the Ministry of Environment

LCA comparison of GHG emissions by fossil fuel (CO2 equivalents)
The chart below uses life cycle assessment (LCA*1) to show a comparison of fossil fuel greenhouse gas emissions (as carbon dioxide equivalents), covering all processes from production to
combustion. LNG is the cleanest energy of all fossil fuels in terms of GHG emissions.
Greenhouse gas emissions comparison (g-CO 2/MJ, Total Calorific Value)
Coal*2

Oil*2

LPG*2

LNG*2

City gas 13A*3

Production

4.58

4.06

4.94

8.62

7.57

Transport

1.71

0.79

1.80

1.83

1.48

Domestic manufacturing

−

−

−

−

0.48

Infrastructure

0.11

0.08

0.11

0.05

0.34

Combustion

88.53

68.33

59.85

49.40

50.96

Total

94.93

73.26

66.70

59.90

60.83

Ratio

160

122

111

100

*1 LCA
Life Cycle Assessment. A comprehensive quantitative method of survey, analysis, and evaluation for best assessing the amount of environmental impact of products and services. The assessment covers allprocesses related to products and services from resource extraction to waste disposal including production, transportation, consumption, recycling, and disposal.
*2 Source
Future Forecast for Life Cycle Greenhouse Gas Emissions of LNG and City Gas 13A (Energy and Resources, Vol. 28, No. 2, March, 2007)*3 Source
Emission factors related to the production and transportation of city gas:“City Gas’s Life Cycle Assessment” on the Japan Gas Association’s website However, for domestic manufacturing, the figures are based on
the Company’s emissions in FY2023.3.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance036

ESG Data

Environmental Accounting
FY2023.3 results of environmental accounting
In FY2001.3, we introduced environmental accounting, which we see as an important tool for quantifying environmental costs and economic benefits toward more efficient environmental activities
and continuous enhancement of our environmental performance. Environmental conservation costs—both environmental investment and expenses—for FY2023.3 decreased from the previous fiscal
year mainly due to decreases in the amount of green purchasing and the environmental R&D-related costs. In terms of internal economic effects, cost reduction progressed due to reducing andrecycling excavated soil.
    We will continue to follow up on our environmental initiatives in monetary terms to ensure efficient environmental investment and expenses.
(1) Environmental conservation costs
Environmental conservation costs item

Investment (million yen)

Details

Expense (million yen)

FY2021.3

FY2022.3

FY2023.3

FY2021.3

FY2022.3

FY2023.3

Global environment

Capital investment in and management and labor costs incurred by energy
conservation, efficient energy use, the protection of the ozone layer, etc.

111

216

48

692

577

597

Pollution prevention

Capital Investment in and management and labor costs incurred by theprevention of air, water, and noise pollution

61

54

6

85

49

31

Resource recycling

Capital investment in and management and labor costs incurred by the reduction
and recycling of excavated soil, waste management, etc.

2

0

2

29

32

20

Environmental
management

Costs of green purchasing, environmental education, the development ofenvironmental management systems, the operation of environmentalorganizations, etc.

0

0

0

8,351

8,927

4,320

Other

Greening at plants, environmental preservation grants, etc.

2

3

2

14

50

15

Environmental
impact reduction atcustomers’ sites

Environmental R&D

Cost of researching and developing technologies for environmental impact
reduction, environmentally sustainable products, etc.

324

127

128

93

328

156

Environmental
impact reduction byrecycling

Recycling of used
gas appliances

Cost of collecting and recycling sold gas appliances, their packaging, etc.

0

0

0

32

47

37

Costs of voluntary greening, environmental advertising, the disclosure ofenvironmental information, etc.

1

1

22

129

7

115

502

400

208

9,424

10,0185,291

In-house activities

Social contribution activities

Total(2) Internal economic benefits
Economic benefits (million yen)
FY2021.3

FY2022.3

FY2023.3

2,812

1,847

1,836

Sales of valuable resources (LNG cold heat)

180

169

195

Saving from conserving energy, resources, etc.

323

128

−940

3,314

2,143

1,091

Saving from reducing and recycling excavated soil

Total

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

037(3) Environmental conservation results
Impact per output

Total amount

Reduction

Unit

FY2022.3

FY2023.3

Unit

FY2022.3

FY2023.3

Unit

FY2022.3

FY2023.3

NOx emissions from LNG terminals in the city gas business

mg/m3

1.53

2.35

t

10.81

16.01

t

38.20

94.18

COD at all LNG terminals

mg/m3

0.39

0.40

t

2.77

2.72

t

8.63

9.55

CO2 emissions from LNG terminals

g-CO2/m3

15.77

16.25

1,000 t-CO2

111.90116.301,000 t-CO2

0.00

0.00

CO2 emissions from other sites

g-CO2/m3

4.35

4.35

1,000 t-CO2

30.87

31.15

1,000 t-CO2

34.13

34.41

Excavated soil for final disposal

t/km

3.30

0.00

1,000 t

1.38

0.65

1,000 t

20.20

22.20

General waste for disposal

g/m3

0.00

0.00

t

10.67

11.15

t

1,053.73

1,062.40

Industrial waste for disposal(including used gas appliances)

g/m3

0.03

0.03

t

179.06

223.64t

3,359.96

1,238.76(4) Social benefits of environmental conservation efforts (monetary value)
FY2021.3 monetary value (million yen)

FY2022.3 monetary value (million yen)

FY2023.3 monetary value (million yen)NOx emissions from LNG terminals in the city gas business

17

14

34

COD at all LNG terminals

14

13

14

CO2 emissions from LNG terminals

17

0

0

CO2 emissions from other sites

117

120

121

Excavated soil for final disposal

994

447

491

3

3

3

141

103

38

1,303

700

702

General waste for disposal
Industrial waste for disposal (including used gas appliances)
Total

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

038

Environmental Targets
Principle and Outline
Contributing to regional and global environmental conservation is a pivotal mission of the Daigas Group, which is mainly engaged in the energy business. In line with its Charter of Business Conduct,
Code of Business Conduct, and Environmental Policy, the Daigas Group promotes environmental conservation activities.
Having set the medium-term environmental targets for the reduction of GHG emissions from its business activities, resource recycling, and the like, we have devoted active efforts to helping
increase the use of natural gas, developing and facilitating more widespread use of highly efficient equipment, including fuel cells, offering customers proposals for the use of energy-saving products
and services, and introducing renewable energy.
In line with the worldwide trend toward action against climate change, we are striving to reduce GHG emissions from its business activities, including CO2 and methane (CH4), to help realize a
low-carbon or decarbonized society. Specifically, we devote positive efforts to reduce CO2 emissions from liquefied natural gas (LNG) transportation, city gas production, and power generation. We
also implement various energy-saving measures at offices.
In addition, as the trend toward decarbonization further accelerates, and as global economic stagnation and increased volatility in the energy market become apparent, it is becoming more
important from the perspective of “S + 3Es”*—the basic policy of the nation’s energy policy—to make energy carbon-neutral without compromising stability and security of energy supply.
In line with the “Carbon Neutral Vision” announced in January 2021 and “Medium-Term Management Plan 2023” in March of the same year, we are further accelerating our efforts toward
low-carbon/decarbonized business operations. In March 2023, we announced “Energy Transition 2030 (ET2030),” which provided an overall picture of the path toward low-carbon/carbon-neutralenergy solutions.
We will accelerate our efforts to combat climate change toward our medium- to long-term targets.
The results for each target established based on the Daigas Group Environmental Policy and “Medium-Term Management Plan 2023” are presented below.
* S + 3Es: safety, energy security, economic efficiency, and environment

Environmental targets (FY2024.3 targets) and results Osaka Gas underwent a third-party verification by Bureau Veritas Japan Co., Ltd. (Verified items are indicated with an asterisk [*].)
Field

ClimatechangeCO2 emissions reductions
from our own businessactivities
CO2 emissions reductions at
customer sites and throughthe value chain
Contribution to CO2 emissions
reductions across society

Resource
recycling

3R (reduce, reuse, andrecycle) efforts in the Group’s
own business activities

Biodiversity
Development of technology
Green procurement and purchase

Indicators

Targets

Net zero emissions
CO2 emissions of Daigas Group*
27.02 million tons*1(5 million tons less than FY18.3)
Percentage of renewables in our power generation portfolio in Japan
Nearly 50%
5 GW
Contribution to developing renewables capacity on a global basis
2.5 GW• Accelerating low-carbonization/decarbonization by facilitating more widespread use of highly energyefficient and high value-added equipment using natural gas, renewable energy, etc.
• Operating LNG carriers efficiently and increasing the use of low-emission and other environmentally
sustainable vehicles• Providing environmental value by disseminating high-quality solutions in the fields of information, realestate, and materials
Avoided emissions (Including reductions contributed at customer sites
and overseas

10 million tons
(Baseline: FY2017.3)

Target fiscal year
2051.3

FY2023.3 results
25.98 million tons

2031.325.05 million tons

2031.32031.32024.313.0%

Every year until 2031.3

Please see

2.11 GW

P.43-44 for major initiatives.

2031.33.86 million tons

Industrial and general waste (final disposal rate)*

2% or below

1.0%

1% or below
100%
98% or above
4% or below

Every year until 2031.3

Affiliates

Soil excavated during piping works (final disposal rate)*
Soil excavated during piping works (final disposal rate)*
Industrial and general waste (final disposal rate)*
Gas meters (reuse rate)*

0.1%
100%
98.7%
3.6%

Value chain

Promoting 3R efforts concerning used equipment collected from customers or business activities

Osaka Gas (including
network company
and the core energy
business companies)

Paying due attention to biodiversity in business activities in line with the Daigas Group Biodiversity
Promotion Policy
Facilitating the development of technologies that will contribute to realizing a low-carbon or decarbonizedsociety and provide a strong business foundation
Promoting green purchase, the green partner system, etc. in cooperation with business partners

Please see

P.48-50 for major initiatives.

Every year until 2031.3

Please see

P.51-54 for major initiatives.

Every year until 2031.3

Please see

P.55-57 for major initiatives.

Every year until 2031.3

Please see

P.89 for major initiatives.

*1 Emissions in domestic supply chain (Scopes 1, 2 and 3) (Targets for FY2031.3 newly set in “ET2030”)

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

039

Actions for Climate Change
Principle and Outline
In response to the growing social need for measures against global warming, the Daigas Group aims to become carbon neutral by 2050 by decarbonizing the raw materials of city gas throughmethanation* using hydrogen and CO2 produced powered by renewable energy and by making power sources carbon neutral through the introduction of renewable energy, in addition to theconventional efforts to expand the use of natural gas.
*A technology for synthesizing methane, which is the main component of city gas, from hydrogen and CO2

Carbon Neutral Vision
In response to the further increase in social demands for global warming
countermeasures, the Daigas Group aims to become carbon neutral by 2050.
We plan to reach the goal through decarbonization of our gas and electricity byintroducing methanation* to generate gas with renewable energy and hydrogenand by increasing the share of renewables in its power generation portfolio, in
addition to continuing efforts to expand the use of natural gas to date.

Carbon Neutral Vision and Energy Transition 2030

CarbonNeutralCarbon Neutral Vision (announced in January 2021)
Daigas Group’s approaches to decarbonization

Achieving a carbon-neutral society

2050

Energy Transition 2030 (announced in March 2023)• Overall picture of Daigas Group's energy transition• Daigas Group's initiatives and solutions for a lower carbon society in 2030
2030

Energy Transition 2030 (ET2030)
Under Energy Transition 2030 (ET2030), the Daigas Group outlines the overall
picture of its transition to low-carbon and carbon-neutral energy. In order toachieve carbon neutrality, a steady transition to low-carbon energy is crucial,
as a great deal of time and social cost will be required for technologicalinnovation and the building of new supply chains. It is also important to choose
optimal energies and supply methods to suit the customer’s energy use
characteristics, such as the balance of electricity and heat use and theirlocation. Focusing on the transition to low-carbon energy by 2030 through ashift from coal and oil to natural gas, and the seamless transition to carbonneutral energy with the introduction of “e-methane” and biogas in the future,
we will continue to pursue the decarbonization of power sources in ways thatmeet customer needs. This will include the use of hydrogen and ammonia, thedecarbonisation of power sources, such as renewable energy generation andzero-emission thermal power plants.

FY2031.3
Targets

5 GW
5 million tons

Contribution to developing renewables
capacity on a global basis
Reduction of Daigas GroupCO2 emissions

Percentage of renewables in our power
generation portfolio in Japan
Nearlye-methane(relative to FY2018.3)

Overallpicture oftransition to
low-carbon/
carbon-neutralenergyTransition to a low carbon society
Coal and oil

Shift to natural gas

Coal in coastal areas where ammonia can be used

Decarbonize
gaseous energy

Initiatives in theelectricity business toachieve carbon neutrality

Avoidedemissions

10 million tons
(baseline: FY2017.3)

2030

Low carbon transition
with the advanced
utilization of natural gas

Initiatives for the social
implementationof e-methane

50%

1% introduction

Present
Daigas Group's energy
conversion

2050

Fuel conversion to natural gas

2050
Carbon neutrality with innovation
Transition to e-methane and biogas
Study on ammonia and biomass utilization② eメタンのサプライチェーン構築

Natural gas advanced utilization/CN-LNG*1 utilization

Transition to e-methane and biogas

New utilization near hydrogen power plants in coastal areas

Study on hydrogen utilization

New utilization near ammonia power plants in coastal areas

Study on ammonia utilization

Renewables (PV, wind, biomass, geothermal, etc.)

Gradual expansion
Transition to e-methane and biomass

Decarbonize
power sources
Initiatives concerning
the capture, utilization,and storage of CO2

CCUS

Natural gas-fired power generation

Hard-to-abate industries, etc.

Study on hydrogen utilization(mixed combustion→single combustion)

Expansion of CCUS*2 (direct CO2 reduction)*1 C
 N-LNG: Carbon Neutral LNG, which is considered to produce no CO2 on a global basis when greenhouse gases emitted in the supply chain
from natural gas production to combustion are offset by CO2 absorbed and reduced in a separate process from the value chain.
*2 CCUS: Carbon dioxide Capture, Utilization and Storage

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

Daigas Group’s CO2 Emissions Reduction Roadmap

Approach to Avoided Emissions in Society

In Energy Transition 2030, we have declared targets for 2030 and 2050 regarding CO2
emissions in our domestic supply chain and avoided emissions in the whole society, andpresented a CO2 emissions reduction roadmap. Through such measures as the 1%
introduction of e-methane into existing infrastructure, we will aim to reduce the CO2 emissionsof the Daigas Group’s supply chain in Japan by 5 million tons, and 10 million tons of avoided
emissions in society as a whole in FY2031.3 through the Group’s activities. After the
introduction of “e-methane” in FY2031.3, we will pursue decarbonization through its wideruse.

The following sums up our approach to avoided emissions in society. For example, we canreduce approximately 45% of CO2 emissions with the switch from coal to natural gas.
However, if we have supplied the natural gas, our gas sales volumes increase, which means
an increase in Scope 3 CO2 emissions according to the GHG Protocol*1 that is commonlyused by companies to calculate their CO2 emissions. For this reason, in the transition phase
until 2030, our CO2 emissions will increase by promoting fuel conversion from oil and coal tonatural gas. On the other hand, by switching to natural gas, CO2 emissions per the same
calorific value will be reduced, which means that we can contribute to CO2 emissions reductionin the whole society. However, under the current GHG Protocol, there is no way of evaluating theCO2 reduction effect on society as a whole through contributions to other parties.
    To steadily promote the transition to low-carbon/decarbonization together with ourmany customers, we believe that it is important to understand our progress with an indicatorthat shows the effect of CO2 emissions reduction in the whole society (avoided emissions) andto obtain the understanding of our stakeholders.

Emissions
reduction

CO2 emissions from thedomestic supply chain(Scope1•2•3)

32

-0.6
Avoided emissions
in the whole society

27

FY2031.3

Fuelconversion(million tons)-5

Energyconservation
Introductionof e-methane

FY2018.3

Emissions
reduction

Further spreadof e-methane
Use ofhydrogen/ammonia-32

CO2 emissions per same calorific value*2

FY2051.3-10

5 GW of renewables development〜50 % renewable energy in our portfolio in Japan
1% e-methane in gas grid

Coal

Oil

100

75

Naturalgas

55

Further avoided
emissions(million tons)

Decarbonize powerLow-carbon/carbon neutral power (renewables, e-methane, hydrogen, and CCUS)

Decarbonize gas

Low carbon transition with natural gas

Carbon neutrality with e-methane

Avoidedemissions040

What is “avoided emissions”?
Quantified CO2 emissions reduction through products
and services provided to others
Calculated based on the “Guidelines for Quantifying GHG emission
reductions of goods or services through Global Value Chain”(Ministry of Economy, Trade and Industry, March 2018)

Reduced by 45%
through conversion to natural gas

Indicator of society-wide avoided emissions throughcontribution to other companies' emissions reduction*1 International standard for calculating and reporting GHG emissions*2 Prepared based on the “Ordinance Concerning Calculation of GHG Emissions from Business Activities ofSpecified Emitters” issued by METI and the Ministry of the Environment

Avoided emissions calculation example
Reduce in-houseemissions
Investmentvaluation

Net zero in our office buildings and vehicles
Application of internal carbon pricing (ICP)

Customer’s CO2 emissions

-45

Coal

Reduced by switching fromcoal to natural gas+

100

Natural gas

Before conversion

After conversion

55

Same
55

1,055

Osaka Gas’ CO2 emissions
Scope 3 CO2 emissions increase
due to gas sales growth

1,000
+
100

(CO2 emitted from combustion by customer)
Before conversion

After conversion

1,100

1,055
-45

Society-wide CO2 emissions
After

conversion

Beforeconversion

1,055 − 1,100

Avoidedemissions-45

Osaka Gas’s Scope 3 emissions increase,but society-wide CO2 emissions decrease

Before conversion

After conversion

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

Daigas Group’s Avoided Emissions

SocialGovernance

ESG Data

041

Avoided emissions results (million t)
10

The Daigas Group is working to introduce various low-carbon or decarbonized systems both
domestically and internationally at our customers’ sites and in our own business activities. The
avoided CO2 emission is calculated for such systems that contribute to the reduction of CO2
emissions in society as a whole.
The Osaka Gas Group contributed to a 3.86-million-ton CO2 emissions reduction, as
revealed by the results of calculations of the effect of reducing CO2 emissions in FY2023.3(FY2023.3 results) achieved by using the systems listed below that the Daigas Group has
introduced since FY2018.3 at customer sites and in its own business activities.
The results were calculated using the stock-based approach, based on the “Guidelines
for Quantifying GHG Emission Reductions of Goods or Services through Global Value Chain”(published by the Ministry of Economy, Trade and Industry in March 2018), assuming the
calculation method and baseline concept shown in the table below.
The calculation results were validated by a third-party review by Bureau Veritas Japan Co., Ltd.

3.86
3.36
2.28
1.65
1.06
0.61

2018.32019.32020.32021.32022.32023.3 (FY) Target for FY2031.3

Calculation method
Area ofreduction

Low-carbon/
carbon-neutral system

Reduction effectcalculation method

Baseline concept

Area ofreduction

Renewable energy sourcesWind farm

Reductionof CO2emissionsfrombusiness
activities

Solar power plant

Amount of electricity
generated or procured
×
Average electricity
emission factor ofthermal power*

Substitution forthermal power
generation

Biomass power plant etc.

High-efficiency thermal power
generation

High-efficiency thermal power plant

Cryogenic power generation
facilities using cold heatgenerated in the manufacturing
process of city gas

Amount of electricity
generated×
Difference in CO2emission factor between
high-efficiency andexisting thermal power
Amount of electricity
generated×
Average electricity emission
factor of thermal power

Comparison withemission factor ofexisting thermal
power generation

Low-carbon/
carbon-neutral system

Reduction effectcalculation method

High-efficiency distributed system

Household fuel cell system:
Number of installed units ×
Reduction per unit

Household fuelcell system

Cogeneration
systemExpanded and advanced useof natural gas

Reductionof CO2emissionsatcustomer
sites

Fuel conversion High-efficiency
water heaterGas-powered air conditioning
Substitution forthermal power
generation

Proposals for energy saving(Solar power generation systems/
Conversion to LED lighting)

Cogeneration system:
Installed capacity ×
Reduction per unit capacity

Baseline concept

Substitution forconventional water
heaters (boilers)and purchased
electricity

Fuel conversion:
Amount developed ×
Difference in CO2emission factor

Emissionscomparison withother fuelsGas-powered air
conditioning:
Capacity sold × Reduction
per unit capacity

Substitution forconventional air
conditioners

High-efficiency water heater:
Number of installed units ×
Reduction per unit

Substitution forconventional water
heaters

Amount of electricity
generated or saved ×
Average electricity emission
factor of thermal power*

Substitution forthermal power
generation*Calculated using the average electricity emission factor of thermal power given in the Plan for Global WarmingCountermeasures (approved by the Cabinet on October 22, 2021): 0.65 kg-CO2/kWh (FY2014.3)

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialEfforts to achieve net zero emissions regarding the Group’s CO2 emissions(environmental impact throughout the Daigas Group value chain)
The Daigas Group calculated the amount of greenhouse gas (GHG) emissions from companies that constitute the Daigas
Group’s value chain network, based on the GHG Protocol, an international emission accounting standard. The methodologyof the calculation and its results have been certified by an independent organization to verify their reliability and accuracy.
Combined GHG emissions by the Daigas Group and value chain companies, measured by CO2, totaled about
25.98 million tons in FY2023.3. The sum breaks down into about 4.73 million tons, or about 18%, for GHG emitted throughbusiness activities by the Daigas Group (Scope 1 and Scope 2), and about 21.25 million tons, or about 82%, emitted byothers in our value chain (Scope 3). GHG emissions from city gas and LNG combustion on the customer side amounted to
16.54 million tons in the reporting year in terms of CO2, accounting for about 64% of the total. GHG emissions throughelectricity generation, as measured in terms of CO2 in the year, amounted to 3.89 million tons, accounting for about 15% of
the total emissions, which represented the majority of GHG emissions from the Group’s own business activities. As a way of
reducing GHG emissions from power generation, the Group will continue to actively introduce highly advanced energy-efficient
power generation facilities and use renewable energy sources.
GHG emissions from material and fuel procurement totaled 4.61 million tons, as measured in terms of CO2 in the year,
accounting for about 18% of the total emissions. The procurement of energy sources, especially LNG, accounted for over
70% of that amount. Under these circumstances, we will continue our efforts to improve fuel efficiency regarding the operationof LNG tankers in collaboration with resource suppliers.

Reduction of CO2 emissions from the Group’s own business activities—
Facilitating the development of renewable energy sources
The Daigas Group aims to raise by FY2031.3 the percentage of renewables in its power portfolio in Japan to about 50% andrenewables development contribution on a global basis to 5 GW. To achieve these targets, it is engaged in renewable energy
businesses such as wind, solar, and biomass.
In FY2023.3, the percentage of renewables in our power portfolio was 13.0%, and renewable power development
contribution was approximately 2.11 GW.
Domestically, we participated in a biomass power generation project in Gobo City, Wakayama Prefecture, and a solar
power generation project in three locations in Japan, including Oita City, Oita Prefecture. In January 2023, the Noheji Mutsu
Bay Wind Farm in Noheji-cho, Kamikita District, Aomori Prefecture, began commercial operation.
Overseas, Osaka Gas has concluded an agreement with Oriden LLC in the United States regarding the joint
development of a solar power plant in the United States and with Summit Ridge Energy, LLC, an operator of distributed solar
power generation business in Maine, U.S., to jointly implement the same business in Illinois, U.S.

Overseas0.25 GW
End of March 2023

2.11 GW*2

Domestic
1.86 GW(including 0.64 GW procured)

Governance042

ESG Data

G HG emissions from the value chain (FY2023.3 results)
Please see

P.34 for detailed data.
LNG, Natural gas

Combustion of LNG
LPG, coal, biomass
Other procurement items

Procurement
4.61 million t-CO2e

Scope 3

City gas production/supply,
business office21.25 million t-CO 2e

Scope 1 Business
and 2

Combustionof city gas

4.73 million t-CO2e

activities

Power generation
Heat supply

Customer side
16.54 million t-CO2e

GHG emissions
25.98 million t-CO2e

LBS business and others
Sales, waste disposal(business activities bycompanies outside
the Daigas Group)

Companies subject to the calculation of GHG emissions:
63 companies in total, including Osaka Gas Co., Ltd. and 62 companies among
154 consolidated subsidiaries are subject to calculation of GHG emissions.
Those housed in office buildings as tenants and whose environmental data are
difficult to grasp and whose environmental effects are minimal are not subject tosuch calculation. Also excluded from the calculation are overseas companies,
except two companies.

 ontribution to developing renewables capacity on a global basis*1
C(FY2023.3)
Overseas0.25 GW
End of March 2023

2.11 GW*2

Domestic
1.86 GW(including 0.64 GW procured)

Results as ofMarch 2021

Results
March 2

1.05 GW

2.11 G*1 Includes power sources to which thefeed-in tariff (FIT) program applies*2 Includes power sources that havealready been decided/underconstruction

 ontribution to developing renewables capacity
Con a global basis: Targets and results
Results as ofMarch 2021

Results as ofMarch 2023

Target for
March 2024

Target for
March 2031

1.05 GW

2.11 GW

2.5 GW

5 GW

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

CO2 Reduction Initiatives at Customers and in the
Value Chain
The Daigas Group believes that it is important to reduce not only GHG emissions from its own
business activities but also CO2 emissions at customers’ sites. We are seeking to assist
customers in reducing their CO2 emissions by popularizing the use of natural gas anddeveloping and proposing highly energy-efficient equipment. We are also cooperating with ourbusiness partners and affiliated companies to reduce CO2 emissions from logistics.

Efforts to reduce CO2 emissions in LNG transportation
In 2022, Osaka Gas began chartering the lowfuel-consumption LNG carrier Grace Freesia toachieve even greater energy savings whentransporting LNG, an essential material for city gas.
The new type of LNG carrier is equipped with adual-fuel low-speed diesel engine and areliquefaction device that effectively utilizes surplus
boil-off gas to further reduce fuel consumption,
CO2 emissions, and transport costs.

SocialGovernance

ESG Data

043

Approaches at customer sites
To help realize a low-carbon society, Osaka Gas is striving to sell and disseminate two types of fuel-cellsystems that generates electricity through chemical reactions between the hydrogen extracted
from city gas and oxygen in the air. Those are polymer electrolyte fuel cells (PEFC) and solid oxide fuelcells (SOFC) sold as “Ene-Farm” and “Ene-Farm type S,” respectively as co-generation systems forhousehold use that help conserve energy and reduce CO2 emissions. These are high-efficiency energy
systems that make effective use of the heat generated alongside electricity to supply hot water.
    In FY2020, Osaka Gas developed a new product of ENE-FARM Type S*1 in collaboration with
Aisin Seiki Co., Ltd., Kyocera Corporation, Noritz Corporation, Purpose Co., Ltd., and Rinnai
Corporation. The new product was launched in April 2020. This product attains the highest power
generation efficiency in the world*2 of 55%.*3 Installation has been improved by significantly
downsizing the main unit. A convenient switch, which has been added to the remote controller,
works with a special smartphone app, enhancing the product’s IoT function.
    The cumulative sales total of the fuel cell systems, Ene-Farm and Ene-Farm type S, reached180,000 units*4 on May 11, 2023. These units have helped reduce CO2 emissions by about 330,000
t-CO2*5 annually, which is equivalent to the planting of about 23.95 million sugi cedar trees.*6
Cumulative sales total of the fuel cell systems(Unit)
200,000

Cumulative total
178,771

Low fuel consumption LNG carrier chartered

158,679
141,687

150,000
119,653

Reducing CO2 emissions in logistics
In Japan, the number of trucks accounts for less than 20% of the overall number of
automotive vehicles, yet CO2 emissions in the logistics sector are as high as about 35%. Largetrucks generate particularly high emissions, so the introduction of natural gas-powered large
trucks can have a significant effect on reducing CO2 emissions. According to a roadverification report by the Organization for the Promotion of Low Emission Vehicles (LEVO),
large natural gas trucks have 12.9% lower CO2 emissions than large diesel trucks. Osaka Gas
is working to expand the use of large natural-gas trucks for long-distance transport between
cities, and small and medium-sized natural-gas trucks for transport within municipalities.
    We have also transported LNG using LNG tanker
trucks fueled by compressed natural gas (CNG). TheseLNG tanker trucks can help reduce CO2 emissions by
about 7%, compared with diesel-fueled tanker trucks.
    Japan’s first commercial LNG station was
opened in Osaka City in June 2018, allowing the startof transport using large LNG trucks. LNG featureshigh-efficiency fuel storage, which lets trucks run for
LNG tanker truck fueled by CNG
over 1,000 kilometers without refueling for further
reductions in CO2 emissions.

100,000

50,00002020.32021.32022.32023.3 (FY)

*1 ENE-FARM Type S is an environmentally friendly energy system that generates power through a chemical
reaction between hydrogen, which is extracted from clean natural gas, and oxygen in the air. The generated
power can be used at home, and hot water generated in the power generation process can also be usedeffectively. In development, we utilized some of the results obtained from the project commissioned by the
New Energy and Industrial Technology Development Organization (NEDO).
*2 The highest power generation efficiency in the world in terms of fuel cells for household use whose rated
output is 1 kW or less (based on a survey conducted by Osaka Gas as of the end of January 2020).
*3 Power generation efficiency when rated power generation is continued for at least three hours (e.g. under the
surplus electricity purchase system). In the cases other than the above, the rated power generation efficiency
is 54% (overall efficiency: 87%). The power generation efficiency for LP gas is 53% (overall efficiency: 85%).
The values were calculated based on the Lower Heating Value (LHV).
*4 Based on orders received by Osaka Gas*5 Our estimated value when a “gas water heater and heating unit,” which is the conventional system, isreplaced by “ENE-FARM” or “ENE-FARM Type S” (in the case of a family of four who lives in a single-family
detached home)[Conventional system] A gas water heater/heating unit, gas hot water floor heating system (living/dining room),gas hot water bathroom heater/dryer equipped with a mist sauna function, gas stove, electric air conditioner[ENE-FARM/ENE-FARM Type S] ENE-FARM/ENE-FARM Type S, gas hot water floor heating system (living/dining room), gas hot water bathroom heater/dryer equipped with a mist sauna function, gas stove, electric air
conditioner[CO2 emissions coefficient] Gas: 2.29 kg-CO2/m³ (our data), electricity: 0.65 kg-CO2/kWh (source: meancoefficient of thermal power sources of FY2014.3 in the Plan for Global Warming Countermeasures [approvedby the Cabinet in October 2021])*6 Unit CO2 absorption of one sugi cedar tree = 13.9 kg-CO2/year (on the supposition of a 50-year-old sugi
cedar tree with a diameter of 26 cm and a height of 22 m; source: 1997 White Paper on Forestry)
Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

About Green Power Fuel Corporation
In March 2019, Osaka Gas established Green Power Fuel Corporation (hereinafter, “GPF”), a
joint venture company that procures and sells domestically grown woody biomass for biomass
power plants, in cooperation with Seishin Shinrin Shigen Co., Ltd. and Nippon Paper Lumber
Co., Ltd. The Daigas Group already operates or plans to operate seven biomass plants inJapan, including participating in operating the Matsusaka Woody Biomass Power Plant, which
is fueled 100% by locally available biomass. In cooperation with Seishin Shinrin Shigen, which
has abundant knowledge about forestry, and Nippon Paper Lumber, which has a long trackrecord in dealing in domestically grown woody biomass, GPF procures and transports unused
wood from woodlands in Japan as power generation fuel to ensure stable, long-term biomass
supply for several biomass power plants owned or under development by the Daigas Group.
On December 17, 2021, Green Power Fuel Corporation signed a cooperationagreement with Shiso City, Hyogo Prefecture, on the utilization of fast growing trees*1 for fuelapplications, aiming for local production and consumption of biomass fuels and sustainablegrowth of domestic forestry. GPF decided to start a demonstration project that aims to build astable supply system of biomass fuels using fast growing trees, in cooperation with Shiso City,
which has abundant forest resources (land suitable for project operationalization). The company
focuses on fast growing trees, which are expected to have shorter growth and logging cycles
than those of general tree species, from the viewpoint of further increasing its biomass
procurement volume and reducing cost. As the first step of this project, the company plans to
examine the growth of fast growing trees and evaluate their usefulness as biomass fuels
through trial planting in the forests and on abandoned cultivated land owned by Shiso City.
Through this demonstration project, GPF will work to build a sustainable business model fordomestic forestry by utilizing fast growing trees as fuels. In addition, by utilizing the output of
this project, the company will try to realize the independent operation*2 of biomass power
plants after the purchase period under the FIT scheme expires.

SocialGovernance044

Among the industrial organizations participating in this plan, the Japan Gas Associationand the Electric Power Council for a Low Carbon Society have established their own actionplans to achieve a low-carbon society in the city gas industry and the electricity industry,
respectively. Osaka Gas, a member of both organizations, participates in those plans for bothindustries and promotes initiatives to address global warming (climate change).
In June 2021, this plan was renewed as the “Keidanren Carbon Neutrality Action Plan.”
From now on, we will formulate a plan to achieve carbon neutrality by 2050 and promote
initiatives to serve that purpose.

Joint investment in a forestry fund formed by the Sumitomo Forestry Group—A Fund in the order of USD 415 million to contribute to the realization ofa decarbonized society—
In July 2023, Osaka Gas, together with nine Japanese companies, announced a joint
investment in a forestry fund formed by the Sumitomo Forestry Group.
The size of this fund is approximately USD 415 million, and the investment period isplanned for 15 years. By 2027, the pooled capital will have been invested in the acquisition
and management of 130 thousand hectares (more than 320 thousand acres) of forest,
primarily in North America. Through this fund, we will increase the CO2 absorption capacity offorests, generating approximately one million tons of additional CO2 absorption capacity eachyear, and contribute to the realization of a decarbonized society by creating high-quality
carbon credits and rewards. The value of forests as natural capital will also be enhanced,
such as by maintaining biodiversity and conserving water resources. The fund will deliverglobal climate benefits by supporting responsible forest management at an area and financial
scale beyond that which individual companies could achieve on their own.
Structure of forestry fund

*1 A general term for trees that grow faster than the commonly planted tree species. Some representative
species include Chinaberry and Chinese Fir.
*2 Under the feed-in tariff (FIT) scheme, renewable electricity is purchased at fixed prices for 20 years at
maximum. After this period, the generated electricity must be sold at market prices. For this reason, GPF
aims to substantially reduce mainly transportation costs by using domestically produced fuels, thereby
realizing sustainable fuel costs.

Investor
Invests

Delivers cash dividends
Delivers carbon credits

Fund

Participated in the “Keidanren Carbon Neutrality Action Plan” (formerly
titled “Commitment to a Low Carbon Society”)
Recognizing that global warming is a global long-term issue to be solved, the Japan Business
Federation (Keidanren) formulated a plan titled “Keidanren’s Commitment to a Low Carbon
Society” in 2013 (revised in 2017), presenting a vision common to the Japanese industries ofleveraging their technological prowess to play a central role in achieving the target of reducing
global GHG emissions by half by 2050. This plan envisions that each member industry should
work to reduce CO2 emissions from business activities and people’s lives in Japan byintroducing the best available technologies (BAT) to the maximum and that aspiring initiatives
to stop global warming should be actively encouraged abroad. The plan also sets targets forstrategically developing innovative technologies that will help achieve a breakthrough for the
reduction of CO2 emissions by half by 2050.

ESG Data

Forest property
Pays fortimberPays forSells
timber carbon
credits

Timber consumer(e.g., sawmill factory)

Sells carbon
credits

Carbon credit
consumer(e.g., airline)

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

045

Disclosure based on the TCFD Recommendations: Recognition of and Action on Risks and Opportunities
Principle and Outline
Tackling climate change is seen as one of the Sustainable Development Goals (SDGs) adopted by the United Nations. Since the Paris Agreement came into force in November 2016, initiatives to tackle
climate change are being undertaken around the world. In Japan, the country declared carbon neutral by 2050 in October 2020, making it even more important to address climate change.
For the Daigas Group, which is engaged primarily in the energy business, climate change represents an important management challenge, and initiatives to reduce CO2 emissions are a crucial mission. In
January 2021, the Daigas Group established and announced the “Daigas Group Carbon Neutral Vision,” indicating its vision of how it strives to become carbon neutral by 2050. In March of the same year,
the Company announced its “Medium-Term Management Plan 2023.”
In March 2023, we released “Energy Transition 2030,” which outlines the overall roadmap for the transition to low-carbon energy and decarbonization, as well as our Group’s specific initiatives of ourgroup and the solutions we can offer our customers toward 2030.
The recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) announced in June 2017 (the “TCFD recommendations”) encourage companies to disclose climatechange-related financial information to promote appropriate investment decisions by investors. Osaka Gas supports the TCFD recommendations, and utilizes them as indicators to validate its climatechange response. We also participate in the TCFD Consortium,* where discussions take place on efforts toward information disclosure on responses to climate change based on the TCFD
recommendations.
* TCFD Consortium
The TCFD Consortium was established on May 27, 2019, whose members from the Japanese private sector discuss how companies can effectively disclose information on tackling climate change and how financial institutions
can use the disclosed information to make appropriate investment decisions. From the Japanese government, the Ministry of Economy, Trade and Industry, the Financial Services Agency, and the Ministry of the Environment
participate as observers in the consortium.

Climate Change Governance
The Daigas Group regards tackling climate change as a key management issue. Just as with other important business activities
across the Group, the Board of Directors is responsible for making decisions on and supervising activities aimed at tackling climatechange and other environmental issues. At the ESG Council (Management Meeting), which is held three times a year, executives
discuss activity plans and activity reports related to ESG issues, including climate change issues, and submit reports to the President.
    The Group also has the ESG Committee, chaired by the Executive in Charge of ESG Promotion (Representative Director and Vice
President), who supervises the Group’s sustainability activities, and consisting of the heads of related organizations. The ESG
Committee meets four times a year for the cross-organizational deliberation, coordination, and supervision of climate-change-related
issues, including the planning and promotion of related business activities, progress in achieving relevant targets, and risk
management. The committee submits to the Board of Directors deliberation proposals and reports on important agenda items, suchas the status of achievement of sustainability-related ESG management targets and business projects expected to sustain a major
financial impact due to climate change.
    Directors other than Outside Directors are paid performance-linked remuneration, and one of the performance indicators is the
ESG indicators achievement coefficient. For ESG indicators, CO2 emissions aimed at carbon neutrality and other climate changerelated indicators are employed.

Strategy
Scenario analysis

The Daigas Group has been working on climate change scenario analysis that is intended to be Board
utilizedof
asDirectors
reference material in the
Making Important
Decisions;evaluation and preparation of countermeasures, and to understand the impact of climateProposal
change andon theGroup’s businesson a mediumReportSupervisionand long-term basis. For the analysis, we used the scenarios* published by IEA.
Representative
Directorand President
We assessed our energy businesses (gas, electricity and related businesses in Japan andoverseas) which
are expected
to experience
the greatest impact from climate change among the Group’s businesses, assuming a multi-track
scenario(1.5˚C
Scenario(NZE2050), 2.6˚C
Submission and Report
Scenario (STEPS)*) that takes into account the progress of energy conservation and changes in the composition of power sources, etc.
ESG applying
Council (Management
Meeting)*    We steadily implement initiatives to increase the resilience of the Group’s businesses, while
the suggestions
gained fromscenario analysis to our evaluation of medium- and long-term business strategies. Moreover, as the global response to climate change
Report, etc.
continues to progress, the scenario’s preconditions may also change in the future. We will continue to deepen our scenario analysis,
ESG
Committee
renewing our assumptions in line with the latest conditions as necessary, taking into accountCorporate
scenarios Committee:
established byexternal
authorities.
Chairman: Head of ESG Promotion
Source: IEA “World Energy Outlook 2021”

Governance System for Climate Change•Board of Direc

10 Directors (6Board of Directors
Proposal and Report

Making Important Decisions;Supervision

Representative Director and President•ESG Council (1 Executive P
Senior Execut* In principle, it i

Submission and Report

ESG Council (Management Meeting)*
Report, etc.

•ESG Committe

Executive Viceheads of relat

Corporate Committee: ESG Committee
Chairman: Head of ESG Promotion•Board of Directors

10 Directors (6 Internal Directors and 4 Outside Directors)•ESG Council (Management Meeting)
1 Executive President, 3 Executive Vice Presidents and 7
Senior Executive Officers* In principle, it is held three times per year as “ESG Council.”•ESG Committee

Executive Vice President (Head of ESG Promotion) andheads of related business units, etc.
(As of June 23, 2023)

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

046

Recognition of risks and opportunities
Using a multi-track scenario analysis, the Daigas Group identified anticipated risks and opportunities, based on the environment surrounding its domestic and overseas energy businesses, evaluatedthem, and examined countermeasures in the short- to medium-term toward 2030 and the long-term toward 2050.
    The Group is engaged in gas and electricity businesses, primarily in the Kansai region, which use natural gas as their main raw material and fuel. The external environment is undergoing various
changes due to climate change. We have classified the major factors associated with these changes into “transition risks” and “physical risks,” and identified the major risks and opportunities.
Significant risks for the Group related to climate change include the possibility that rising sea levels and natural disasters such as typhoons and torrential rains due to localized abnormal weather
events, etc. may cause damage to our manufacturing equipment. In addition, it is possible that our businesses may be affected by significant increases in the carbon tax rate in Japan, or an
increased desire among our customers to switch to non-fossil fuels. However, promotion of the development and spread of renewable energy and decarbonization technologies also represents asignificant opportunity for the Group.
    The Group will respond appropriately to identified risks and opportunities by promoting diverse businesses through portfolio management.
Evaluation of Risks and Opportunities
Scenario
PhysicalPhysicalrisks

ImpactStrategies/Countermeasures for Risks and Opportunities

Impact on Business
Short- and Medium-Term

Long-Term

2.6˚C

Damage to facilities arisingfrom meteorological disasters

Increase in capital investment
costs and insurance premiums

Increase in facilities
countermeasure costs

2.6˚C

Switch to natural gas

Increase in prices due to greater
competition in LNG procurement

Further price hikes and impediments
to procurement, due to increasing
competition in LNG procurement

1.5˚C

Switch to non-fossil
fuel energy

Fall in sales of gas and thermal
power

Fall in sales of gas and thermal
power

1.5˚C

Focus of investment
criteria on low-carbon or
decarbonized businesses

Diminished capital procurement
power in gas-related businesses

Declining investment in fossil
fuels businesses

Short- and Medium-Term
Physical

Opportunity

Physical

Policy andframework

1.5˚C
2.6˚C

Introduction of acarbon tax

Carbon tax burden on gas andthermal power businesses

Increasing burden with risingcarbon tax rates

Physicalopportunity

2.6˚C

Increase in awareness andsupport measures for weather
disaster countermeasures

Increase in sales of products/
services with disaster response
function

Expansion of decentralizedenergy systems

Market2.6˚C

Switch to natural gas

Switch to LNG in Japan;
Expansion of LNG business oversea

Switch to LNG and expansion of salesof high-efficiency equipment abroad

Technology

1.5˚C

Development of renewableenergy and CCUS technologies

Expansion of development of
renewable energy sources

Introduction of “e-methane,”
expansion of renewable energy sources,
utilization of thermal power generation with CCS

Implementation of a national
policy for the mass introductionof renewable energy sources

Expansion of sales of electricity
from renewable energy sources

Expansion of sales of electricity
from renewable energy sources

Development of Al/IoT

Participation in decentralized powersources aggregation business

Expansion of decentralized powersources aggregation businessTransition
Policy andframework

1.5˚C
2.6˚C

Technology

1.5˚C
2.6˚C

Financial impact : Small

Risks

Please see the following material for our major initiatives
Transition

Carbon Neutral Vision
Investigate, develop, and verify
CCUS/“e-methane”
technologies

Physical

Opportunity

Risks

Reputation

Implement disaster countermeasures for facilities
Diversify procurement sources
Develop and expand sales of renewable energy power sources in Japan and abroad
Engage in dialogue with investors

MarketTransition

Long-Term

Full-scale introduction andestablishment of supply chainsof CCUS/“e-methane,”hydrogen, etc.

Development and sale of equipment with disaster response functions
Develop and expand sales of renewable energy power sources in Japan and abroad
Develop and market high efficiency, compact decentralized power sources (CHP, fuel cells)
Expand fuel switching, sales of high efficiency equipment in Japan and abroad
Verify and participate in the decentralized power sources aggregation business
Please see the following material for our major initiatives

Transition

Carbon Neutral Vision

Further develop energy-saving
technologies

Full-scale introduction andestablishment of supply chainsof CCUS/“e-methane,”hydrogen, etc.

Financial impact : Large

Financial Impact of Climate Change Risks and Opportunities
The Daigas Group’s Medium-Term Management Plan has identified “achieving a low carbon/carbon neutral society” as a priority issue, and expects to spend 150 billion yen on decarbonization
related investments in the period from 2021 to 2023 as it works toward achieving the goal of carbon neutrality in 2050.
    The Daigas Group is actively contributing to the spread of renewable energy, and estimates that the impact on sales of its renewable energy business expansion will be in the order of 100 billion
yen in fiscal 2031.3.
    It should be noted that there are uncertainties and assumptions in the above estimation of financial impact. In practice, the impact may vary significantly as a result of changes in key factors.
Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

047

Initiatives to Reduce Greenhouse Gas Emissions
Initiatives to reduce greenhouse gas emissions are a crucial mission for the Daigas Group. We focus on reducing CO2 emissions, not only from our own business activities, but also from customers
who use the energy we provide.
    In the Daigas Group Energy Transition 2030 (ET2030), we have set a target of reducing CO2 emissions in our domestic supply chain by 5 million tonnes by FY2031.3 compared to FY2018.3,
and we are taking various initiatives to reduce CO2 emissions.
    Under the Daigas Group Carbon Neutral Vision, we have established the goal of contributing 10 million tons per year of CO2 emissions reductions in FY 2031.3. This indicator will enable us tocontribute to reductions throughout society, and we therefore use it as a management target linked to the Group’s business initiatives.
   Please see
P.38-44 for details on the specific initiatives by the Daigas Group to reduce greenhouse gas emissions.

Initiatives Ensuring Resiliency for a Decarbonized Society
Securing a stable supply of energy, a core social infrastructure, is one of the major climate change-driven challenges facing society as a whole. By continuing to provide a range of services, including
multiple sources of clean energy such as gas and electricity utilizing decarbonization technologies, disaster response equipment, and the widespread and advanced use of energy, the Daigas Groupwill strive to contribute to society in terms of stable supply and resilience for a decarbonized society.
   Please see
P.39 for an overall picture of the Daigas Group’s efforts for low carbonization and decarbonization of energy.

Risk Management
When deciding on the Daigas Group’s business plan and investment plan, the internal organizations responsible for the gas, electricity, and other businesses analyze the risk factors and their impact
on each business, distill and identify risks, and submit these together with other business risks, etc. to Management
Meeting for deliberation. Climate change risks in the formulated plans are managed through a PDCA cycle, and are• Resolutions for collaboration and participation in projects for areported and followed up at the Environment Subcommittee, ESG Committee, and ESG Council (Management Meeting).
decarbonized society, based on the Carbon Neutral Vision
The PDCA (plan-do-check-act) cycle is used to manage such actions.
• Formulation and disclosure of ET2030    Decisions on climate-related risk and sustainability, including investment decisions, are made by the Board of• Monitoring of the results for indicators used to manage climate
Directors and the Management Meeting. Matters related to climate change that were proposed or reported by March 31,
change response, etc.
2023, included those listed to the right.

Indicators and Targets

Risk Management System for Climate Change
Board of Directors
Reports on important management issues, including climate-related issues, each half-year
Making Important Decisions;Supervision
1

Representative Director and President- Response to cross-cutting
issues relating to climate change- Formulation of strategies relating toclimate change- Reflection in activities of eachorganization

Submission and Report

ESG Council (Management Meeting) 3

4

Proposals and reports on important management issues, including climate-related issues
2

Proposal, Report, etc.

Corporate committee: ESG Committee 3
Chairman: Head of ESG Promotion

Report, etc. Environment
Subcommittee 1 3 4Report,Report, Coordination, etc.
Coordination, etc.

3(Secretariat of ESG Committee/Environment Subcommittee)
Report, Coordination, etc.
1

Coordination, Promotion, etc.

Each organization and affiliate of Osaka Gas

1

2

External Verification（ 3 ）Third party verification of environmental performance data★

Implementation/Operation

4

Review- Identification of issues- Evaluation and implementation ofcountermeasures

Establishment of Carbon
Neutrality Promotion Office (April 2022)

Oversight of establishment and promotionof strategies to achieve carbon neutrality;
coordination, planning promotion andfollow-up with each organization and affiliate.

Indicators

CO2 emissions of Daigas Group

Checking- Report and follow-up for eachtarget and performance at theEnvironment Subcommittee,
ESG Committee, and ESG
Council (Management Meeting); third
party verification of environmental
performance data

3

Carbon Neutrality Promotion Office, Corporate Strategy Dept.

Field- Actions for each target- Performance tracking for eachindicator

4

ESG Office, Corporate Strategy Dept.

Plan formulation

The Daigas Group will proceed to contribute to radically reducing CO2 emissions and realizing
a decarbonized society, through initiatives such as energy conservation, the advanced use ofnatural gas, and the widespread use of renewable energies.

Climate Change

Proposal and Report

Percentage of renewables in our power generation
CO2 emissions
portfolio in Japan
reductions fromour own business Contribution to developing renewables capacity on a
activities
global basis
CO2 emissions
reductions at
customer sites
and through thevalue chain

Targets

Target FY

Net-zero
CO2 emissions

2051.327.02 million tons*(5 million tons less than FY18.3)

2031.3

Nearly 50%

2031.3

5 GW

2031.3

2.5 GW

2024.3• P romote carbon reduction and decarbonization through more widespread use ofhigh efficiency, high value-added equipment with natural gas, renewable energy, etc. Each year
until
2031.3solutions in the fields of information, real estate, and materials• Efficient operation of LNG tankers and expanded use of low emission vehicles, etc.
• Provide environmental value through the dissemination of high-quality

Contribution to CO2
Avoided emissions (t-CO2e) (Including reductions
emissions reductions
contributed at customer sites and overseas)
across society

10 million tons
(baseline: FY2017.3)

2031.3*Emissions in domestic supply chain (Scopes 1, 2 and 3) (Targets for FY2031.3 newly set in the “ET2030”)
Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

048

Contributing to the Resource-Recycling Society
Principle and Outline
With the aim of creating a recycling-oriented society, the Daigas Group strives to minimize waste emissions through efficient use of resources throughout its business activity value chain and throughresource recycling by means of promoting the 3R + Renewable efforts. The Group also strives to conserve water through appropriate use of water and wastewater management.
    More Specifically, Daigas Group is thoroughly implementing the 3Rs (reduce, reuse, recycle), cutting its resource consumption and waste generation, and endeavoring to reuse and recycle
used resources. We are recycling resources throughout our business activity value chain by such means as striving for zero emissions at LNG terminals, reusing gas meters, recycling gas pipematerials, reusing excavated soil from gas pipe installation, and recycling used gas equipment.

Consumption of Resources by Daigas Group
Recycling of used gas pipes
The polyethylene (PE) pipes waste material generated at work sites is mainly used as covers
to protect gas pipes and as post markers to indicate the location of supply pipes. In FY2023.3,
137 tons of polyethylene (PE) pipe waste was generated and all was reused. Metal pipes,
such as steel and cast-iron pipes, are sold to electric furnace manufacturers and recycling
companies, who use them as raw materials for products.

Reusing of gas meters
To measure the amount of gas used by customers, Osaka Gas has installed approximately 7.4
million gas meters. Under the Japanese Measurement Law, these devices must be replaced
every 10 years.*1    After 10 years in use, gas meters are repaired (taken apart, inspected, and fixed) to makethem perform as well as new ones. They are then installed at customer sites. In the past, thistype of repair was conducted a third time to give the gas meters a total lifespan of 40 years.
After conducting evaluations including durability tests*2 jointly with the gas meter
manufacturers, we came to a decision that these gas meters can be used another 20 years if
twice of additional repairs are conducted. Based on the result, the Company has decided toincrease the maintenance of gas meters by two times since FY2010, and to use them for 60
years.
    As a component material, around 2 kg*3 of aluminum is used in each gas meter body.
Reusing gas meter reduce 80%*4 of CO2 emissions, that includes CO2 emission that would
have been emitted in the process of casting a new gas meter body, giving a cumulative total
reduction of 85,000 tons over the next 20 years, compared with producing new meters.
*1 Replacement of meters: Some exceptions apply. (Meters from #25 or higher need to be replaced every
seven years)*2 Durability test: Cyclic tests, accelerated temperature tests, etc.
*3 Calculation of aluminum use: A body of gas meter contains approximately 2 kg (average of from #2.5 to#6) of aluminum.
*4 Calculation of CO2 emissions: Calculated with new meters also using regenerated aluminum.

Electronic issuance of a manifest certifying waste disposal via the Daigas
Group’s e-Cycle system
The Daigas Group operates a proprietary “e-Cycle” system that links appliance sales agents,
collection and transportation companies, and disposal companies via the Internet. This systemenables prompt confirmation of “manifests,” which certify that used equipment collected bysales agents has been appropriately handled by the shipping companies and the disposal
companies.
    The manifest is electronically issued, as the Daigas Group’s e-Cycle system is connectedto the Japan Industrial Waste Information Center (JWNET) through the EDI.** EDI
EDI stands for electronic data interchange. Electronic data are exchanged between the JWNET and Osaka
Gas’s e-Cycle system.

Compliance with the Home Appliance Recycling Law
The Daigas Group appropriately disposes of gas air conditioners for household use andclothes dryers, covered by the Home Appliance Recycling Law, in line with the law. In
FY2023.3, about 111 tons of gas air conditioners for household use were collected, and 91% ofthem were recycled, higher than the minimum mandatory recycling rate of 80%. The amountof clothes dryers collected during the same year came to about 19 tons, 90% of which wasrecycled, far above the mandatory recycling rate of 82%.
Air Conditioners
Number of units recycled (units)

FY2019.3

FY2020.3

FY2021.3

FY2022.3

FY2023.3

4,728

4,348

3,656

2,921

2,755

Gross weight recovered (t)

195 t

177 t

147 t

118 t

111 t

Weight recycled (t)

178 t

161 t

134 t

107 t

101 t

Recycling rate

91%

91%

90%

90%

91%

Clothes Dryers
FY2019.3

FY2020.3

FY2021.3

FY2022.3

FY2023.3

Number of units recycled (units)

591

476

523

393

445

Gross weight recovered (t)

24 t

19 t

21 t

16 t

19 t

Weight recycled (t)

21 t

17 t

19 t

15 t

17 t

Recycling rate

88%

88%

89%

90%

90%

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

049

Compliance with the Act on Promotion of Recycling of Plastic Resources
The Daigas Group promotes resource recycling efforts through the promotion of the 3Rs (reduce, reuse, and recycle) plus renewable with the aim of creating a recycling-oriented society.
    With regard to plastic resources, we are actively implementing material recycling in our business supply chain, including 100% recycling of waste polyethylene (PE) pipes, which are gas pipematerials, and recycling of resin used for gas alarms.
    We will also continue our efforts to minimize the amount of landfill waste and other waste finally disposed of by effectively utilizing waste from other plastic products as thermal energy by, forexample, converting it into refuse paper & plastic fuel (RPF).

Appropriate Use and Discharge of Water Resources
Water is not a primary material among the products handled by the Daigas Group. We recognize that the use of water does
not pose a major business risk for our Group. However, the Group controls water discharge after using drinking water, industrialuse water, groundwater and seawater. At power plants, core facilities for its electricity business, the Group uses industrial water
as a coolant in a steam turbine condenser, and vaporizes it inside the cooling tower. Drinking water, industrial-use water andgroundwater are also used at LNG terminals, power plants and offices, and discharged. Seawater is mainly used forvaporization of LNG at city gas plants and for cooling in steam turbine condensers at some power plants. We discharge theseawater to the sea without consuming it or affecting its composition. In discharging water, we have conducted water quality
inspections in line with relevant laws, ordinances and agreements with local municipalities, and there were no violations. The
Group sees water as a limited natural resource. We will continue to use water adequately, control its discharge strictly, andpromote water saving.

Amount of water intake in FY2023.3

Amount of water discharge in FY2023.3

General water, industrial water

10,800 thousand m3

Sewer

581 thousand m3

Underground water

3,463 thousand m3

River3,089 thousand m3

Sea

536,070 thousand m3

Seawater

Osaka Gas has pleased to announce that
we have been recognized for leadership in
corporate transparency and performance onwater security by global environmental
non-profit CDP, achieving a place on the
CDP A List for the second consecutive year.

534,660 thousand m

3

Efforts to reduce water use
The Daigas Group is working together with business partners and customers to reduce water consumption.
In its employee activities at offices, the Group strives to conserve water and addresses the challenge of reducing the amount of water it uses.
    Making use of its technological capabilities cultivated in the gas business, Daigas Energy Co., Ltd., a wholly owned subsidiary of Osaka Gas, provides customers with water purification andtreatment services, including cooling water chemical services, to reduce water consumption.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

Chemical substance management

Management of waste containing PCBs

Legal compliance and proper management

Proper management and disposal of PCBs in line with government policy

There are very few hazardous chemicals handled by the Daigas Group during the processing
and supply of natural gas. The Group will continue to manage and reduce the amount ofchemicals it uses under the policies shown below.

Every company in the Daigas Group manages and disposes of waste containing PCBs in
accordance with Japan’s Act on Special Measures for Promotion of Proper Treatment of
Polychlorinated Biphenyl (PCB) (PCB Special Measures Act). All capacitors and transformers
with a high density of PCBs over 10 kg were disposed of by FY2013.3. All ballasts and otherequipment that contain PCBs were also disposed of by the statutory processing deadline.
Low-density PCBs have been consigned to approved decontamination facilities since
FY2014.3 in a systematic process of disposal.
    Going forward, we will continue to store and dispose of PCBs properly, in accordancewith the government’s disposal schedule and policies.

Daigas Group Chemical Substance Management Principles
1. W
 e comply with laws and environmental regulations concerning the use of chemical
substances.
2. W
 e use ISO 14001-compliant and other environmental management activities to step up
management and decrease emissions of chemical substances.
3. W
 e disclose information on chemical substance management mainly on our website.

Soil and groundwater conservationInformation Disclosure on the Inspection
Results of the Former Plant Sites

050

Gas appliance eco-design
Conform with all laws and take the environment into consideration, such as byInspecting soil and groundwater on former coal gas production sites

restricting the use of chemical substances

In compliance with relevant laws and regulations, Osaka Gas has checked the possibility ofsoil pollution at former coal gas production sites by measuring the amount of specified
chemical substances contained in the soil and groundwater taken from the sites andassessing their impact on the sites and surrounding areas. The results of the surveys havebeen disclosed and response measures have been implemented where necessary. For
example, when chemical substances (mainly cyanide compounds and benzene) in excess ofthe maximum amount allowed under the Soil Contamination Countermeasures Law were
found, the incidents were reported to administrative authorities and adequate measures,
including removal and cleaning the problematic soil, were taken promptly. Before changing
the form of land, we conducted surveys based on relevant laws and regulations, followed by
implementing appropriate response measures, including disposing of the contaminated soil
and on-site containment of the soil. We have issued press releases regarding the results ofinvestigations and the response measures, all of which have already been implemented. We
will continue to take necessary measures based on the Soil Contamination
Countermeasures Law.

July 2006 was the start of the RoHS Directive, which restricts the use of specified substances,such as lead and cadmium, in appliances. Also in July 2006, in Japan the revised Law for the
Promotion of Effective Utilization of Resources went into effect, obligating companies to label
products as containing the six substances of the RoHS Directive according to J-MOSS, theJIS standard for the labeling of electrical and electronic products containing chemical
substances.
    In line with the measures propelled in the automobiles and home appliances sectors, we
are working together with gas appliance manufacturers on the development ofenvironmentally-friendly gas appliances and its labeling. The Daigas Group currently does not
manufacture or sell gas appliances containing any of the specified substances that requirelabeling under J-MOSS. The Group abides by Japanese regulations on chemical substances(the Law Concerning the Examination and Regulation of Manufacture, etc. of Chemical
Substances, and the Law for the PRTR and Promotion of Chemical Management). We also
engage in independent evaluations of chemical management according to the RoHS Directive
and are working to reduce chemical substances outlined therein.

Management of asbestos
The status of asbestos use at major facilities and buildings of the Group, and in its gas
equipment, is given below.

Gas manufacturing
and supply facilities

Gas equipment,
combustion equipment

Asbestos is not used in new
facilities. The asbestos used inexisting facilities as installed
does not disperse into the air.
When these facilities areserviced or reclaimed,nonasbestos material will be
used in place of asbestos.

Asbestos is not used in new gas
equipment or combustion
equipment. Some of the gas
equipment sold in the past usedasbestos in gaskets or the like,which does not disperse into
the air under ordinary conditionsof use.

Daigas Group's buildings
Measures to systematicallyeliminate spray-on asbestos
insulation in buildings have been
completed. Showrooms andother open spaces visited bycustomers do not use spray-on
asbestos.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

051

Biodiversity
Principle and Outline

Daigas Group Biodiversity Policy

Recognizing the essential nature of the many blessings of biodiversity, the Daigas Group in April 2010 established the “Daigas Group Biodiversity Promotion Policy,” revised from the Daigas Group
Biodiversity Promotion Policy in March 2018. In line with the Policy and through its business activities, the Group intends to offset its negative impacts on biodiversity and aims to build a naturepositive society.

Efforts live up to the Policy
The Daigas Group has long been striving to conserve biodiversity through various measures, including protecting rare native plants growing on the LNG terminal sites, reusing soil excavated during
gas piping works, building multi-level gardens at the experimental residential complex NEXT 21,* and planting trees in Japan. Since we formulated the Daigas Group Biodiversity Promotion Policy inApril 2010, we have made positive efforts in line with this policy and actively provided information thereon. Our efforts to conserve biodiversity, have been made under the guidance of governmentand research institutes, outside experts, and external consultants. We also exchange information with various research groups, including the Japan Business Initiative for Biodiversity (JBIB) to makeprogress in our efforts. Since 2003, Osaka Gas has been participating in the Keidanren Nature Conservation Council as a member company; we also participate in the Keidanren Initiative for
Biodiversity Conservation to collaborate with stakeholders, including the government and regulatory bodies.
    Based on its Green Purchasing Guidelines (formulated in 2000, revised in 2022), Osaka Gas works with business partners to promote green purchasing: prioritized procurement of biodiversityfriendly goods and construction works that have less impact on the environment.
    In the Daigas Group, every new investment and development project, whether in Japan or abroad, follows an environmental impact assessment at the planning stage when required by law. We
survey the water environment, flora and fauna on land, and ecosystems to assess environmental impacts and take necessary measures to achieve a sustainable society.
    We have set environmental targets in line with our environmental management system (EMS) and the Group Medium-Term Management Plan 2023, both of which are aimed at the complete
implementation of the Daigas Group Environmental Policy, a pledge by the Head of ESG Promotion. These environmental targets also include paying due consideration to biodiversity in businessactivities.
* Experimental Residential Complex “NEXT 21”
The “NEXT 21” was constructed in October 1993 by Osaka Gas to propose an ideal neo-futuristic urban multiple-unit housing under the concept of “Achieving both comfortable and convenient life and energy-saving/environmental preservation. ” With Osaka Gas’s employees and their families actually living there, NEXT21 has conducted demonstrative experiments based on the themes that are in tune with the times. Such themes include
energy saving for the entire building, reducing its CO2 emissions, greenery restoration and environmental symbiosis in urban areas, ideal forms of residence that reflect diverse lifestyles, and product development. Also, many
proposals and presentations that may lead to ideal multiple-unit housing in the future have been made at a time when the liberalization of the energy market is advancing. Some of the proposals have been commercialized.

Key Biodiversity Efforts in the Value Chain

Procurement

Consideration tobiodiversity in LNG
tanker transportation

Production

Green space
management at LNG
terminals using native
seeds and seedlings,
etc.
 onservation of nativeC
seeds and seedlings
and rare species• 
Network formation withnature in local areas••

 allast waterBmanagement

SupplyReduction in excavatedsoil from undergroundgas piping works andpromotion of recycling
to reduce pit sandextraction
 se of Vermeer methodU
to reduce excavated soil
• 
Recycling of excavatedsoil and road work
waste•

OfficeActivities to raiseawareness towardbiodiversity

Customers rovision of informationP
on measures taken at
our showroom and LNG
terminals• 
Use of native seeds andseedlings in the urban
development business•

Daigas Group Sustainability Report 2023

Introduction

Management

Environmental

Biodiversity conservation actives
The Daigas Group is committed to helping build a society harmonious with nature that canconserve biodiversity and enjoy the bounties of nature into the future, and will undertake
efforts that promote the conservation of biodiversity and sustainable use, based on the“Daigas Biodiversity Promotion Policy”.
We promoted the following initiatives in FY2023.3.

Procurement
We manage ballast of LNG tankers we use in accordance with regulations of the country
where the port of call is located. In addition, our tankers are equipped with water-processing
facilities that meet the conditions set under the International Convention for the Control andManagement of Ships’ Ballast Water and Sediments stipulated by the International Maritime
Organization (enacted in September 2017).
    We have reduced the impact of ballast on ecosystems by, for example, replacing ballast
taken on at a Japanese port with water from the open ocean before releasing the ballast in aforeign port.

Production
At our LNG terminals (Senboku LNG Terminals I and II, Himeji LNG Terminal), green areas
were managed in a way that contributes to biodiversity. In addition, native seeds andseedlings, etc. were maintained, biotopes were created, and biodiversity monitoring studies
were conducted at LNG terminals.

SupplyThe Daigas Group works to reduce the amount of excavated soil and waste asphalt generated
as a result of gas pipe installation, which contributes to reduce impact on the ecosystem.
Ways to achieve this include the Vermeer method, which requires soil excavation of only two
points, and the shallow pipe installation method. In FY2023.3 these methods allowed us toreduce the amount of excavated soil generated by approx. 222 thousand tons compared towhat would have been generated using conventional methods. Our soil and asphalt recycling
system promotes the reuse of waste asphalt and excavated soil as either recycled asphalt,
regenerated roadbed material, or improved soil. These efforts allowed us to reuse 98% ofmaterial excavated during gas pipeline construction in FY2023.3 and send to final disposal
approx. one thousand tons.
* In April 2022, Osaka Gas Network Co., Ltd. took over the city gas pipeline business of Osaka Gas Co., Ltd.

Customers
We conduct community and environmental communication and environmental education inapproximately 100 m² of rice paddies and 12 m² of fields created on the roof of its own
facilities. In addition, our group company engaged in urban development projects is working
on planting plants that take biodiversity into consideration at its facilities and thecondominiums they develop, encouraging interaction with the local community and creating
connections between people and the city.

SocialGovernance

ESG Data

052

Habitat conservation for biodiversity: Use of native seedlings in green space
management at LNG terminals
At Osaka Gas LNG terminals, we are conducting afforestation activities that recreate the area’s
original ecosystems and are capable of supporting a high level of biodiversity. We are also regularly
conducting biodiversity monitoring studies to verify the effectiveness of our biodiversity efforts.
At the Senboku LNG Terminal, our concept is “a network of greenery that brings us closer tothe community.” We are striving to create a green belt thatwill be home to a diverse range of life through efforts suchas planting native seedlings in a green area, the “Senboku
no Mori,” and planting a field of Japanese blood grass as
described in “The Pillow Book,” an ancient Japanese essay
written in the Heian Period.
    Since 2002, under the guidance of the Museum of
Nature and Human Activities in Hyogo Prefecture, theHimeji LNG Terminal has been preserving rare plants native
At Senboku LNG Terminal: Green belt
to the area of Nishi Harima, Hyogo Prefecture. We areplanted with Cogon Grasscurrently growing rare plants including Gardneria multifolia“CHITOSEKAZURA”    and Red-root Lithspermu (both rated level 2
endangered on the Ministry of the Environment’s
endangered species list). The new biotope created in
FY2014.3 reproduces satoyama woodlands, grasslands
and marshes with plants indigenous to Nishi Harima,preserving such rare species as the Platycodon orJapanese Bellflower.
These native species are originally suited to the local Biotope at Himeji LNG Terminal
climate and are easy to grow. Therefore, they do not require any special consideration or burden in
the management of green spaces in the plant to conserve rare species.
    As there are indications that these efforts are resulting in an increase in the number of insect
and bird species, it is hoped that these trends will also spread to neighboring green belts.
In the future, we will continue to monitor these areas under the guidance and advice of experts.
Changes in Butterfly Species Confirmed at Himeji LNG Terminal
35(Number of confirmed species)

Contents

Total in the terminal
Biotope30

Nishi Harima no Mori
25
20
15

13

10

12

0

7

12

12

11

6
5
3

18

19

20
19
15

10

5

18

12

9

6

2014.3 2015.3 2016.3

11

13
10

11

6

8
4

5

2
2017.3 2018.3 2019.3 2020.3 2021.3 2022.3 2023.3 (FY)(Fiscal year of survey)

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

Preservation of biodiversity habitats: Development of condominiums
introducing the indigenous species in their gardens
Osaka Gas Urban Development Co., Ltd. is a real estate company and is engaged in thedevelopment and management of office buildings and condominiums/rented apartments. In
addressing “co-existence with the environment,” one of its “five focuses” for urban andproperty development, Osaka Gas Urban Development Co., Ltd. is pursuing a planting planthat takes biodiversity into consideration.
The planting of native seedlings of “Chimakizasa,” a species of bamboo grass called
Sasa, were introduced to the garden of The Urbanex Kyoto Matsugasaki, which wascompleted in March 2014. Chimakizasa has been recognized as an endangered plant in Kyoto
City as a result of excessive eating by wild deer, whose population in the city has been
increasing in recent years. All of the 10 bamboo grass plants that were planted in the gardenof the “Urbanex Kyoto Matsugasaki” were donated by the Chimakizasa revival committee, a
local team formed to increase numbers of the plant, with members being mainly residents ofSakyo Ward, Kyoto City and researchers from Kyoto University.
At the “Urbanex Kobe Okurayama”, completed in February 2016, Osaka Gas Urban
Development has planted Japanese blue oaks, gooseneck loosestrife, and other local seeds/
seedlings with support from the Museum of Nature and Human Activities, Hyogo. Signs
describing plant names and their characteristics were also installed to help local residents
learn about the importance of biodiversity. These combined efforts, including the active use ofnative seedlings, earned the 2016 Good Design Award.
Since FY2019.3, Osaka Gas Urban Development Co., Ltd. has transplanted native
seeds and seedlings from green spaces at Osaka Gas facilities to the planting areas ofcondominiums it has developed. Examples of these properties completed in FY2021.3 are
Scenes Osaka Honmachi and Scenes Otemachi. In this way, we share our in-house know-how
in conserving biodiversity across the Daigas Group. Osaka Gas Urban Development willcontinue to standardize biodiversity-friendly planting plans as specifications and work on suchplans at the condominiums it develops.

SocialGovernance

ESG Data

053

Biodiversity risk assessment
The Daigas Group, being aware of the environmental impact of its value chain, strives tominimize its impact on biodiversity and expand its contribution.
    We conduct questionnaires regarding sustainability activities at our LNG suppliers tocheck on the status of their monitoring activities for local ecosystems and their efforts toconserve the biodiversity of local ecosystems.
    In the Group, every new development project, whether in Japan or abroad, follows anenvironmental impact assessment at the planning stage when required by law.
    For example, in the process of constructing the Senboku Natural Gas Power Plant, thecore facility for the Group’s electricity business, between 2002 and 2006, we conducted anenvironmental impact assessment. It covered the construction work (the impact oftransportation of construction materials, such as air pollution, noise, and vibration) and thepresence and shared use of land and workpieces (the impact of ground modification and thefacility’s existence on local flora and fauna and the impact of exhaust gas and wastewaterfrom the facility in operation on the quality of air and water). We also adopted environmental
conservation measures against air pollution, noise, vibration, and wastewater in order tofurther reduce the environmental impact of the project.
    Also, in the Himeji Natural Gas Power Plant construction project, which Himeji Natural
Gas Power Generation Co., Ltd., a wholly owned subsidiary of Osaka Gas, is implementing,an assessment process has been completed in compliance with the Environmental Impact
Assessment Act.

Scenes Tsukaguchi
As of July 31, 2023, 31 properties have introduced local biodiversity-friendly planting.
(including properties for sale and for rent)

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

Biodiversity-conscious initiatives at the Scenes Tsukaguchi condominium
selected for the 10th ABINC Certification and Good Design Award 2020
In February 2021, Scenes Tsukaguchi, a condominium in Amagasaki City, Hyogo Prefecture,developed by Osaka Gas Urban Development Co., Ltd., acquired the 10th Ikimono Kyosei
Business Establishment *1 certification organized by the Association for Business Innovation inharmony with Nature and Community (ABINC)*2.
The ABINC certification aims to foster harmony between nature and human beings inbusiness activities. ABINC conducts a third-party assessment of biodiversity-conscious
initiatives to create, manage and use green spaces, and it certifies eligible business sites as“Business Sites in Harmony with Nature.” Osaka Gas Urban Development constructed Scenes
Tsukaguchi while implementing biodiversity-conscious initiatives in cooperation with experts,
including those from the Museum of Nature and Human Activities, Hyogo. On thecondominium site, native plant species, such as the bamboo-leaf oak and the sawtooth oak,were planted to create green spaces in consideration of local vegetation. These green spaces
were designed to create a network with other small green spaces dotted nearby and help
birds and butterflies find places to inhabit. In addition, seedlings thinned in the planting
management process on land owned by the Daigas Group were transplanted to thecondominium site to help preserve the genes of plant species native to the Rokko mountains
in Hyogo prefecture.
Scenes Tsukaguchi also won the Good Design Award 2020 organized by the Japan
Institute of Design Promotion. Following the Good Design Award 2016, this was the second
time that Osaka Gas Urban Development had won the same award. The 2020 award came tothe company in recognition of its success in facilitatinginteractions between the condominium and theneighborhood and creating a linkage between residents
and the local community by designing the condominium
to be open under the concept of “Re:CONNECT,” and in
fostering communication between people from different
areas or age groups in the living environment abundantwith rich natural features by building three gardens with
ABINC certification Good Design Awarddifferent themes on the condominium site.

SocialGovernance

ESG Data

054*2 ABINC (Association for Business Innovation in harmony with Nature and Community)

Scenes Tsukaguchi*1 “ Ikimono Kyosei Business Establishment” (lit. “Business Sites in Harmony with Nature”) is the registeredtrademark of the Japan Business Initiative for Biodiversity (JBIB).

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

055

Development of Environmental Technology
Principle and Outline
The Daigas Group views technology as the foundation for its corporate competitiveness and views research and development as one of its most important strategies for differentiating itself from thecompetition. While accelerating low-carbon transitions through development of technologies contributing to the reduction of CO2 emissions, we take on the challenge of technical research anddevelopment for the decarbonization of our gas and electricity. We will actively tackle a wide range of subjects, from the advanced use of natural gas to the further utilization of renewable energy andthe research and development of gas decarbonization technologies such as methanation, to accelerate development of technologies that will contribute to achieving carbon neutrality.

Development of New Technologies that Contribute to Low-Carbon/Carbon-Neutral Solutions
The Daigas Group believes that “e-methane,*” which is synthesized from hydrogen produced using renewable energy and CO2, is the key to making city gas carbon-neutral. The Group is working on
establishing a variety of methanation technologies toward full-scale introduction of “e-methane” in 2030. Moreover, we are promoting development of technologies that contribute to further lowcarbon/carbon-neutral solutions by making use of the gas synthesis/catalyst technology, combustion technology, and material technology that Osaka Gas has developed so far. The Company has
developed a variety of natural gas combustion technologies tailored to our customers’ uses, and it is now leveraging that know-how to develop hydrogen and ammonia combustion technologies.
Such efforts include development of a small ammonia engine system in cooperation with Toyota Industries Corporation. The Company is also working on the development of chemical looping
combustion technology as a technique for producing carbon-neutral hydrogen and electricity from biomass. In addition to energy, Osaka Gas also develops and sells SPACECOOL, a radiative coolingmaterial. The Carbon Neutral Research Hub of Osaka Gas conducts these research and development projects, disseminates information, and forms business alliances. To further accelerate these
efforts, we are establishing a new research and development base in the Torishima district of Osaka City, with full-scale operations scheduled for FY2026.3.
*Synthetic methane produced from non-fossil energy sources, such as green hydrogen, is called “e-methane”.

“e-methane”—the key to low-carbon/carbon-neutral solutions created by methanation technology“e-methane,” which is produced by recycling CO2 otherwise emitted into the atmosphere and synthesizing it with hydrogen, is a carbon-neutral hydrogen carrier.
    Since “e-methane” has almost the same composition as city gas, existing city gas infrastructure and combustion equipment at customers’ sites can be used as is, enabling seamless
decarbonization during the transition period and advantageously reducing the cost of its social implementation.

e-methane Supply Chain

Methanation technologies
New infrastructure

Already established in society as existing LNG/gas infrastructure
City gas
consumers

Hydrogenutilization
Renewable energy

Green hydrogen

Methanation facility

H2
CH4

H2 O
Water

ImportDomestic
production

CO 2

e-methane

Carbon dioxide*1

Gas grid(existing infrastructure)

Methane synthesis fromgreen hydrogen and CO2
Trucks and coastal vessels

Thermal power plants(dispatchable)

Carbon recycling (CCU*2) = No increase in atmospheric CO2*1 B
 iogenic CO2 and possibly CO2 derived from DAC (Direct Air Capture: atechnology used to capture and remove CO2 directly from the atmosphere) might
be utilized in the future.
*2 Carbon dioxide Capture and Utilization

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

056

Efforts to establish three methanation technologies to enable the introduction of "e-methane"
In addition to working to scale up the existing technology, Sabatier methanation, we aim to commercialize biomethanation, a locally produced and locally consumed energy generation technology,
and to achieve early introduction of highly efficient SOEC methanation, an innovative technology.
Sabatier methanation*1 (existing technology): Scaled up and implemented in society at an early stage
Biomethanation*2 (innovative technology): Produce and use energy locally for local consumption
3 SOEC methanation* 3 (Innovative technology): Reduce cost by enhancing energy efficiency

12Roadmap for Social Implementation of Methanation Technology

2020
Timeline

2030

2040

1

Sabatier

400 m3/h

10,000 m³/hCommercialization (1% in gas grid)2

BioTech. dev.

Demo

Commercialization

3

SOEC

Tech. dev. (0.1

400m3/h)Acceleration

Large-scale demo (10,000 - 60,000 m³/h)

2050

e-methane commercialization
net zero emissions
Commercialization*1 CO2 conversion by a catalytic reaction with hydrogen derived from renewable energy, etc. to synthesize methane.
*2 Technology that uses biological reactions to synthesize methane from CO2 and hydrogen*3 Use of SOEC equipment to electrolyze water and CO2 into hydrogen and carbon monoxide using renewable energy, etc., and then synthesize methane by catalytic reaction of the hydr ogen and carbon monoxide.

Development of chemical looping combustion technology for simultaneous
production of hydrogen, electricity and CO2
Osaka Gas is working on the development of chemical looping combustion (CLC) technology,
which produces hydrogen, electricity, and CO2 by leveraging the redox action of iron oxide.
CLC technology circulates iron oxide to have it react with fuel, water, and air, through whichhydrogen, electricity, and CO2 are produced simultaneously. The fuel may be coal or biomass.
When carbon-neutral biomass fuel is used, this technology is expected to produce or supply
green hydrogen, electricity, and biomass-derived CO2.
    Meanwhile, there has been no implementation example of CLC technology aimed at
producing hydrogen using biomass as fuel. For commercialization, it is necessary to solve
technical issues such as elemental technology development toward the establishment ofsystem design technology and process verification.
    Osaka Gas aims to utilize this technology to produce and supply green hydrogen using
biomass as fuel, helping customers achieve carbon neutrality.

Our Vision for the Practical Application of CLC Technology

Fuel cell vehicles
Other sources
Released into
the atmosphere

Biomass
Carbon neutral or
negative emission

Industrial use(CCU)

CO2-free products

Industrial use

Consumers
Sequestration (CCS)

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

057

Radiative cooling material SPACECOOL®, a new product, by SPACECOOL Inc.
—Also contributing to realizing a decarbonized society with world-classcooling performance—
SPACECOOL®, developed by Osaka Gas and manufactured and sold by SPACECOOL Inc., is aradiative cooling material with zero-energy cooling capability. By releasing heat into space under
direct sunlight, it lowers the temperature*1 below the outside temperature without using energy. It
has the potential of contributing to low-carbon or carbon-neutral solutions for society as a whole.
    A demonstration test conducted by Osaka Gas found that the surface temperature of
the material was up to about 6°C*2 lower than the outside air temperature under direct
sunlight, realizing world-class*3 cooling performance.
    Using the material, two types of products (film and canvas) have been developed. The
material is expected to be deployed as products for implementing measures against global
warming, achieving energy conservation and ensuring cooling comfort. Potential specificapplications vary widely, including canvas-covered structures and container warehouses.
    The material was selected for the environmental technology exhibition at the Japan
Pavilion of the 27th Conference of the Parties to the United Nations Framework Convention on
Climate Change (COP27), which was held in Egypt from November 7 to November 18, 2022.
SPACECOOL demonstrated the material at physical and virtual exhibitions. At the exhibitions,people from various countries facing heat issues showed a lot of interest in the material.
    In the future, we would like to promote the spread of this material both domesticallyand internationally and contribute to the realization of a low-carbon or carbon-neutral society.
*1 This has been achieved by using Osaka Gas’s proprietary optical control technology to develop amaterial design that reduces the solar heat input and increases heat dissipation through thermalradiation.
*2 The temperature was measured at Osaka Gas Energy Technology Laboratories in Konohana-ku, Osaka(ambient temperature at the time of measurement: approximately 35°C). The temperature on the reverse
side of a steel sheet covered with the radiative cooling material was measured.
*3 The survey was conducted by Osaka Gas, based on published papers.

Radiative cooling material (thin film material)

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

058

059 Innovation Management Summary
060 Promoting Business Transformation with DX
063	Research and Development/Intellectual Property
064 Human Resources Summary
066 Human Resources Management067 Human Resources Development
070 Diversity & Inclusion
073 Work-Life Balance
075 Occupational Health and Safety

Social080	Communication Between Employees and Company
081 Human Rights Summary
081	Respect for Human Rights throughout the Value Chain
082 Human Rights Due Diligence
085 Action on Human Rights
087 Supply Chain Management Summary
088 Supply Chain Management
090 Customer Health and Safety Summary
091 Customer Health and Safety
096 Customer Satisfaction Summary
097 Customer Satisfaction
100 Community Summary
101 Co-creation Activities with Local Communities
105	Activities by Public Interest Incorporated Foundations

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

059

Innovation Management
Summary

Why the topic is material

The Daigas Group views technology as the foundation for its corporate competitiveness and views research and development as one of its most important strategies for differentiating
itself from the competition. We also recognize that proactively leveraging digital technology for our business, creating innovative services, evolving data management, and reforming
business processes will lead to improved business competitiveness.
    While providing a stable supply of city gas in the Kansai region, the Group has expanded its business into peripheral areas and developed together with the region by working
on research, development, and practical application of various new technologies that lead to comfortable lives and development of business for our customers.
    To attain sustainable development and growth that address the needs of the environment and society, the Group will create new value and provide a wider range of services
and new technologies to customers in collaboration with various stakeholders.
Items to be addressed

Specific initiatives
Policy and promotion system

Promoting business
transformation with DX• Data management evolution• Practicing innovative service creation• Operational process innovation

We aim to become a “corporate group capable of keeping on changing” to continue providing value amid rapid change in society
and the work environment as well as changes in customer values. We will proactively leverage digital technology, which is
progressing rapidly, for our business and accelerate innovative service creation, data management evolution, and operational
process innovation.
    In April 2022, we established the DX Strategy Department at the Corporate Planning Headquarters, and the DX Committee, a
corporate committee, performs cross-organizational coordination and promotion of DX for the entire Daigas Group.
Initiatives undertaken in FY2023.3• Transforming value for customers• Building systems and structures that take advantage of Group’s collective strength• Transforming employee value through “Daigas X (Daigas Transformation)”• Human resources development
Policy and promotion system

Research and development/
intellectual property•R esearch and development of technologies
that contribute to achieving carbon
neutrality• Technology development to ensure stableenergy supply and safety• Research and development for the creationof new businesses• Securing and utilizing intellectual property
rightsIn line with the Medium-Term Management Plan 2023, the Carbon Neutral Vision, and Energy Transition 2030 (ET2030), we aim torealize a low-carbon, decarbonized society and promote research and development of technologies to ensure a stable energy supply
and safety as well as to create new businesses. Based on the rules and regulations related to technological development, we makedecisions on the implementation of technological development, allocate appropriate budgets according to the importance of thetheme, and follow up on progress at the time of implementation.
Initiatives undertaken in FY2023.3• Promoted research and development, including that of methanation, to achieve carbon neutrality• Continued to promote technological development to ensure and improve safety, and research and development to create new
businesses• Secured and utilized intellectual property rights in conjunction with business and technology development strategies• Promoted open innovation activities that actively integrate and utilize technologies owned by Osaka Gas and those owned byexternal parties

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

060

Promoting Business Transformation with DX
Principle and Outline
We aim to become a “corporate group capable of keeping on changing” to continue providing value amid rapid change in society and the working environment as well as changes in customer values.
We will proactively leverage digital technology, which is progressing rapidly, for our business and accelerate innovative service creation, data management evolution, and operational process innovation.
We will change our business operations to enable them to respond rapidly and flexibly to any changes to enhance productivity dramatically to create value sustainably for realizing MediumTerm Management Plan 2023 and Long-Term Management Vision 2030.
In the new age in which both our customers and services rapidly change, we will aim for transformation of the business itself and for innovation as a corporate group that can keep onchanging by revising constantly and flexibly our business model, operations, rules, and systems, which used to be taken for granted.
To make a major transformation to realize our vision, we will work on building a promotion system driven by top management, strengthening human resources development, demonstrating thecomprehensive strength of the Daigas Group, including OGIS-RI Co., Ltd. and building alliances with our partner companies.

DX Promotion System

DX Promotion System

In April 2022, to realize “what we aim to be” and acceleratebusiness transformation (creation of new businesses/
sophistication of existing businesses/operational process
innovation) and system transformation, we established the
DX Strategy Department under the Corporate Planning
Headquarters as an organization consolidating theInformation/Communication Systems Department and the
DX Promotion Office.
    We also established the DX Committee as acompany-wide committee to perform cross-organizational
coordination and promotion of DX (business transformation
utilizing digital technology) for the entire Daigas Group fromthe perspective of alignment with the business, IT andfinancial strategies, etc., and we aim to realize the groupwide vision and transform the business.

Representative Director and President

DX Strategy

What We Aim To Be

Management Meeting
Corporate committee: DX Committee
Group-wide
activities

NEW

Data management evolution

Innovative service creation

Operational process innovation

Enhancing value creation capabilities

Responding quickly and flexibly
to changes

Focusing on work that enhancescompetitive advantage

Creation of
surplus capacity

Optimization foreach customer

DX Strategy Dept.,
Corporate Planning HQ

Support acrossthe organization

Initiatives during the Current Medium-Term

Each organization
OGIS-RI Group

Full utilizationof data assets

Group's collective
Top-down DX
strengths and alliances promotion system

Development andrecruitment ofdigital talent

System renovation,
securityenhancement

Present status
Gas business-centric business operations, rules, operational process, and system structure*(*Based on a household, month & fiscal year, fixed operational process)Practicing innovative service creation
We will offer various services with higher value by incorporating trends and the diverse needs of customers without delay. This does not only refer to the development of new businesses and newservices, but also leads to increasing sophistication in existing businesses, resulting in an increase in customer accounts, business opportunities, and net sales as well as raising business operations
to the next level. In rapidly changing times, it is important to “accelerate the trial and error cycle.” We will acquire skills through practice, innovate the system itself and foster customs and mindsets
across the entire Group, which enable the Group to move forward with new initiatives aggressively and quickly.

Operational process innovation

We will thoroughly review our internal operations from “the perspective of customers.” We will also focus on merging and abolishing operations as well as standardizing and aggregating different procedural
operations among organizations to broadly redesign the entire operational process. Furthermore, we will reduce the workload for remaining operations with digital technologies such as AI and RPA.
    Through these transformations, employees in the Group will be able to generate extra power to work on more non-routine and discretionary operations, as well as operations that require
higher expertise and judgment, in a comfortable working environment. This will allow employees to devote more energy to providing better value to customers.

Data management evolution
The Group has been leading efforts to utilize data, placing an internal “Business Analysis Center” at its core. In the future, utilizing valuable assets such as data as our strengths is the key to value
creation and growth strengths. For example, if we can catch customer’s needs from data, we can offer services optimized for each customer. We will continue to create new value in customer
experiences and our supply chain by developing our initiatives in the past and evolving data management further.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

061

Key Initiatives
Transforming value for customers
We are giving a concrete form to what we aim to be in 2030. To achieve this goal, we havestarted to transform our business activities to keep providing value to customers. Under the
key phrase of “All for everyone’s smile,” Osaka Gas Marketing Co., Ltd., which conducts
business for residential customers, aims to create a future where not only customers but also
business partners and Group employees are smiling. The Group will continue to provide
optimized experiences tailored to each customer by taking advantage of digital technologies
and transforming services and communication in accordance with customer and societal
needs. Helping customers achieve a safe and secure, comfortable and convenient, andenergy-saving and eco-friendly lifestyle, we aim to be a “housing and lifestyle partner.”

Transforming employee value through Daigas X (Daigas Transformation)
In FY2023.3, we launched an initiative to evolve how we work and operate, so that we cankeep producing a virtuous cycle of employee and company value creation in unprecedented,
rapidly changing times.
    In FY2024.3, the initiative was named “Daigas X (Daigas Transformation),” and sharedwith all employees via the intranet along with specific measures and what we aim to be.
Daigas X rolls out activities that aim to enable diverse human resources to take on challenges,
keep learning, and grow, as well as toOffering Information on the Intranet
let us speedily explore and deepen our
understanding of unprecedentedchanges. Simultaneously, we are
creating environments and systems
that support the initiative. Eachorganization considers what they aim
to be and what action they take to that
end, based on the reality in theorganization and on the frontline. In
parallel, the company is developing
internal mechanisms, such as theintroduction of chat tools to stimulate communication, and the expansion of learning
opportunities for employees to encourage autonomous career development.**Please see

P.66 for information on measures for voluntary career development.

Building systems and structures that take advantage ofGroup’s collective strength
Under the DX promotion system built in FY2023.3, we are building group-wide systems andstructures from FY2024.3 to accelerate DX promotion, with stronger collaboration with OGISRI Co., Ltd. in charge of the Information Solutions Business. Specific initiatives include thelaunch of “DX Practical Training,” a consulting service that works together with eachorganization to help resolve their issues. This aims to support Group employees to improvebusiness operations and take on the challenge of transformation. In collaboration with OGISRI Co., Ltd., we are also taking advantage of the Group’s collective strength in working on
Daigas X and the transformation of customer value in the residential energy business.

Human resources development
To focus on the development of human resources who can integrate business with digital anddraw and promote what we aim to be, we are promoting systematic training by job level.
    In FY2023.3, we invited external experts for monthly lectures and dialogues for the
management, which featured case studies of corporate reforms, trends in the shift ofcustomers’ values, and other topics. The contents were shared with employees as well. We
also develop core human resources who take advantage of digital technologies for operational
reform and new business planning. After defining the skills necessary for core humanresources, we implemented a development program that includes lectures, OJT, and feedback
interviews. As of April 2023, a total of approximately 120 employees have undergone thedevelopment program. For all employees, we offered e-learning, as well as courses for
obtaining qualifications, and enhanced reskilling support. From FY2024.3, our initiatives will
target managers as well. We thus aim to build a system where top-down and bottom-up
approaches create synergy
Development Program by Job Level

TargetManagement

Development program•L ectures by and dialogues with external experts held about once a month(approx. 20 participants)

Managers•L aunch initiatives in FY2024.3

Core humanresources• Development program including lectures, OJT, and interviews(targeting approx. 120 employees)

All employees• E-learning, courses for obtaining qualifications• Share lectures for the management
 nhance reskilling support•E

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

DX in Gas Production Business—Optimization of LNG Tank Operation
Planning
Once LNG is delivered to a manufacturing plant, it is stored in tanks and then delivered
according to demand, which requires appropriate heating value management and inventory
control. The formulation of the tank operation plan requires expertise of skilled personnel
since complex equipment configurations, operational constraints, city gas demand andvarious other factors need to be considered. We are working to optimize tank operation
planning, using this expertise and mathematical programming.
LNG inventory management
at terminals

Receiving LNG carriersSocialStoragetank

Storagetank

Customer site A(partly consumed in-house)

City gas

Receivingtank

Storagetank

Storagetank

Storagetank

Flow of service provision
Flow of submission of plans

Conditions to consider

Carrier allocation plan

Calorific value of LNG

Tank availability and inventory

Power transmission and distribution networks
of general power distributors

Customer site B

Wheeling and self-consuming
Surplus power

Power generation
prediction by weather
forecasting technology
Flow of electricity

Power plant062

As one of our low-carbon and decarbonization solutions for corporate customers, we havestarted proposing a new electricity scheme using renewable energy, which is greatly affectedby weather conditions, by using the weather forecasting technology and AI developed
independently by Osaka Gas for output and demand prediction to improve accuracy.

Gas transmission

Storagetank

ESG Data

AI-Based Self-Wheeling Scheme for Renewable Electricity—Starting supply and demand management service for self-wheeling,using a solar power generation system—

Solar power
generation systems

ReceivingtankGovernance

Demand prediction
by proprietary
AI technology
Power generation/sales plan

Demand/procurement plan

Organization for Cross-regional Coordination ofTransmission Operators, Japan

Status of facilities, etc.

Derive plans for receiving LNG vessels, LNG inventory management andgas delivery, respectively, to keep inventory and calorific value within
control limits and to minimize operational load.

Digital Utilization in Gas Supply Equipment Management
Since the gas supply business involves a great deal of on-site work, including gas pipe
installation, maintenance and management, and safety monitoring, and involves an extremely
large number of employees and partner companies, we are promoting the use of digitaltechnology for the purpose of future efficient business operation, improvement of safety
quality, and securing of technology and expertise.
    We are operating a mapping system that displays and manages information on gas
supply equipment on a map, including the location of approximately 60,000 km of gas pipes
and the history of past gas works and works accepted from other companies, and using thisinformation as the basis for various operations related to gas supply. By managing absolutecoordinates based on latitude and longitude coordinates, we increased the accuracy of
information on the location of gas pipes, which was previously handled based on relative
distances to buildings and other structures.

Indicating distances

Improved mapping system

Indicating coordinates

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

063

Research and Development/Intellectual Property
Principle and Outline

Open Innovation Activities

The Daigas Group consider research and development to be one of the most important
growth strategies for the Group. In addition to ensuring and improving safety, we areconducting research and development aimed at improving operational efficiency and reducing
equipment-related costs through the use of digital technology, improving customer
convenience, and enhancing the sophistication of existing services. We are also engaged inresearch and development for the creation of new businesses and research and developmentthat contributes to the realization of carbon neutrality.
    Furthermore, we regard intellectual property rights as an important management
resource and are actively working to secure and utilize the rights in conjunction with ourbusiness and technology development strategies. We are also actively promoting open
innovation activities to accelerate and streamline development and create new technologies
and products by actively integrating the Group’s proprietary technologies with those of
external parties and utilizing them.

Open innovation refers to an efficient approach used to seek solutions outside the company totechnology development problems that Osaka Gas is unable to solve independently and to
speed up technological development for higher efficiency. Osaka Gas has pioneered thisapproach since 2009. Our efforts have led to the building and expansion of a network ofpartnerships (Open Innovation Platform) with universities, public research institutes, small
enterprises, large corporations, ventures and overseas companies.
    To find outside partners to work with, we have revealed details of our technology to-do
list, something we have rarely done in the past, in order to solicit promising technical ideas
from outside parties. After we launched full-fledged open innovation activities in FY2010.3, wehave achieved many matchmaking opportunities. Some cases have actually led tocommercialization and practical applications.
    For example, gas pipe patrols using technology that automatically recognizes the part
requiring construction with an on-board AI camera, and the use of drone technology in facility
inspections are examples of value-added products created by combining our technology withexternal technologies.
    The task ahead is to introduce some of the efficient technologies that we obtained
externally, and together with our alliance partners, actively promote the creation of new R&D
themes and creation of new businesses through the Open Innovation Platform.

Patent Portfolio by Business Type (Group)
グループ分野別保有特許件数

0歳未満の社員）
2022 年3月期

Fiscal year ended March 31,2023

1.30%

2,885patents

Open Innovation(patents)

3,500

1.36

3,000

1.30

1.05

3,286

2,500
2,000
1,500
1,000
500
0

20.3

21.3

19.3

22.3

3,194
515

515

3,015

2,885

2,913
508

490

476

How Open Innovation Works

699

725

499

515

Public release of
informationon technology
needs

678

708

701

607

583

508

366

337

301

547

508

463

291
430

260
418

573

543

534

504

491

20.3

21.3

22.3

23.3

DaigasGroup(FY)

Gas production, distribution, and supply
Residential gas appliances
Commercial and industrial gas equipment
Cogeneration
Materials technology
Other• Business matching event• Use of website

Creationof new value• Developing of new product• Cost reduction• Upgrading of functions• Launch of new businesses
etc.

Proposal on
technologicalseeds

Ventures

Companies

Universities

Overseas

Publicresearch
institutions

Reward System for Inventors
グループ水使用量

2022system
年3月期 in which inventors who have madeOsaka Gas has an invention achievement reward
significant contributions to its business are rewarded in order to motivate employees to invent
取水量
排水量 activities.
3and encourage百万m
intellectual
property
百万m3    We disclose the results of the review of achievement rewards on the internal portal site,
and respond to inquiries and opinions from employees regarding the results of the review, inan effort to operate the system in a fair and transparent manner.

594（百万m³）

800
600

633 630

595 585585

591 582568 558

594 585

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data064

Human Resources
Summary

Why the topic is material

In the Daigas Group Corporate Principles, the Group declares its aim to create value primarily for customers, as well as for society, shareholders, and employees. Based on the belief thathuman capital is a source of value creation, the Group aims to be a company where employees can achieve personal growth through their work.
    Based on the notion that creating a comfortable work environment that takes into consideration the health and safety of our employees is the foundation of all our operations, we areworking to prevent occupational accidents and promote health and wellness of our employees.
We respect the individuality and self-reliance of all employees and actively promote diversity, equal opportunity, and inclusion so that they can take on challenging and rewarding work.
We position employee engagement, development of employee skills, and diversity & inclusion as material issues.

Items to be addressed

Human resourcesmanagement•R etention of necessary personnel torespond to the evolution of our businessportfolio• Maximization of the entire Group’s
performance by assigning the right people
to the right jobs
• Revitalization of individuals by increasing job
satisfaction
Materiality Employee engagement

Specific initiatives
Policy and promotion system
We are engaged in various initiatives to improve employee satisfaction and the Group’s entire performance in a rapidly changing businessenvironment with increasingly diversified employees’ work perspectives.
    The personnel system of the Osaka Gas helps all employees understand their roles and expectations through meetings with theirsupervisors, who serve as personnel development advisors, and allows employees to choose their own career course to pursue.
    Moreover, we have established the Daigas Group Safety and Health Council to discuss measures for and share information on
occupational accident prevention and health maintenance and enhancement.
    Each year, we measure employee engagement through the Attitude Survey of Daigas Group employees, reflecting the results ineach policy.
KPIs based on the materiality

FY2023.3 results

Employee engagement

Conducted the Employee Attitude Survey. Maintained four overall indicators at appropriate levels

Initiatives undertaken in FY2023.3• Strengthened recruitment of highly specialized human resources and established a multi-track career path system by offering new
career paths• Introduced a talent management system• Continued to implement improvements to the workplace environment to make it more comfortable to work in
Policy and promotion system
The Daigas Group’s Long-Term Management Vision 2030 lists the promotion of work style reform and development of human resources asimportant goals. We consider it vital to develop personnel who are capable of working actively in a rapidly changing business environment,
and to that end, we offer a range of training and educational programs aimed at developing individual capabilities.
    Osaka Gas offers a wide range of training programs for all positions and job descriptions, in addition to the training system foreach career course. These include training programs by level along with self-directed training.

Human resources
development•R evision of the specifics of the training
contents in light of the employees’ desired
level of growth and the personnel profile• Implementation of DX human resources
education
Materiality Development of employee
skillsHuman Resources Department

Leading the development of common elements across the company

Respective organizations

Leading the development of organization-specific elements (operational expertise, acquisitionof qualifications, etc.)

Supervisor

Person responsible for development

Instructor for new employees

Person promoting the development of new employees’ skills during their first three years of
employment

General affairs of the eachorganization

Confirmation of the development status and support

KPIs based on the materiality

FY2023.3 results

Annual average hours of training
per employee

Practical training: 26.3 hours/person; e-learning: 5.8 hours/person

Initiatives undertaken in FY2023.3• Periodically conducted follow-ups and assessments through meetings between employees and their supervisors based on
Management by Objectives (MBO) approach• Developed each individual’s spontaneous desire and motivation for growth and formulated a future career plan

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

Items to be addressed

Diversity and Inclusion

For empowerment of female employees:• Implementation of career education(including balancing of work and childcare)• Creation of an environment where life
events do not disrupt a career• Enhancement of recruitment activities forfemale students
Materiality Diversity and Inclusion

Work-life management

Labor safety and health• Implementation of measures for supporting
employees balancing work and life• Efforts to improve productivity and reduce
working hours• Support for community activities
involvement•C ontinued implementation of measures toprevent occupational accidents• Practical implementation of Kenko Keiei*• Continued support for labor health andsafety management at group companies*The term “Kenko Keiei®” is a registeredtrademark of Non-profit Organization
Kenkokeiei.

Communication between
employees and company•C ontinuing to set up opportunities for direct
dialog between Osaka Gas President andgroup employees• Maintaining and strengthening sound andgood labor-management relations to resolve
issues• Continued implementation of the in-houseaward system

SocialGovernance

ESG Data

065

Specific initiatives
Policy and promotion system
We take action across the organization in line with the UN Global Compact, related laws, and the Daigas Group Diversity Promotion
Policy to make improvements in recruitment, human resources development and the workplace environment, led by the dedicateddivision for diversity promotion.
KPIs based on the materiality

FY2023.3 results

Percentage of women among:• Executives/Directors• Newly promoted to middle
management positions• New recruits for career-track
positions•P ercentage of women among Executives/Directors: 13.3%/10.0%(Results after the Annual Meeting of Shareholders held in June 2023: 26.7%/20.0%•P ercentage of women among all career-track employees promoted to middle management
positions: 14.3%• Percentage of women among new recruits for career-track positions: 28.1%

Initiatives undertaken in FY2023.3• Implemented self-motivated career development through the mentoring program• Strengthened cooperation between those engaged in employee development (supervisor, HR departments in the organization andhead office), using meeting sheets from pregnancy to return to work
• Held information sessions that introduce a range of actual career paths to clarify how employees can play active roles after joining the company
Policy and promotion system
We aim to create a corporate culture in which employees can maximize their abilities by striking a balance between rewarding workand fulfilling personal lives and involvement with society. Furthermore, labor and management are working together to realize awork-life balance by systemizing support measures needed by employees at each life stage and creating a workplace environmentthat facilitates the use of such measures.
    We are working on work-style reform while considering measures to promote highly productive and creative work styles
through corporate committees called the Efficient Work Styles Committee and the DX Committee.
Initiatives undertaken in FY2023.3• Expanded systems to promote work styles that are not restricted by location or time (telework, flexible work hours and paid leave by the hour)• Implemented mindset-building programs to promote the penetration of systems that support balancing work with childcare, nursing care,and medical treatment
Policy and promotion system
In March 2021, we established the Daigas Group Declaration of Health and Productivity Management by summarizing our attitude
toward Kenko Keiei (health and productivity management), which was indicated in the Daigas Group Corporate Principles, theDaigas Group Charter of Business Conduct, and the Daigas Group Code of Business Conduct. We also established the Daigas
Group Action Guidelines “7 Rules for Being Healthy” to encourage employees to live healthy lifestyles.
    In addition, in order to create a workplace where employees can work safely, based on the idea that ensuring safety andmaintaining and improving physical and mental well-being are key to all operations, we declared in the Daigas Group Code ofBusiness Conduct that we will prevent occupational accidents and promote fitness.
Initiatives undertaken in FY2023.3• Continued implementation of measures to prevent occupational accidents: Continued implementation of safe driving education andheat stroke countermeasures• Practical implementation of Kenko Keiei: Health promotion activities based on the Daigas Group Action Guidelines “7 Rules forBeing Healthy”• Implementation of health-related training: 9% of employees participated• Continued support for labor health and safety management at group companies: Once a year each group company prepares asafety and health action plan. Conducted a survey on the status of labor health and safety management in conjunction with thesubmission of the action plan.
13,715 employees from 34 companies (total of Osaka Gas and affiliated companies) received regular health checkups at the
Osaka Gas Health Development Center.
Policy and promotion system
The Daigas Group believes that it is important for employees and the company to work together to realize the healthy growth of eachgroup company with a sense of mutual trust and tension.
    To this end, we promote communication between employees and the company by opinion exchanges at informal meetings
between the labor union and management and various study committee meetings, as well as workplace visits by the President of
Osaka Gas to group companies and organizations.
Initiatives undertaken in FY2023.3• Continuing to set up opportunities for direct dialog between Osaka Gas President and group employees: 11 times provided• Maintaining and strengthening sound and good labor-management relations to resolve issues: 9 work councils held
• Continued implementation of the in-house award system: President’s Award granted once

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data066

Human Resources Management
Principle and Outline
To achieve its sustainable growth, the Daigas Group is working to maximize the value of each and every employee by hiring and fostering human resources who will continue to create value, creating
an organizational culture that accepts diverse values and encourages challenges, and ensuring safety and maintaining and improving the health of its employees. We will continue to contribute tosolving social issues, promote diverse and creative work styles, and work even more actively to create a rewarding and comfortable work environment.
    Furthermore, based on the idea that it is important to create disruptive innovation in order to enhance our corporate value over the medium to long term and the driving force for such innovation is acombination of diverse individuals, we promote diversity, equal opportunity and inclusion and actively incorporate diversity in terms of experience, sensitivity and values into our organization. We havetraditionally been helping female, elderly, disabled and non-Japanese workers play an active role and making considerations to ensure that they are not disadvantaged because of their minority
status. We will develop an environment for them to further demonstrate their abilities.

Efforts to Assign the Right People to the Right Jobs

Efforts to Maintain and Improve Employee Engagement

The Daigas Group aims to implement business portfolio management based on the threepillars of “Domestic Energy Business,” “International Energy Business,” and “Life & Business
Solutions Business.” To maximize performance by ensuring the quality and quantity of
personnel to that end and by empowerment of diverse human resources based on theprinciple of assigning the right people to the right jobs, we work to hire and foster humanresources who can flexibly respond to changes in the business environment and highly
specialized human resources. In particular, we secure human resources while expanding
mid-career recruitment to meet the growing need for highly specialized human resources torealize our management strategies, which include initiatives to achieve carbon neutrality,
accelerate international energy business expansion, and transform through DX. Recognizing
the importance of sustainable organizational management in achieving our management
strategies for the future, we will work to secure personnel in a planned manner and appoint
personnel with an awareness of human resource development.

In FY2022.3, we reviewed the content of the attitude survey, which was conventionallyconducted at Osaka Gas, and designed and conducted the new Employee Attitude Survey soas to grasp employee engagement across the group. In a survey conducted in FY2023.3,
5,769 employees at Osaka Gas responded, and the response rate was 92.5%. At affiliatedcompanies, 7,305 employees responded, and the response rate was 89.9%. Four indicators
were used as evaluation indicators: “overall satisfaction,” which indicates the current level ofsatisfaction with the company, “loyalty,” which indicates the level of dedication to the company,“intention to continue working,” which indicates the intention to continue working for the company,
and “recommendation intention,” which indicates the degree to which employees recommend thecompany to their friends and acquaintances. It was confirmed that the levels at Osaka Gas and its
affiliated companies were higher than those in general. We analyze the results of the Employee
Attitude Survey by age bracket, organization, etc., and implement measures to address
identified issues.

Introduction of Talent Management System

Data on Osaka Gas Workforce

Osaka Gas considered the introduction of a talent management system and has begun using
the system on a trial basis since FY2022.3.
    The job fields are classified into a total of 18 areas, including international business,
electricity business, and financial operations. We reorganized the duties experienced by thetarget employees by linking them to their respective job fields, and we consolidated theexperience of each member within the company.
    By organizing these job requirements and consolidating human resource information toform foundations, and by matching the organized job requirements with human resource
information, such as personal characteristics and transfer experience, we aim to maximize
performance through the appointment of the right persons in the right positions and theempowerment of diverse human resources.
    Furthermore, we will formulate a succession plan mainly for management posts, aiming
to achieve sustainable performance as an organization.

The number of employees at Osaka Gas as of the end of March 2023 was 1,163 (male: 895/
female: 268). For recruitment, a joint recruitment seminar is held by Daigas Group companies. In
FY2023.3, ten companies participated in the seminar, where approximately 320 students were
provided explanations on the businesses of each group company and the type of personnel thatthey are looking for. Furthermore, in FY2023.3, we provided approximately 500 students withinternship opportunities to gain work experience. The number of employees who joined thecompany through mid-career recruitment was 29. (The ratio of those hired through mid-career
recruitment to full-time workers was 16.7%.) We are also actively hiring locally at our overseas
affiliates.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

067

Human Resources Development
Principle and Outline
The Daigas Group aims to become a group of companies at which all employees can find personal growth through their work. We have introduced a career-course-specific human resources systems
designed to respect and put to full use the individuality and autonomy of employees, and we have been conducting a wide range of training. Overseas business training is also provided to develop
personnel who can play an active role globally. Furthermore, we have introduced an employee evaluation system that is highly objective based on the Management by Objectives (MBO) method, as
well as a system that allows employees to take on the challenge of voluntary career development.

Personnel System

Training System

Personnel system to develop human resources according to their roles

Career-course-specific training

For the steady growth and development of the company, Osaka Gas has introduced a careercourse-specific personnel system in which roles and expectations are clearly defined for all
employees and employees are appropriately employed, fostered, evaluated and assigned
according to each role. Under this personnel system, employees themselves conduct course
registration.

To enable employees to play an active role in their respective courses, we systematize training
and conduct training sessions in a planned manner to have participants acquire abilities
required for each career course.

Outline of the Personnel System
Expert Course

Organizational
Leadership Course

Planning andManagement Course

Specialist Course

Professional expertisethat is outstanding inindustry and company

Ability to achievegoals, ability tocoordinate personnel
relationship

Decision-making
ability, ability toachieve goals

Highly professional
expertise that is
outstanding evenoutside the company

Meister Course

Management Course

General Course

Specialist Course

Training for workplacepros and job pros

On-site/job training ofsupervisors andmanagers

Training ofstrategic staff

Training of advanced
specialists

Professional Course

General/Specialist Course

Placement,
training

Training for workplace pros and job pros

Training of strategic staff and advanced specialists

Employment

Employment forProfessional Course

Employment for General/Specialist Course

Meister Course
This course is designed to foster business professionals who achieve high performancethrough their extensive business experience and outstanding skills and who contributeto business performance by passing on their skills and know-how. Employees
systematically acquire required skills and know-how according to the nature of theirwork at the human resource development center established at each business unit.
Management Course
This course is designed to develop future managers and supervisors who will manage
operations based on their wealth of work experience and leadership skills and to promoteorganizational vitality and the development of subordinates. Selective training sessions
and other programs are provided to enhance management and leadership skills.
General Course
This course is designed to develop human resources who will lead an organization basedon a wide range of work experience, including management, while taking on staff duties,
such as strategic planning for the business unit and the Daigas Group as a whole. We
have an in-house business school for learning the knowledge and skills that form thebasis of strategic planning, such as logical thinking, marketing, accounting and finance.
Specialist Course
This course is designed to foster specialists who will draft strategies for the business
unit and the Daigas Group with a high level of expertise to help with decision-making
and realization of such strategies. In addition to the in-house business school for the
General Course, we provide in-house study sessions, etc. to learn advanced expertisein each business field.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

Training for all job levels

Training to develop human resources leading overseas operation

Training for young employees

Overseas business training systems

Osaka Gas positions the first three years after employees join the company as a period for nurturing
young employees and encourages them to form their foundations as members of society.
    After acquiring basic conduct and attitudes as a member of society throughintroductory training at the time of employment, each employee receives follow-up training
every year to enhance the abilities required at each stage of growth. For the same period, an
instructor assigned to each newly hired employee
provides guidance on work to promote further
growth.

In order to develop a large number of human resources who can play an active role inoverseas business, we send personnel appointed by each organization to carry out overseas
business to a short-term intensive overseas business training curriculum conducted overseas
or in an environment in Japan close to an overseas environment.

068[Specific curriculum examples]
Overseas Trainee System (a system under which employees are assigned to affiliatedcompanies under the Energy Resources & International Business Unit or overseas research
institutes as trainees for a certain period of time),
short-term overseas language training, etc.

Studying-abroad program
We send employees to study at overseas universities inorder to have them foster a sense of globalization andacquire management literacy.

Language learning support system

Training for young employees

Training system for the Daigas GroupTo enhance the Daigas Group’s human resource development support measures, we offer
systematized training programs that are highly requested by group companies. In addition toprograms for all job levels, the system is designed to encourage self-directed careerdevelopment and personal growth by providing self-development support programs.

Newly appointed director training
Management seminars
Purpose: To improve managerial skills and build sympathetic qualities

Training for managers

Mid-level
employees

Junior/new
employees

Self-discovery training
Purpose: To raise self-awareness regarding the skills andqualities needed for workplace management and to foster
the desire to develop one's own abilities
Managerial skills booster program
Purpose: To develop in managerial candidates an understanding ofmanagerial skills and aid in their acquisition
Mid-career training
Newly appointed instructor training
Newly hired employee training

Online study courses

Mid-level leadership program
Purpose: To develop the core leaders of the organization

Accounting and financial affairs seminars

Enlightenment program for manager candidates
Purpose: To raise self-awareness regarding the skills and qualities
needed for organizational management and to foster thedesire to develop one’s own abilities

Challenge seminars (self-directed training)

Managers

Our employee who experiences
working overseas under the Trainee
System (second from right)

Employee Performance Evaluation and Interviews
Aiming for evaluations that lead to growth

Outline of the Training System for Daigas Group
Executives

We have a support system for employees to learn
English in order to nurture human resources who canplay an active role both in Japan and abroad.

Osaka Gas is using two evaluation indicators, performance evaluation, which measures thedegree of performance based on the Management by Objectives (MBO) method, and role
expectation evaluation, which evaluates the level of performance of daily activities. Whileenhancing opportunities for meetings between supervisors and subordinates, we clarify each
employee’s strengths and areas for improvement, and supervisors give appropriate advice,leading to each employee’s skill development.
    In performance evaluation, in which employees set their own goals, we encouragethem to take on even more aggressive challenges by appropriately evaluating not only
results but also processes in the course of work.
Evaluation System
Performance assessment:
Management by objectives (MBO)• Assessment of level of attainment of worktargets• Assessment of how well actions being
carried out in relation to expected role
Role expectation assessment(abilities, action assessment)

Bonus merit

Promotion,
salary increase

Salary increase merit

Bonus• Overall judgment

Monthly salaryCompliance set as a personnel evaluation item
Since FY2009.3, we have set compliance initiatives as one of the evaluation items in the role
expectation evaluation. This promotes compliance with laws and regulations and ethical standards.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

069

Furthering Employees’ Careers at Osaka Gas
Creating a system that encourages employees to take on challenges on
their own initiative
Osaka Gas provides an opportunity for all employees to have a self-observation interview oncea year, in which each employee reflects on the satisfaction and performance of his or her
current job, proactively draws up desired mid- to long-term career plans, and expresses his or
her desired career path, etc. By taking into consideration the opinions and wishes of each
employee obtained through these interviews, we are able to make decisions on assignments
and other matters, thereby raising awareness of the need for employees to shape their careers
on their own.
    We have a Challenge System in place that allows employees to choose the work thatthey are interested in or want to do from among internally advertised jobs, encouraging
employees to seek career development on their own accord. A total of more than 280
employees have been reassigned through this system since FY1989.3, when it was launched.

Support for self-development
Encouraging self-development
We offer Challenge Seminar Training Courses (approximately 100 courses per year) for all
Daigas Group employees, allowing them to acquire advanced business skills at theirdiscretion. In addition, to improve the skills of employees, we encourage them to take various
correspondence training and education courses by subsidizing a portion of the fees for thesecourses.

Skill development support
Aiming to improve field operations skills
In order to provide safe and reliable products and services to our customers, the Daigas
Group provides technical training for employees in the management of LNG terminal facilities,
gas supply pipe installation and safety inspections, and equipment installation and repair.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

070

Diversity & Inclusion
Principle and Outline

Daigas Group Diversity Promotion Policy

As a way of enhancing its corporate value, the Daigas Group believes that it is essential for the Group to promote diversity in its corporate membership and corporate structure whereby employees
can maximize their potential, irrespective of gender, age, nationality or physical disability. Recognizing that it is necessary for the Group to foster a corporate culture, the Group has adopted the
Daigas Group Diversity Promotion Policy aiming for people with diverse personality and talent are respected, accepted, they can feel rewarded and fulfilled through their work.

Supporting a More Active Role for Female Employees
As the working population is expected to decline in Japan, Osaka Gas believes it important to accept diverse values and has been striving tocreate a work environment where female employees can exercise their abilities and play active roles. With their aptitude and wishes taken into
account, female employees have been displaying their abilities in various fields. Under the Daigas Group Diversity Promotion Policy, we have
set numerical targets of increasing the percentage of women on the board and in executive positions to 20% or higher, respectively, and thepercentage of women among career-track employees promoted to middle management positions*1 to 30% or higher by FY2031.3 and of
maintaining the percentage of women among career-track hires at 30% or higher, and we will promote various initiatives and enhance various
systems. We have made various efforts to achieve a healthy work-life balance and taken measures for career development. These endeavors
have led to a steady increase in the percentage of women in middle management positions. Osaka Gas has won the “Eruboshi” (highest level)
certification from the Minister of Health, Labor and Welfare as an excellent company in terms of the status of women’s participation andadvancement in accordance with the Act on the Promotion of Women’s Participation and Advancement in the Workplace. In FY2022.3, Osaka
Gas was also selected for the Nadeshiko Brand by the Tokyo Stock Exchange (TSE) and the Ministry of Economy, Trade and Industry as oneof the TSE-listed companies which actively promote the utilization of female human resources, including the development of an environment
where women can continue to work.
    Osaka Gas has also been selected as a constituent of the MSCI Japan Empowering Women Index (WIN), an ESG investment index forJapanese stocks adopted by the Government Pension Investment Fund (GPIF). In FY2019.3, Osaka Gas became the first gas provider toreceive gold in the PRIDE Index, Japan’s first index introduced by a volunteering group called “work with Pride” to evaluate corporate efforts to
support inclusiveness of LGBT employees and other sexual minorities.
*1 P ercentage of women among all career-track employees promoted to middle management positions:
The percentage of women promoted to middle management positions among career-track employees promoted to managerial positions in that fiscal year(including loan employees)

Gold in the PRIDE Index

Nadeshiko Brand

MSCI Japan Empowering
Women Index (WIN)

Osaka Gas acquires
Eruboshi certification(third stage,
which is the highest)

Change in the percentage of women in managerial positions (Osaka Gas)*2
The target of 5% or more for the percentage of women in managerial positions was attained by FY2021.3*2 Percentage of women in manager positions or higher (non-consolidated)

Percentage of female employees inmanagement positions•

FY2005.3

FY2016.3

FY2017.3

FY2018.3

FY2019.3

FY2020.3

FY2021.3

0.3

2.3

2.7

3.8

3.4

3.5

5.0

In FY2022.3, a new indicator was set to attain “30% or more for the percentage of women among employees promoted to managerial positions by FY2031.3 (managerial positions changed to“managerial positions or equivalent,” including Osaka Gas’s loaned employees).”
FY2022.3

FY2023.3

Percentage of women among all employees promoted to managerial positions*3

6.3

14.3

Percentage of female employees in managerial positions*4

4.2

4.5s

*3 The percentage of women promoted to managerial positions among career-track employees promoted to managerial positions in that fiscal year (including loan employees)*4 For the percentage of female employees in managerial positions, the target was changed from female employees on a non-consolidated basis to all employees, including loan employees.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

071

Main Actions Taken in FY2023.3
Specific initiatives in FY2023.3
Recruitment

Holding of diversity seminars to introduce female employees’ career paths and workplace environments where they are playing an active role; Holding seminars for science-major female students
WebsitePosting of articles about career plans pursued by female workers

Transfer and appointment

Transfer and appointment based on individual development plans suited to each employee
Career-design seminars
Mentor system (mentoring program)*Roundtable talks between female workers on careers(strengthen connections with internal role models)

Career education
Interviews with young workers during their training period (young workers when they are employed/after assignment/after three years)

Development of
human resources

Dispatch of employees to an external organization that supports the empowerment of women, the “Japan Institute for Women’s
Empowerment & Diversity Management”
Training for newly appointed and existing managers/supervisors
Training for supervisor

Holding of a Diversity Promotion Forum (lecture by knowledgeable person and workshop)
Attendance of supervisors in various training programs for women
Holding child-rearing luncheon meetings (job networking event)Holding forums for employees raising children and their supervisors

Childcare(Men are also eligible.)

Offering intranet networking opportunities for workers on leave and returners

Work environment

Holding roundtable talks for people taking childcare leave
Holding seminars on balancing work and childcare for men (Diversity West Japan Study Group)
Provision of information through continued distribution of e-mail news and in-house web magazines
Corporate culture
Continued implementation of measures to promote efficient working* Mentor system (mentoring program): A program that provides female employees before and after life events and before management with the opportunity to receive direct guidance from experienced mentors to foster
networking and career awareness.

Holding of Diversity Training for Newly Appointed Managers/Supervisors
Osaka Gas conducts diversity training as part of training for newly appointed managers/supervisors.
Number of Participants in Training for Newly Appointed Managers/Supervisors
FY2019.3

FY2020.3

FY2021.3

FY2022.3

FY2023.3

Group

171

156

176

163

149

Osaka Gas

98

77

46

36

10

Number of Participants in Mentoring Program
Osaka Gas

FY2019.3

FY2020.3

FY2021.3

FY2022.3

FY2023.3

22

12

17

19

16

*Osaka Gas and consolidated companies

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

072

Creating a Work Environment for the Disabled
Hiring the disabled
Osaka Gas does all it can to hire disabled persons and creates a work environment conduciveto the talents of each individual. As a result of these efforts, disabled persons accounted for
2.59% of our workforce as of June 2023, well above the legal minimum of 2.3%. Of the 37
Group companies subjected to the law, 20 companies including Osaka Gas have achieved
the legal minimum.
Percentage Rate of Disabled Employees (Osaka Gas)
(%)
3.0

2.36

2.40

2.34

2.45
2.59

2.0

1.0

0
2019

2020

2021

2022

2023

(As of June in each year)

Creating a Work Environment for Seniors
Creating a work environment for seniors
Osaka Gas has implemented a reemployment scheme to rehire employees who havereached mandatory retirement age, under which applicants are placed in jobs that match
their skills and preferences. All Daigas Group companies have similar reemployment
programs.

Post-retirement support
In order to meet the diversifying needs of second life, at Osaka Gas, the Career Development
Project Team conducts career guidance (training) and career development interviews for
employees at the ages of 45 and 53.
    This training offers the employees briefings on circumstances inside and outside thecompany as well as various support systems, and through closer examinations of their work
histories and group discussions, the employees are encouraged to seek out career paths thatare consistent with their values and motivation and to develop their own career plans. After the
training, each employee will fill out a career track questionnaire and then attend a one-on-one
interview with an in-house career counselor to discuss their career aspirations and growth plans.
About 270 employees received career development interviews in FY2023.3.
    When employees reach the age of 54, they are invited to attend a “Nice Life Seminar” with
their spouse. They are briefed about various systems that may affect their post-retirement life plans.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

073

Work-Life Balance
Principle and Outline
Osaka Gas aims to create a corporate culture in which employees can maximize their abilities by striking a balance between rewarding work and fulfilling personal lives and involvement with society.
Furthermore, labor and management are working together to realize a work-life balance by systemizing support measures needed by employees at each life stage and creating a workplaceenvironment that facilitates the use of such measures.
    By researching strategies to encourage an innovative and productive work style inside the cross-company Efficient Work Styles Committee and the DX Committee, the Company is aiming tochange the way people work.

Support for Male Employees to Participate in Childcare

Efforts to Improve Productivity and Reduce Working Hours

Osaka Gas encourages male employees to take one month of childcare leave. In addition tosolving social issues such as the declining birthrate and creating a society in which both men
and women can play an active role, taking childcare leave is expected to improve the work-lifebalance of employees raising children, thereby increasing their job satisfaction andproductivity, and creating innovation from a new perspective through the experience ofchildcare, which is different from their work duties. Based on this concept, in addition tochildcare leave, we have introduced a system that allows employees to flexibly take leave andaccording to their work and family needs, including “Hagukumi Leave”*, and the utilization rateof such leave system was 87.8% in FY2023.3. In addition, we are striving to create anenvironment that facilitates the use of the system by sending out messages frommanagement, preparing guidebooks, and sharing examples of cases where employees haveused the system.

Osaka Gas promotes efficient work styles to improve productivity with the objectives ofincreasing employee value by realizing work-life balance, creating a culture to promote
diversity, and preventing health problems caused by overwork. Aiming to reduce total annual
working hours, we have been implementing the following initiatives one by one since FY2010.3.

*Hagukumi leave: A unique paid leave for childcare purposes that can be taken for five days within six
months of the birth of a child.

Support for Balancing Work and Nursing Care by Improving
the Systems and the Workplace Environment
Osaka Gas offers various systems to support a balance between work and nursing care. For
employees who need to take leave to care for family members, we have established systems
that allow employees to take more leave than legally required, including a nursing care leavesystem that allows employees to take a total of 366 days of leave per family member who
needs care and a system of shorter working hours for nursing care that allows employees towork up to 3 hours less per day for a total of 1,096 days in addition to the leave period.

Helping Employees Balance Work and Medical Treatment
In April 2021, Osaka Gas introduced a system of shorter working hours to support employees
in balancing work and medical treatment, mainly for employees requiring cancer and dialysis
treatment. Normally, employees use paid leave, half-day paid leave, flextime, etc. when goingto the hospital for treatment of illnesses, etc. However, in some cases where long-term
continuous treatment is required, paid leave, etc. may not be sufficient. In response to such asituation, we introduced a system of shorter working hours for the purpose of outpatient
treatment that allows employees to apply to shorten their working day.

 romote paperless office by digitizing internal documents (e.g., use of a projector in principleP
for internal meetings and discussions).
• 
Improve efficiency of meeting management (e.g., distribution of meeting materials in advanceand sharing of meeting minutes via electronic bulletin board, etc.)• 
Create a work environment that encourages creativity through office layout changes (e.g.,
free-address office space with no fixed seating for employees).
• 
Visualize data, such as actual overtime work hours, and streamline operations using IT (e.g.,
information sharing via internal portal site, work support via smartphone, and automation ofoperations using RPA).
•

As part of our efforts to promote telecommuting, whichleads to flexible work styles, we have establishedsatellite offices where employees can work in an officeother than their own regular office to improve
productivity by reducing commuting and travel time andconcentrating work in a remote office. Furthermore, weoffer our employees diverse and flexible work options
that are not limited to working in our offices by all
employees eligible for telecommuting and introducing a
web conferencing system that allows employees toSatellite office set up in Grand Frontparticipate using smartphones and other devices.
Osaka, located near Osaka Station    In addition, we have formulated the Code of
Conduct for Efficient Work Styles, a set of specificaction standards that supervisors, subordinates, and related personnel should be aware ofand implement from the perspective of increasing work efficiency and saving labor and of
promoting further productivity improvement by practicing actions in line with the standards.
    In April 2023, we introduced a system that allows employees to take paid leave by thehour, creating a more flexible work environment.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

074

Supporting Employees’ Participation in Society through aJuror Leave System, etc.
Prior to the implementation of the juror system in Japan in May 2009, Osaka Gas establisheda juror leave system that allows employees to take paid leave for the required number of days
when they are selected as a juror or prosecution councilor in FY2009.3 to support employees’
participation in society.

Volunteer Leave System/Community Leave System
Osaka Gas has introduced various systems for employees to participate in company-approved
volunteer and social contribution activities. Under the volunteer leave system, each employee
is treated as being on leave during the period of an activity and is provided with special
treatment regarding their work period and salary. The community leave system is a system tosupport employees’ involvement in the community, under which they can take special leave.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

075

Occupational Health and Safety
Principle and Outline

Safety and Health Management Promotion System

Convinced that ensuring employees’ safety and maintaining/improving their physical andmental well-being are keys to all its operations, the Daigas Group has been undertaking efforts
to prevent employees from developing health problems and support their medical treatment.
Positioning health promotion as a priority management policy, we established the Osaka Gas
Health Development Center in 1975. Since then, we have been implementing various
measures to promote the health of employees, including providing regular health checkups
and individual health guidance by medical professionals to all employees, including those ofGroup companies.
    Today, in the era of the 100-year life, being healthy throughout a lifetime is of great
importance not only to employees but also to society. Based on this idea, in March 2021 weestablished the “Daigas Group Declaration of Health and Productivity Management” bysummarizing our attitude toward Kenko Keiei* (health and productivity management), which
was indicated in the Daigas Group Corporate Principles, Daigas Group Charter of BusinessConduct, and Daigas
Group Code of BusinessRealizing the four value creations
Conduct. We alsoestablished the Daigas
Value for customers
Value for societyGroup Action Guidelines
Value for shareholders
Value for employees“7 Rules for Being
Healthy” to encourage
employees to live
healthy life styles.
A lively and vibrant workplace
A workplace where everyone can work
*The term “Kenko Keiei®” isa registered trademark ofwith peace of mind

In accordance with the Daigas Group Code of Business Conduct, Osaka Gas not only
complies with relevant laws and ordinances but also has established its original rules,
including the Daigas Group Safety & Health Promotion Regulations and the Osaka Gas Safety& Health Management Regulations. In this way, Osaka Gas works with its Group companies
and partner companies to improve the levels of workers’ safety and health.
    The Daigas Group Safety and Health Council, chaired by an officer in charge of the
Human Resources Department at Osaka Gas (Director and Managing Executive Officer),deliberates the Daigas Group’s safety and health basic policy and submits deliberation
proposals to the Management Meeting. After deliberation by the Management Meeting, thedecision is made by the Representative Director and President of Osaka Gas.
    The Daigas Group Safety and Health Council also discusses measures for and sharesinformation about occupational accident prevention and health maintenance andenhancement of employees.

Non-profit Organization
Kenkokeiei.

Ensure safety

Maintain and improvemental and physical health

Daigas Group Safety and Health Promotion System
Representative Director
and President
Formulation of
the Basic Safety
and Health
Improvement Plan

Management Meeting

Daigas Group Health and Safety Council
Chairman: Director in charge of the
Human Resources Department(Director and Managing Executive Officer)
Daigas Group Health and
Safety Executive Committee

Secretariat: Human
Resources Department
Occupational healthphysician<Each Daigas Group company>

Daigas Group Declaration of Health and Productivity Management

Creates a safety and health activity plan every year based on the Daigas Group Basic
Safety and Health Improvement Plan and the company’s safety and health situation, andcarries out the planned activities.

The Daigas Group believes that we can create value that meets the expectations ofcustomers, society, shareholders and employees by ensuring that our employees stayhealthy both mentally and physically, and fully exercise their abilities, individuality andinitiative, thereby remaining motivated and satisfied with their jobs.
    The Daigas group will work as one to maintain and improve the health of
employees and create a vibrant workplace filled with people who are mentally andphysically energetic, with the aim of becoming a corporate group that powers continuous
advancement in customer and business life.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

Preventing Injury in the Workplace“Accident Indices” for Evaluating Safety Activities

Promoting safety and health management activities based on OSHMS

If an industrial accident occurs at Osaka Gas, the Company division concerned investigatesand identifies the cause and takes measures to prevent a reoccurrence. The case is sharedcompany-wide through a portal or other means, to ensure that similar accidents will not occur.
    To assess safety activities at each workplace, we also use the “Accident Indices,” whichuses a unique formula to calculate the degree of the accident in terms of seriousness andimpact. The “Accident Indices” was created to establish a common, company-wide standard forlabor accidents in all business segments, from gas processing and supply to sales.
    Also, we honor organizations that meet their prescribed accident index targets torecognize their efforts as well as to raise awareness.

Osaka Gas has been systematically and meticulously undertaking activities aimed atpreventing workplace accidents with establishing the “Osaka Gas Health and Safety Action
Plan” based on the Occupational Safety and Health Management System (OSHMS), which
was established by the Minister of Health, Labour and Welfare. Based on the Plan, eachorganization of Osaka Gas is working on reducing the number of incidents leading to absencefrom work due to workplace accidents to zero. The Plan, consisting of three priority themesprevention of transportation-related accidents, prevention of general work accidents, andprevention of accidents through collaboration with business partners—is designed to enhance
the level of workplace safety by implementing improvement measures under the PDCA (plando-check-action) cycle.
    Each Daigas Group company is working on establishing the PDCA cycle to improvesafety and health-enhancement activities in accordance with each company’s safety andhealth situation while maintaining the current safety and sanitary management system and inline with the Daigas Group’s Basic Safety and Health Improvement Plan (FY2022.3-FY2024.3).
Goals for FY2023.3
Items

Goals for FY2023.3

Accident causing absence(Osaka Gas, other party)
Accident causing noabsence0

Osaka Gas

Negligence 0

Other party

0

Efforts of the health and safety committee to improve health and safety
The Health and Safety Committee holds a meeting once a month at the head office and each
district office (workplace), attended by representatives of the company and labor union,industrial physicians. The Health and Safety Committee investigates and deliberates on
measures that should serve as the basis for preventing employee hazards and healthproblems (measures to eliminate the causes of occupational accidents and prevent theirreoccurrence, etc.), thereby striving to ensure that the opinions of employees are well reflected
when implementing measures and policies related to employee health and safety.

076

Daigas Group’s Safety Education Efforts“Safe Driving Education”
The Daigas Group and its partners use a large fleet
of vehicles in their work. We implement uniquemeasures to ensure that all our vehicle operators
master reliable driving skills and improve their driving
manners so that everyone in the community can trust
the Daigas Group’s commitment to safe driving.
    The Safe Driving Training Center run by
Osaka Gas offers safe driving education with afocus on practical training, and we are seeking toClass at an on-site driver training center
extend safe driving practices throughout the
Daigas Group to improve safety across the Group as a whole. In FY2023.3, a total of 3,710
employees from 46 companies, including Osaka Gas, took part in this safe driving program.
The intranet and email are used to share and disseminate information across the Group as a whole
to reduce accidents.

Education for foremen and health and safety managers
In accordance with Article 60 of the Industrial
Safety and Health Act, we conduct safety andhealth education for those who are newly charged
as foremen (first line supervisors) or others to
directly guide or supervise workers in operations,by inviting a lecturer from the Japan Industrial
Safety & Health Association. The Daigas Groupholds training sessions five times a year for newly
appointed managers who need foreman education.
Approximately 160 people take the training.

Class at an on-site safety and healtheducation

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

Competency improvement education for foremen and healthand safety managers
According to the Guidelines for Promotion of Safety and Health Education issued by the
Ministry of Health, Labour and Welfare, employers are required to provide education according
to the competency improvement education for foremen and other workers approximately
every five years, or when there is a major change in machinery and equipment.
    Based on this, since FY2023.3, the Daigas Group has been providing the competency
improvement education four times a year for those who have completed the education forforemen or the education for health and safety managers and are still leading theirsubordinates as foremen, with approximately 50 employees having taken the education.

Joint Safety Activities With Partners
Osaka Gas works closely with affiliates and partners at the sites of gas business activities. In
particular, we strive to boost the level of safety by working closely with our partners throughthe Health and Safety Promotion Council to exchange safety-related information and hold arange of training and safety activities.
    The Council, with 74 member companies, primarily in the manufacturing sector, promotes
voluntary safety and health activities, with the goal of zero lost-time injury. As a key activity,
the Council has designated a disaster prevention month in both the first half and second halfof the year, during which we conduct safety patrols jointly with them. It also issues a Safety &Health Monthly Report that provides useful information on company efforts in preventing
workplace accidents and promoting employee health.
    At piping works, we work with partner companies in organizing exercise sessions toenhance physical performance and prevent accidents involving older workers falling from, or
tipping over, stepladders.

Safety patrol with partner (Implemented a small number of people while
taking measure against COVID-19 in the second half in FY2023.3)

Safety & HealthMonthly ReportSocialGovernance

ESG Data

077

Prevention of General Work Accidents
Heat stroke prevention measures
Osaka Gas has introduced work clothes with built-in fans as part of measures to improve theworking environment and prevent heat stroke in the summer with extreme heat (except forworkers handling raw gas because fans are not explosion proof). In FY2019.3 we started
considering the introduction of fan-equipped work clothes and conducted research using
monitors to assess the required quantity and needs. The fan-equipped work clothes are madeusing a fabric suitable for fitting fanswhile following the design of thecurrent ones. Also, the fan-equipped
work clothes allow the use of a fullharness safety belt, which has been
mandatory from January 2022 due toa revision of the Industrial Safety and
Health Act.
Fan-equipped work clothes

Prevention of fall accidents
Fall accidents occur frequently nationwide, accounting for one-quarter of industrial accidents.
    Osaka Gas strives to prevent fall accidents by introducing health-enhancement physicaltraining to workplaces and giving laptop tote bags to employees.
    Older workers have come to constitute a larger portion of the entire working population
at the Daigas Group, resulting in an increase in the number of accidents involving workers on
duty, including stumbling. In FY2018.3, we introduced health-enhancement physical training
company-wide. We have changed the conventional exercise program centered on stretching
to health-enhancement physical training that strengthens muscles and the body trunk,including squats and standing on one leg.
    In 2019, an employee slipped down the stairs with a laptop in his hands. A similar
accident occurred in FY2018.3, too. To address this matter, we have been promoting
company-wide measures to prevent similar accidents.
To avoid a similar accident, you should not walk around the office (especially up and down thestairs) while holding an open laptop in your hands. So, we encourage employees to carry
laptops and documents in bags to keep both hands open while walking.
    Moreover, to promote thehabit above, we have provided
laptop-carrying bags toorganizations upon request.
    We have also created aposter encouraging employees
to keep both hands open while
Scene of squat exercises, part of Introduction
Enlightenment
walking and sent it to each anda health-enhancement physicalof laptop tote
posterevery organization.
training program being conducted
before the start of the day

bags

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

Maintaining and Improving Health

ESG Data

078

Promotion of measures to prevent lifestyle-related diseases

Health checkup at the Daigas Group
Health Development Center

Daigas Group Health Development CenterIn general

Health checkups

Half a day

About half a day

Explanation of health checkup
results

On the day

Later date

Judgement of work classification

On the day

Later date

Health promotion class

On the day
Advice on health promotion Special healthguidance (in the first session)

On the day
To be conducted after evaluating the stress
Interviews with people
experiencing a high level of stress level through a prior medical questionnaire(Stress checks specified by law are
conducted separately.)
Reservation for thoroughexamination

GovernanceEfforts related to the Action Guidelines“7 Rules for Being Healthy”

Regular health checkups and health guidance
Osaka Gas holds regular health checkups as requiredby law, and all employees expected to take them hadplanned checkups at the Daigas Group Health
Development Center within the Human Resources
Department.
    The Center also offers health checkups andhealth counseling services to employees of affiliates.
In FY2023.3, 13,715 employees of 34 companies (thetotal number from Osaka Gas and its affiliates) received
health checkups at the Center.

SocialOn the day
Medical staff make reservations on the spot
(legally mandated item).

We will increase the number of employees working to improve their lifestyle habits by carrying out
specific activities in line with the Action Guidelines “7 Rules for Being Healthy.”    In FY2023.3, the Healthy 7 Olympics (no smoking category) was held as in FY2022.3,
and seminars on each of the Healthy 7 categories were also held to encourage employees toactively engage in Healthy 7 activities.
    Furthermore, to enhance awareness among young employees of their risks of futurehigh blood pressure and excess blood glucose, we analyze the results of their latest healthcheckups and create a health condition sheet and distribute it to each employee to provide
advice to young employees on how to maintain and promote their health. The sheet showseach employee his/her probability of developing lifestyle-related diseases within seven years
and a comparison with the average probability for all employees who underwent the checkup.
    We are working on enhancing employees’ consciousness toward health from an earlylife stage, with the aim of reducing their risks of contracting lifestyle-related diseases in the
future.
Healthy 7 Lifestyle Habit Monitoring Indicator: Total of Osaka Gas, Network
Companies, and Three Core Energy Business Companies
Obesityrate (men)Breakfastskipping

Exerciseat least
twice
a weekDrinking
360 ml or
more

Smokingrate(men)

Smoking
rate(women)Rest fromsleep

FY2023.3

33.5

22.5

26.6

23.6

23.9

2.2

69.2

FY2022.3

34.2

21.5

25.7

19.8

24.7

2.1

70.7

33.0

3.1
(Reference)

28.7

27.9

27.1

7.6

78.3

Unit: %

Later date

No

National data*
To be made by oneself

Prevention and control related to global health issues
The Daigas Group has set forth “Providing safe and secure workplace” and “Ensuring safety of
products and services” in the Daigas Group Code of Business Conduct, and it has establisheda system to provide health care against infectious diseases beyond the legal requirements.
    In accordance with legal requirements, we provide employees with an opportunity for
regular health checkups (once a year), including chest x-ray examinations for early detectionof pneumonia, pulmonary tuberculosis, lung cancer, and other diseases.
    Furthermore, based on advice and warnings on COVID-19 and other risks issued by
the Ministry of Foreign Affairs and the World Health Organization (WHO), the Group takes
measures such as alerting employees and setting up a task force.

 he figures shown for indicators other than obesity rate and smoking rate are the total ofT
men and women.
• 
Breakfast skipping: Percentage of respondents who answered they skip breakfast three ormore times a week (Nationwide: Percentage of respondents who answered they do not eat
breakfast [reference])• 
Exercise at least twice a week: Percentage of respondents who answered they exercise atleast 30 minutes a day at least two days a week• 
Drinking 360 ml or more: Percentage of respondents who answered that the amount of
alcohol consumed on a drinking day is 360 ml or more• Rest from sleep: Percentage of respondents who answered they get enough or moderate
rest from sleep* From the National Health and Nutrition Survey (Ministry of Health, Labour and Welfare, 2019
[data on sleep from the 2018 Survey])•

Other results
Information on other health results, such as the Healthy 7 Olympics participation rate.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

Promotion of Measures to Enhance Mental Health

Measures against Infectious Diseases

The Daigas Group implements various measures to enhance mental health in order to promote
early detection and prevention of mental disorders.
• We conduct a group analysis of stress checks and provide feedback to the general affairs
department of the organization to promote improvement of the working environment in theorganization. Depending on the issues, the medical staff will conduct detailed group analysisof stress checks and provide feedback to the head of the organization and exchange views
on how to create a better workplace. In this way, the general affairs department of eachorganization and the Health Development Center are working together to improve theworking environment.
• For mental health measures for younger employees, we conduct a health questionnaire for
new employees. For employees in their second year of work, we conduct a stressquestionnaire and individualinterviews at the time of ahealth checkup. Based on
the results, we takeappropriate measures incooperation with theirsupervisors.
• For managers/supervisors,
we provide mental healthInterview with employees in
Mental health training for managers
training centered on casetheir second year of workand supervisors
studies.
regarding stress

In late January 2020, when the spread of COVID-19 infection was confirmed overseas, Osaka
Gas started the implementation of various infection preventive measures against COVID-19,
based on its Business Continuity Plan in Response to COVID-19 Pandemic.
    With the change of COVID-19 to a Category V Infectious Disease on May 8, 2023, we
lifted the alert; however, we will continue to respond according to the situation to ensure thesafety of our employees and the stable and appropriate supply of gas and electricity to ourcustomers.

Helping employees manage and maintain their health
Medical staff hired by the Daigas Group visit its business offices to provide health education toemployees. This measure is designed to create a working environment that ensures workers’
health and comfort, and encourages them to work on enhancing their health on their own.
    We are providing employees with health management information via the Health
Development Center website.
    To help employees relieve shoulder stiffness and backache and avoid a lack of
exercise, we have created a video titled “Easy Workout and Exercise,” which introduces aworkout and exercise that can be easily done even during remote work. Employees exercise
while watching the video before meetings or when they are
waiting their turn during health checkups.

079

Osaka Gas Selected as a 2023 Health & Productivity
Stock Selection Brand for the First TimeIn March 2023, Osaka Gas was selected as one of the brands in the 2023 Health &Productivity Stock Selection Brand program, jointly administered by the Ministry of Economy,
Trade and Industry and the Tokyo Stock Exchange.
    The Health & Productivity Stock Selection is a program topromote enterprises’ initiatives for Kenko Keiei,* or health andproductivity management, by selecting outstanding listed
enterprises engaging in a health and productivity management
program, in which enterprises focus on and strategically carry out
efforts with regard to their employees’ and other workers’ healthfrom a management perspective, and introducing them as
attractive enterprises to investors who are focused on improving
corporate value from a long-term perspective.
    As well as the Daigas Group Declaration of Health andProductivity Management, we established the Daigas Group Action Guidelines “7 Rules forBeing Healthy” to encourage employees to have healthy lifestyles, aiming to improve theirlifestyles through health promotion activities based on the rules. In recognition of these
initiatives, we have been selected.
*The term “Kenko Keiei®” is a registered trademark of Non-profit Organization Kenkokeiei.

 rainings by Occupational Safety and Health Staff
T(FY2023.3)
No. of such
events held

No. ofparticipants

Description

14

766

Measures for mental
health, back pain,
women’s health, etc.

Easy and quick exercise

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

080

Communication Between Employees and Company
Principle and Outline
The Daigas Group believes that it is important for employees and the company to work together to realize the healthy growth of each group company with a sense of mutual trust and tension. To thisend, we promote communication between employees and the company by opinion exchanges at informal meetings between the labor union and management and various study committee meetings,
as well as workplace visits by the President of Osaka Gas to group companies and its organizations.

Labor-Management Relations

Company Award System

Cooperation between labor and management to resolve issues

President’s Award to boost employee morale

Osaka Gas has adopted a union shop system, in which all employees, except those inmanagement positions, are members of a labor union, pursuing sound and good labormanagement relations. The Osaka Gas Workers Union consists of approximately 4,100
members, including those temporarily transferred to affiliated companies, etc. The workers
union and management exchange opinions at informal meetings and various study
committees on overall corporate activities, including actions regarding various management
issues, as well as changes in working conditions. We strive to build, maintain and strengthensound and good labor-management relations based on mutual understanding and trust.

Osaka Gas presents the President’s Award every year to honor employees who have madesignificant contributions to the company’s activities to boost employee morale. Awards arepresented to regular and contract employees at Osaka Gas and employees of affiliatedcompanies for their outstanding achievements in business operations and contributions to
the environment, the community, and other aspects of society, passing on skills, the safety
field, etc.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

081

Human Rights
Summary

Why the topic is material

The Daigas Group respects human rights as basic rights inherent to all. The Group supports the international standards on human rights and promotes activities and programs toprotect the human rights of its stakeholders. We comply with the applicable laws and regulations of the countries and regions where we operate. In the case where there is a conflict
between internationally recognized human rights-related norms and the laws and regulations of a country or region, we will pursue ways to ensure maximum respect forinternational norms.

Items to be addressed

Specific initiatives
Policy and promotion system

Respect for human rights
throughout the value chain/
Human rights due diligence/
Human rights awarenesspromotion•M anagement regarding respect for humanrights• Human rights due diligence• Encouragement of suppliers• Promoting human rights awarenessactivities for Daigas Group officers andemployees

Based on the Daigas Group Human Rights Policy, we support international human rights-related norms and comply with laws andregulations of the countries and regions where we operate, promoting activities and programs to protect the human rights of its
stakeholders.
Initiatives undertaken in FY2023.3• Implemented human rights due diligence• Informed our suppliers of our procurement policy and conducted a sustainability questionnaire• Provided human rights awareness training to Daigas Group officers and employees

Respect for Human Rights throughout the Value Chain
Principle and Outline
The Daigas Group supports and respects international standards for human rights, including the International Bill of Human Rights (Universal Declaration of Human Rights and the International
Covenants on Human Rights) and the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work. We also promote human rights initiatives in accordance with
the UN Guiding Principles on Business and Human Rights, the UN Children’s Rights and Business Principles, and other relevant principles.
    We identify and assess the negative impact of our business activities on human rights and take steps to prevent or mitigate such risks under the Daigas Group Human Rights Policy. We will
also demand that our suppliers and other parties concerned respect human rights and not infringe on them.

Daigas Group Human Rights Policy

Daigas Group Human Rights Policy

The Daigas Group established the Daigas Group Human Rights Policy in April 2021. This Policy is based on the Daigas Group Corporate Principles and the Daigas Group Charter ofBusiness Conduct and has been approved by the Board of Directors of Osaka Gas.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

082

Human Rights Due Diligence
Principle and Outline
In accordance with the United Nations Guiding Principles on Business and Human Rights, the Daigas Group is committed to establishing systems in order to respect the human rights of all
people affected by the group’s business activities, and proactively disclose its initiatives in this area. The Group conducts human rights due diligence as part of its efforts to respect human rights
and realize business sustainability.

System for Promotion of Human Rights Due Diligence

Human Rights Due Diligence Cycle

Human rights due diligence is jointly promoted by the Human Rights Center in the Human
Resources Department; Compliance Office and the Internal Control Planning Team in the
General Affairs Department; and the ESG Office in the Corporate Strategy Department.
    The Board of Directors, which makes decisions and supervises other important businessactivities across the Daigas Group, is responsible for supervising activities aimed at tacklinghuman rights issues and other related issues.
    At the ESG Council (Management Meeting), which meets three times a year, officers
deliberate on action plans and reports concerning ESG issues, including human rights issues,
and report to the Representative Director and President.
    The Group also has the ESG Committee, chaired by the Head of ESG Promotion(Representative Director and Executive Vice President), who supervises the Group’s
sustainability activities, and consisting of the heads of related organizations and other members.
In principle, the ESG Committee meets four times a year for cross-organizational deliberation,
coordination, and supervision of the formulation, promotion, etc. of plans for human rights due
diligence activities.

We have built a cycle in which human rights risks that may arise from our business activities
are investigated and identified, the identified human rights risks are addressed throughcorrective and remedial measures, education and awareness-raising activities, etc., and theeffectiveness of these measures are evaluated and linked to improved initiatives.
Human Rights Due Diligence Cycle
Human Rights Policy
Investigate risks throughquestionnaires and interviews
Check cases handled by consultation desks
Identify important human rights themes

Investigate andassess humanrights risks

1

Report on initiatives on
the website

4
Disclose
information

PDCA

Respond to
humanrights risks(remedy,
prevention,
etc.)

2

System for Carrying Out Human Rights Due Diligence
Board of Directors
Reporting on key issues, including those related to human rights
Submitting deliberation proposals and reporting

3 Evaluate
effectivenessKey decision-making and supervision

Representative Director and President
Submission and Report

ESG Council (Management Meeting)
Report on human rights policy formulation and human rights due diligence
ReportCorporate committee : ESG Committee
Chairman : Head of ESG Promotion
Proposal and Report

Reflect on overall initiatives
Incorporate the results ofreflection into activities in thefollowing fiscal year

Remedy if issues manifest
Disseminate information on
consultation desks and respond toindividual cases
Raise awareness toward humanrights based on identified themes

Proposal and ReportCompliance/Risk Management Subcommittee
Human Rights Committee
Report, etc.

Compliance Office, Human Rights Center, ESG Office
Coordination, Promotion, etc.

Basic organization and affiliate of Osaka Gas

Results of Initiatives in FY2023.3
Investigate and assess human rights risks
We conducted inspections using G-RIMS, a self-assessment system, and a compliancequestionnaire survey to check the status of employees’ understanding and penetration ofcompliance. We also conducted a questionnaire survey of Daigas Group’s major suppliers andfound no significant risks related to human rights.

Respond to human rights risks (remedy, prevention, etc.)
We offered human rights training and conducted educational activities aimed at improving
awareness and instilling knowledge of human rights issues.
Please see
P.85-86 for more information on each action.

Establishment of grievance mechanisms
We have established the Human Rights Center and the Compliance Desks as contact points
for consultation, and we appropriately respond to cases received by them.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

Identification of key human rights risks (process)

Identify important human rights themes (assessment)

By reference to the dual axes of the seriousness of each potential human rights infringement
and the likelihood of it occurring, we identify key human rights risks that the Daigas Groupneeds to consider in the course of its business activities and establish a priority order for
addressing them.

Based on the results of the survey and the cases received by consultation desks in FY2023.3
and in consultation with experts, the Daigas Group identified important human rights issues
that it should take into consideration when conducting its business activities and organized
the human rights risks by rights holder in the table below.
    Among the human rights risks that may occur in the Group’s business activities, we
identified 14 items as prominent human rights risks, including failure to take occupational
health and safety into consideration, human rights infringements due to overwork andnonpayment of wages, and harassment, as well as forced labor, child labor, and bribery andcorruption as risks in international business and infringement of rights of foreign workers andtechnical intern trainees as a risk in domestic business.
    For these risks, we have taken various measures to prevent or reduce them under the
relevant policies and other relevant guidelines.
    In discussions with experts, it was pointed out that the chemical and developerindustries require special attention to human rights risks due to the nature of their industries.
In the chemical industry, we are aware of human rights risks, such as forced labor and childlabor at raw material suppliers in the supply chain, and in the developer industry, where labor
shortages are an issue, we recognize the need to pay attention to human rights risks in hiring
foreign nationals and accepting technical interns.
    We also evaluate human rights risks for new businesses. For example, when carryingout M&A, as part of our due diligence, we investigate whether the new company joining ourgroup complies with labor standards, health and safety laws and regulations to ensure that noserious human rights issues arise in it.

Identification Process
1. C onfirm the likelihood of occurrence and seriousness of humanrights infringements based on the results of the human rights risk
investigation and human rights consultations.

2. C onduct a discussion among internal stakeholders and evaluateeach item of human rights risks using the matrix shown in the
figure below.

Identified Human Rights Themes and Classification of Entities of Rightsdue to environmental pollution•Bribery/corruptionrights of foreign•Infringement
workers and oftechnicalintern•Forced labor/child labor•Human rights infringements

trainees, etc.

occupational health and•Failure to takesafety into consideration•Overwork andnonpayment of wages•Harassment, etc.

Likelihood of occurrence

Entity of rights
Local
Group Customers residents
Suppliers
employees
and others

Daigas Group’s important human rights risks

Seriousness of infringement

3. C onsult with experts to identify the Group’s significant humanrights risks.

083

Relevant policy

Forced labor*1

Daigas Group Human Rights Policy

Child labor
Lack of consideration foroccupational health and safety
Infringement of human rights
caused by excessive working hours
or unpaid wages
Discrimination on the basis of
disability, race, nationality, gender, etc.
Discrimination based on one’s origin*1

Daigas Group Human Rights Policy

Harassment
Infringement of the rights of foreign
workers or technical interns
Infringement of rights to privacy
Infringement of the rights ofindigenous peoples or local
residents
Human rights problems caused byenvironmental pollution
Defective quality of products orservices, and inappropriate
provision of information
Bribery/corruption

Occupational health and safety
Occupational health and safety
Daigas Group Diversity Promotion Policy
Daigas Group Human Rights Policy
Daigas Group Code of Business Conduct*2

Daigas Group Human Rights Policy
Initiatives to protect personal information
Daigas Group Code of Business Conduct
Daigas Group Environmental Policy
Daigas Group Code of Business Conduct*1

Procurement of conflict minerals

Daigas Group Code of Business Conduct
Daigas Group Procurement Policy*1 Overseas subsidiaries, *2 Domestic subsidiaries

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

Response to Human Rights Risks

SocialConsideration for occupational safety and health
The Daigas Group not only complies with all applicable laws and regulations related to safety
and health but also has established its original rules, including the Daigas Group Safety &Health Promotion Regulations. The Group has also established the Daigas Group Safety and
Health Council to discuss and share information on measures to prevent occupational
accidents and promote health maintenance, thereby working to improve the levels of workers’
safety and health throughout the Group.
    In March 2021, we issued the Daigas Group Declaration of Health and Productivity
Management to summarize our stance toward health and productivity management, based on
the idea that ensuring safety and maintaining and improving physical and mental well-being
are key to all operations.
    Based on the Declaration of Health and Productivity Management, we also establishedthe Daigas Group Action Guidelines “7 Rules for Being Healthy” to encourage employees tolive healthy lifestyles, and we provide guidance to organizations and individuals at the Health
Development Center, as well as lifestyle advice to employees at health checkups.

Action on human rights
To promote human rights awareness throughout the Daigas Group, we have established the
Daigas Group Human Rights Committee, with the Human Rights Center as its secretariat andchaired by the officer responsible for the Human Resources Department.
    The Human Rights Committee strives to understand group-wide issues through thesharing of information and the exchange of opinions related to human rights.
Activities for group employees include programs by level and lectures on human rights.
    In addition, Osaka Gas overseas affiliated companies have made the English version of
the Daigas Group Code of Business Conduct known to all of their employees to raise employee
awareness with respect to human rights, work standards, and anti-corruption measures.

Consultation Desks for Human Rights
The Daigas Group accepts requests for consultation regarding human rights from not only
employees but also customers, the local community, suppliers, and all other stakeholders.
    Information on consultation desks is provided to employees through channels suchas the intranet and posters and to external stakeholders via our website.

ESG Data

084

Consultation Desks

Employees•H uman rights promoters are assigned to each organization, including key affiliatedcompanies, as an initial point of contact.
• The Human Rights Center provides consultation services (for officers, employees,
and temporary employees of all Group companies).
• The Compliance Desks accept requests for consultation and reports concerningcompliance with laws, regulations, and internal rules (for officers, employees, andtemporary employees of all Group companies).

Customers, local
communities, etc.

• Customer Centers accept inquiries.

Suppliers• Consultation requests and reports are accepted at
the consultation/reporting desk on the website.

Establishment of policies and regulations
The Daigas Group has stated that human rights are to be respected in the Daigas Group
Charter of Business Conduct, which expresses the Daigas Group’s corporate stance, and the
Daigas Group Code of Business Conduct, which serves as a code of conduct for officers andemployees, and it established the Daigas Group Human Rights Policy in April 2021.
    In addition to the Daigas Group Procurement Policy, which is aimed at respecting
human rights throughout the supply chain, we have also established various regulations
related to occupational health and safety, etc.

GovernanceConsultation/reporting desk

Encouraging suppliers to comply with laws and regulations regarding
human rights
To ensure respect for human rights throughout the supply chain, the Daigas Group strives toencourage its suppliers to understand the concept of human rights and follow international
human rights standards through the Daigas Group Procurement Policy and the Daigas Group
Procurement Policy for Suppliers.
    In our sustainability questionnaire for suppliers, we set up a section on human rights toascertain the actual status of forced labor and child labor, confirm that there are no problems, andprovide an opportunity to mutually confirm the importance of our efforts to respect human rights.

Major requests
Respect for Human Rights
Respect the human rights of all those involved in corporate activities according tointernational human rights standards, and prevent direct or indirect infringement of
human rights, including discrimination, harassment, and other inhumane treatment,
due to corporate activities throughout the supply chain.
Fair Working Conditions
Comply with international labor standards and related laws and ordinances toappropriately pay employees, manage their working hours, and give them days off; toprevent any kind of discrimination at the workplace, forced labor, or child labor; and torespect the rights of workers (including technical intern trainees, other workers fromabroad and immigrant workers), such as the freedom of association and the right ofcollective bargaining.
Contribution to Environmental Conservation
Reduce the environmental burden of business operation and products and services.
[Examples: Reduce greenhouse gas emissions by saving energy and using low-carbon
and/or decarbonized energy; promote green purchasing; use resources (water
resources, raw materials, etc.) in a sustainable way; promote resource recycling;
prevent air, water and soil pollution; and conserve biodiversity]
Ethical Corporate Management
Respect free and fair competition and prevent misconduct.
    Protect intellectual property rights; disclose information appropriately; maintainconfidentiality; safeguard privacy, including that of personal information; procureminerals responsibly; conduct responsible marketing activities; and never have any
relationships with antisocial groups.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

085

Action on Human Rights
Principle and Outline
The Daigas Group holds that human rights ought to be accorded the maximum respect in all circumstances. All officers and employees must be keenly aware of this, and acquire and act on
correct knowledge pertaining to human rights. In expanding its business globally, the Group pays careful attention to compliance with local and national laws and regulations, respect for humanrights and other international norms, local culture and customs, and the interests of stakeholders. Accordingly, it offers human rights training and conducts educational activities aimed at improving
awareness and instilling knowledge of human rights issues.

Systems and Plans for Human Rights AwarenessTo promote human rights awareness throughout the Daigas Group, Osaka Gas has
established a “Daigas Group Human Rights Committee” headed by the director (Director
and Managing Executive Officer) responsible for the Human Resources Department. This
committee decides the activity policy with regard to human rights.
    Based on this policy, the Human Resources Department’s “Human Rights Center”
plans, formulates and administers numerous efforts and events such as human rights
training for all job levels, human rights lectures, and human rights slogan contests, andoffers cooperation and support to individual organizations. In FY2023.3, we have started
training programs based on human rights themes identified as those which we should giveconsideration to in human rights due diligence. The top award-winning slogans are madeinto posters that are put up in offices to constantly remind employees of the importance ofhuman rights.
    As well, business units and major affiliates have their own “Human Rights
Committee,” which relays company policies and human rights information to employees,
encourages participation in outside lectures and the human rights slogan contest. The“Corporate Human Rights Committee” also exchanges information and opinions withdivisions in the Group, all in an effort to understand what must be done across the entire
Group. Further, each business unit and major affiliate appoints a “Human Rights AwarenessPromotion Leader,” who is in charge of dealing with daily issues related to human rights.
    The Daigas Group’s “Compliance Desks” and “Human Rights Center” also accept
consultation requests and reports on all matters related to human rights.

System for Promoting Human Rights Awareness
Daigas Group Human Rights Committee
Members: General Manager of the department in charge of general affairs in eachorganization, and Managers of the ESG Office and the Compliance Office
Daigas Group Human Rights Executive Board
Members: Manager of the team in charge of general affairs at each organization, the ESG
Office, and the Compliance Office
Human Rights Committees at each organization
Members: Persons in charge of general affairs, etc., including affiliated core energy businesscompanies and related companies
Human Rights Promoters (at each organization)
Members: Persons in charge at each organization
Daigas Group Human Rights Committee
Head: Executive in charge of the Human Resources Dept.
(Director and Managing Executive Officer)

Dagas Group
Human Rights
Executive Board

Secretariat
Human Rights Center

Divisions Human Rights Committee
Human Rights Promoter (Each affiliation and company)

Initiatives to Respect Human Rights for Suppliers
The Daigas Group sets up a section on human rights in its annual sustainability questionnaire for major suppliers. In FY2023.3, we conducted a questionnaire survey of 395 companies and received
353 responses, confirming that there were no problems with forced labor or child labor.
    In addition, at the human rights lecture for organization heads and managers, which is held every year, in FY2023.3, we invited the participation of construction companies, service chain
companies, and other partner companies, and approximately 80 people attended the lecture.
Please see

P.89 for more information on the details of the conducted questionnaire survey.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

086

Implementation of Human Rights Training
Human rights training for all levels
Human rights lectures for organization heads and managers
The Daigas Group has human rights training for all job levels: directors, managers, and new
recruits.
    In the human rights training for new managers, participants learn about companies and humanrights. We have human rights lectures for division heads and managers led by outside experts.
    In FY2023.3, a human rights training session for all employees provided by a Human
Rights Promoter appointed at each organization was held for the purpose of promoting
awareness of the newly formulated and released “Daigas Group Human Rights Policy” among
employees, under the theme of “Becoming Aware of Unconscious Bias.” Approximately 17,100
employees, including those from affiliated companies, participated in this training session.

Group-wide Human Rights Training - ParticipantsParticipants

Implementation period

No. of participants

Executives

September

29

Managers and leaders

May, June, November, December

212

New employees

April

Training for all employees

From November to March

Human rights lecture (for organization
heads and managers)

July

460

Human rights lecture (for all employees)

February450

New employees at affiliates

April, June, October, February

329

Others (HR Committee members, etc.)

Year around

146
About 17,100

142

Total

About 18,800

Training for human rights awareness leaders
In training for each division’s human rights awareness leaders, participants take a variety ofcourses outside the company. In FY2023.3, a total of 110 took these courses.
Results of Participation in Courses outside the Company
Course name

No. of participantsAnti-discrimination and Human Rights Issues AwarenessRaising (for Managers)
Human Rights and Anti-discrimination Awareness Raising
Buraku Liberation/Human Rights Summer Course

110

Buraku Liberation/University Human Rights Course
Other

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

087

Supply Chain Management
Summary

Why the topic is material

The Daigas Group could not conduct business without the cooperation not only of companies within the Group but also of its various stakeholders. We believe that it is necessary for
the Group to control the social and environmental effects that are generated in the business processes in the most responsible manner and in close cooperation with our
stakeholders.
    Based on the Group’s corporate motto, “Service First,” we strive to procure responsibly in cooperation with our suppliers.
    Supply chain management is positioned as one of our material issues.

Items to be addressed

Specific initiatives
Policy and promotion system
The Daigas Group is committed to fulfilling its social responsibility in close cooperation with suppliers in line with the Daigas Group
Code of Business Conduct, revised in accordance with the United Nations Global Compact.
    The Daigas Group has formulated the Daigas Group Procurement Policy and has made it known to the Group’s suppliers,
together with the Daigas Group Procurement Policy for Suppliers.
    Each organization in charge of procuring particular materials is to fulfill its responsibility.

Supply chain management• Promoting understanding of the Daigas
Group Procurement Policy among suppliers• Confirmation of the status of major
suppliers’ sustainable activities, etc.
• Promotion of green purchasing
Materiality Supply chain management

KPIs based on the materiality

FY2023.3 results

Appropriate new supplier ratio

100%
A total of 27 suppliers began new business transactions with Osaka Gas. No business deals
were barred from being started due to violations of standards set in the fields ofenvironmental and social impacts, human rights, and labor practices.

Initiatives undertaken in FY2023.3• Implementing and promoting a system for disseminating the Daigas Group Procurement Policy and the Daigas Group Procurement
Policy for Suppliers to our suppliers and confirming the status of their sustainable activities before proceeding with a business
transaction• Conducting questionnaires for major suppliers to understand, evaluate, and analyze the status of their sustainable activities, etc.
• Implementing and promoting the Green Partner Initiative, a system for evaluating the environmental initiatives of suppliers who areproactive in such efforts as building an environmental management system (EMS) and obtaining certification

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

088

Supply Chain Management
Principle and Outline
Our broad-based city gas value chain is built on the cooperation of various suppliers. Fulfilling our social responsibility by working with our suppliers in the value chain builds relationships of trust with
our stakeholders and furthers the development of the entire value chain.
    The Daigas Group is committed to fulfilling its social responsibility in close cooperation with suppliers in line with the Daigas Group Code of Business Conduct, revised in accordance with theUnited Nations Global Compact. The Daigas Group has formulated the Daigas Group Procurement Policy and has made it known to the Group’s suppliers, together with the Daigas Group
Procurement Policy for Suppliers.

Daigas Group Procurement Policy

Daigas Group Procurement Policy

The Daigas Group aims to contribute to the development of a sustainable society and believes that environmental and social consideration is important in procurement.
Based on this idea, the Group formulates its policy on the procurement of works, services, goods, products, parts, materials, etc. as follows:
1. Compliance
We will ensure that our procurement will be in compliance with laws and ordinances, basedon common sense corporate practices following sound ethical views, and in fullconsideration of occupational health and safety, respect for human rights, includingprohibition of discrimination, forced labor, and child labor, and the elimination of misconduct.
2. Open Trading
To procure high-quality, safe and economical materials, equipment and the like atappropriate timing, we will deal with not only domestic companies but also overseas
companies.
3. Fair Dealing
We will fairly and justly select suppliers, vendors, contractors and others with whom we
conduct business (collectively referred to as “Suppliers”), taking into comprehensive accountsuch factors as their corporate soundness, financial condition, commitment to corporatesocial responsibility, safety management system, technical capabilities, the quality, prices,

Daigas Group Procurement Policy for Suppliers (Excerpt)
Respect for Human Rights
Respect the human rights of all those involved in corporate activities according tointernational human rights standards, and prevent the direct or indirect infringement of
human rights, including discrimination, harassment, and other inhumane treatment, due tocorporate activities throughout the supply chain.
Fair Working Conditions
Comply with international labor standards and related laws and ordinances to appropriately
pay employees, manage their working hours, and give them days off; to prevent any kind of
discrimination at the workplace, forced labor, or child labor; and to respect the rights ofworkers (including technical intern trainees and other workers from abroad, and immigrant
workers), such as the freedom of association and the right of collective bargaining.

and reliability of their products and services, the compatibility of their products and services
with existing equipment, reliability in delivery, after-sales service, and economic rationality.
4. Contribution to Environmental Conservation
Based on the Daigas Group Environmental Policy, we aim to operate our business inharmony with the environment, including consideration of biodiversity. We will promote green
purchasing* in consideration of the balance between economic conditions and the reductionof environmental burdens.
5. Trusting RelationshipWe will build a solid relationship of trust with Suppliers and strive for mutual development
through close communication and fair and just purchasing transactions with them.
For more details, refer to the Daigas Group Procurement Policy for Suppliers, which theGroup has formulated.
*“Green purchasing” is purchasing in full consideration of the necessity of the purchase, taking into
account not only quality and price but also the environment.

Daigas Group Procurement Policy for Suppliers (Excerpt)

Contribution to Environmental Conservation
Reduce the environmental burden of business operation, and products and services.
[Examples: Reduce greenhouse gas emissions by saving energy and using low- and/or
zero-carbon energy; promote green purchasing; use resources (water resources, rawmaterials, etc.) in a sustainable way; promote resource recycling; prevent air, water and soil
pollution; and conserve biodiversity]
Ethical Corporate Management
Respect free and fair competition and prevent misconduct.
Protect intellectual property rights; disclose information appropriately; maintainconfidentiality; safeguard privacy, including that of personal information; procure minerals
responsibly; conduct responsible marketing activities; and never have any relationships with
antisocial groups.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

Responsible Procurement

SocialGovernance

ESG Data

089

Results of the questionnaire surveys of suppliers

Measures in material procurement
We have a system for explaining the Daigas Group Procurement Policy and the Daigas Group
Procurement Policy for Suppliers to our suppliers and confirming the status of their sustainable
activities before proceeding with a new business transaction in materials purchasing.
    In addition, we conducted a questionnaire survey of major suppliers in materials
purchasing to check their sustainability efforts. Furthermore, when the suppliers conductbusiness transactions with the Daigas Group, they are asked to observe the Green Purchasing
Guidelines set by the Group, which are attached to the specifications for the transactions.

Sustainability activity survey of gas appliance makers and other suppliers
conducted to promote information sharing on social and environmental
issues to be tackled by companies
The Daigas Group conducts a questionnaire survey of major suppliers* on sustainable
activities to provide a sense of security to customers when they choose the Daigas Group, as
well as taking into account social and environment aspects in doing business. The survey isbased on the Daigas Group Procurement Policy and the Daigas Group Procurement Policy for
Suppliers. The survey was conducted of gas appliance makers and other suppliers to assess thestatus of their efforts for a total of 59 items on the eight themes of compliance, human rights,
labor, occupational health and safety, product safety and quality, environmental conservation,
ethics and prevention of corruption, and policy enforcement system. In addition, we conducted asurvey of service chain partners and construction work contractors, to which the Group has entrusted
gas business-related duties, and of LNG suppliers.
*Selected based on the degree of impact on our business, such as the transaction amount and whether or
not Daigas Group brand products are handled

Survey on Sustainability Activities Conducted in FY2023.3
Companies covered by thesurveyNo. ofcompanies
surveyed

No. ofcompanies
which replied

Other efforts

Main suppliers

146

146

Green Partner InitiativeGas appliancemanufacturers

36

36Service companies,
engineering firms

205

165

LNG suppliers

8

6

Questionnaire surveys of suppliers regarding sustainability activities for FY2023.3 found no
violations in the environmental and social fields. For responses that raised concerns, wefollowed up individually from each responsible line to confirm that there were no problems withthe actual state of activities.
    We provided suppliers with feedback on good practices among respondent companies
and comparisons between overall average values and the results of their own responses toencourage them to continue and improve their efforts.

Efforts to encourage the reduction of environmental burdens and results
We encourage major suppliers, etc. to reduce environmental burdens as part of our efforts to
reduce environmental burdens in our supply chain. In addition to complying with environmental
laws and regulations, we request them to monitor their CO2 emissions and water usage, report
the status of setting reduction targets, and take measures to reduce environmental burdens.

Promoting green purchasing in collaboration with suppliers and affiliates
Based on its Green Purchasing Guidelines (formulated in 2000, revised in 2022), Osaka Gas
works with suppliers to promote Green Purchasing: prioritized procurement of biodiversityfriendly goods and construction work that have less impact on the environment. We actively
use eco-friendly products, including Forest Stewardship Council-certified paper, recycled
paper, LED lighting, and carbon offset products.
    In 2005, we launched the “Green Partner Initiative” to evaluate environmental efforts by
our main suppliers, including establishing an environmental management system (EMS) andobtaining an EMS certificate. Suppliers recognized as supporting the initiative have beenregistered as Green Partners.
    The Green Partner Initiative was revised in FY2016.3, resulting in suppliers other thanthose previously covered now being covered by the initiative. As of March 31, 2023, 85
suppliers were registered. Affiliated companies are working to expand green purchasing under
the Daigas Group Environmental Management System (OGEMS), our unique environmental
management system.
Green Purchasing Guidelines

Participation in an initiative related to supply chains
Since FY2018.3, Osaka Gas has been participating in Sedex, which promotes theestablishment of ethical supply chains, to respond to requests from suppliers.
    We regularly undergo SMETA audits (an audit scheme provided by Sedex) at our
manufacturing sites in an effort to respect the human rights of our employees and improve theworking environment.

Training for personnel in charge of purchasing
The Daigas Group conducts training for personnel in charge of purchasing once a year. During
training, we disseminate the Daigas Group Procurement Policy, which shows consideration forcompliance, human rights, and the environment.
    We also have e-learning courses for personnel in charge of purchasing available at
all times.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

090

Customer Health and Safety
Summary

Why the topic is material

The Daigas Group is committed to making a positive contribution to realizing a higher level of comfort of its customers and the development of their business activities by ensuring astable supply of city gas, electricity, LPG, and other energy sources and the safety of city gas supply and equipment with an improved level of services for its customers. To realize
this, we believe that it is important to improve energy resilience so that customers can use energy without worry. We will endeavor to provide products and services that offer utmost
reassurance about safety in order to be a corporate group that continually evolves and develops alongside our customers.
    We have positioned customer health and safety as one of our material issues.

Items to be addressed

Specific initiatives
Policy and promotion system

Customer health and safety• Ensuring continued stable procurement andsafe supply of energy• Building resilient facilities• Emergency response system and antidisaster measures• Passing on advanced knowledge and skills
in safety and disaster prevention• Disseminating information about safe use
Materiality Customer health and safety
Materiality Stable supply of services

The Daigas Group is committed to ensuring the quality of city gas, our primary product, its stable supply, and the safety of our gas
and power generation facilities—all by adhering to our “Security Rules.” From FY2023.3, based on legal separation, we establishedthe “Safety and Disaster Prevention Committee” as a company-wide committee to centrally manage and promote measures forevents related to safety, disaster prevention, and gas supply stability, with the aim of building a system that exercises governanceacross the company during normal times.
KPIs based on the materiality

FY2023.3 results

Number of serious accidents

We continued achieving zero serious accidents by implementing quality control of city gas in
the production business and safety inspections of gas facilities in the supply business inaccordance with laws, regulations, and internal rules.

Building resilient facilities

The percentage of earthquake-resistant facilities is approximately 89%, and the number ofearthquake blocks* increased to 713 due to the subdivision of supply network.

Initiatives undertaken in FY2023.3• Ensuring the safety of city gas, gas and power generation facilities, and continuing to maintain quality levels• Striving to systematically update facilities and maintain a pipeline network to build resilient facilities• Building and implementing a system that allows for quick response to accidents and disasters, developing a Business Continuity
Plan (BCP) to Take Effect During a Large-scale Disaster or Accident, and conducting drills• Continuing to develop human resources with advanced knowledge and skills related to safety and disaster prevention*Blocks are divided parts of the supply network aimed at early restoration in the event of supply disruptions due to earthquakes, etc.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance091

ESG Data

Customer Health and Safety
Principle and Outline
The Daigas Group announced Long-Term Management Vision 2030 in March 2017 and Medium-Term Management Plan 2023 in March 2021. Ensuring the safety of city gas as well as gas andpower generation facilities is of the utmost priorities for the Daigas Group, which sets targets of continued zero serious accidents and more than 10 million customer accounts and aims to enhance
the resilience of customers and society. To that end, we consider it important to work towards enhancing safety and improving preparedness for accidents and disasters.
    The Daigas Group Code of Business Conduct, which sets forth the standards of conduct that our officers and employees must follow without fail, specifies “ensuring safety of products andservices.” In order to ensure safety, we are committed to not only meeting legal standards but also pursuing safety from the perspective of customers in each of our operations.

Safety and Disaster Prevention Promotion Structure

Safety and Security Efforts in the Energy BusinessWe established the Safety and Disaster Prevention Committee as a corporate committee,
which is a system built for ensuring governance across the company during normal times so
as to centrally manage and promote measures for incidents related to safety, disasterprevention, and gas supply stability.

Ensure stable procurement by diversifying sources of LNG imported by
Osaka Gas

Representative Director andPresident

Management Meeting

Corporate Committee: Safety andDisaster Prevention Committee
Chairman: Head of Safety

SafetySubcommittee

Disaster Prevention
Subcommittee

Gas Supply Disruption
Countermeasures
Subcommittee

Natural gas resources—the source of city gas and fuels for power generation—are spreadworldwide. Osaka Gas started importing LNG from Brunei in 1972 and has since diversified
its procurement sources.
    In December 2019, a natural gas liquefaction project was launched in Texas, U.S. LNG
from the United States is procured with a new method, whereby the price is determined inconnection with Henry Hub prices, the index upon which the market price for natural gas
futures is based in the United States. This procurement method has been added to Osaka
Gas’s existing procurement method, whereby the price is determined by indexing to crude oil
prices.
    The use of more diverse price indicators will enable us to procure LNG at stable prices
even if crude oil prices fluctuate. Moreover, investment in the natural gas liquefaction projectwill enable us to procure a kind of price-competitive LNG, whose price is closer to prime cost,among the kinds of LNG whose prices are linked to Henry Hub prices.
We will continue our efforts to procure more affordable LNG in a more stable manner.
LNG Handled by Osaka Gas (Including Fuel Used for Power Generation and Wholesale)(thousand ton)
Fiscal Year

Operations and maintenance tasks inspected
In the infrastructure business, one accident can have various effects on stable supply andcause large losses. So, Inspections beyond the regular ones were carried out led by the
Safety Subcommittee, on operations and maintenance work.
    In FY2023.3 we have reaffirmed and improved our efforts and systems to prevent
accidents and ensure stable supply in the energy businesses that are essential to people’s
lives and industry, such as gas, electricity and heat supply. In addition to continuously
checking the operational status in FY2023.3, we will also expand the scope in FY2024.3 toour renewable energy business. We will roll out good practices obtained from inspection
results to new businesses.

21.3

22.3

23.3

Brunei

454

641

160

Indonesia

285

127

0

Malaysia

945

942

1,153

Australia

3,436

4,011

4,756

Russia

384

449

321

Qatar

421

179

0

Oman

1,271

1,335

1,460

Papua New Guinea

1,308

1.663

1,939

USA

1,836

2,803

679

Others

235

274

141

Total

10,575

12,443

10,608

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

Safety measures at LNG terminals

Odorization aids gas leak detection

Our system docks LNG tankers safely

At Osaka Gas’s two LNG terminals, the LNG brought in by tankers at a temperature of -160°C
is vaporized using the heat of sea water, then the heating value of the gas is adjusted before it
is delivered to customers. Because natural gas is odorless, it is given a specific odor so that it
can be detected in case of a gas leak.

At the Osaka Gas LNG terminals at Senboku and Himeji, we strive for complete safety on site
and in the surrounding areas. This safety begins as soon as the tankers carrying LNG dock at
dedicated piers at the LNG terminals.
    The tankers bringing LNG from around the world are docked with the utmost concern
for safety. Osaka Gas developed its own system specifically for safely docking tankers througha series of processes.
    This system uses a GPS to monitor in real time the position of the tankers to an
accuracy of 10 cm as they enter and leave the port, and dock and undock.

092

Monitored 24 hours a day, 365 days a year
Central control rooms at LNG terminals carry out around-the-clock monitoring and operationof all processes from receipt of LNG, vaporizing of the gas, to delivery of the product.
    These central control rooms also carry out monitoring and operation of all of the incident
detectors and surveillance cameras so that problems are detected promptly and prevented fromspreading. If an incident detector picks up a problem, an alarm is sounded in the central control
room and staffs are on the scene immediately.

LNG tank safety measures
The LNG transported by tanker is fed into LNG tanks from the dock. To ensure a stable supplyof city gas, our two LNG terminals have a total of 25 LNG tanks, including one of the world’s
largest land-based tanks.
    Tanks are equipped with advanced earthquake-proof technology. Should there be a gas
leak, the tanks have dikes to stop the LNG from flowing to the outside. And there are highexpansion foam discharge systems and water curtain facilities to contain any spilt LNG.
Central control room at an LNG terminal

Developing a Business Continuity Plan to Take Effect During a Large-scale
Disaster or Accident

High-expansion foam discharge and water curtain facilities along
the dike around an LNG tank

In July 2013, the Daigas Group formulated a Business Continuity Plan (BCP) to be
implemented in the event of a large-scale disaster or accident. This BCP, which we havedisseminated throughout our Group, outlines responses to identified risks.
    It assumes a situation in which the company and society at large are affected by anearthquake or tsunami resulting in a paralysis of various functions, or a functional failure due toproblems with raw materials suppliers and our equipment. According to the terms of the “Acton Special Measures for Pandemic Influenza and New Infectious Diseases,” the company shall
respond promptly and accurately to the outbreak of a new strain of influenza or the like toprevent infection of employees and to protect public health. We have established company
regulations under the name of the “Pandemic Influenza and New Infectious Diseases
Preparedness Action Plan” in order to ensure the stable supply of gas in such a situation.
    In principle, we review our BCP annually and promote employee awareness byimplementing BCP training, earthquake drills, and education and training incorporating e-learning.
    In the event of an earthquake, we must respond by upholding business continuity in parallelwith implementation of disaster response operations, so clearly advanced disaster response
capabilities are required as well. By simultaneously implementing earthquake drills and BCP
training in FY2023.3, we were able to identify the challenges of maintaining business continuity
concurrently with disaster response operations, thus strengthening our overall disaster-response
capabilities.
Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

Osaka Gas Network Co., Ltd. initiatives:
Safety measures during supply

Governance

ESG Data

093

Integrated system for monitoring and controlling the gas supply

Monitoring and replacing gas pipes
City gas is delivered to customers via the gas
pipeline network. Therefore, Osaka Gas Network
Co., Ltd. recognizes that keeping the gas pipes
safe and properly maintained is one of the mostimportant matters and is constantly replacing old
metal pipes with pipes made of polyethylene, which
is highly durable and earthquake resistant.

SocialPipes made of polyethylene exhibit
superior strength

Building resilient facilities
To ensure stable city gas supply, we believe that it is important to renovate the processing
facilities, build a gas pipeline network, and take disaster prevention measures inaccordance with meticulously devised plans to strengthen our foundation to secure ahigher level of stability in the gas supply.
    Osaka Gas Network Co., Ltd. is working to improve the earthquake resistance ofgas facilities as a preventive measure (promotion of the spread of earthquake-resistantfacilities), including the introduction of highly earthquake-resistant gas pipes. We arerefurbishing aged gas pipes and introducing pipes with superior resistance toearthquakes and corrosion according to the plan. We are actively proposing the repair ofold buried gas pipes at customers’ sites that pose a risk of corrosion. We completed
measures for cast iron pipes (pipes requiring measures) ahead of schedule fromFY2021.3 to FY2016.3. We continue to implement measures for cast iron pipes (to be
maintained and managed) and pipes for preventing corrosion and deterioration.
    As part of emergency measures to prevent secondary disasters, we haveestablished a gas shutoff system to prevent secondary disasters caused by gas leakage
in the event of an earthquake or other disaster.
    In accordance with the Ministry of Economy, Trade and Industry’s “Gas Safety
Upgrading Plan,” we are working to increase the percentage of earthquake-resistantpipes, which indicates the ratio of earthquake-resistant pipes to the total, and to
subdivide supply blocks to keep gas shut off due to emergency measures to theminimum extent possible.
    We believe that energy resilience can be improved by taking both measures:increasing earthquake resistance as a preventive measure against earthquakes andminimizing damage and achieving early restoration in the event of an earthquake.

Security measures to prevent accidents
Osaka Gas Network Co., Ltd. ensures that thefollowing security measures are taken to prevent theoccurrence of accidents including gas leaks.
1. Regular inspection of gas pipes along the pipelines
to ensure there are no gas leaks
2. Inspection and repair of facilities including
Regular inspection of gas pipes onregulators, valves, and gas pipes on bridges
bridges
3. Meetings with contractors who are doing excavation
work for water and sewage pipes, and electrical and phone lines near Osaka Gas
pipelines, as well as inspection of the work sites, before, during, and after the work

The Central Control Room of Osaka Gas Network
Co., Ltd. ensures a stable and safe supply of gas
24 hours a day, 365 days a year.
    We have a gas supply monitoring andcontrol system that keeps a constant watch ongas, from the LNG terminals to every corner of thepipeline network. The system constantly gathers
data on gas pressure, flow volume, andirregularities from points around the gas pipeline
network, providing integrated control throughremote operation that controls production andsupply and detects any problems.

Central Control Room

Osaka Gas Network Co., Ltd. initiatives: Emergency
response system and anti-disaster measures
Taking calls and responding all day, every day
It is particularly important to establish an initial response
system in the event of accidents and natural disasters
and act appropriately in response to such events.
    Osaka Gas Network Co., Ltd. has established aunified security system covering the entire supply area.
Under the system, if gas leakage occurs, the Central
Control Room will take charge of all relevant duties,
Central Control Room (emergency
including receiving an accident report and dispatchingcall reception)
security staff to the accident site. Specifically, theCentral Control Room will order the dispatch of the emergency vehicle that can reach theaccident site the fastest by taking various factors into consideration, such as availabilityof vehicles and their locations.
    The Central Control Room accepts emergency reports, such as a gas leakage,around the clock via dedicated telephone lines set up in the Room. After an accident isreported, emergency staff will be sent to the site immediately and work in close
collaboration with local police and fire departments.

Initiatives for coordination with local governments in the event of a disaster
Osaka Gas Network Co., Ltd. has concluded agreements with local governments on
coordination in the event of a major disaster or in other similar situations. The purpose of
the agreements is to quickly stabilize people’s lives by working together with local
governments to restore gas supplies safely in the event of any major disaster. As of
March 2023, the company has concluded agreements with approximately 70 local
governments within the supply area, including Osaka City.
    With this agreement, the company will deepen its cooperation with the government
in normal times even more than before, and build a system for cooperation andcollaboration in the event of a disaster.
Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

Emergency response system and anti-disaster measures

Status of technology development and operation for disaster preparedness and recovery support

Measures against possible large-scale earthquakes

Various in-house organizations must work in close cooperation to restore gas supply suspended
because of a disaster or accident. This requires that information on conditions at trouble spots beshared immediately.
Osaka Gas developed the “BRIDGE” disaster recovery support system to centrally manage
real-time information from the onset of a disaster/accident through recovery, and put this system
into operation in April 2012. The system links up map information with customer information, making
it possible to “visualize” recovery actions by centrally managing on-site progress and reducing thetime needed to complete recovery work.
In addition, the “OG-DRESS” mobile-based reporting system aimed at supporting disasterrecovery has been established, enabling reporting on completion of recovery work via mobile phone.
Based on such a system, we will make our response actions in the event of a disaster expeditious.
We developed the “Typhoon and Torrential Rainfall Information System,” which provides
centralized information on accumulated rainfall and landslide disasters during typhoons and torrential
rainfall, and have been operating the system since 2015. We also built a system to grasp the risk ofriver flooding at an early stage and have operated it since 2021. If we identify a risk of inundation ofgas supply facilities due to river flooding, we will establish an emergency system and take preventive
measures for the facilities to ensure the safe supply of gas for our customers. We have developed a“recovery visualization system” that provides easy-to-understand information on the restoration ofgas service to customers living in areas where gas supply is cut off due to a major earthquake. In theevent of a major earthquake, the top page of our website switches to an emergency-use page thatprovides status updates on gas supply stoppage and restoration using this system.
The recovery visualization system has two types of browsing functions: a map on which the gas
recovery status is shown color-coded by stage and a list that shows the gas recovery progress by area.
We will continue to work to improve our disaster prevention and mitigation measures against
earthquakes and other natural disasters and to deliver city gas to our customers with greater safety
and stability.

Daigas Group has taken a range of measures for dealing with large earthquakes, including installing
earthquake-resistant polyethylene pipes and intelligent meters that detect vibrations from theearthquake and shut off the gas supply and securing an emergency communications network. In
addition, the Great Hanshin-Awaji Earthquake of 1995 has prompted us to step up these measures.
    We have installed seismometers in the Group’s service area, which allow us to quickly determine
the seismic intensity and other information. The service area is divided into blocks. In the event of thedetection of ground shaking that may cause damage to gas pipelines, to prevent secondary damage,gas supplies are shut off block by block. This is possible thanks to a system of automatic gas shutoff
devices equipped with a seismoscope as well as remote gas shutoff devices that are activated bycommand from the Central Control Room. If the Central Control Room is physically damaged, theCentral Control Subcenter set up with a similar function will take over its task.
    We also make constant efforts to improve employees’ ability to respond to emergencies,
including conducting company-wide disaster drills and providing disaster prevention education throughe-learning, in addition to taking physical countermeasures against earthquakes as described above.
    In FY2023.3, as a company-wide disaster drill, we conducted a company-wide earthquake
drill and business continuity plan (BCP) training simultaneously, continuing from last year, to identify
issues arising from conducting disaster response and business continuity operations at the sametime. In the drill, which was based on the scenario of an earthquake of magnitude 8.7 with an
epicenter in the Nankai Trough, a task force, headed by the President of Osaka Gas, was formed at
the Head Office. We worked to strengthen our initial disaster-response capabilities and share thedisaster response flow until the completion of restoration.
    In addition to approximately 2,000 employees of the Group, including partners, 50 people from 13
retailers other than Osaka Gas also participated in the drill to confirm cooperation in disaster response.
Progress of Earthquake Countermeasures after the Great Hanshin-Awaji Earthquake
Focus

Main earthquake
countermeasures

Install additional
seismometers
Strengthen
information
gathering function Introduce earthquake
damage prediction system

Establish supply
suspension
systemStrengthen
emergency
communications

At the time ofGreat Hanshin-Awaji
Earthquake (January 1995)
Installed at 34 locations—

Subdivide supply blocks into
smaller segments

55 middle blocks

Introduce supply suspension
equipment

Remote suspension
equipment only for super
blocks (dividing the supply
area into 8)

Strengthen wireless systems—

Ratio of strengthening ofearthquake resistance

Percentage of earthquake
resistant pipes: 68%

Promote widespread use ofpolyethylene (PE) pipes

PE pipeline length: Approx.
1,200 kmPromote widespread use of
microcomputer meters

Overall adoption rate:
Approx. 75%

Other

Back up important online
information—

094*Since April 2022, the city gas supply business has been conducted by Osaka Gas Network Co., Ltd.

Present (April 2023)

Passing on advanced knowledge and skills in safety and disaster prevention• Installed at approx. 3,300 locations• Introduced at the Central Control
Office (head office, back-up center)and 5 areas• 87 middle blocks• 713 little blocks• Remote suspension equipment at
approx. 3,600 locations• Earthquake-sensitive automatic
suspension equipment at approx.
3,000 locations• Head office and back-up center
serve as two hubs
• 6 portable satellite communications
facilities• Percentage of earthquake resistantpipes: Approx. 89%• PE pipes used for basically all
low-pressure pipelines• PE pipeline length: Approx. 17,900km• Installation completed for residential
sector• Overall adoption rate including
non-residential sector: Approx. 99%• Back-up center opened

Based on the belief that our greatest mission is to deliver gas safely and securely, the Daigas Group
strives to nurture human resources with a high level of knowledge and skills in the areas of safetyand disaster prevention.
At LNG terminals, a system with a 3D animation function was installed to simulate things
that are not easy to experience, such as a more realistic reproduction of a fire or other serious
accident, to improve the quality of training and transfer skills. The Technical Skill Development Centerof Osaka Gas Network Co., Ltd. strives to develop human resources with advanced knowledge andskills through high-quality lectures, abundant video content, etc., with the aim of preventing gas
accidents and accidents resulting in injury or death. To convey the lessons learned from various past
failures, we have also set up experiential-type training facilities that reproduce the circumstances at
the time of these failures. Also in the Energy Solutions Business Unit, the Human Resource
Development Centre provides various training programs to improve the quality of work related tosecurity, such as starting service of gas supply, regular safety checks of gas appliances, andinstallation and repair of equipment.
In order to further solidify “safety,” we have established the Four Safety Principles as auniversal code of conduct common to those involved in safety as part of their work. We aim toeliminate accidents and problems by adhering to these four principles, which are: adherence torules, reliable communication, reconfirmation, and interruption at unexpected times. We will follow
these provisions to help make ourselves continuously aware of our responsibility to customer safety.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

Products and services ensure safe use by customers

Announcement of joint development of a smart meter system

Informing customers about safe use of gas appliance

Osaka Gas Network Co., Ltd., Tokyo Gas Network Co., Ltd., and Toho Gas Network Co.,
Ltd., which are city gas pipeline companies, have been working to jointly develop a smart
meter system for the city gas business with the aim of increasing the efficiency of gas meterreading and gas line closing operations in normal times and improving disaster resilience.
    The introduction of communication-enabled smart meters will increase the efficiency of
on-site work through remote gas meter reading and gas line closing. The smart meters will
also enable remote gas shutoff operations (gas line closing) in the event of gas leakage as well
as remote safety measures (gas line closing) and gas restoration operations (gas line opening)in the event of a disaster. This will further help enhance safety and improve resilience insupplying city gas.
    We believe that joint development of the system responsible for signal exchange
between smart meters and various business systems will not only reduce development costs,
but also contribute to improving social benefits.

To ensure that customers can use their gas appliances with peace of mind, we take every
opportunity to talk to them about the safety of their appliances: during regular safety
inspections, when providing a new gas service, and when conducting repairs.
    The Osaka Gas website has a section with important announcements on gas
appliances, where we talk about the proper use of gas appliances, and post prompt notices
about product modifications or defects.

Developing and promoting the use of safer gas appliances
The Daigas Group strives to bring customers products and services that ensure the safe useof gas. In 1992 we developed an automatic shut-off device for gas stoves and in 1999 a small
gas water boiler with interlock mechanism*1. To eradicate fires originating from gas stoves,since April 2008 all products have been equipped with an auto shut-off function toautomatically turn off the gas when the user forgets to. We have been working to spread theuse of this product, called the “Si” Sensor-Equipped Cooking Stove.
    In 2019, we developed and launched a new safer and securer gas stove in cooperation
with Paloma Co., Ltd. to reduce the risk of clothing catching fire*2 during cooking. The newgas stove is equipped with area sensors*3, an industry-first technology. When a sleeve or otherobject comes close to the flame, the sensors detect it, lower the flame automatically, andsound a voice alert. The product obtained recommendation certification as a product witheffective fire and disaster prevention functions from the Fire Equipment and Safety Center ofJapan, the first time for a cooking device. Meanwhile, we would like to eradicate all old gas
appliances that lack safety mechanisms. In particular, we visit customers who are still using
old appliances that are not equipped with incomplete combustion prevention devices, such as
small tankless gas water heaters and wire-mesh gas stoves, and recommend that customers
upgrade to safer gas appliances.
    The Group also provides gas alarm systems that warn residents of a gas leak or carbon
monoxide and offers a range of safety-related services, including the dispatch of staff to ahome when trouble is detected.

095

Product Safety Voluntary Action Plan for residential gas appliances
The Daigas Group, as a distributor of residential gas appliances and a repair and installation
business, strives to ensure the safety of residential gas appliances, acting according to the
Product Safety Voluntary Action Plan, being based on a strong determination to continue toensure that our customers enjoy safe, secure, and comfortable lives.
Product Safety Voluntary Action Plan for residential gas appliances

When problems occur
When there is a product accident or other problem with a gas appliance that it sold, installed,
or repaired, the Daigas Group immediately informs the media and places notices innewspapers and on its website. At the same time, the Group proceeds with the inspection of
the product in question and if necessary repairs it or replaces parts.
No such incident occurred in FY2023.3*1 Interlock mechanism: A device that stops the ignition process after the incomplete combustion
prevention mechanism is triggered three times.
*2 Clothing catching fire: A sleeve, for example.
*3 Area sensors: It is a registered trademark of our company.

Changes in the Rate of Use of Water Heaters with an Incomplete Combustion Prevention
Device and Gas Stoves with a Function of Automatically Turning off the Flame
FY2019.3

FY2020.3

FY2021.3

FY2022.3

FY2023.3

Water heater with anincomplete combustion
prevention device

99.9%

99.9%

99.9%

99.9%

99.9%

Gas stove with a functionof automatically turning off
the flame

96.0%

96.1%

96.2%

96.3%

96.3%

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

096

Customer Satisfaction
Summary

Why the topic is materialWith “Service First” as its corporate motto, the Daigas Group believes it is important to strive to improve our security and service quality as well as appropriately provide customers
with information regarding the safety aspects of our products and services so that they can use them in a safer and more convenient manner. To provide services in excess ofcustomer expectations, we are listening to their voices through various contacts with them, with the aim of improving our products and services.
    We have positioned the improvement of customer satisfaction and quality of services as one of our material issues.

Items to be addressed

Customer satisfaction• Maintenance and improvement of service
levels by collecting and analyzing customer
feedback and reflecting it in operations• Creation and sharing of manuals for each
duty, aiming for higher level of service• Promotion of awareness-raising activities
through training for managers and persons
in charge
Materiality Improvement of customer
satisfaction and quality ofservices

Specific initiatives
Policy and promotion system
The General Manager of the Energy Solution Business Unit plans the basic policy for customer satisfaction improvement activities inaccordance with the “Customer Service Rules,” and the head of each organization in charge formulates and implements
specific measures.
KPIs based on the materiality

FY2023.3 results

Customer satisfaction rate

90%

Initiatives undertaken in FY2023.3• Conducting a questionnaire after completing a duty, analyzing and sharing it within the company, and reflecting it in the
improvements in duties• Continuing efforts to improve the skills of managers and persons in charge through the creation of manuals and training for each duty

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

097

Customer Satisfaction
Principle and Outline
Since FY1989.3, Osaka Gas has conducted the Customer Satisfaction Survey with the aim of improving customer satisfaction. The survey covers five duties that directly deal with customers: opening ofgas lines, repair of gas appliances, sales and installation of appliances, regular security patrols (gas facilities inspection), and response to telephone inquiries (at the customer centers). After completing
each duty, we ask customers to provide their feedback in a questionnaire, and in FY2023.3, we received 33,400 responses to the questionnaire.
    The results of this survey are reflected in our efforts to improve daily operations and enhance CS awareness among the Group employees and Osaka Gas service chain employees.
    The results of this survey are also reflected in KPIs based on material issues. We manage our progress toward achievement of our goals and redouble our efforts to achieve higher levels ofcustomer satisfaction.

Improving Customer Satisfaction
Prompt, precise phone service connects customers to the relevant company division
In 1985, Osaka Gas opened its “Customer Centers” as a one-stop service portal for customers withinquiries and applications for service. The center takes telephone inquiries on all matters relating to gas
and electricity, such as starting and stopping a gas and electricity service, inquiries about gas andpower bills, requests to change payment methods, and repair of gas appliances. On the Osaka Gas“Internet Reception” page, customers can easily apply for services related to moving to a new home,inquiries on gas bills, and changes in the day of equipment surveys. And for the hard of hearing, wehave a facsimile service for handling inquiries. With our company-wide “Hello System,” applications andinquiries are relayed from the “Customer Centers” to the relevant Osaka Gas division to ensure that
customers always get a prompt and appropriate response.
    For the sake of greater customer convenience, we have been offering toll-free numbers and aphone service even on Sundays and holidays to take gas appliance repair requests 24 hours a day. In
April 2020, we launched a new service whereby artificial intelligence (AI) automatically responds by
voice to phone calls made by customers to arrange a schedule change for gas equipment inspection,using the Voice Digital Transformation (DX) Consulting Model* provided by NTT Communications
Corporation.
    Aiming to further improve service in additional ways, we will optimize the assignment of
Customer Center operators and introduce an automated attendant system to ensure that phone calls
can be answered at all hours. We will also continue our efforts to further enhance our system foraccepting requests, applications, etc. online.

Hello Network of Osaka Gas

Hello Network of
Osaka Gas
CustomercenterReport on business
operations

Response

Request andinquiry

Report on business
operations

Visit to takeresponse action

Osaka Gas businessoffice in eachservice area

Visit to takeresponse action

Customer

Request andinquiry

Service shopand others*The Voice Digital Transformation (DX) Consulting Model is a solution that automates the entire process, from responseat the contact center to clerical processing, by combining an interactive AI engine and application programming
interface (API; a system for sharing the functions of software)

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

098

Efforts to Improve Customer Satisfaction in Each Duty that Directly Deals with Customers
Opening of gas lines

Sales and installation of appliances

For the opening of gas lines, we first receive an application from a customer when starting a
new gas service and then visit the customer on the desired date and time. In the presence ofthe customer, we perform work such as checking for gas leaks and the safety of gas
appliances so that gas services can be used without worry. We accept applications by phone
at Osaka Gas’s customer center or on our website. In response to feedback from customers
who have moved into new homes where they do not know how to use the installed gas
appliances, we provide explanations on how to use gas water heaters and stoves. We havereceived positive feedback from many customers through questionnaires.

For the sales and installation of appliances, Osaka Gas’s service chain partners, which operate
in approximately 200 locations in the Kansai region, provide community-based services thatcan respond quickly and meticulously to customer requests. In order to help our customers
live safe and comfortable lives through a wide range of operations, our experienced staff
members provide various services, including proposals for appliances, quotations, contracts,
installation, and after-sales service. We created a video explaining the details of installation
work, based on the comments from customers who have signed a contract for purchasing agas stove regarding advance explanations of the installation work, including “I would feel moresecure if I knew the details of the work in advance.” We use this video at the time of sale orinstallation so that customers can see in advance what will be performed on the day of thework, and thus the appliance can be delivered with a greater sense of security.

Repair of gas appliances
For the repair of gas appliances, we accept requests for repairs 24 hours a day, 365 days ayear, and visit our customers’ homes to repair their appliances. In addition to accepting
requests by phone at Osaka Gas’s customer center, we also accept them on our website,where customers can inquire about the details of their problems and receive advice on issues
that can be resolved without our visit. In our questionnaires, we have received many
comments expressing satisfaction with a quick fix of malfunctions. For this reason, Osaka
Gas’s service chain partners hold a large inventory of parts of hot water appliances, for which
there are particularly many requests for repair, so that we can repair them on the day of ourvisit. As a result, the satisfaction rate for the number of days from acceptance to completionof repairs reached 98%, indicating that our repair speed is highly evaluated by our customers.

Regular security patrols
In regular security patrols, inspections of gas facilities for gas leaks and ventilation equipment(gas water heater/gas water boiler) are conducted at least once every four years* inaccordance with the Gas Business Act to ensure safe and secure use of gas. The work on the
day of the inspection is carried out by workers who have received appropriate technicaltraining. In addition to the inspection items stipulated by law, we have set items for voluntary
work, such as checking the ignition of some gas appliances and measuring the carbon
monoxide concentration in the exhaust gas, in an effort to call attention to the safe use of gas.
Additionally, as we require the customer’s cooperation during the inspection, we mail a noticeof the visit date in advance, and if the date is not convenient for the customer, we accept
requests to change the visit date. In addition to applying by phone, we also make it possible
to apply online in an effort to reduce the burden on our customers.
*Patrols are conducted at least once a year for specific underground malls and specific underground rooms.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

099

Proposing New Value“Sumikata Services”: A range of home repair and other services to support comfortable, safe living
Osaka Gas provides a wide range of services under the umbrella of “Sumikata Services” for residential customers, which extend beyond gas and electricity, to support the comfort and safety ofpeople’s home living environments.
    Sumikata Services include plumbing repair, air conditioning repair, home repair, house cleaning, and other services as part of “Kaketsuke Service,” which involves the dispatch of personnel tothe customer’s home. Other services include disaster-management and crime-prevention services covering gas alarms, fire alarms, home security, and more. For example, personnel from the Osaka
Gas service chain, with expertise gained through the repair of gas equipment, quickly accept and respond to service requests to repair water-related problems in the kitchen, bath, sink area, or toilet.
    In June 2020, we started providing services, such as housekeeping and garden tree care, in collaboration with Duskin Co., Ltd., and from October the same year, we began the provision ofservices to respond to trouble with PCs and IoT devices in partnership with Japan PC Service Co., Ltd.
    Through Sumikata Services, we respond to a wide range of problems faced by our customers in collaboration with the Osaka Gas service chain and diverse alliance partners. The membershipof the services currently exceeds 480,000.

Accuracy in Advertising
Ensuring complete accuracy and honesty in advertising based on the code of conduct
Advertising activities and product labeling are important means for many customers to accurately understand the products and services of Osaka Gas, and they are important factors for customers
to make decisions when selecting products and services. Therefore, we strive to provide and display appropriate information about products and services based on “9. Ensuring safety of products
and services” in the Daigas Group Code of Business Conduct. Responding to rising popularity and demand among our customers for environmentally friendly products, whenever the degree ofenergy-saving effects of a product is printed in our catalog, as a rule we ensure the accuracy by double-checking the manufacturer’s claims of the product’s performance data and confirming thosenumbers internally.
    As for the safety of products and services offered by the Daigas Group, we are managing the development and quality control as well as labeling and information disclosure for all Osaka Gas
brand products in line with the technological standards stipulated under the Gas Business Act and the Law Concerning the Securing of Safety and the Optimization of Transactions of Liquefied
Petroleum Gas and guidelines set by the Japan Industrial Standards (JIS) and the Japan Gas Appliances Inspection Association (JIA), as well as in-house rules.

Introducing energy saving information and a safety guide on our website
The Daigas Group uses various media to provide customers with a wide variety of useful information for daily life regarding energy saving so that they can use energy efficiently. “Kurashi no Hinto
Zukan” on the Osaka Gas Website contains a collection of hints regarding measures aimed at promoting energy saving at households and their expected benefits. Users of the website can accessthe content of a guidebook called “Anshin Guide,” detailing how to use gas safely, which they are to receive from Osaka Gas staffers visiting their homes for gas equipment surveys.
    We have set up an online site called “Daigas STUDIO” to deepen people’s knowledge of Osaka Gas and increase their favorability of our company. Users of the service can access the most
updated information about the Daigas Group and relevant topics through the website, Facebook and X (Twitter).
    In addition, we share information about our low-carbon and decarbonization initiatives, which are of great importance to society, on our website “The Daigas Group’s Challenge to Carbon Neutrality”.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

100

Community
Summary

Why the topic is material

The Daigas Group operates a business that is rooted in and supported by local communities. We believe that our various contributions to local communities will lead to a virtuous
cycle, leading to the development of both the Group and society.
    The Group recognizes that it is important to proactively disclose information, enhance management transparency, and promote co-creation through constructive dialogue witha wide range of stakeholders for the public’s better understanding of its corporate activities. We have positioned coexistence with the local community as one of our material issues.

Items to be addressed

Specific initiatives
Policy and promotion system

Co-creation activities withlocal communities• Community building• Recommendations to society throughresearch activities• Partnerships with social service
organizations• Contribution to next-generation education• Contribution to local communities throughsports• Corporate volunteering activities under the
Small Light Campaign
Materiality Coexistence with local
community• Leveraging networks with a wide range of stakeholders, including local governments, schools, and NPOs, to provide knowledge
and programs aimed at resolving social issues• Promoting sound development of the next generation through the Group’s energy and environmental education, disaster prevention, foodeducation, sports menus, etc.
KPIs based on the materiality

FY2023.3 results

Participation in local governments’ activities(i.e. community development planning)

38 cases

Number of joint efforts with local
communities

326 times

Initiatives undertaken in FY2023.3• Local contribution activities under the Small Light Campaign and collaboration with neighboring companies and local organizations
by employees
Policy and promotion system

Activities by public interest
incorporated foundations• Assisting the elderly- The Osaka Gas Group Welfare Foundation• Doing our part on the international scene- The Osaka Gas Foundation of International
Cultural Exchange• The Foundation engages in activities to improve and enhance the welfare of the elderly by subsidizing local welfare activities for theelderly and surveys/research conducted by universities and medical institutions and by promoting health to help senior citizens
maintain and improve their health.
• The Foundation continues its activities to grant subsidies in the fields of education, academics, and science and technology innatural gas-producing countries in Southeast Asia and Oceania, with the aim of deepening international mutual understanding
between Japan and these countries and contributing to international goodwill.
Initiatives undertaken in FY2023.3• Subsidy projects for welfare activities for the elderly and surveys/research: 62 subsidies for welfare of the elderly (5.24 million yen);
14 subsidies for surveys/research (9.88 million yen)
• Health promotion projects aimed at helping senior citizens maintain and improve their health: 96 times, 3,514 participants• Subsidy projects for universities, students, etc. in Indonesia, Malaysia, and East Timor: Scholarships, grants for experimental
research, etc. (21.89 million yen)

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

101

Co-creation Activities with Local Communities
Principle and Outline
As a corporate group operating in a community-based manner, the Daigas Group believes that its good relationships with local communities is an indispensable foundation for its management. To help
local residents better understand our business, we are proactively disclosing information and increasing the transparency of our company operations, as well as communicating with the general public. In
addition, we will promote activities that are highly compatible with the Group’s management strategy and that can contribute to coexistence with local communities. We have been making proposals
for and cooperating in local governments’ activities and working on joint efforts and activities with communities to create value in communities by taking full advantage of knowledge and resources
which the Group has acquired through its business operations.
Examples of activities
Theme

Participation in local governments’
activities (i.e. community
development planning)

Examples of activities
upport for SDGs promotion activities by local governments through•Sproposals
for community building
activities with third parties to create attractive cities••Research
Holding the Uemachi-Daichi past and present forum event• Production of Storytellers’ Theater

Co-creation with local communities

activities with NPOs and social entrepreneurs••Collaborative
Communication related social issues through NPO for social
designing• Supporting NPOs through Osaka Gas member’s club•

Other activities(next-generation education,
consumer support, etc.)

Holding “Fureai Bazaar,” etc. under the “Small Light Campaign”•Environmental communication activities•Disaster response education and fire education•Food education•Response to consumer groups and consumer centersroposals for/participation in councils, committees, etc. organized by•Pvariousorganizations and local governments
upport for activities by elderly people in collaboration with local•Sgovernments,
NPOs, etc.

•Holding social design forums and workshops
ctivities to revitalize communities in collaboration with local•Agovernments
and third parties• Talkin’About and Walkin’About activities• Histoire project•NOBY T&F activities•Research on disaster response and network activities•Lectures and presentations at universities•Community clean-up by sports clubs•Holding coaching sessions for baseball and track and field, etc.

Social contribution activity costs
FY2023.3: 197 million yen

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

Community Building
As an energy service provider focusing on businesses closely related to people’s day-to-day
lives as well as addressing environmental preservation with a great sense of mission, theDaigas Group is working on giving the public greater safety and security by cooperating andmaking proposals in fields related to daily lives, such as cooperation and proposals forcommunity development that takes into account the local environment and disasterprevention, as well as the health of local residents and other areas of life.

Recommendations to Society through Research Activities
The Research Institute for Culture, Energy
and Life (CEL), the in-house research
institute of the Daigas Group, wasestablished in 1986 as one of the projects
commemorating the 80th anniversary of
the founding of Osaka Gas.
    We work on research, practice, andrecommendations to analyze the social
structure and solve problems in society with
Produced “Osaka Midosuji Monogatari” and released it
the aim of creating value in communities ((i)
on Youtube.
responding to an environment-oriented andrecyclable society, (ii) responding to security
and mutual assistance in a mature society, and (iii) responding to utilization of the vitality ofcommunities and creation of attractive cities). It also makes good use of them in outside
activities undertaken in cooperation with government agencies, business committees and NPOs.
    In addition, efforts have been made to disseminate information through media,
including the CEL magazine, its website, and SNS. Furthermore, the CEL is taking advantage
of a laboratory set up at the Knowledge Capital facility at Grand Front Osaka on the north sideof JR Osaka Station for the purpose of studying the attraction of cities. Seminars and study
sessions are being held on various themes, such as region/community and super-ageing
society.

Partnerships with Social Service Organizations
Local communities face many social issues, and these issues are becoming more advanced
and complex. The Daigas Group regards the practitioners of “My Project = Starting to Solve
Social Issues by Considering Them as if They Were My Own” as future partners in livening up
communities in the Kansai region. The Group disseminates their activities to society and aims
to collaborate with various stakeholders.

SocialGovernance

ESG Data

102

Collaborative activities with NPOs, etc.
Osaka Gas Network Co., Ltd., which is oneof the Daigas Group companies, has been
operating the online magazine “My Pro
Showcase Kansai” jointly with the NPO
Greenz since 2013 to introduce regional
projects undertaken by Kansai-based“social designers” and nonprofit
organizations. Outside Japan, Osaka Gas
USA Corporation (OGUSA), which develops and invests in natural gas and power generation
projects, etc. in the U.S., works on social contribution activities, including reforestation
projects in public parks.

Efforts to realize an inclusive society
The “Hajimaru-kun Personal Computer
Donation Program,” being organized byGroup member OGIS-RI, based on the ideaof helping the environment by encouraging
the reuse of PCs, is also a social
contribution activity that provides
employment support for the disabled towhom recycling operations are outsourced,
as well as IT support for donation
recipients. Since this program started in
2009, it has donated over 4,533 PCs to
PC recycling work at a welfare workshop
social welfare organizations. FY2023.3, the13th Daigas Group Hajimaru-kun Personal Computer Donation Program donated 190“Hajimaru-kun PCs” to 150 welfare facilities in six prefectures in the Kansai region, Japan.

Community contribution activities in collaboration with customers
Osaka Gas and Osaka Gas Marketing
Co., Ltd. have been working with ourcustomers to consider and supportsocial issues in local communities
through the implementation of “Social
Design+,” a project that supports social
design leaders who are striving to solve social issues on the membership-based website “MyOsaka Gas,” and of the “Let’s Do Something Good for Our Planet — Connecting Project,”which supports groups that carry out
environmental activities.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

Contribution to Next-generation Education

Contribution to Local Communities through Sports

Energy and environment education

NOBY T&F CLUB, a track club led by Nobuharu
Asahara, a Daigas Group employee and Beijing
Olympics medalist, aims for the sounddevelopment of the next generation and creationof a new community through athletics and trackand field.
    In addition to focusing on fostering top
athletes by leveraging the experience andleadership of former Olympians and Japanesenational team members for world
NOBY T&F CLUB training programchampionships, the club also offers courses
aimed at improving the health of seniors.
    The training programs that have been
held for more than 10 years and the instructional know-how are also used at municipal eventsor in school classes.
    Furthermore, we disseminate information on tips for rich eating habits and bodybuilding that lead to good health through seminars, websites, and SNS.

Since FY2007.3, the Daigas
“ Energy and Environment Education” Total
Track Record
Group employees and alumni
Number of classes
Number of participants
traveled to elementary, junior and(Number of
410,926 419,970 (Number ofsenior high schools to teach394,712 402,328
classes)
people)373,614lessons on energy and the400,000
10,000environment in order to help
300,000
7,500
children think about andunderstand increasingly important
200,000
5,000
environmental issues. The
Group’s instructors offer two
100,000
2,500
programs, including Eco-Cooking.*
9,758
10,573
10,833
11,127
11,589In addition, Osaka Gas
002019.32020.32021.32022.32023.3 (FY)runs the Gas Science Museum(located on the premises of the Senboku LNG Terminal) where visitors can learn about energy
and the environment. In December 2022, its content was completely renewed to provide thelatest information. The museum is also used by the general public for experimental learning
programs at nearby elementary and junior high schools or local events.
    In FY2023.3, the number of participants in energy and environment education was
9,044, and the number of times it was held was 462.
*Eco-Cooking is a registered trademark of Tokyo Gas Co., Ltd.

Disaster response education
In response to the increased need for disaster response education following the Tohoku earthquake
and tsunami of 2011, we created an original textbook for an upper elementary school on the themeof disaster response Lessons in Disaster Response that we distribute to local elementary schools.
The textbook teaches children about natural disasters in Japan. While studying it, children take aworkshop designed to impart useful knowledge about the changes that take place in people’s lives
when a disaster strikes. The textbook also contains a checklist of items to prepare and things to do
at home to prepare for emergencies. Over a period of nine years, the textbook has been used widely
at junior high schools, high schools, and universities, as well as by local governments and local
residents’ associations. Over 240,000 textbooks in total have been distributed.

Left: L earning material for upper gradesof elementary school(A4, 40 pages, full color)
Right: T eacher handbook(with worksheets and supplementaryteaching materials for the class, A4,
40 pages, full color)103

Corporate Volunteering Activities under the Small Light
Campaign
As a “corporate group that works together withlocal communities,” the Daigas Group has
always actively participated in local activities.
    The Small Light Campaign was launched
in 1981, the UN International Year of Disabled
Persons, as a company volunteer effort.
    Based on donations made by group
employees, we provide support for children inneed of social care, employment support forpeople with disabilities, support for disasterstricken areas, and support for employees’
volunteering activities.
    The Midosuji Fureai bazaar, an initiative to
The Mdosuji Fureai bazaar held for the first
support the employment of people withtime in two years
disabilities that was suspended due to the
COVID-19 pandemic, was held for the first timein two years in April 2022 under infection control measures. In October of the same year, the“Midosuji Disaster Stricken Area Recovery Assistance Bazaar” was also resumed.

“Lessons in Disaster Response,” inwhich children learn in a workshop
format how their lives can change during
a disaster and useful knowledge fordisaster preparedness

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

104

Fund management
The Small Light Campaign gathers funds
through various activities, including charity
calendar donations and proceeds from theMidosuji Fureai bazaar, a used book bazaar, as
well as donations from workplace groups,
individuals, and the Suzurankai (Osaka Gas
alumni) — all managed as the Small Light
Fund. The money is used to support the activitiesof the Small Light Campaign, to support recovery
in disaster-hit areas, and to donate items forsocial welfare or educational purposes, such as
A charity calendar for raising donations fromwheelchairs and picture books, to all
Daigas Group employees, alumni, other relevant
parties and customers
municipalities served by Osaka Gas.
    The Fund’s operating balance for
FY2023.3 was 7,600 thousand yen in income and 9,144 thousand yen in expenses, including a
special expense for the 40th anniversary of the Fund.

Social contribution activities by employees with the mindset of the Small
Light Campaign
Business activities of the Daigas Group are closely tied to the daily lives of everyone in thecommunity. Our employees contribute to local communities as members of the community, or“good corporate citizens.”    In addition to donating blood, collecting unused postcards and used stamps, anddonating proceeds from sales of used books, we continue to participate in volunteer activities
to support a citizen marathon race aimed at supporting regional revitalization.
    The Osaka Gas Tomoshibi Club, which donates welfare points granted to employees by
the company to social service organizations, donated a total of 2.344 million yen to sevenorganizations in FY2023.3, along with the best wishes of the employees.
    In FY2023.3, we launched the “Social Contribution Portal Website” to encourage
participation in community contribution activities.

The “Social Contribution Portal
Website,” an in-house bulletin boardthat provides employees withinformation on volunteer activities,etc.

To support the Osaka Marathon 2023, 83
employees participated in the event asvolunteers.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

105

Activities by Public Interest Incorporated Foundations
Principle and Outline
In order to further the welfare work that the Daigas Group has conducted as a company volunteer
through the “Small Light Campaign,” which was started in 1981 (the UN International Year of
Disabled Persons) in a more planned and ongoing manner, 362 companies including Osaka Gas
and affiliate companies, the associations comprised of contracted companies providing sales ofgas appliances and other services, pipe working joined together in October 1985 to establish andfund the Osaka Gas Group Welfare Foundation in honor of Osaka Gas’ 80th anniversary. The
Foundation is involved in subsidizing local welfare activities for the elderly and surveys/research
conducted by universities and medical institutions, and in promoting fitness efforts aimed at
helping senior citizens maintain and improve their health.
    In September 1992, the Osaka Gas International Exchange Foundation was founded andfully funded by Osaka Gas, and in October 2010 the Foundation was granted authorization by the
Cabinet Office to transition into a public interest incorporated foundation. The Foundation now
works to deepen mutual understanding with natural gas producing countries and to makeinternational contributions through the foundation’s activities.

Assisting the Elderly - The Osaka Gas Group Welfare Foundation
Set up in 1985 through the contribution of Daigas Group companies, the Osaka Gas Group
Welfare Foundation operates in six prefectures of the Kansai region, mainly engaging in (1)funding welfare projects, (2) researching and surveying the elderly population and (3)supporting health-promotion projects to help maintain and improve the health of the elderly.
    In FY2023.3, the Foundation provided 5.24 million yen in subsidies to 62 welfare
projects for the elderly, and 9.88 million yen in subsidies to 14 investigation and research
projects, and carried out 96 health-promotion projects involving 3,514 participants.

Health-promotion project: Gathering for health promotion

Subsidy for the welfare of the elderly: Subsidy forfarm tools for agricultural workshop courses

Results of each activity (cumulative total from FY1986.3-FY2023.3)(1) Funding to Enhance the Welfare of the Elderly(2) Funding for Research and Surveys(3) Health-promotion project

3,045 cases
658 cases
6,102 times

691 million yen
440 million yen
443,790 participants

Distribution of “Health Seminar for the
Elderly” on YouTube
In conjunction with the renewal of our website in
FY2022.3, we have created the video content “HealthSeminar for the Elderly” and have started distributing
it on YouTube.
    We will continue to annually distribute content
that can be used for health promotion in the elderly.
Video content “Health Seminar for the Elderly”

Stakeholder Comment

Striving to Build a Sense of Community
Ms. Naoko Kitao,
Section Chief, Area Social Welfare and Volunteer Promotion Section,
Kyoto Prefectural Social Welfare Council

I would like to express my great appreciation for the efforts your foundation has
made since 1985 to help build a community for an aging society by providing
assistance for welfare programs for the elderly, activities for encouraging them toparticipate in society, and other activities.
    As the environment surrounding the community is changing rapidly thesedays, it is important to catch up with the issues that have emerged and are being
faced by local residents, and the cooperation of not only professionals but also local
residents and community activists is essential for this.
    With COVID-19 being reclassified to Class 5 from May 2023, efforts to createa place to stay and build connections in the community will be resumed, and acommunity culture that respects diversity more than ever will be fostered. Also, theSocial Welfare Council will work to promote community welfare activities with an eye
toward a society coexisting with COVID-19.
    Organizations in Kyoto Prefecture that have received subsidies from yourfoundation have been promoting such efforts as exchanges at salons for the elderly,
etc., creation of a place to stay for foreign nationals, and cross-cultural exchanges,
aiming at creating a community where everyone can live with peace of mind.
    Our Council will continue working to achieve its basic principles of the fifth
medium-term plan: To create a society where everyone can live with dignity whileconnecting with others. We sincerely ask for your continued support of thesecommunity welfare efforts.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

106

Doing Our Part on the International Scene - The Osaka
Gas Foundation of International Cultural Exchange
Deepening friendship and mutual understanding with natural gas-producing countries
The Osaka Gas Foundation of International Cultural Exchange provides aid services topromote mutual understanding with natural gas-producing countries in Southeast Asia andOceania and contribute to international goodwill.
    In FY2023.3, the Foundation provided a total of approximately 14.62 million yen in aid
to Indonesia, including grants for educational equipment to elementary and junior highschools, scholarships for 300 students, research grants in the energy and environment fields
for three universities, and a short-term training program in Japan for four graduate students.
For Malaysia, the Foundation provided a total of approximately 5.22 million yen in subsidies,such as English education assistance, experimental research grants, and scholarships to 12
university students. For East Timor, it provided a total of approximately 2.05 million yen inscholarships to 30 university students.
    Marking its 30th anniversary, the Foundation reviewed its aid activities to date, in which
it has provided subsidies totaling approximately 590.11 million yen, scholarships to 10,494
people, and grants for 438 research themes. In addition, it held an interview with the Chairman
and an online meeting with local students to further explore future directions of its activities.

Graduate students of University ofIndonesia visiting the Gas Science
Museum during their Japanese
language training program

Meeting at the Ministry of
Education Malaysia

Presentation ceremony at National
University of East Timor

Scope of Funding otal Assistance Provided fromT
FY1993.3 though FY2023.3

Banda Aceh

Malaysia

Kuching

Other
17

Miri
Bintulu(Unit: million yen)
Educational
materials
152

Training
70

BontangSamarinda

Approx.
590.11 million yen

Indonesia
Jakarta
Bogor

Bandung
Dili...Cities where funding is provided

East Timor

The Osaka Gas Foundation of International Cultural Exchange

Grant Disbursement (single-year base)

Educational materials
Experimental research
Scholarships
Training
Total

Experimental
research
157

Scholarships
194(unit: thousand yen)

FY2018.3

FY2019.3

FY2020.3

FY2021.3

FY2022.3

FY2023.3

2,512
5,888
8,483
4,592
21,475

1,878
5,401
6,558
3,212
17,049

1,873
5,172
8,092
3,175
18,311

1,760
5,049
7,737
371
14,917

1,973
5,332
8,512
313
16,129

2,115
6,935
9,564
3,281
21,895
Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Governance

Environmental

SocialGovernance

ESG Data

107

108 Corporate Governance Summary
109 Corporate Governance
120 Compliance
123 Information Security
124 Protection of Personal Information

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

108

Corporate Governance
Summary

Why the topic is material

For its business activities, the motto of the Daigas Group is to place the highest priority on creating value for customers, and the Group aims to expand it to creating value for society, forshareholders, and for employees. We believe that our social responsibility is fulfilled by creating the four types of value for all these stakeholders through fair and transparent businessactivities. To appropriately respond to the exercise of shareholder rights and improve our own value, we believe that it is important to have a system for appropriately operating anddeveloping the business based on relationships of trust between its stakeholders and the Group through dialogue and collaboration.
The Daigas Group Code of Business Conduct was established as a specific code of conduct to be followed by our officers and employees. We follow the code, viewing it as widely
governing common sense corporate behavior based on sound ethics as well as laws and regulations. The Group’s officers and employees act appropriately in accordance with thecode when performing their duties.
Items to be addressed

Corporate governance• Separation of business execution fromsupervision• Ensuring diversity(The percentage of women among
executives/directors has been adopted as
KPIs based on materiality.
For detailed information, pleaseP.21-23.)see• Remuneration linked with sustainable growth• Internal control

Specific initiatives
Policy and promotion system
Based on corporate principles, we will respond appropriately to the exercise of shareholder rights and strive to maintain and improve
trust of stakeholders through dialogue and collaboration with them. We are continually working to enhance and strengthen our
corporate governance to respond quickly and accurately to changes in the business environment, make transparent, fair, anddecisive decisions, and execute business operations efficiently and appropriately.
Initiatives undertaken in FY2023.3• Percentage of women among executives/directors: 13.3%/10.0% (Results after the Annual Meeting of Shareholders held in June
2023: Percentage of women among executives/directors: 26.7%/20.0%)
Policy and promotion system

Compliance• Predictive data monitoring• Improving compliance awareness• Proper operation of the whistleblowing
system• Promoting anti-corruption initiatives
Materiality ComplianceWith a good understanding of the Code of Business Conduct, we act in accordance with the internal rules and regulations. We haveestablished the Compliance/Risk Management Subcommittees under the ESG Committee to improve compliance through efforts
such as development of measures and information sharing in a cross-organizational manner.
KPIs based on materiality

FY2023.3 results

Number of serious violations oflaws and regulations

There were no serious violations of laws and regulations in our group.

Initiatives undertaken in FY2023.3• Implementation of monitoring• Provision of compliance training• Proper operation of the whistleblowing system• Promoting anti-corruption initiatives
Policy and promotion system

Information security/
Protection of personal
information• Establishment and revision of theInformation Security Guidelines• Investigations of and measures for
information security at group companies• Strengthening risk management related to
information security and protection of
personal information

As a business operator responsible for social infrastructure, we recognize the importance of managing customer information andother data. In line with a relevant set of guidelines, we implement information security measures.
As an information security promotion system, we have established an Information Security Subcommittee under the Cyber Security
Committee, a corporate committee, to implement group-wide measures.
We are striving to properly manage and prevent leakage of personal information by establishing a personal information protection
system, which comprises managers appointed at each organization and affiliate under the direction of the Chief Privacy Officer.
Initiatives undertaken in FY2023.3• Maintained and operated the Information Security Guidelines, etc.
• Investigations of and measures for information security at group companies• Provision of training on information security and protection of personal information

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

109

Corporate Governance
Basic Views on Corporate Governance
As a corporate group that powers “continuous advancement” in consumer life and business, our Corporate Principles aim to create four types of value: “Value for Customers,” “Value for Society,”“Value for Shareholders” and “Value for Employees” by providing various products and services relating to not only the energy business, including natural gas, electricity, and LPG, but also its
peripheral services and non-energy businesses, such as urban development, materials and information businesses.
    Under these Corporate Principles, the Company and its affiliates (the “Group”) will respond appropriately to the exercising of shareholder rights, and work toward maintaining and increasing a
sense of trust by dialogue and cooperation with its stakeholders. In addition, the Group will continue to enhance and strengthen corporate governance in order to respond quickly and appropriately
to changes in the business environment surrounding the Group, make transparent, fair, and decisive decisions, and execute business efficiently and appropriately.

Corporate Governance System
Osaka Gas has selected to be a company with Audit & Supervisory Board and conducted the introduction of an executive officer system, appointment of multiple Outside Directors, andestablishment of voluntary advisory committees on management, appointment of Directors and Audit & Supervisory Board Members and Director remuneration. The Company considers its current
governance system best suited for the decision-making and business execution described above.
Corporate Governance System (as of June 23, 2023)

General Meeting of Shareholders
ReportAudit and Report
Making Important Decisions; Monitoring and Supervisory Function

Audit and Report

Directors (Board of Directors)

Business Execution Function

Corporate Committees
ESG Committee
Safety and Disaster Prevention
Committee• Cyber Security Committee• Investment Evaluation Committee• DX Committee••

ReportMaking Important
Decisions;Supervision

Representative Director
and President(President and Executive Officer)

Report,etc.

Management
Meeting*4
ProposalDelegating Authority

Consult

ReportSubmission and Report(Management;
Appointment;
Remuneration)*2

Delegating
Authority

Report, etc.

Report, etc.

Advisory
Committee

Proposal andReport(including Outside Directors)*1

Executive Directors (Vice-Presidents and Executive Officers, Managing Executive Officers)
Osaka Gas: Basic Organization
Affiliates

ReportAppointment andDismissal

Audit & Supervisory Board
Members (Meetings)(including Outside Members)*3

Office of Audit &Supervisory Board

Approval of Audit Plans, etc./
Report Audit Results

Internal Audit, etc.

ReportReportAppointment
andDismissal

Accounting
AuditorCooperation(Sharing Information etc.)

Cooperation(Sharing Information etc.)

Appointment and Dismissal

Cooperation(Sharing Information etc.)

Proposal and Report

Auditing Department*1 Board of Directors: 10 Directors (6 Internal Directors and
4 Outside Directors)*2 Advisory Committee: 4 Outside Directors, Representative Director
and President, and a person appointed by
the President (up to one member who is a
Representative Director)*3 Audit & Supervisory Board: 5 Audit & Supervisory Board Members(2 full-time Audit & Supervisory Board
Members [internal] and 3 Outside Audit &Supervisory Board Members)*4 Management Meeting: 1 President and Executive Officer,
3 Vice-Presidents and Executive Officers,
and 7 Managing Executive Officers

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

110

Overview of Corporate Governance System
Board of Directors, Directors of the Company
The Board of Directors consists of 10 Directors (including four
Outside Directors). Its mission is to formulate the “Regulationsof the Board of Directors” and the “Standards for Voting on
Resolutions in the Board of Directors”, make swift andappropriate decisions about important matters that affect thewhole Group including subsidiaries, and enhance supervisory
capabilities. The Articles of Incorporation stipulate that there
shall be no more than 15 Directors. They also direct that theappointment of Directors is to take place with a quorum ofshareholders possessing at least one-third of shareholder
voting rights and by a majority of voting rights held byshareholders present, and that no cumulative voting may be
used for appointing Directors.
    In FY2023.3, the Board of Directors held 13 meetings,
with 100% attendance by all Directors. Meetings discussed
the Group’s management plans, the establishment ofimportant organizations, important human resources matters,
execution of important investments and agreements greaterthan a certain amount, and operational status reports fromexecutive Directors, etc.

Executive Officers
The Company has adopted an executive officer system(Executive Officers consist of President and Executive Officer,
Vice-President and Executive Officers, Managing Executive
Officers, and Executive Officers), which enables the Directorsof the Company to focus on making business decisions andmonitoring and supervisory functions, and worked toward
strengthening the business efficiency and the supervisory
functions by vitalizing the Board of Directors. Executive
Officers perform duties determined by the Board of Directors,
and some Representative Directors and Directors concurrently
serve as Executive Officers to make management decisionmaking more accurate and efficient.

Management Meeting
The Company examines basic management policies andimportant management issues at the Management Meeting andfully deliberates the foregoing before decision-making. In
accordance with internal regulations, the Management Meeting
consists of President and Executive Officer, Vice-President andExecutive Officers, and Managing Executive Officers. In principle,
the Management Meeting is held three times per year as the“ESG Council,” which deliberates on activity plans and reports
on activities related to the promotion of ESG management.

Audit & Supervisory Board, Audit & Supervisory
Board Members

ESG Committee

The Audit & Supervisory Board consists of five Audit &Supervisory Board Members, of whom three are Outside Audit& Supervisory Board Members and each Audit & Supervisory
Board Member monitors the execution of work duties by the
Directors.

The Company has established the ESG Committee topromote activities relating to the Group’s sustainability,
including the environment, compliance, social contribution,
respect for human rights, and risk management.
(Chairman: Head of ESG Promotion/Representative Director
and Vice-President)

Auditing Department

Safety and Disaster Prevention Committee

The Company has established the Auditing Department as aninternal audit division. Based on a yearly auditing plan, it
audits, from independent and neutral viewpoints, the status ofexecution of business activities. Audit results are reported
regularly at the Management Meeting and other meetings. In
the event that an internal audit identifies a matter that may
have a significant impact on management, it is reported to theBoard of Directors (dual reporting). The Auditing Department
evaluates internal control over financial reporting based on the
Financial Instruments and Exchange Act. The Head of the
Auditing Department regularly exchanges opinions with Audit& Supervisory Board Members, the accounting auditor, andoutside officers (Outside Audit & Supervisory Board Members
and Outside Directors).

In order to take all possible measures to ensure safety, disasterprevention, and gas supply stability after the legal spin-off ofthe gas pipeline service business, the Company establishedthe Safety and Disaster Prevention Committee to unify the
management of events related to safety, disaster prevention,and gas supply stability, and to promote measures againstthem within the Group.
(Chairman: Head of Safety/Managing Executive Officer)

Advisory Committee

Investment Evaluation Committee

The Advisory Committee consists of all the Outside Directors(four), the President, and, if necessary, a person appointed by
the President (the President may appoint up to one personfrom among the other Representative Directors). From theperspective of corporate value enhancement, ensuring
objectivity and transparency in the decision-making process,the Advisory Committee deliberates on matters related to key
issues such as medium- to long-term corporate strategy andsustainability, matters related to the election of candidates for
Directors and Audit & Supervisory Board Members, mattersrelated to the selection and dismissal of Representative
Directors and other Executive Directors, and matters related to
the remuneration of Directors. All committees are chaired by
Outside Directors (Advisory Committee on Management,
Advisory Committee on Appointment, and Advisory
Committee on Remuneration).

The Company has established the Investment Evaluation
Committee to examine risk and return and assess investments
in excess of a certain amount, and report findings to theManagement Meeting to help make appropriate investment
decisions.
(Chairman: President of the Corporate Planning HQ/
Representative Director and Vice-President)

Cyber Security Committee
The Company has established the Cyber Security Committee
to reinforce the cyber security measures of the Group.
(Chairman: Head of Technology/Representative Director andVice-President)

DX Committee
The Company has established the DX Committee to promote
DX for the entire group while coordinating the alignment withbusiness, IT, and financial strategies across the organization.
(Chairman: President of the Corporate Planning HQ/
Representative Director and Vice-President)

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

111

Views on the Composition of the Board of Directors
From the perspective of contributing to its sustainable growth and improvement of the medium- to long-term corporate value of the Daigas Group, Osaka Gas has adopted a basic policy of
appointing diverse talent as Directors and Audit & Supervisory Board Members in full consideration of their knowledge, experiences, ability, personality, etc. regardless of gender, nationality, career, orage, etc. The Group positions the advancement of women as a first step for diversity promotion and has set a target of 20% or more in both the ratio of female officers and female directors by
FY2031.3. As of June 2023, the ratio of female officers and directors was 26.7% and 20.0%, respectively.
    Moreover, based on medium- and long-term management plans, we have defined the basic qualifications for Internal Directors as having experience and expertise, etc. in corporate
management, marketing, technology/R&D, DX, global management, ESG, finance/accounting, legal/risk management, human resources development of the Group including the energy business, andthose for Outside Directors as having not only independence that enables objective judgment but also extensive knowledge, wealth of experience, great expertise in their specified field, etc. As such,the Board of Directors as a whole has a well-balanced composition.
In addition, we have long since defined the term of Director as one year in order to respond flexibly to changes in our business environment and clarify management responsibility.
    Based on the above-mentioned policy, decisions on the selection of candidates for Directors and Audit & Supervisory Board Members and the appointment and dismissal of Representative
Directors and other Executive Directors are made based on deliberations by a voluntarily appointed Advisory Committee made up of a majority of Outside Directors in order to ensure objectivity andtransparency in decision-making.
The following is a list of the expertise and experience that the Board of Directors should possess as identified in light of the medium- to long-term management plan as well as the significant
expertise and experience of each Director and Audit & Supervisory Board Member.
Skills Matrix (as of June 23, 2023)
Name

Position

Takehiro Honjo

Chairman and Director

Masataka Fujiwara

Representative Director andPresident

Tadashi Miyagawa

Age

Fields of Significant Expertise and Experience
AttendanceYears
at Board ofInternal/
Humanin
Independence
GlobalFinance/ Legal/Risk
Directors Corporate Marketing Technology
OutsideDX
ESG
Resources
office/R&D
Management
Accounting Management
Meetings Management
Development

69

14Internal—

100%

President andExecutive Officer

65

7Internal—

100%

Representative Director

Vice-President andExecutive Officer

64

7Internal—

100%

Takeshi Matsui

Representative Director

Vice-President andExecutive Officer

62

6Internal—

100%

Takayuki Tasaka

Representative Director

Vice-President andExecutive Officer

60

5Internal—

100%

Managing Executive
Officer

61

2Internal—

100%

Fumitoshi Takeguchi Director
Kazutoshi Murao

Director

70

4

Outside100%

Tatsuo Kijima

Director

68

3

Outside100%

Yumiko Sato

Director

71

2

Outside100%

Mikiyo Niizeki

Director

55—

Outside—Hisaichi Yoneyama

Audit & Supervisory Board Member

623Internal—

100%

Ichiro Hazama

Audit & Supervisory Board Member

57—

Internal——

Shigemi Sasaki

Audit & Supervisory Board Member

75

7Outside100%

Eriko Nashioka

Audit & Supervisory Board Member

561Outside100%

Chieko Minami

Audit & Supervisory Board Member

62—

Outside—Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

Independence of Directors

Governance

ESG Data

112

Diversity of Directors and Audit & Supervisory Board Members

Percentage of Non-executive Directors

50%

SocialPercentage of Independent Outside Directors

Non-executive
Directors:
5 persons

Percentage of Female Executives

OutsideDirectors:
4 persons

40%

26.7%

FemaleExecutives:
4 persons

Directors: 10 persons

20%

FemaleDirectors:
2 personsMale
Directors:
8 personsMale
Executives:
11 persons

Internal
Directors:
6 personsExecutive
Directors:
5 persons
Directors: 10 persons

Percentage of Female Directors

Directors: 10 persons

Audit & Supervisory Board Members: 5 persons

Corporate Governance Initiatives
2019
Chairperson of the Board
Execution system
Separation ofbusiness execution
and supervision

Diversity

Outside Directors

2020

From 2015: Representative Director and Chairman of the Board

From 2016: 3 persons

From 2021: 4 persons

From 2014: 3 persons

Voluntary advisory committee

In 2013: established (appointment and remuneration)

Remuneration system

2023

From 2020: percentage of Outside Directors: 1/3 or more

From 2014: one person (one Audit & Supervisory Board Member)

Skills matrix
Linkage between
sustainable growth
and remuneration

2022

From 2009: adoption of an executive officer system

Outside Audit & Supervisory
Board Members

Female officers

2021
From 2021: Director and Chairman of the Board

In 2022: expanded (management, appointment, and remuneration)
From 2021: 2 persons (one Director and one Audit & Supervisory Board Member)

From 2023: 4 persons (2 Directors and2 Audit & Supervisory Board Members)

Since 2021: disclosed
In 2013: established performance-linked remuneration system

Since 2022: linked remuneration to ESG indicators achievement
In 2021: established stock-based remuneration system

From 2003: Investment Evaluation Committee
From 2006: CSR Committee*³
Corporate committee*1

From 2020: ESG Committee

From 2019: Cyber Security Committee
From 2021: DX Committee

Internal Control

From 1996: Executive Safety Council
Strengthening risk
management(operation of G-RIMS*²)

From 2017: targeting Osaka Gas, domestic and overseas affiliates

Cross-shareholdings

In 2013: established policies regarding cross-shareholdings*4

From 2022: Safety and Disaster Prevention Committee*1 Established for the purpose of coordinating and promoting matters (important issues for the entire Group) across multiple basic organization*2 Systematized self-assessment of risk management practices (Gas Group Risk Management System)*3 The new “CSR Committee” was established to coordinate and promote the activities of the committees (Compliance Committee and Energy & Global Environment Committee), which had been operating separately by field, as well as community and social contribution,
human rights, employment, and other activities promoted by the organizations in charge, on a cross-organizational basis.
*4 Rules on the purchase and management of third-party stocks were established. The Board of Directors examines the significance of each individual stock holding. If the significance of holding an issue has waned, we sell it sequentially.
With respect to the exercise of voting rights, a standard for exercising voting rights was established (in 2016). We examine the content of proposals through various methods, including dialogue with investees, and decide whether to approve or disapprove.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

113

Advisory Committee
The Advisory Committee consists of all the Outside Directors (four), the President and, if necessary, a person appointed by the President (the President may appoint up to one person from among the other
Representative Directors). From the perspective of corporate value enhancement, ensuring objectivity and transparency in the decision-making process, the Advisory Committee deliberates on matters related
to key issues such as medium- to long-term corporate strategy and sustainability, matters related to the election of candidates for Directors and Audit & Supervisory Board Members, matters related to theselection and dismissal of Representative Directors and other Executive Directors, and matters related to the remuneration of Directors. All committees are chaired by Outside Directors.
FY2023.3 Results
Name

Composition of eachadvisory committee andpercentage of Outside
Directors

AgendaAttendance

Attendance
rate

Outside Director

2 out of 2 meetings

100%

Outside Director

2 out of 2 meetings

100%

Kazutoshi Murao

Outside Director

2 out of 2 meetings

100%

Yumiko Sato

Outside Director

2 out of 2 meetings

100%

Masataka Fujiwara

Representative Director, President and Executive Officer 2 out of 2 meetings

100%

Issues discussed

Name

Prospects and challenges
for achieving carbon
neutrality, trends in humancapital and the Company's
personnel measures, etc.

Hideo Miyahara*1

Tatsuo Kijima
Advisory
Committee on
Management

Advisory
Committee on
Appointment

Advisory
Committee on
Remuneration(Management)(Management)(Management)

67
%
67
67%%

(Appointment)(Appointment)(Appointment)

80
%
80
80%%

(Remuneration)(Remuneration)(Remuneration)

67
%
67
67%%

Key issues such as
medium- to long-term
corporate strategy andsustainability

Matters related to the election ofcandidates for Directors and Audit &Supervisory Board Members, theselection and dismissal of Representative
Directors and other Executive Directors,
skills matrix, and succession plan, etc.

Matters to be considered in theselection of candidates for Directors,
the election of candidates for
Directors, selection and dismissal ofRepresentative Directors and other
Executive Directors, skills matrix, etc.

Policy on determining
remuneration of Directors,
calculation method for the
portion linked to businessperformance of the
remuneration, payment
coefficient, appropriateness of
the remuneration levels, etc.

Policy on determining
remuneration of Directors,
appropriateness of the
remuneration levels, calculation
method for the portion linked tobusiness performance, payment
coefficient for the portion linked
to business performance, etc.

Position

Chairperson

Takeshi Matsui

Representative Director, Vice-President and Executive Officer 2 out of 2 meetings

100%

Kazutoshi Murao Chairperson

Outside Director

3 out of 3 meetings

100%

Hideo Miyahara*1

Outside Director

3 out of 3 meetings

100%

Tatsuo Kijima

Outside Director

3 out of 3 meetings

100%

Yumiko Sato

Outside Director

3 out of 3 meetings

100%

Masataka Fujiwara

Representative Director, President and Executive Officer 3 out of 3 meetings

100%

Yumiko Sato

Outside Director

3 out of 3 meetings

100%

Kazutoshi Murao

Chairperson

Outside Director

3 out of 3 meetings

100%

Hideo Miyahara*1

Outside Director

3 out of 3 meetings

100%

Tatsuo Kijima

Outside Director

3 out of 3 meetings

100%

Masataka Fujiwara

Representative Director, President and Executive Officer 3 out of 3 meetings

100%

Takayuki Tasaka

Representative Director, Vice-President and Executive Officer 1 out of 1 meeting*2

100%*1 Retired as of the close of the Company’s Annual Meeting of Shareholders held in June 2023.
*2 Deliberations on Directors’ remuneration levels, etc. are not subject to attendance.

Outside Directors

Number ofthemeetings
held in
FY2023.3

2 meetings

3 meetings

3 meetings

Internal Directors

Training Policy for Directors and Audit & Supervisory Board Members, and Succession Plan
When appointed, the Company provides internal officers an opportunity to acquire knowledge regarding their roles, legal duties to be complied with, and responsibilities expected of a Director or Audit &Supervisory Board Member. Subsequently, the Company regularly provides opportunities internally or externally for Officers to receive training regarding legal affairs, risk management, compliance, andother matters to continue to acquire the knowledge necessary for the comprehension of legal revisions and other latest world trends. Further, as part of the succession plan for top management, humanresources to oversee the Company’s management are fostered through such means as the systematic rotation of the areas of responsibility of internal Directors and Executive Officers.
    As for Outside Officers, the Company provides opportunities for them to deepen their understanding upon appointment, such as by explaining the nature of the Group’s businesses, so thatthey can put to practice their expertise and experience in each of their fields for supervising and auditing the Company’s business. Later, the Company also offers opportunities as necessary in which
the business environment and business trends are explained accurately in a timely manner so that Outside Officers can gain an understanding.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

114

Directors and Audit & Supervisory Board Members Remuneration
Remuneration for Directors shall be provided in a remuneration system designed to raise motivation for Directors to achieve sustainable growth and mid- to long-term increase in corporate value.
Remuneration for Directors other than Outside Directors shall consist of basic remuneration as fixed remuneration, performance-linked remuneration and stock-based remuneration, and remuneration
for Outside Directors shall only consist of basic remuneration as fixed remuneration, as they have a standpoint independent of business execution.
    Remuneration for Directors shall be determined within the total amount of remuneration*1 approved at the Annual Meeting of Shareholders, after deliberation at a voluntarily appointed Advisory
Committee on remuneration made up of a majority of the Outside Directors, from the perspective of ensuring objectivity and seeking transparency in the decision-making process.*2    The Company has established a policy on determining the remuneration of Directors as prescribed by the resolution of the Board of Directors after deliberation at a voluntarily appointed
Advisory Committee made up of a majority of Outside Directors. This policy is summarized as follows.
The system of paying retirement benefits to Directors was abolished in June 2004.
*1 A
 t the 203rd Annual Meeting of Shareholders held on June 25, 2021, it was resolved that the monetary remuneration quota would be up to 57 million yen per month, the stock remuneration quota would be within 72 million yen per year, and the maximum
number of shares would be within 48,000 shares per year. The number of Directors at the end of said Annual Meeting of Shareholders was ten.
*2 The content of monetary remuneration may be determined by the Representative Director and President based on delegation of authority by the resolution of the Board of Directors.

Outline of Remuneration
Standard composition*³
Remuneration
items

Fixed/variableBasic
remuneration

Fixed

Performancelinked
remuneration

Variable(short-term incentive)

Stock-based
Variable
remuneration (mid- to long-term incentive)

Internal
Directors

OutsideDirectors

50%

100%

40%

10%

—

—

Type ofremuneration

OutlineMonetary
remuneration• Monetary remuneration paid on a monthly basis• The amount shall be determined in accordance with the rules prescribed by the resolution of the Board of Directors, whileconsidering such factors as each Director’s position and responsibilities, public standards, and other factors.

Monetary
remuneration

Stocks• Monetary remuneration paid on a monthly basis• The amount shall be determined using the profit attributable to owners of parent for the past three years and thecoefficient of ESG indicators achievement in the previous year as the main indicators
Base amount by
position×

Payment coefficient of performancelinked remuneration (indicator: profit
attributable to owners of parent)

×

ESG indicators achievement(indicator: internal ESG
indicators achievement)=

Performancelinked
remuneration• Restricted stock shall be granted at a certain time every year for the purpose of strengthening the linkage between
remuneration and mid- to long-term increase in corporate value and further promoting sharing of value with theshareholders.
• The number of shares to be granted shall be determined with consideration for the positions and responsibilities of each
Director and stock prices, etc.
• A Director shall not transfer, establish a security interest on, or otherwise dispose of the allotted shares during the period
from the date of the allotment of shares to the date of his/her retirement from office.
• Transfer restrictions shall be lifted on the condition that the resignation of a Director is due to reasons deemed justifiableby the Company or due to the death of the Director.
• In the event that a Director commits an act of misconduct or falls under other certain events stipulated in the restricted
stock allotment agreement, the Company will naturally acquire all or part of the allotted shares without remuneration(malus and clawback provisions).

*3 When performance-linked remuneration targets are fully achieved.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

115

ESG Data

Officer Remuneration System Taking into Account ESG Indicators Achievement
At the Board of Directors meeting held on December 23, 2021, Osaka Gas resolved to reflect the coefficient of ESG indicators achievement in the previous year in officer remuneration to contribute toshort-term and mid- to long-term increases in corporate value.
The coefficient of ESG indicators achievement includes the achievement of the following items.
This has been applied from July 2023 onward, when remuneration is paid based on FY2023.3 results.
Main ESG Indicators Please see

P.20-21 for FY2023.3 results.

Charter of Business Conduct

Materiality

Value for a sustainable future

Maintain and expand customer base
Improvement of customer satisfaction
and quality of services
Customer health and safety
Stable supply of services

Creating value for customers

Contributing to the sustainability of theenvironment and society

Climate change

Engaging with and contributing to society

Coexistence with local community

Respecting human rights
Complying with laws and regulations

Supply chain management
Compliance
Employee engagement
Development of employee skills

Providing work environment that supports
employees’ personal growthFiscal year ended
ProfitPlan
attributable tomillion yen
owners ofResultparentEstablishing lifestyles and businesses
adjusted to the new normal

Customer satisfaction rate

Enhancing resilience of customers andsociety
Achieving a low-carbon/carbon-neutral
society

Building foundations that support therealization of value for a sustainable future

Diversity and Inclusion

P rofit Attributable to Owners of Parent (Consolidated Profit) for
the Last Three Years
Term

Indicators

Number of customer accounts

202nd

203rd

204th

March 31, 2020

March 31, 2021

March 31, 2022

55,00073,00070,50041,78880,857130,421

Number of serious accidents
Build resilient energy supply facilities
CO2 emissions of Daigas Group
Percentage of renewables in our power generation portfolio in Japan
Contribution to developing renewables capacity on a global basis
Avoided emissions (Baseline: FY2017.3)
Number of our participations in local governments’ activities (i.e.
community development planning)
Number of joint efforts with local communities
Appropriate new supplier ratio
Number of serious violations of laws and regulations
Employee attitude survey (Loyalty Score)
Annual average hours of training per employee
Percentage of female officers/percentage of female Directors
Percentage of women in members newly promoted to middle
management positions
Percentage of women in new recruits for career-track positions

 otal Amount of Remuneration by Officer Classification and by Type of Remuneration,
Tand Number of Eligible Officers (Fiscal year ended March 31, 2023)

Classification

Total amount of
remuneration(million yen)

Total amount of remuneration by type of
remuneration (million yen)Non-monetary
Performanceremuneration, etc.
linkedFixed

Number ofpayeesDirectors (excluding Outside Directors)

417

183

187

46

6

Audit & Supervisory Board Members(excluding Outside Members)

69

69

—

—

2

Outside Directors

48

48

—

—

4

Outside Audit & Supervisory Board Members

36

36

—

—

4

Note: The number of persons and amounts include one Outside Audit & Supervisory Board Member who retired as of the close of the Company’s
204th Annual Meeting of Shareholders held on June 28, 2022.
*T he total amount of remuneration for each officer is not stated as there is no officer with a total amount of consolidated remuneration of 100 million yen or more.
* There are no employees concurrently serving as officers.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

Evaluation and Analysis of Effectiveness of the Board of Directors as a Whole

Audit & Supervisory Board, Audit & Supervisory Board Members

The Board of Directors analyzes and evaluates the effectiveness of the Board of Directors andthe Advisory Committee each fiscal year based on the results of interviews conducted by the
Board of Directors Secretariat with each Director and Audit & Supervisory Board Member. The
methods and results of the evaluation of the effectiveness of the Board of Directors for the
fiscal year ended March 31,2023 are summarized below.

Percentage of Outside Audit &The Audit & Supervisory Board consists of five Audit & Supervisory
Supervisory Board Members
Board Members, of whom three are Outside Audit & Supervisory
Board Members. The Company has established the Office of Audit
Outside Audit& Supervisory& Supervisory Board, which is composed of full-time staff
Board Member:
operating outside the Executive Directors’ chain of command. The
3 persons
Office is designed to support Audit & Supervisory Board Members’ Internal Audit%& Supervisory
auditing work and thus enhance their auditing function.
Board Member:    Audit & Supervisory Board Members monitor the execution 2 personsof duties of the Directors from an independent viewpoint and strive Audit & Supervisory Board Members: 5 persons
to raise the effectiveness and quality of auditing by exchanging
information as necessary on such occasions as regular meetings
about annual audit plans and audit reports. Further, theyexchange opinions on the status of internal controls and risk management with the internal audit
division and the accounting auditor. Full-time Audit & Supervisory Board Members conduct auditing
activities on a daily basis and share their findings with Outside Audit & Supervisory Board Members
in a timely manner. Their main activities are as follows.

1. M ethod
Interview
Conducted interviews
with all Directors (10)and all Audit &Supervisory Board
Members (5) in MarchApril 2023 regarding thecomposition of the Boardof Directors, its operation,and the content ofdeliberations, etc.*

Discussion
Discussed theeffectiveness of theBoard of Directors at
the outside officers
meeting held in April
2023 (attended by all
Outside Directors andOutside Audit &Supervisory Board
Members).

Addressing Key Issues
Promote improvement of key issues

Report to the Board of
Directors and Discussion• At the Board of Directors meeting
held in May 2023, Outside
Directors reported the results of
the outside officers meeting, andthe Board of Directors confirmed
their assessment of theeffectiveness of the Board of
Directors for FY2023.3.
• The Board of Directors discussed
and confirmed the direction of
improvement for the issues
identified in the Board effectivenessevaluation, prioritizing themaccording to their level ofimportance and the period of timerequired for their consideration.

60

Main Activities of Audit & Supervisory Board Members(a) Businessaudit• Attend important meetings such as Management Meeting and read important
documents• Conduct visiting audits at Head Office, major offices, and affiliates• Listen to reports from each organization and affiliate• Exchange opinions with Directors (including Outside Directors)• Cooperate with the internal audit division and Audit & Supervisory Board
Members of affiliates(b) Accounting
audit

•C
 onfirm the independence of the accounting auditor and proper conduct of audits• Confirm accounting audit plans and audit results, etc.

* Based on the evaluation by an external specialist institution, we have established the interview items for the fiscal year ended March 31, 2023.

2. I nterview Items
1 Initiatives in response to last year’s issues• Establishment of medium- to long-term
themes to examine the direction of thecompany as a whole• Further enhancement of information tojudge candidates for Directors• Devising ways to deepen discussions at
the Board of Directors meetings
2 Composition of the Board of Directors• The ideal structure and composition of
the Board of Directors to realize thelong-term management vision andmedium-term management plan
• Ensuring diversity (gender, expertise,
experience, ability, etc.), etc.

3 Operation of the Board of Directors meetings• Frequency and time, proceedings,
materials• Development of appropriate
management strategies and plans, thestatus of response to key issues such as
climate change risks and DX, etc.
4 Advisory Committee• Frequency of meetings, content ofdeliberations, method of operation,
topics to be discussed, etc.
5 Outside officers’ meetings and others• Theme, exchanging opinions for the
purpose of developing management, etc.
6 Free opinion

3. E valuation Results<Major issues>• Board operations that devote more time to discussion• Expansion of Advisory Committee on Management• Expansion of opportunities to exchange views with internal officers• Cultivate internal officer candidates from a medium- to long-term perspective (especiallywomen and highly specialized personnel)

116

The Audit & Supervisory Board reports on the implementation status of the audit, sharesinformation, and conducts necessary deliberations and resolutions. 14 Audit & Supervisory
Board meetings were held in FY2023.3. The main resolutions of the Audit & Supervisory Board
meetings are as follows.
Main Resolutions at the Audit & Supervisory Board Meetings• Audit plans by Audit &Supervisory Board
Members• Report on audits by
the Audit &Supervisory Board• Approval of proposal forelection of Audit &Supervisory Board
Members• Selection of full-time Audit &Supervisory Board
Members•A ssignment of duties of each Audit& Supervisory Board Member• Evaluation and reappointment/
non-reappointment of theaccounting auditor• Approval of remuneration for
the accounting auditor

The amount of remuneration for Audit & Supervisory Board Members was approved at the 176th
Annual Meeting of Shareholders held on June 29, 1994, to be up to 14 million yen per month. The
number of Audit & Supervisory Board Members at the end of said Annual Meeting of Shareholders wasfive. The amount of remuneration for each Audit & Supervisory Board Member shall be determinedthrough discussions among Audit & Supervisory Board Members within this amount, and consisting
only of fixed remuneration because they are assigned the role of auditing the execution of duties byDirectors from a standpoint independent of the performance of the Company’s businesses, and taking
into consideration the position, etc. of each Audit & Supervisory Board Member. The system of paying
retirement benefits to Audit & Supervisory Board Members was abolished in June 2004.
Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

117

Risk Management
Basic Approach and Policy
As the social and economic environment is changing drastically, with the increasingly unstable international situation, exchange rate fluctuations and inflation, the importance of energy security is
rapidly growing, along with the further acceleration of decarbonization. In such an environment, the Daigas Group, which operates a various types of businesses in various regions, recognizes thatrisks listed on
P.118 may have an impact on its business performance and financial position. We are working on each measure under the risk management promotion system, and the ESG
Committee, the Safety and Disaster Prevention Committee, and other corporate committees are implementing plans and following up on progress.
Matters concerning the future as stated are based on the Group’s judgment and assumptions as of the end of FY2023.3.

Promotion System
Organizational heads of the Company and presidents of the affiliates promote the management of the risk of losses and periodically conduct risk management assessments. Each basic organization
or affiliate identifies risk items, checks the status of management concerning the risk items, and conducts follow-ups or other measures by using such means as the “G-RIMS (Gas Group Risk
Management System),” which systematizes the self-assessment of risk management practices.

Periodic Reviews and Monitoring
Operating our own self-assessment system G-RIMS
The Group introduced the “G-RIMS,” a system for risk management in routine business operations, in 2006. The manager of each organization and affiliated company checks if preventive measures
have been implemented or if an early-detection system is in place as required, using a checklist comprising about 50 risk items. G-RIMS is also designed to evaluate the magnitude of risks andidentify risks to be addressed, before PDCA (plan-do-check-act) is operated for improvement.
G-RIMS (Gas Group Risk Management System) Checklist
1.Management environment• Dissemination of corporate principles• D ecision-making and follow-up process• Poor maintenance of regulations• Failure to report business information thatshould be reported• Effectiveness of self-audits
2.Human rights, harassment• Violation of human rights(workers, local residents, consumers, etc.)• Harassment (sexual harassment, maternity
harassment, power harassment)
3.Personnel affairs, labor affairs• Inappropriate labor management andincompliance with labor-related laws andregulations• Inappropriate employment contracts with
non-regular employees• Securing human resources• Developing human resources
4.Accident prevention, workplace safety• Slack conduct regarding accident
prevention and workplace safety• Vehicles for business use• Illegal use of bank accounts
5.Response to relevant laws
• Violation of applicable laws and regulations• Embezzlement of cash
• Embezzlement of sales proceeds
6.Illegal transactions• Violation of the antitrust act• Illegal spending• Violation of the subcontract act• The same person taking a spending-related• Violation of the labeling act
post for a long time
7.Inappropriate relationships
14.Accounting, tax-related procedures• Cozy relationships, bribery, etc. with public• Errors, illegal practices, and delays concerning
servants; cozy relationships with clients andaccounting and tax-related procedures
suppliers
15.Credit control, loan control• Irrecoverable loans, delays in loan collection
8.Anti-social forces• R• Acceptance and execution of guaranteed efusal to have a relationship with anti-social forces
9.Insider tradingdebts• Practice of insider trading, provision of insider
16.Scandals involving suppliers• Compliance problems emerged at corporate
information
10.Public funds (subsidies, etc.)
clients concerning human rights, labor• Illegal receipt of public funds (subsidies, etc.)
practices, environment, and corruption
11.Management of seals
17.Whistle-blowing system(Compliance Desk)• Illegal use of seals• Insufficient dissemination of a whistleblowing
12.Purchase, expense-related spending
system• Inappropriate procedures and illegal practices• Operational defects of a whistleblowing
concerning purchase and expense-related
systemspending (accounting spending)
18.Environment-related
13.Illegal practices concerning money• Violation of environment-related laws
transfer• Illegal use of information, illegal alteration
19.Products, services• Quality of products and services
of information, and information leakage, all(complaints, defects, recall, product liability,
arising from the lack of security measuresconsumer protection, etc.)
26.Personal information concerning
customers and corporate clients
20.Business continuity in emergency(including customer information)• Suspension or delay of business activities/• Leakage, loss, and illegal use of personal
operations in an emergency, such as ainformation concerning customers
disaster
27.Personal information concerning
21.Intellectual property
employees
・Insufficient protection of intellectual• Leakage, loss, and illegal use of personal
property rights owned by Osaka Gas
information concerning employees
・Infringement of intellectual property rights
28.“My Number” system (individual
owned by third companies
identification number and22.Lawsuits
specified personal information)• Legal disputes such as lawsuits• Leakage, loss, and illegal use of “My
23.Information disclosure
Number” identification numbers• Inappropriate information disclosure
29.Funds, derivatives
procedures and the subsequent erosion of• Problematic fund management and fundpublic trust in Osaka Gas
procurement
24.Information control in general• Problematic fund control• L eakage, loss, and illegal use of information• Speculative derivative transactions
25.Computer network related
30.Electronic banking(computer networks, business apps related• Illegal and erroneous money transfers
to computer networks, information used via
using the electronic banking systemsuch networks and apps)

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

118

Recognition of and Countermeasures Against Business Risks
In addition to the measures preparing for the following risks, the Daigas Group aims to mitigate the impact on its business in cases where such risks emerge by appropriately understanding andsupervising the situations of business operations, while considering the degree and time period of the potential for risks to materialize.
Risks Related to All Businesses within the Group
Changes in economic, financial,and social conditions as well as market contraction
Occurrence of catastrophic disasters, accidents, or infectious diseases
Changes in international rules, politics, laws and regulations,and institutional systems
Changes in foreign exchange rates and borrowing rates
Uncollected investments
Climate change and decarbonization

Countermeasures against Risks
The Group is practicing portfolio management that responds to changes in the business environment by growing each of three segments “Domestic
Energy Business,” “International Energy Business,” and “Life & Business Solutions (LBS) Business.”
In preparation for the occurrence of natural disasters, terrorism, accidents, and infectious diseases, we are promoting initiatives including centralized management,
intensive inspections, and continuous improvements of facilities, taking out various types of insurance such as disaster insurance, and formulation and review of a“Business Continuity Plan (BCP)” in the event of a catastrophic disaster or accident and an operational plan for responses to outbreaks of infectious diseases, etc. In
addition, we are striving to build cooperative relationships in projects in which we participate for safe and stable business operations.
We are executing our respective businesses in accordance with international rules on environmental, social and governance issues, as well as otherdomestic and international rules, politics, laws and regulations, and institutional systems.
We are working to minimize the impact of changes in foreign exchange rates and borrowing rates through hedging and foreign currency procurement.
The Board of Directors makes decisions on various types of investments for growth based on comprehensive management decisions by the Investment
Evaluation Committee including projects’ economic and risk evaluation.
In order to respond to changes in regulations due to climate change issues, changes in social trends toward the realization of a carbon-neutral society in the future, andfluctuations in energy demand, etc., we are promoting initiatives for fuel conversion from coal and heavy oil to natural gas, the introduction of renewable energy andhighly efficient products and facilities, and development of technologies and building supply chains related to low-carbon/carbon-neutral transition.

Intensifying competition

In order to increase our market competitiveness in all business segments, we are promoting initiatives to increase added value, reduce raw material costs, develop technologies, etc.

Breakdown or malfunction of critical IT systems, information leaks,
and development delays
Quality issues with products or services

We are promoting and monitoring security measures, ensuring dissemination and education of information management, building information systems, etc.

Non-compliance with laws and regulations

In order to ensure that the products and services we offer are used securely and safely, we are working on thorough quality management and other measures.
To raise awareness of compliance, we are promoting initiatives to prevent problems from occurring through ongoing internal training, periodic risk
identification, and review, follow-up and improvement of response status, etc.

Individual Risks of Each Business Segment• Domestic Energy Business

Products such as gas equipment and facility issues

In order to respond to the impact of fluctuations in energy demand, we are expanding sales in peripheral energy fields such as gas appliances andenergy services.
We are working to minimize the impact of cash flows through diversifying contract price indices and hedging in the procurement of LNG, and to adjust
unit gas prices under the fuel cost adjustment system.
As most of the raw fuels for gas and electricity, such as LNG, are imported from overseas, we are promoting diversified procurement from numerous producers aswell as utilizing LNG carriers owned by the Group, aiming to ensure stable and flexible raw fuel procurement.
We are working to ensure a stable electricity supply by responding to power demand through procurement from procurement contracts with other companies, and fromthe Japan Electric Power Exchange and other markets, in addition to procurement from our own power source.
In order to maintain safe and stable city gas production/supply and electricity generation/supply, we are carrying out various drills to prepare for emergencies,
periodic inspections and upgrading of facilities, and measures to prevent accidents and supply disruptions including earthquake and tsunami countermeasures.
We are striving to ensure a stable supply of products, and promoting the use of safe equipment and related inspection and dissemination.

Intensifying competition in the industry and the resulting increase in choices available to consumers

We are working to provide various added values, aiming to be a company that continues to be the first choice of customers.

Impact of fluctuations in temperature/water temperature on energy demand
Changes in raw fuel costs
Difficulty in procuring raw fuels
Changes in electricity procurement costs
Difficulties in gas production/power generation and gas/power supply• International Energy BusinessChanges in the operating environment, such as decreased profitability or project
delay or cancellation, resulting from the public policies, implementation of orchanges in regulations, deterioration of economic or social conditions, market
fluctuation in areas including crude oil prices and gas prices, technical issues,or damage by natural disasters in the countries in which the Group operates

We are promoting risk countermeasures such as proactive business operations and strict evaluation of target projects in the decision-making of investment for
growth. In addition, for stable procurement, we are striving to build cooperative relationships that contribute to safe and stable operations in the participating
projects.

• Life & Business Solutions BusinessChanges in the operating environment, such as soaring material costs,
suspension of material supplies, and worsening economic conditions

We are working on internal growth, investment for growth, and other initiatives based on technologies and knowledge we have cultivated in our energy
business.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

119

Status of Internal Control
Osaka Gas established systems (internal control systems) to ensure that Directors of the Company execute the duties in compliance with the laws and regulations and the Articles of Incorporationand other systems necessary to ensure the properness of the Daigas Group’s operations at the Board of Directors. The Company confirms the operating status of the internal control systems
periodically by identifying items to confirm for various matters and receiving reports from the organizational heads and other persons concerned. At the meeting of the Board of Directors held on
April 26, 2023, it was reported that the internal control systems were operating in a proper manner.

Overview of Operating Status of the Internal Control Systems (FY2023.3)
1 Matters concerning compliance, etc.
The ESG Committee promotes initiatives in each sector, including sustainability activities,
through the Compliance and Risk Management Subcommittee, Environment Subcommittee,
and Social Contribution Subcommittee. With the movement toward decarbonization gaining
pace globally in response to the issue of climate change, the Company formulated andannounced Energy Transition 2030 (ET2030) in March 2023, integrating an overall roadmap forthe transition to low carbon and carbon neutral energy, as well as the Group’s specificinitiatives and the solutions it can provide for customers. Educational materials, including a
guide to the Daigas Group Code of Business Conduct, are posted on the intranet at all times
to familiarize Directors and employees of the Group with said Code to promote and ensure its
understanding.
    The consultation and reporting system has been revised in light of the Partial
Amendment of the Whistleblower Protection Act (Act No. 51, 2020), which came into effect inJune 2022. Effective April 1, 2022, the number of affiliated companies with whistleblower
hotlines was expanded, and measures have been taken to ensure the independence ofwhistleblowing processes involving management. During FY2023.3, the Company
implemented measures to improve the operational quality of whistleblower hotlines at affiliatedcompanies.
    On May 10, 2023, CD Energy Direct, Inc. (our stake of 50%) received an order from theConsumer Affairs Agency to suspend its door-to-door sales operations (for six months) basedon the Act on Specified Commercial Transactions, for some inappropriate business practices
in door-to-door sales by a subcontractor. In order to prevent recurrence, the Company isreviewing its compliance system and strengthening the supervision and education of its
contractors.
2 Matters concerning risk management, etc.
We are committed to risk management under the promotion system described on
P.117.
Regarding the management of risks concerning security and disaster prevention
which are common to the Group, the organization in charge is clearly specified, and theorganization supports each basic organization and affiliate to ensure risk management on aGroup-wide basis.
    With the legal separation of our gas pipeline division, we established a Security andDisaster Prevention Committee on April 1, 2022, to coordinate and promote crossorganizational measures related to safety and disaster prevention within the Group, and aretaking all possible measures to ensure safety and disaster prevention after the legal
separation. We also implemented internal investigations to confirm the status of measures toblock the transfer of information between the Network Company and the Company and its

affiliated companies, which are gas retailers, and the status of information management.
    To prepare for emergencies, regulations for disaster countermeasures and business
continuity plans are prepared. We carry out company-wide disaster-prevention drills, which
consist of earthquake drills and BCP exercises. During FY2023.3, in addition to drills assuming
disasters occurred amid an epidemic, we also implemented emergency coordination training
and drills, including the use of remote communications, to ensure coordination between the
Network Company and gas retailers.
    The Cyber Security Committee has been established to further strengthen measuresagainst cyberattacks from outside the Group’s network such as by carrying out periodic
inspections and following up on the Group’s security.
3 Matters concerning the management of businesses in the GroupThe affiliates to be managed by the core non-energy business companies, the gas pipeline
business company, the overseas regional headquarters, or the management support
organizations are designated and their managerial tasks are monitored by receiving periodic
reports and reports on important issues from the affiliates. In addition, day-to-day
management of those affiliates is performed by using the G-RIMS and/or conducting audits.
    The Company’s Auditing Department, which conducts internal audits, implements
planned internal audits of the Company’s organizations and affiliates and provides follow-up
audits after a certain period of time.
4 M atters concerning the effectiveness of audits by Audit & Supervisory Board

Members
Full-time Audit & Supervisory Board Members have periodic exchanges of opinion with the
Director and Chairman, the Representative Director and President and the accounting auditor,in which Outside Audit & Supervisory Board Members also participate as necessary. Partly
through the opportunity to exchange opinions with the accounting auditor, Audit & Supervisory
Board Members evaluate the qualifications, expertise and independence of the accounting
auditor.
    Full-time Audit & Supervisory Board Members attend important meetings such as theManagement Meeting, the ESG Council, the Investment Evaluation Committee, etc., and readapproval documents and other important documents. Through the Board of Directors’
resolution on the internal control systems, they also clarify important matters to be reported to
Audit & Supervisory Board Members and disseminate information thereof.
    Five assistants to Audit & Supervisory Board Members are in place to engage solely inassisting Audit & Supervisory Board Members in the performance of their duties.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

120

Compliance
Principle and Outline
The Daigas Group views compliance not only as adherence to laws and regulations but also as the practice of sensible corporate activities based on sound ethics. The Group believes that ensuring
compliance is the most important thing that it can do to gain the trust of customers and society, and it is the basis for continuing its business.
    We are providing training and educational activities aimed at raising awareness of the importance of compliance, instilling knowledge, and improving the ability to think ethically to ensure that all officers
and employees follow laws/regulations and their consciences, understand the foundations for compliance set forth in the Daigas Group Code of Business Conduct, and act in accordance with in-house
regulations and rules.
Furthermore, we have established “Compliance Desks” as a system aimed at quickly identifying cases of violations of laws and regulations, misconduct, etc., and responding quickly and appropriately.
    We have also established a “Human Rights Desk” in the Human Resources Department as a contact point for consultations about the human rights of employees, as well as a “Harassment Desk”
within respective organizations and affiliated companies as contact points for consultations about harassment for employees.

Compliance Promotion Systems

Predictive Data Monitoring

The Daigas Group has established“Compliance/Risk Management
Subcommittees” under the “ESG
Committee,” in order to consider
cross-organizational measures andshare information, etc. The Compliance
Office in the General Affairs Department
promotes compliance across the
Daigas Group as a whole, and we havealso selected “Heads of Compliance”
at each Business Unit, Company, andCore Affiliate, as well as “Compliancecoordinators” and “staff who serve as
key personnel in the complianceefforts” at each organization of Osaka
Gas and each affiliate, as part of efforts
to enhance compliance across theGroup as a whole.

The “Predictive Data Monitoring” initiative has been conducted throughout the Daigas Groupsince FY2012 for the purpose of detecting signs of potential compliance-related problems.
This initiative aims to prevent dishonest acts from occurring by detecting unusual changes inthe data through regular and continuous monitoring and by taking proactive measures as soon
as possible.
In FY2023.3, we monitored 150 items.

Compliance Promotion Systems
Representative Director and President
ESG Council (Management Meeting)Corporate committee: ESG Committee
Chairman: Head of ESG Promotion
Compliance/Risk Management Subcommittee
Compliance Office, General Affairs Dept.
Coordination,
Promotion, etc.
(Each Business Unit, Network Company,
Core Non-Energy Business Company)
Head of Compliance(Each organization and affiliate) Compliancecoordinators and staff who serve as key personnel
in the compliance efforts

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

Improving Compliance AwarenessInternal Reporting Systems and Compliance Desks

Promotion of global compliance in line with overseas business expansion

Established at Osaka Gas’s headquarters, major affiliated companies,
outside law firms, etc. as points of contact receiving reports and offering
consultation from inside and outside the GroupIn view of expanding business operations abroad, an English version of a leaflet summarizing
the Daigas Group Corporate Principles, the Daigas Group Charter of Business Conduct andthe Daigas Group Code of Business Conduct and information on Compliance Desks used forthe internal reporting system are posted on the intranet for dissemination to employees.
    In addition, Osaka Gas overseas affiliated companies have made the English version of
the Daigas Group Code of Business Conduct known to all of their employees to raise
employee awareness with respect to human rights, work standards, the environment andanticorruption measures.
    In FY2023.3, we utilized the Osaka Gas proprietary risk management system “G-RIMS,”
with revisions to certain items for overseas subsidiaries, as we endeavored to identify thestatus of implementation of actions on risks at 20 major overseas subsidiaries. For
approximately 40 risk items, we promote implementation of actions on risks by inspecting thestatus of implementation of initiatives for prevention and early detection of risks.

Internal training and other initiatives
We are continually working to improve compliance awareness through such efforts as training
sessions and awareness surveys.
    For example, we conduct case method training to sharpen the ability to think ethically,
and we offer Compliance Coordinator and Staff Seminars for compliance coordinators andstaff who serve as key personnel in the compliance efforts of organizations and affiliatedcompanies (including all subsidiaries), training sessions for organizational heads andhigher-ranked managerial personnel conducted by invited outside instructors, and education
arranged by job level for managers and new employees. In addition to the above, eachorganization/affiliate takes the initiative in conducting compliance training, such as
in-workplace discussions on cases related to the Daigas Group Code of Business Conduct.
    As a means of checking the degree of compliance penetration among Group employees,
we also check the degree of understanding of the Daigas Group Charter of Business Conduct
and the Daigas Group Code of Business Conduct (“Code”), as well as the degree to which each
employee is aware of the Code when performing his or her daily duties. Furthermore, based on
the results of the checking and social trends, we are periodically reviewing the Code.
    Furthermore, we provide employees with a variety of compliance-related information
through the intranet and other means and undertake educational activities such as soliciting“Compliance Slogans” from employees every year (10,215 submissions were received groupwide in FY2023.3).

121

We have established “Compliance Desks” at Osaka Gas’s headquarters, major affiliatedcompanies and outside law firms representing Osaka Gas as points of contact to receive
reports and offer consultation regarding the observance of laws and in-house rules in the
Daigas Group. Not only executives, regular employees and temporary employees of the Groupbut also executives and employees of business partners that continually provide products andservices to group companies can seek advice or give reports by phone or email, or throughother means. The Compliance Desks can also be used anonymously.
    In FY2023.3, a total of 166 requests for consultation and reports were received. For
these cases, after considering the necessity of fact-finding investigations, we conductedinterviews, verified the evidence, and took corrective and recurrence-prevention measures asnecessary. As a result, no serious violations of laws and regulations were found.
    If the Compliance Desk receives a report of a violation of laws and regulations, we willtake corrective action if the results of the investigation indicate that there has been a violation.
    Even in cases where there is no violation of laws and regulations, we will make
improvements as necessary to maintain and improve a healthy work environment.
    We report on and share the description of the reports received, investigation results,
corrective measures, etc. at the Compliance/Risk Management Subcommittee, the ESG
Committee and other meetings to prevent recurrence.
N umber of Requests for
Consultation/Reports

Breakdown of Reported Cases

(No.)
200

166

165
143

150

12％

Lack ofmanagement

100

39％

21％

5％

50

0

Human rights,
harassment

Others23％

Corruption or
misconduct
2021.32022.32023.3 (FY)Labor matters

Setting compliance as a personnel evaluation item
Osaka Gas has set compliance initiatives as one of the evaluation items in the role expectation
evaluation to evaluate the level of conduct demonstrated by employees in their daily activities.
This promotes compliance with laws and regulations and ethical standards.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

Protection of informants
We handle requests for consultation/reports received by the Compliance Desks and conduct
investigation, etc. regarding them in accordance with the Rules for the systems of consultation
and reporting on legal compliance, which clearly specify the confidentiality of the names of
informants and persons being reported and other information and the prohibition of prejudicial
treatment of informants.
    We report on and share the description of the reports received, investigation results,
corrective measures, etc. at the Compliance/Risk Management Subcommittee, the ESG
Committee and other meetings to prevent recurrence.
System of Compliance Desks
Daigas Group executives and employees, temporary workers,
and business partners’ executives and workers

Telephone
Information sharing
ESG Committee
Compliance/Risk Management
Subcommittee

Interview

LetterConsultations and reports

E-mailFeed backCompliance Desks
Compliance Dept., core affiliates, and external law firms

Fact-finding investigation, rectification/report oninvestigation result and rectification
content/consideration of preventive measures

SocialGovernance

ESG Data

122

Anti-Corruption Initiatives
Anti-corruption
In the Daigas Group Code of Business Conduct, which sets forth the standards of conductthat all officers and employees of the Daigas Group must follow to ensure compliancemanagement, the prevention of bribery and corruption is described in “Complying with
antimonopoly laws and regulations, and conducting fair transactions” and “Building andmaintaining sound relationships with business partners,” which stipulate compliance with laws
and ordinances concerning corruption prevention, including the National Public Service Ethics
Act and the Unfair Competition Prevention Act, and prohibition of bribes to foreign public
servants.
    Furthermore, we have taken priority measures for business segments, bases andbusiness activities that pose a high risk of bribery, and we are working to ensure that thesemeasures are properly implemented.
    In our G-RIMS system for managing risks related to daily business activities, we
conduct periodic inspections and monitoring of suppliers in our supply chain to ensure that
there are no compliance issues in human rights, labor, environment, anti-corruption and otherareas.
Please see

P.117 for more information on G-RIMS.

Organization and companies subjected

Initiatives for proper operation of the internal reporting system
Requests for consultation regarding compliance violations, including harassment, may bereceived not only by the Compliance Desks but also by the department in charge of generalaffairs in each organization. In order for each organization to be able to properly respond tosuch requests, training sessions are held for newly appointed compliance coordinators andstaff, etc. to learn how to respond when receiving requests for consultation.

Tax ComplianceFundamental concept
In the Daigas Group’s business operations, we follow the Daigas Group Code of BusinessConduct, comply with laws and regulations, and act sensibly based on sound ethicalstandards. We understand that appropriate tax payments are part of our corporate social
responsibility, and we comply with the tax laws and regulations of each country we operate inperforming tax procedures.

Employee training on anti-corruption
The Daigas Group has compiled the Daigas Group Code of Business Conduct (“Code”) into abooklet and portable card, which are distributed and posted on the intranet to make the Codeknown to all employees. We strive to promote understanding of the Code by posting the
Explanation of the Code of Business Conduct on the intranet and through training and otherprograms. We also provide training on the topic of anti-corruption, in which participants havegroup discussions on specific cases to examine what measures should have been taken by
the organization and individuals and how to respond to cases of corruption when they occur,in an effort to prevent corruption.
    Furthermore, we have compiled and posted on the intranet the bribery regulations ofcountries with which we have a close relationship, as well as commentary on A Resource
Guide to the U.S. Foreign Corrupt Practices Act when it was revised in 2020, in an effort torespond to the strengthening of laws and regulations against bribery and corrupt practices
worldwide.

Tax risk management
We have established processes to promote correct recognition of tax risks and appropriate
responses to the risks. We also seek advice from tax experts as necessary to maintain andimprove tax compliance.

Building relationships of trust with tax authorities
We strive to build and maintain a relationship of trust with tax authorities through timely tax
filing and payment, and appropriate information disclosure.

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

123

Information Security
Principle and Outline

Information Security Promotion System (April 2023)

The evolution of the Internet has led to sharp rises in leaks of confidential information, infections by computer viruses
and other serious social issues, and the harm suffered by companies from such incidents increasingly extends
beyond direct damage, even resulting in the loss of public trust.
    As a business operator responsible for social infrastructure, the Daigas Group recognizes the importance ofmanaging customer information and other data. The Cybersecurity Committee is chaired by the Head ofTechnology (Representative Director and Executive Vice-President), who oversees the Group’s information
security and other technology-related activities, and consists of the heads of related organizations and othermembers. The Cybersecurity Committee meets twice a year to formulate medium- to long-term security
strategies, coordinate and promote cross-organizational measures to address security risks across the Group,and gives instructions on improvements as necessary. The Committee submits to the Management Meeting
deliberation proposals and reports on important agenda items. Under the leadership of its subcommittee called
the Information Security Subcommittee, the Committee strives to step up information security measures.

Representative Director
and PresidentManagement Meeting

Corporate committees
ESG Committee

Cyber Security Committee

Information Security Subcommittee

Monitoring andadvice/improvement
instructions on
measures

Investment Evaluation
Committee

Safety and Disaster
Prevention Committee

DX Committee

Control Security Subcommittee

Secretariat

Daigas Group companies (including Osaka Gas)

Efforts to Strengthen Information Security
Under the leadership of the Information Security Subcommittee, the Daigas Group has
established a system to enhance its overall information security by deploying managers incharge of promoting information security at core companies of the Daigas Group andorganizations in charge of supporting the management of Osaka Gas and by deploying staff incharge of promoting information security at other organizations and affiliated companies.
    In FY2022.3, we worked to strengthen information security measures through theestablishment or revision of the internal rules for the Daigas Group, including the Information
Security Guidelines. In addition to the existing content, we added and revised the Information
Security Measures Standards based on recent security incidents that occurred inside andoutside the company. We have been operating the telework guidelines, guidelines related tosmart devices to respond to the expansion of the use of smart devices, and guidelines which
compile the requirements that must be observed when using the cloud services, all of whichwere created in FY2021.3 and have been updated in light of the spread of telework.
    Also, we conducted on-site surveys and checkups regarding information security atgroup companies, formulated improvement plans for each of these companies, and had them
implement suitable measures. Education on security was also provided to all Daigas Group
employees and employees in charge of IT at each affiliate and organization to improve theinformation security awareness and skills of each and every employee. To enhance employees’
information security awareness and enable them to respond appropriately to security
incidents, we conducted simulation training on targeted email attacks, based on actual cases(for about 20,000 employees).

Moreover, the entire gas industry in Japan is working on security measures in line with the
Action Plan on Information Security Measures for Critical Infrastructure, formulated by the
National Center of Incident Readiness and Strategy for Cybersecurity (NISC). Osaka Gas, too,is striving to strengthen the measures.

Major information security measures undertaken in FY2023.3
 aintained and operated the Information Security Guidelines, etc.
M
Implemented voluntary information security inspections of affiliated companies• 
Implemented training on targeted email attacks (for approx. 20,000 employees)• 
Implemented e-learning for employees (for approx. 8,000 employees)••

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

124

Protection of Personal Information
Principle and Outline
The Daigas Group believes that information is an important asset for a company and should be properly managed to prevent leakage or loss, and it has established a system for the proper use andmanagement of personal information received from customers. Furthermore, we are working to enhance risk management regarding personal information by utilizing our risk self-assessment system,
G-RIMS, and to raise employee awareness through e-learning and training programs.

Privacy Policy

Strengthening risk management through training and e-learning programs

In accordance with the Act on the Protection of Personal Information, our Rules for Personal
Information Protection, and other related regulations, Osaka Gas has established a privacy
policy regarding the handling of information on its customers, shareholders and other parties
and posted it on its official website. Based on this policy, we strive to properly protect
information on our customers, shareholders, and other parties. In addition, we handle personal
information on our employees, etc. in the same manner as customer information. We are making
the privacy policy regarding personal information of our employees, etc. known through theinternal portal site and striving to properly protect the personal information on our employees, etc.

Every year, the Daigas Group strengthens risk management regarding personal information by
utilizing its risk self-assessment system, G-RIMS, and addresses personal information
protection as an important theme in compliance training and other educational programs toraise employee awareness. Furthermore, all employees and temporary employees who haveaccess to computers provided by the Group are required to take e-learning courses on
information security, which consists of basics and case studies. In FY2023.3, in light of therevision of the Act on the Protection of Personal Information, we increased opportunities for
employees to deepen their understanding of personal information protection by providing
e-learning programs to learn about personal information protection based on the content of
the revised act and case studies.

Protection of Personal Information

Privacy Policy

Establishing a personal information protection system that includes
subcontractors in its scope

Information security e-learning session participants in FY2023.3: Approx. 6,100 employees

The Daigas Group, which handles a large amount of personal information, has establishedrules and implemented various security control measures to protect such information. We are
striving to properly manage and prevent leakage of personal information by establishing apersonal information protection system that includes subcontractors in its scope, in which the
Representative director and Vice President responsible for the General Affairs Department
serves as the Chief Privacy Officer (CPO) and managers are assigned to the Business Units,
the Human Resources Department and affiliated companies.
Personal Information Protection System
Chief Privacy Officer (CPO)
Representative Director and Vice President in charge of the General Affairs Department

Personal Information Manager(Customer information)

Personal Information Manager(Employee information andother personal information)

Head of Energy Solution B.U.

Executive in charge ofthe Human Resources Dept.
Executive in charge ofthe General Affairs Dept.

Osaka Gas organization heads and affiliate company presidents
Employees, contractors

Daigas Group Sustainability Report 2023

Contents

Introduction

Management

Environmental

SocialGovernance

ESG Data

125

ESG Data
See the files below for data on initiatives in the ESG categories covered by the Sustainability Report.

PDF

Environmental
Performance Data

• Boundary• Environmental Policies• ISO 14001 Certification Acquisition
Status at the Daigas Group’s
Manufacturing Sites• Environmental Action Targets andIndicators• Environmental Management
Efficiency• Response to Climate Change(Management of Emissions)• Resource Use/Discharge and Waste

PDF

Social Data

• Policies on Social Issues• Research and Development/
Intellectual Property• Employees (Employment)• Employees (Human Resource

PDF

Governance Data

• Governance Policies• Corporate Governance• Compliance

Development)• Employees (Promotion of Diversity,
Work-Life Balance)• Employees (Health and Safety)• Customers• Pipeline length and Powergeneration facilities• Contribution to Society

Osaka Gas CO., Ltd.
4-1-2, Hiranomachi, Chuo-ku, Osaka 541-0046, Japan
https://www.daigasgroup.com/en/

Published in 2023

Daigas Group Sustainability Report 2023