For the year ended January 31, 2023

Value Report 2023
— Our Engagement

1

Foreword to
Value Report 2023

CONTENTS

share the same goals through the good times and the bad. If everyone participates in running the company, there will be no conflict between employcompany. If Love of Humanity exists between ourselves and our partner
contractors, builders, and suppliers, we will be able to prosper together,and the foundation of the company will be reinforced.”core competencies empower our corporate activities.
Since our founding, we have always been in synch with the times. To
consistently address the needs of customers and society, we have developed advanced technologies and human resources to support the Group.
The Sekisui House Group’s global vision, and our promise to stakeholders, is to “make home the happiest place in the world” as we move forward.
We will make our vision a reality by improving corporate value as a sustainable company and consistently providing happiness in the era of the 100Through Value Report 2023—Our Engagement, we seek to tell our story
from business, financial and non-financial perspectives and engage in dia-

About the Cover Design
The three rings on the cover of this report symbolize the Sekisui House Group’s mission—our threematerial issues. To evoke the kind of happy homes that the Sekisui House Group strives to provide,
their texture has an organic warmth. The white shining from the center of the rings depicts our loveof humanity. The expansion of these three rings will make the various “homes” they encompass thehappiest places in the world.

Section 2

logue with stakeholders.

Value Creation Process................................................. 37
Sekisui House’s Operating Environment,
Risks and Opportunities.............................................. 38
Management Resources(Four Types of Capital)................................................ 39
The Sekisui House Group’s
Human Capital Management.................................... 41
Business Models............................................................... 50
Value Chain.......................................................................... 51
Core Competencies......................................................... 53
Stakeholder Engagement............................................. 54

Built-to-Order Business................................................. 61
Supplied Housing Business.......................................... 64
Development Business.................................................... 67
Message from the Officer in Charge of
the Overseas Business .................................................... 70
Overseas Business ............................................................ 71

Financial and Capital Strategy................................ 74
Financial Analysis............................................................ 78
ESG Strategy....................................................................... 82

Environment..................................................................... 133

Respect for Human Rights........................................ 182
Developing Human Resources............................... 187
Diversity and Inclusion............................................... 192
Happiness Health Management............................ 199
Occupational Health and Safety............................ 201
Customer Initiatives...................................................... 207
Coexisting with Local Communities................... 210
Supply Chain Management...................................... 216

ESG Management

Participation in International Initiatives
and Activities with Government andIndustry Groups............................................................. 219
Independent Third-Party Assurance Report.... 220

The Outside Members of the ESG
Promotion Committee Share Their Views........ 94
Stance and Initiatives to Promote
ESG Management (Sustainability)........................ 97
Governance.......................................................................... 99
Message from the Chairperson of theBoard of Directors......................................................... 100
Corporate Governance................................................ 101
Promoting Compliance............................................... 117
Strengthening Risk Management.......................... 121
Themes and KPIs for Initiatives That
Provide a Basis for Our Material Issues........... 125
Shareholder and Investor Engagement............. 126

Environmental Management.................................... 134
Contributing to a Decarbonized Society.......... 136
Disclosure in Line with Task Force on
Climate-related Financial Disclosures(TCFD) Recommendations..................................... 142
Biodiversity Conservation......................................... 146
Disclosure in Line with the Taskforce on
Nature-related Financial Disclosures(TNFD) Draft Recommended
Disclosures.......................................................................... 152
Initiatives to Realize a Circular Economy.......... 154
Water Security................................................................... 162
Environmental Data...................................................... 166
Factory Site Report....................................................... 175

Social..................................................................................... 181

Environmental Strategy.................................................. 83
Improvement of Social Value..................................... 85
Human Resources Strategy......................................... 86
Technology and R&D Strategy:
Sekisui House Technology........................................... 87
Digital Transformation (DX) Strategy................. 90

Mechanisms and Catalysts for
Creating Value

year lifespan.

We hope to reach the hearts of our stakeholders.

Group Vision and Material Issues........................... 16
Our Material Issues and the Value
We Provide............................................................................. 17
The Sekisui House Technology andMindset Behind Our Material Issues..................... 18
Creation of High-Quality Housing
Stock and KPIs................................................................... 22
Contributing to a Sustainable Society
and KPIs.................................................................................. 26
Diversity and Inclusion and KPIs........................... 32

Section 4

tion capabilities and customer base it has created since its founding. These

Section 1—From the Corporate Philosophy

Message from the President..........................................7
The Building of Sekisui House—Our Corporate Story................................................. 11
Sekisui House’s Material Issues.............................. 15

Section 3

Long-Term Vision andMaterial Issues

ees and management, and this will serve as the driver in growing the

The Sekisui House Group is proud of the technical capabilities, construc-

Evolution of Our Businesses andBusiness Model Based on the
Residential Domain........................................................ 57
Evolution of Our Mid-Term
Management Plans.......................................................... 58
Sixth Mid-Term Management Plan
(FY2023–FY2025) ......................................................... 59
Business Strategy

Section 4

employees will become a group who share a common destiny, and who

Messages from the Audit andSupervisory Board.......................................................... 127
Directors of the Board and Audit andSupervisory Board Members................................... 128

Financial Data, Company
Information and Share Information
Section 5“A company is made of its people. By acting with Love of Humanity, our

Mid-Term Management Plan for
Sustainable Growth

Foreword to Value Report 2023 / Contents.......1
Editorial Policy / Communication Overview....2
Corporate Philosophy and Global Vision............3
Business Portfolio...............................................................4
Keys to Understanding the
Sekisui House Group........................................................5

Consolidated Financial Statements................... 222
11-Year Highlights (Consolidated)..................... 226
Company Information................................................ 230
Share Information......................................................... 231
External Recognition and Awards...................... 232

2

Editorial Policy / Communication Overview
Editorial Policy

Communication Overview

We produced this report with the primary purpose of helping readers

Third-Party Assurance

understand our businesses and initiatives. This report lays out the corpo-

To enhance the credibility of the information in this report related to ourrate story of Sekisui House. It uses the process of determining material

environmental and social performance indicators, we received third-party

issues to help readers understand the corporate value and significance ofsustainability report assurance from KPMG AZSA Sustainability Co., Ltd.

the Sekisui House Group, and clearly expresses the Group’s vision for itself

compliant with ISAE 3000 and ISAE 3410, the International Standards on

through the value creation process. Since 2022, we have published theAssurance Engagements issued by the International Auditing andValue Report, which incorporates the content formerly published in the

Assurance Standards Board.

Financial Information

DialogueIntegrated Report and the Sustainability Report. By including a broad arrayof ESG information, this report is intended to serve as a unified tool for all

Note on Forward-Looking Statements

stakeholders, including institutional investors and shareholders, that

Forward-looking statements in this report, such as performance forecasts,

explains Sekisui House’s corporate value from business, financial andare estimates made by the Company based on information available at the

non-financial perspectives.

time this report was prepared and include potential risks, uncertainties and• Briefings on ESG management• Meetings with stakeholders• Securities Report (Japanese only)• Business Report• Corporate Governance Report• Value Report (integrated report)
This unified disclosure explains
corporate value by providing financial
and non-financial information and awide array of data.

Reportsother factors. Please be aware that actual results may differ significantly
Section 4 describes the Sekisui House Group’s approach to and initiatives

Non-Financial Information• Briefings on earnings results andmanagement plans• Meetings with analysts andinvestors• General Meeting of Shareholders

from forecasts due to changes in various factors.

for environment, social and corporate governance (ESG) issues. Within
Section 4, information in each subsection is organized under the headings ofGovernance, Strategy, Risk Management, Metrics and Targets, andInitiatives and Other Related Information, based on the approach to ESG
information disclosure presented by the International Sustainability Standards
Board, which was created by the IFRS Foundation in November 2021.

Each page has navigation buttons to facilitate movement between pages

In principle, this report encompasses Sekisui House, Ltd. and its 345 consolidated subsidiaries. Departures from this scope are indicated in the text.
• Period covered: FY2022 (February 1, 2022 to January 31, 2023)

1   1 Some activities undertaken in the fiscal years preceding and following FY2022 are also covered.

• Date of publication: Published annually (previous report was issued in

Websiteand to external resources.
Contents

Investor Relations

Return to table of contents
Link to an external website

Report Content and Topic Boundaries

June 2022)

Navigating the Report (online version)

Jump to related page in this report

ESG Management

Guidelines referenced• The International Integrated Reporting Framework, IFRS Foundation• “Guidance for Collaborative Value Creation,” Ministry of Economy, Trade and Industry• “Environmental Reporting Guidelines 2018,” Ministry of the Environment• ISO 26000 (Guidance on Social Responsibility), International Organization forStandardization• GRI Standards• SASB Standards , Sustainability Accounting Standards Board (SASB), IFRS Foundation• “Final Report: Recommendations of the Task Force on Climate-related Financial
Disclosures,” Task Force on Climate-related Financial Disclosures (TCFD)• TNFD beta framework (v.0.4), Taskforce on Nature-related Financial Disclosures (TNFD)

Value Report 2023
SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Contents

Mechanisms andCatalysts for Creating Value

Corporate Philosophy and Global Vision
Our stanceLove of Humanity…. Our philosophy

Truth & Trust

With an awareness that each and every
human being is precious and irreplaceable,
we will wish for the happiness of others,
make their joy our own, and act withintegrity and in the spirit of service.

Our philosophy

Love of
Humanity
Our goal

The meaning of our business

Deliver the highest
quality and technology

Create enriching homes
and environments

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

The Sekisui House Global Vision

Make home thehappiest placein the world3

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSEBusiness Portfolio
The Sekisui House Group divides its operations into four areas: the built-to-order business, supplied housing business, development
business and overseas business. The built-­

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Other

2.8%

Overseas business

Built-to-order business

17.8%¥80.7 billion

36.8%¥521.1 billion

Exterior business, etc.

¥1,077.3 billionto-­order business creates high-­value-added,
high-quality housing stock on land owned by
the customer. The supplied housing businessworks to increase the asset value of housing
stock through remodeling and supports the
management of rental housing through subleasing. The development business starts fromland acquisition and other investments to create high-quality communities. The overseas
business provides housing markets in othercountries with the quality and advanced technologies we have cultivated in Japan.

Overseas business

Customdetached houses

Net sales: ¥521.1 billion
Sales of detached houses; preparation,
development and sales of residential land;development of condominiums for sale,rental condominiums, and other properties
in overseas markets
Business regions
United States, Australia, Singapore,
United Kingdom and China

12.0%

Overseas businessContracting of custom detached house design andconstruction

17.8%
Rental housing

Urban
redevelopment

FY2022Net Sales

Condominiums¥2,928.8 billion

4.6%

3.1%

14.5%

10.2%

8.1%

Development business

15.9%

Real estate
management fees

21.1%

¥464.4 billion

Rental housing
Net sales: ¥426.1 billion
Contracting of design and construction of rental housing,commercial buildings and other properties

Architectural/
Civil engineering

Houses for sale

Custom detached houses
Net sales: ¥352.4 billion

Architectural/Civil engineering
Net sales: ¥298.7 billion
Construction of reinforced concrete rental housing and commercial buildings; contracting of civil engineering works
design and construction

Remodeling

5.7%

Remodeling
Net sales: ¥165.9 billion
Houses for sale

Condominiums

Urban redevelopment

Net sales: ¥238.2 billion

Net sales: ¥90.8 billion

Net sales: ¥135.3 billion

Sales of houses and residential land; design and contracting of construction of houses
on residential land for sale

Sales of condominiums

Development of office buildings and commercial facilities;
management and operationof real estate owned

Supplied housing business

26.8%¥785.1 billion

Remodeling and renovation of houses,
etc.

Real estate management fees
Net sales: ¥619.2 billion
Subleasing, management, operation
and brokerage of real estate, etc.

4Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

Keys to Understanding the Sekisui House Group

2.62 million units
The world’s largest cumulative
number of dwellings built(Incl. 30,000 units overseas)
As of January 31, 2023
P.11 The Building of Sekisui House—Our Corporate Story

Sekisui House
Technology
Aiming to Become the
Global De Facto Standard
P.53 Core Competencies
P.87 Technology and R&D Strategy: Sekisui House Technology

Leading the housing
industry bypromoting ZEH
P.136 Contributing to a Decarbonized Society

DX strategy
to create new value andmaximize business opportunities
CRM, Platform House, andDX for rental housing
P.90 Digital Transformation (DX) Strategy

Platform House
Concept

Employee autonomy
×
Alignment of efforts

Helping provide happiness inthe era of the 100-year lifespan .42 The Sekisui House Group’s Approach toP
Human Resource ValueP.86 Human Resources Strategy

P.92 Platform House Concept
Platform House (Japanese only)

19 million trees
29,052 employees Overplanted to dateputting love of humanity into action

Gohon no Ki Project

As of January 31, 2023

P.39 Management Resources (Four Types of Capital)

Supply of 10,000
detached houses
per year by FY2025 in
the overseas businessP.71 Overseas Business
Global Site

Maximizing humanresource value

As of January 31, 2023
P.146 Biodiversity Conservation

ESG management
aimed at being aleading company
P.82 ESG Strategy
P.93 ESG Management

691,000 unitsof rental housing under management
As of January 31, 2023

P.65 Rental Housing Management

5

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

6

Section1

Long-Term Vision
and Material Issues
Message from the President

7

The Building of Sekisui House—Our Corporate Story

11

Sekisui House’s Material Issues

15Group Vision and Material Issues

16

Our Material Issues and the Value We Provide

17 The Sekisui House Technology andMindset Behind Our Material Issues

18

Creation of High-Quality Housing
Stock and KPIs

22

Contributing to a Sustainable Society and KPIs

26

Diversity and Inclusion and KPIs

32

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Message from the President
Advancing stable growth in Japan and proactive
growth overseas to provide the added value ofhappiness worldwide
Yoshihiro Nakai
Representative Director of the Board
President, Executive Officer, CEO

Our Global Vision

Creating happiness for residents to realize enriching lifestyles overincreasingly long lifespans
Since its founding in 1960, Sekisui House has constantly been ahead of the curve, solving issues
with advanced technologies while accumulating unmatched product strengths.
Looking at our history in 30-year segments, during the first phase, up to 1990, our highest priority was housing that offers safety and peace of mind to protect our customers and their assets.
Then, we created new value by making housing proposals aimed at improving resident comfort
and eco-friendliness in the second phase, up to 2020.
Now, over the next 30-year phase, until 2050, how can we offer new value? The key is “happiness.” We are still aiming to build on the leading seismic resistance, thermal insulation andenergy-­saving technologies that we amassed over our first and second phases, but we now seek
to provide the added value of happiness. Accordingly, in 2020, we announced our global vision:
make home the happiest place in the world.

7

Value Report 2023
SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Contents

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Message from the President

Housing is a durable good used over the long term, serving as the foun-that’s only a short time, and there remains much to be accomplished. That

housing with excellent seismic resistance, thermal insulation and energy-­

dation of our daily lives. As life expectancies get longer, needs are chang-said, over these three years of the Fifth Mid-Term Management Plan, we

saving performance across Japan, we are considering forming partnerships

ing; to realize enriching lifestyles in the era of the 100-year lifespan, it will begreatly exceeded our initial targets, and I regard this as a strong start to ourwith regional builders to share Sekisui House technologies and thereby cre-

increasingly important to offer value through housing in the form of health,journey toward realizing the Group’s vision.

ate high-quality housing stock.

Designating Our Material Issues

value of housing stock. Given the current importance of realizing a circular

Beauty that aligns with resident sensibilities is an essential aspect of theconnectedness with friends and family, and diverse experiences and skills
to support the happiness of residents. In 2018, we established the Human
Life R&D Institute, becoming the first company in Japan to launch well-being
research. The fruits of this research, apparent in our Family Suite proposals
featuring spacious living rooms, are already driving the strong performanceof our custom detached houses business. Going forward, we will continue
to enhance our understanding in both scientific and theoretical terms ofhappiness for increasingly diverse families and lifestyles.
At the same time, to deliver happiness to our customers, it is essentialthat those of us in the housing business (including our families) are happy
ourselves. To this end, and with an eye to realizing our global vision, we are
implementing a variety of initiatives to support diverse employee workstyles
and lifestyles.
Furthermore, contributing to society through our business is our mission
as a corporate citizen. Specifically, we aim to become a leading company
in ESG management. In particular, we are working to provide new value inline with the changing needsof customers and society centered on the concepts of“Green First,” aimed at providing eco-friendly products andservices, and “Kids First,”
aimed at supporting parents
and the well-rounded growthof children.
Three years have passed
since we established our global vision, kicking off our third
phase. Within the context ofour 30-Year Vision, however,

Our Material Issues Must be Rooted in Universal
ValuesTo better clarify Sekisui House’s mission, in 2022, we revised the material
issues we seek to address in order to realize a sustainable future. I believe

economy, the sustainability of housing, aimed at carbon neutrality, is another.

Reflecting on the Fifth Mid-Term Management Plan

We focused efforts on social issues and maintained
growth even during the COVID-19 pandemic

that material issues must not be temporary concerns of the moment, butissues based on universal values to tackle over 50 or 100 years. In the

Shortly after we announced the Fifth Mid-Term Management Plan (FY2020–

1960s, Sekisui House helped secure housing during Japan’s period of rapid

FY2022), the Japanese government declared a state of emergency over the

economic growth and establish housing stock with high-quality basic func-

COVID-19 pandemic. Due to pandemic-related effects, in the plan’s firsttions. Since then, we have consistently pursued safety and peace of mind

year, we recorded net sales of ¥2,446.9 billion and operating profit ofas well as comfort and eco-friendliness, striving always to evolve our tech-¥186.5 billion, well below our targets. However, in the plan’s second year,

nologies. I believe that these efforts themselves embody our material

we made up most of the difference, growing net sales to ¥2,589.5 billion

issues. Accordingly, to realize happiness through housing in the coming era

and operating profit to ¥230.1 billion, and in the final year, we greatlyof the 100-year lifespan, we have designated three material issues for our

exceeded our initial targets with net sales of ¥2,928.8 billion and operating

businesses: Creation of high-quality housing stock, contributing to a sus-

profit of ¥261.4 billion. I believe that this was because our business seg-

tainable society, and diversity and inclusion.

ment strategies were correct, and these results were achieved thanks to

The housing market in Japan is commonly expected to shrink in thethe hard work of all our employees who put those strategies into action.

future as the population decreases. Looking more closely, however, of

Amid the pronounced changes in the market environment in recent

Japan’s total housing stock of approximately 62 million units (includingyears, some have expressed doubt over the usefulness of mid-term man-vacant houses), about 29 million are detached houses. Of these, approxi-

agement plans. However, in an environment of drastic social change year

mately 5 million do not meet current seismic resistance standards, while

after year, single-year plans limit the scope of planning and can make it diffi-

only a shockingly low 11% of existing detached houses meet current stan-cult to allocate the necessary resources to deal with unanticipated develop-

dards for thermal insulation.

ments. At the same time, a longer-term approach focused on five or ten

Japan is very seismically active country with harsh seasonal weather

years presents greater difficulty in predicting future conditions. Mid-term

being exacerbated by climate change. Considering this, it seems to me thatmanagement plans, focused on the coming three years, thus strike a useful

the social issues that Sekisui House worked to address in its first and sec-balance, expanding the scope of what is achievable while still allowing a

ond phases are still some way from fully resolved. To promote the spread ofreasonable amount of predictability. We therefore give weight to these8Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Message from the President

plans, which enable us to advance management as planned over the medi-

zero energy houses (ZEH), and the rate of ZEH among orders received for(DX) will be at the core of efforts in this area. We have accumulated vast

um term, considering and adjusting to changes in the external environment

detached houses reached 93% in the year from April 2022 to March 2023.

amounts of customer information and design data over more than 60

while effectively procuring and allocating management resources.

We are also expanding ZEH to multi-unit housing complexes. I think that hav-

years. Utilizing this in new businesses and services will be a major focus.

Of course, to achieve the plan’s targets, it will be important for all

ing rental housing residents experience ZEH and its environmental contribu-

Our target for DX is to support the happiness of housing residents using

employees to share our vision, and for each division and individual to thinktion first-hand will be important to solving environmental issues more broadly.

technology. I think this goal is fully realized in the Platform House Concept–

In addition, since its launch in 2001, the Gohon no Ki Project, which

HED-Net, which aims to realize housing that maintains privacy while unin-

autonomously and act with creativity and ingenuity.

trusively keeping a protective watch over residents.

We designated innovation and communication as a key theme because

plants native tree species around new builds and the surrounding commu-

we will need the ideas of a wide range of employees to innovate in ournities to promote biodiversity, has now been going strong for over twobusinesses. I am sure that our many employees working creatively acrossdecades. Working with customers, the project has planted more than 19

various business fields are a wellspring of innovative ideas that can trans-million trees across Japan. A verification of the project’s effects undertaken

form the Company. To put innovation and communication into practice, we

jointly with the University of the Ryukyus found that it has the potential tomust align the efforts of all employees with our vision while effectively incor-

lead to a doubling of the number of bird species and a fivefold increase in“Stable growth in Japan and proactive growth overseas” is not a particularly

porating opinions and suggestions from the front lines and applying them atthe number of butterfly species that residential areas attract, proving that it

new concept, but we have designated this focus to emphasize that there is

the tactical level. The Company will not hold back in supporting employees

does indeed contribute to biodiversity.

still ample room for growth in the domestic market. This stance aligns with

who are working hard; in return, we will expect all leaders to demonstrateintegrity, grit and the ability to develop human resources. By creating organizations that nurture employees who embody integrity and can succeed as

Focusing on Stable Growth in Japan and Proactive Growth
Overseas

government housing policy, and our track record over the past three years

The Formulation of the Sixth Mid-Term Management Plan

proves that it has been correct.
Overseas, we will advance business mainly in the United States andand vibrant company.

Responding to Diversifying Needs and Evolving
Technologies

Become a Leading Company in ESG Management

We announced Sekisui House’s Sixth Mid-Term Management Plan

need to carefully consider which aspects of performance best match the(FY2023–FY2025) on March 9, 2023. In the plan’s final year, FY2025, weneeds of specific countries and regions. As such, we are advancing deliber-

aim for net sales of ¥3,676.0 billion and operating profit of ¥318.0 billion.

ations on what kind of proposals will succeed in markets overseas, and thisleaders, I am sure that Sekisui House will evolve into an even more diverse

Sekisui House’s history of working with customers to foster enhanced
understanding while promoting ESG management within its primary busi-

Australia. Sekisui House boasts industry-leading technologies not only inseismic resistance and thermal insulation, but also durability, soundproofing, stormproofing, fireproofing and all aspects of housing. However, we will

Looking at the market environment, the number of annual new housing

calculation extends to our approaches to providing housing. The pre-­starts in Japan is expected to remain above 800,000 until 2030. As I men-engineered housing business model is unique to Japan, so we aim to

Our efforts started small, like using double glazing for south-facing first-

tioned earlier, there are many houses in Japan with inadequate seismic

spread it around the world to achieve our vision of making Sekisui Housefloor living room windows, and then expanded with changes like thermal

resistance or thermal insulation. Promoting rebuilding and remodeling willtechnologies the global de facto standard.

insulation for window sashes and eventually improved thermal insulation fortherefore be a pillar of our business strategy going forward, and I see it as

At the International Builders’ Show (IBS), the largest model house tradeentire homes. We realized houses that emit 30% less CO 2, then 50%.

part of our social mission. In addition, amid the diversification of lifestyles

show in the United States, we built a SHAWOOD wooden-frame house

These improvements are thanks to the ongoing efforts of our R&D teams.

and values in the new normal following the pandemic, as well as theshipped from Japan and equipped it with the latest Sekisui House technol-

Building on the achievements of our forebears, we see it as our mission toincreasing severity of natural disasters caused by climate change, I think weogies. It was well received and generated considerable interest amongcontinue to blaze the trail forward and have therefore designated the goal ofwill see growing needs for high-quality housing that combines safety andoverseas market players.

becoming a leading company in ESG management.

peace of mind with comfort and eco-friendliness.

nesses has now become a major advantage.

Today, we have supplied a cumulative total of approximately 70,000 net

We must also leverage advances in technology. Digital transformation

We will promote business expansion into oversea areas via scale expansion through M&A as well as the transfer of Sekisui House technologies. In

9Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Message from the President

the final year of the Sixth Mid-Term Management Plan, we aim to supply

relationships with the environment, human resources, customers and local

will fall to leaders with the ability to practice innovation and communication.

10,000 homes in the overseas business.

communities. The houses we build have more than 10,000 components,

Indeed, leaders with strong integrity who can convey and spread theso we can only accomplish our goals related to CDP forests (a program for

Company’s vision and strategy will be essential.

Creating New Services Utilizing Big Data

requesting the disclosure of information on forests), SBT (greenhouse gas

Based on our material issue “diversity and inclusion,” we will work to create

emissions reduction targets) and realizing a circular economy though col-environments and systems that allow all employees to be themselves andDuring the Sixth Mid-Term Management Plan, we aim to realize three mainlaborative efforts with suppliers. We are encouraging our suppliers to

exercise their abilities to the fullest, regardless of disability, age, gender,

types of DX.

acquire SBT validation and participate in RE100, and have launched initia-

nationality or other such factors. Furthermore, we are proactively implement-

The first is customer relationship management (CRM). We currently havetives to support supplier decarbonization by sharing our expertise. We areing and operating highly flexible work systems that enable diverse workstyles.

many contacts with customers. We will use DX to advance the integrated

fortunate to have strong relationships of trust built over many years withmanagement of such contacts, from our first encounter with customers to

suppliers, which have enabled us to successfully coordinate our efforts.

Sekisui House’s fundamental philosophy is “love of humanity,” which
entails wishing for the happiness of others and making their joy our own. It

The bonds we have with our suppliers as “a community with a common

is our corporate mission to provide value to society based on growth strat-

destiny” originate from the switch to direct construction with the establish-

egies focused on the residential business domain. Guided by the spirit of

The second is DX for residents of rental housing. The rental housing

ment of Sekiwa Construction (now Sekisui House Construction) about ten

love of humanity, we will fulfill our role as a housing manufacturer of provid-

move-in process is cumbersome and time-consuming, entailing mountains

years after Sekisui House was founded. By advancing homebuilding withing happiness while aiming to be a leading company in ESG managementof paperwork and repeated office visits for prospective residents. We aim tocustomers directly, without going through an agency or sales company, we

as we focus on innovation and communication to advance dialogue andsolve these issues with one-stop service. Using a blockchain-linked web-will continue to work with suppliers to address issues and take action tocommunication with our stakeholders across diverse media and venues.

site, we seek to revolutionize the entire flow of processes leading to movebuild a sustainable society.

after-sales services, and provide customer-centric value to enhancesatisfaction.

in and thereby reinforce overall housing services.
The third is the Platform House Concept, which provides services centered on health, connectedness and learning. PLATFORM HOUSE touch,the first phase of this concept, is a smart home service that uses a floor
plan-linked interface and has been well received. We are also planning toinstall homes with additional services that use data on living environments

Human Capital Management

Focusing on Innovation and Communication to
Increase Human Resource Value and Social Valueand lifestyles. These include the HED-Net in-home early detection network

The enhancement of human resource value is a driver of corporate growth.

for acute illnesses, which uses unobtrusive contact-less sensors to avoid

Sekisui House has defined this value with a unique formula: employee

putting stress on residents.

autonomy × alignment of efforts. Human resource value will be highest

In terms of ESG management, I think that advancing efforts through our
main businesses with the participation of all employees will continue to bewhen every employee is highly autonomous while also aligned with thedirection of the organization.

crucial. The housing we build contributes to the creation of high-quality hous-

To promote self-directed career development, it will be crucial foring stock and, in turn, the realization of a circular economy. To become andemployees to use the resources of the Sekisui House Group while autono-remain a leading company in ESG management, we will thoroughly reinforce

mously taking the initiative to continuously develop their careers. To thisthe mindset that the Company does not merely participate in ESG, but exists

end, we will work to create environments and mechanisms, including thewithin ESG.

personnel system, that enable employees and the Company to realize sus-

In addition, to realize a sustainable society, we must build positive

The COVID-19 pandemic has changed the world in many ways. As we
gradually get back to normal, we will continue to take precautions for safety

tainable growth together. The role of aligning the efforts of our employees

while utilizing the experiences of the pandemic to advance our businesses.
Please look forward to seeing Sekisui House press onward in pursuit of major
growth as we work to achieve the targets of the new management plan.

10

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

The Building of Sekisui House—Our Corporate Story

Cumulative dwellings built

Drawing on Our DNA of Creativity to Take on Challenges for Happiness in the Era of the 100-Year Lifespan
Cumulative
dwellings built

Since its founding, Sekisui House has grown while helping to resolve social issues. From

FY2022

2,622,745(incl. 38,767 overseas)

FY2009the very beginning, we have been committed to doing so based on our concept of the

2 million

ideal home and its various roles. Our history can be divided into 30-year phases.

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

11

Happinessin the Era of the
100-Year LifespanDuring Phase 1, we worked to improve housing performance with a focus on safety andCumulative
dwellings built

peace of mind. During Phase 2, we developed advanced technologies to focus on comfort and eco-friendliness. In Phase 3, we continue to build upon our initiatives from theFY1993

Core competencies

1 million

first two phases, even as we move to provide residents with happiness by delivering highadded value that focuses on health, connectedness and learning. By offering new ser-

Customer baseConstruction
Capabilities
P.53

vices, we aim to build homes that support happiness in the era of the 100-year lifespan.
Sekisui House will remain closely attuned to the needs of residents and continue

FY2022

moving forward as a global company to contribute to a sustainable society.

Net sales
Operating profit

Cumulative dwellings built

1970

1980

1990

2000

2010

2020

Net sales (Billions of yen)

34.4 (non-consolidated basis)

430.0

1,090.3

1,364.8

1,488.3

2,446.9

Operating profit (Billions of yen)

3.7 (non-consolidated basis)

39.1

82.4

96.0

56.3

186.5

(FY)

1960

1960
Our Evolving Focus
in the Residential
DomainPhase 1 (1960–1990)

Safety and Peace of Mind

1990

Phase 2 (1990–2020)

Comfort and Eco-Friendliness

P.53

Innovations

2050

Health, Connectedness and Learning

Developing advanced technologies (technologies and lifestyle design)
Improving housing performance (Technologies)
1961	Launch of Sekisui House Model B	First production base opened (Shiga Factory1)
1964	Direct sales and design-build system established1979	Demonstration of the seismic resistance of
our houses (first for pre-engineered houses)
1 Stopped production in March 2009

The People Who
Support Our
Innovation

Phase 3 (2020– )Providing high added value (services)Core competencies

Technical
capabilities

2020¥2,928.8 billion¥261.4 billion

1982	Long-Term Warranty System
Initiated1987	Customer Service Centersestablished1990	Comprehensive Housing
R&D Institute opened

2002 Full application of universal design
2003 Improved insulation performance2007 Sales of SHEQAS launched2009 Green First Strategy launched2010	Slow Living proposals and sales
launched

2011 Sales of Airkis launched2018 Human Life R&D Institute Opened
	Sales of Family Suite launched2019	Platform House Concept announced
at CES20192020	HED-Net in-home early detection network launched2021 Sales of PLATFORM HOUSE touch launched2022 SUITE CONCIER website introducing lifestyle services launched

Developed human resources, including technicians

Promoted diversity

Self-directed careers• Development of skills for each job type and rank
• Created educational training centers, training schools and ability tests• Established in-house certification program and education and training requirements• Participation of women •Hiring of people with disabilities• Respect for human rights •Workstyle innovation• Creation of the next generation of leaders • Employee engagement• Sekisui House Innovation & Performance (SHIP) Awards ProgramValue Report 2023
SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Contents

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

The Building of Sekisui House—Our Corporate Story

Phase 1 (1960–1990)
Safety and peace of mind

A 30-Year Focus on High Quality, High Performance, Safety and Peace of Mind in Housing Construction
Sekisui House’s founding mission was to help resolve the housing shortage caused by a rapid increase in demand during this period ofhigh economic growth. We played a part in post-war reconstruction by popularizing pre-engineered housing with a short construction timeframe. We ensured safety and peace of mind by providing shelter through houses that protect lives and property in Japan, where natural
disasters are frequent. We led the Japanese housing industry with industry-first initiatives, such as the adoption of metric specifications.

Innovations

In the 30 years after Sekisui House was founded, to create homes that offer safety and peace of mind, we advanced innovations in fundamental
housing performance, such as seismic resistance and thermal insulation, and established and integrated system covering every step from development, sales, production and construction to after-sales services, enhancing housing performance.

 Launch of Sekisui House Model B, Our First Mainstay
Product (1961)
We were the first in the Japanese housing industry to introduce metric specifications (using 1,000 mm modules), leading to the creationof more generously proportioned spaces than the use of traditional
shaku-based modules (approximately 910 mm). In addition, we
enhanced design freedom by developing our Universal Frame System,an original steel frame construction
method. We also adopted aluminum
window sashes to improve thermal
insulation performance.

 First Production Base (Shiga Factory1) Opened (1961)
We established our first production
base to meet rapidly growing
demand for high-quality housing
based on our approach of ensuring
quality and stable supply throughproduction of components at ourown factories. Our current production system comprises six locationsin Japan and overseas.
1 Stopped production March 31, 2009

The People Who Support
Our Innovation Direct Sales and Design-Build System Established (1964)
Sekisui House transitioned from using
sales agents to direct sales. We alsoestablished our design-build system, inwhich we take full responsibility fromcontract until completion and also provide after-sales service. We also established the Sekiwa Construction (nowSekisui House Construction) companies
to guarantee high quality by conducting
foundation work in-house.

 Demonstration of the Seismic Resistance of Our Houses(1979)
We conducted the first set of full-scale
vibration experiments on a pre-engineeredhouse at the National Research Center for
Disaster Prevention (now the National
Research Institute for Earth Science andDisaster Prevention). Repeated verification
using the most sophisticated shaking tablethen available proved that our house wasable to withstand powerful earthquakes.

Customer Service Centers Established (1987)
We established Customer Service Centers to provide
after-sales service and conduct business activities
based on direct dialogue with owners so that they canenjoy living in their homes with peace of mind for many
years to come. In 2004, we
also opened centers that
operate outside of normal
business hours to offer
emergency repairs andconsultations at any time.

We believe that employees are the source of our innovative technologies and services, and that human resource development is essential to ourgoal of becoming a leading company in ESG management. Since our founding, we have implemented initiatives to develop the human resources
who will support Sekisui House and ensure that our technologies are passed on.

 Development of skills for each job type and rank

Developed human resources,
including techniciansLong-Term Warranty System Initiated (1982)
After the launch of Japan’s Housing Performance
Warranty Program covering defects in newly built houses, Sekisui House collaborated with the Japan
Prefabricated Construction Suppliers andManufacturers Association to revise the VoluntaryStandards for Prefabricated Housing. Based on the
belief it was our responsibility as a corporation toaddress complaints directly, these changes extended
the warranty on the framing and waterproofing of newhouses from two to ten years.

 Created educational training centers, training schools and ability tests Established in-house certification program and education andtraining requirements

The Fruits of Our Innovation

Improved housing
performance

Created the Lifetime
Housing Concept
Shifted from a focus on housing
designed specifically to accommodate the elderly and people with disabilities to housing that can be usedby all people for a lifetime. Establishedthe “comfortable living—now andalways” housing design concept.

Providing Peace of Mind to
Customers
Through direct sales and the designbuild system, the long-term warranty
system and the Customer Service
Centers, we established a framework forproviding tremendous peace of mind to
customers.

Comprehensive Housing
R&D Institute Opened(1990)
We established the Comprehensive
Housing R&D Institute to test andevaluate basic aspects of housing
performance and conduct R&D ofadvanced technologies. The institute plays a key role in Sekisui
House’s technological R&D.

12

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

13

The Building of Sekisui House—Our Corporate Story

Phase 2 (1990–2020)
Comfort and Eco-Friendliness

A 30-Year Focus on Comfort and the Environment
As environmental issues and climate change became more apparent worldwide, Sekisui House led other companies in further
enhancing superior technologies in areas such as seismic resistance, durability and thermal insulation to realize comfort—aproviding comfort and eco-friendliness for entire communities through town development and urban redevelopment projects.

In addition to addressing the need for housing that provides shelter offering safety and peace of mind, we continued to hone our wide-ranging

Innovations

technologies to develop the most sophisticated approaches to meeting residents’ needs for comfortable living.

 Improved Insulation Performance (2003) Slow Living Proposals (2010)

Drawing on our lifetime housing concept, we apply
Sekisui House Universal Design (SH-UD) to all ofour detached houses to make daily life easier forresidents. Since 2010, we have evolved these
efforts into smart universal design, an approachthat also incorporates comfort. We also commenced efforts to develop human resources withthe skills to advance housebuilding from a universal
design perspective, and have since focused onproviding comfort through design.

We became the first major domestic housing
manufacturer to adopt next-generation energy-­saving specifications that satisfy three criteria set
by the government—for insulation, airtightness
and ventilation systems—as standard for all of
our newly built detached houses. Doing so
improved floor insulation performance by about
20%, helping reduce environmental impact.

We launched sales of Slow Living proposals that connect indoor and outdoor space. Using a scientificapproach, our analyses of comfort led to the development of large sliding glass doors with fully recessedbottom sashes that open to create a large continuous spacefrom inside the house to outsideunder the eaves.

Pleasant to the touch
Good operability
Beautifulappearance

Safety andpeace of mind
Hard to fall
Easy to maintainpostureLess likely tocause injury

Ease of use
Easy to operate
Smooth movement
Easy to work

• Safety, peace of mind
• Health

Developed advanced
technologies
Original SHEQAS Seismic Control System Full Application of Universal Design (2002)

ComfortThe Fruits of Our Innovation

priority for residents—alongside eco-friendliness through energy-saving housing and other measures. We also focused on

SHEQAS dampers absorb shaking by converting seismicenergy into heat. The system can reduce building deformation by more than 50%2 and maintains its effectiveness evenafter multiple large earthquakes or aftershocks.
2 In comparison to Sekisui House’s seismic resistant structures without
the SHEQAS system

Airkis High-Quality Indoor
Air System

Comfort Green First Strategy Launched (2009)
Sekisui House led the housing industry with thelaunch of the Green First house that provides
comfortable, economical and eco-friendly living.
Green First houses reduce energy consumption
through the use of high-performance thermal
insulation and energy-saving technology while offsetting energy consumed through the use of aphotovoltaic power generation system and the
Ene-Farm household fuel cell, leading to a 60%–
80% reduction in household CO2 emissions during
occupancy. The Green First house has now
evolved into our net zero energy house (ZEH).

Comfortable living—now and always

Three benefits for customers

Economic
value

Environmental
consideration

Budget-friendly
living

Eco-friendly
living• Long-life quality
housing• Reduced utility
costs• CO2 emissions
reduction/
zero emissions• Gohon no Ki Project Human Life R&D Institute Opened (2018)
The Human Life R&D Institute studies “houses where
happiness grows the longer you live there.” It conducts
surveys and research on living and lifestyles with theaim of fostering well-being through intangible value.
This research promotes next-generation housebuilding
based on the integration of technologies and lifestyle
design to address diversifying lifestyles.
Houses where happiness grows the longer you live there
Fundamental themes

HealthFulfillment

ComfortConnectedness

Fun

Individuality

Utility

Efficiency

Green First ZERO (ZEH)
Our Green First houses have now evolved
into net zero energy houses (ZEH).

New initiative themes

Safety, peace of mind Functionality

Eco-friendlinessThis system reduces levels of airborne chemicals (such as formaldehyde) to levels safe forchildren, who are the most sensitive, whileproviding ventilation and air purification tocreate a comfortable indoor air environment.

≈
Efficientenergy use
in the home

Energygenerated in
the home

Flexible ß System
The People Who Support
Our Innovation

We are advancing a variety of initiatives in line with our belief that promoting employee diversity will encourage innovation and communication andthus help foster a vibrant culture across the Group, leading to further enhancement of corporate value.

Conventional rigid
frame structure

Flexible ß System

Restricted openings

Unrestricted openings Participation of women

Promoted diversity Hiring of people with disabilities Respect for human rights Workstyle innovation

These heavy-gauge steel
rigid structures use highstrength pillars and beams
to eliminate the need for
multi-story pillars. Pillars canbe positioned freely on eachfloor, enabling flexible floor
plans with such features as
corner windows.

ZeroValue Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

14

The Building of Sekisui House—Our Corporate Story

Phase 3 (2020– )Health, Connectedness
and Learning

Innovations

Providing Value from Housing with a Focus on Health, Connectedness and Learning
The COVID-19 pandemic has increased time spent at home and changed lifestyles. This has led to growing interest in
and demand for home ownership and caused living-related needs to diversify. As we enter the era of the 100-year lifesand services.

Providing high added value

Aiming to provide happiness in the era of the 100-year lifespan, we will further evolve the technologies we cultivated in Phase 1 and Phase 2 as
the basis for new initiatives that are closely attuned to the lives of residents.

Family Suite The Use of IoT Technology
HealthConnectedness

Learning

Intangible assets in theera of the 100-year lifespan
Acquiring andusing data throughthe Internet ofThings (IoT)

Resident data

Livingenvironment
data

Lifestyle data

 The Platform House Concept
To propose new housing concepts that will help residents achieve happiness in the era of the
100-year lifespan, Sekisui House is expanding its business from the residential domain to include
lifestyle services. Through Platform House, we will install homes with services related to health,connectedness and learning that are tailored to each resident.

—HED-Net In-Home Early Detection Network for Acute Illnesses(2020)HED-Net, is the first service in the world that uses contact-less sensors
installed in the home to detect heartbeat and respiration and send an alert
to emergency call centers for safety confirmation in the event that anabnormality is detected. We are currently advancing pilot tests towardcommercialization.
In-home early detection network for acute illnesses

Evolution of hardware
as a platform
Detection Abnormality
alert
and analysis

Safetycheck

Call forambulance

SMART-ECS—PLATFORM HOUSE touch (2021)—SUITE CONCIER (2022)

PLATFORM HOUSE touch is the first
product launched under our Platform
House Concept. This smart home service employs a floor planlinked interface to enable
the remote control of homedevices from inside or outside using the big data of
the house.

SUITE CONCIER is the second product launched under our Platform
House Concept. This website introduces an array of services based on
the four themes of health, connectedness, learning and living (such as
medical consultations, online foreign
language lessons, and art rental) to
increase the experience-based valuethat contributes to customer
well-being.

Remote door
lock control

We are committed to supporting the self-directed career development of employees and conducting initiatives to foster
an innovative corporate culture.

 Creation of the next generation of leaders

Self-Directed Careers

Family Suite integrates
advanced technologies with lifestyle design to realize a wideopen space that breaks awayfrom the living room, dining
room and kitchen (LDK) configuration that is typical in Japan.

Our proactive use of IoT technology enables us to create high-quality, high-performance housing while
improving productivity. We are using digital technologies to transform our businesses in order to meet diversifying housing needs.

World-first

The People Who Support
Our Innovation

The Fruits of Our Innovationpan, Sekisui House will accelerate the provision of new value through the integration of technologies, lifestyle design

Employee engagement Sekisui House Innovation &Performance (SHIP) Awards Program

Clean airEquipped witha HEPA filter

Combining three systems
for zoning, ventilation andair purification, SMARTECS keeps air inside thehome clean while also controlling temperature.
Dirty airIntegration of technologies, lifestyle
design and services
We are integrating technologies and lifestyle design proposals with the Platform
House Concept to installhousing with services related
to health, connectedness andlearning.

Value Report 2023
SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Contents

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Sekisui House’s Material Issues
Sekisui House contributes meaningfully to resolving environmental and social issues through its

Creation ofHigh-Quality
Housing Stockbusinesses. In 2022, we revised our material issues
in line with an update of our corporate story after
reexamining the impacts of our businesses that areboth important to our stakeholders (such as cus-

Contributing
to a Sustainable
Society

Diversity andInclusion

tomers, business partners, employees, shareholders, investors and local communities) and significant
for the economy, environment and society.
Since day one, our businesses have created corporate value while addressing material issues. Thisis the source of our originality and our strength.

Process of Identifying Material Issues

Our material issues: Encompassing the Group’s key tasks from its founding to the future as well as its social mission

Reconfirming key themes that
embody the Sekisui House Group

Crafting the corporate story
based on key themes

Distilling the corporate story into
three material issues

Tracing the history of the Sekisui House Group back to its found-

We identified keywords that evoke these eight themes and theing, we reconfirmed eight themes1 that are both universally pres-links between these keywords and the Sekisui House Group’s“creation of high-quality housing stock,” “contributing to a sustain-

ent and important throughout the Group’s past, present and futurebusinesses and initiatives. We reaffirmed how the innovations weable society” and “diversity and inclusion.” We reaffirmed thatbusinesses and initiatives.

have produced and the human resources who have made themthese constitute the very DNA of the Sekisui House Group and, as

1 Seismic resistance; beauty and aesthetics; ecosystem preservation/biodiversity; heat resistance and CO2 reduction; health, connectedness and learning; maintaining jobs and humanresource development; resource recycling; and coexisting with local communities

possible align with our fundamental philosophy of love of humanity

solving social issues is the Sekisui House Group’s overarching

and, from these two perspectives, crafted the Sekisui House

mission, selected them as our material issues.

From our corporate story, we identified the three keywords ofGroup’s corporate story, organized into 30-year phases.
Creation of corporate story,
designation of phases

Selection of material issues

Exchange of opinions with

Discussion and approval by the

representative directors of the Board

ESG Promotion Committee

Approval by the Board of Directors

15Value Report 2023

Contents

SEKISUI HOUSE

Sekisui House’sMaterial Issues

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Group Vision and Material Issues

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Global Vision

Make home the happiest place in the world

The Sekisui House Group conducts various
businesses to create unique value based on
its Corporate Philosophy.
Now, under the global vision we announced
in 2020 to make home the happiest place in the

Propose happiness through the
integration of technologies,
lifestyle design and service

Make Sekisui House technologies
the global de facto standard
Become a leading company in
ESG management

world, we aim to create homeowner value inthe era of the 100-year lifespan as we steadilytransform into a global company that offers
integrated technologies, lifestyle design andservices based on the residential domain.
Moreover, in anticipation of accelerating

Our philosophy

Love of Humanity
Corporate Philosophychanges in social conditions, we have established Sustainability Vision 2050, which sets
forth medium-to-long-term goals, issues andMaterial Issues
Priority issues to address in order to practice love of humanity and realize our two visions

targets for the Sekisui House Group to pursue
in order to sustainably create value together
with its stakeholders. By reflecting this visionin our business strategies, we are working toCreation ofHigh-Quality
Housing StockContributing
to a Sustainable
Society

Diversity andInclusion

improve both our corporate value and value
for society.
Through our business activities, eachSekisui House Group employee puts into
practice our philosophy of love of humanity.

Leading the Way to a Decarbonized Society

Leading the Way to a Society in Which Humans and Nature Coexist

Leading the Way to a Resource-Recycling Society

Zero CO2 Emissions within the Housing Lifecycle

Maximizing Ecosystem Networks through Business

Expanding Zero Emissions Initiatives within the Housing Lifecycle

Leading the Way to an Advanced, Healthy and Long-Lived Society

Leading the Way to a Diverse Society

Contributing to Health and Longevity through Housing Development

Contributing to a Society in Which All Can Demonstrate Their Individual Abilities

Sustainability Vision 2050

Proactively Contributing to a Sustainable Society
Establishing an Autonomous Governance Structure that is Responsive to Changes in the Environment

16

Value Report 2023

Contents

SEKISUI HOUSE

Sekisui House’sMaterial Issues

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

Our Material Issues and the Value We Provide

ESG Management
G: Governance E: Environment S: Social

Global Vision

Make home the happiest place in the worldSince its founding, Sekisui House hasdelivered wide-ranging value as part of its
unwavering commitment to customer happiness, societal happiness and employee
happiness through its businesses based

Realizing Happiness in the Era of the 100-Year Lifespanon its Corporate Philosophy of love ofhumanity. Sekisui House’s value to society

related to our material issues.
Based on this understanding, in 2022
Sekisui House identified the creation ofhigh-quality housing stock, contributing toSekisui House’s key
issues and mission
from its founding to
the achievement of
the global vision

Material Issues

lies in all we have done over our history of
more than 60 years, which is also closely

Financial Data, Company
Information and Share Information

Creation ofHigh-Quality
Housing StockContributing
to a Sustainable
Society

Diversity andInclusiona sustainable society, and diversity andinclusion as its latest material issues. They
are the basis for our ongoing commitment
Value Provided

to providing sophisticated value with thegoals of contributing to happiness in theera of the 100-year lifespan and making
home the happiest place in the world.

Customer happinessSocietal happiness

Employee happiness

Safety and peace of mind

Decarbonization

Promote diversity

ComfortAsset value creation

Phase 3 (2020– )Phase 2 (1990–2020)
Phase 1 (1960–1990)(Added value
established)
Corporate Story

Extended useful life of housing

Biodiversity conservation
Resource recycling
Coexisting with local communities
Occupational health and safety & supply chain

Employee happiness and healthDiverse workstyles and job satisfaction
Human resource development
and self-directed careers

Health, Connectedness and Learning

Providing high added value/Self-directed careers

Comfort and Eco-Friendliness

Developed advanced technologies/Promoted diversity

Safety and Peace of Mind

Improved housing performance/
Developed human resources, including technicians

Our Corporate Philosophy of Love of Humanity

17

Value Report 2023

Sekisui House’sMaterial Issues

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

The Sekisui House Technology and Mindset Behind Our Material Issues

Creation of High-Quality Housing Stock

These innovative technologies we develop and put to use also contribute to the extended useful life of housing.
SHEQAS original seismic control system

Technology to Improve Housing Performance Creates Safety and Peace of Mind
Pursuing Comfort with Our Lifetime Housing Concept
Sekisui House focuses intensely on the ground and foundation, which are key to theuseful life and precise construction of a house. The prevalence of soft ground in Japan

Committed to comfortable housing, we improved thermal insulation performance in our CENTRAGE ∑ homes bynecessitates investigation of the ground that supports a structure’s foundation, but

making high-performance, multi-layer, heat-insulating glass standard in 1996. Then, in 1999, we adopted

expensive and large-scale boring surveys prior to the construction of detached houses

next-generation energy-saving specifications as standard in the GRENIER-DYNE series. We subsequently madewere not common in the past. Sekisui House addressed this situation by initiating pre-these features standard in all detached houses, which has helped to reduce environmental impact. Our consider-liminary ground surveys at construction sites in 1976 using Swedish weight sounding

ations for the comfort of all residents, such as making the Airkis high-quality indoor air system standard in all

tests, which are now the norm. We were the first private housing manufacturer in Japan

detached houses, have now evolved into our net zero energy house (ZEH).

to attempt this approach.

In 1989, Sekisui House established its lifetime housing concept of “comfortable living—now and always.”
We have been researching foundation methodologies since

Lifetime housing is durable and allows families to adapt easily

1972 and developed our 1260 Foundation in 1974. This approach

to lifestyle changes. It also ensures safety and independence

involves a single pour of ready-mixed concrete into a metal foun-

while helping residents respond to mental and physical chang-dation frame form, and results in excellent uniformity, strength andes due to aging or illness. This concept’s roots go back to ourconstruction efficiency. We then turned to research and develop-

research into housing for the elderly and persons with disabili-ment to improve the consistency of quality, reduce labor andties beginning in 1975. As a design concept, it is a clear

enhance durability. In 1992, we launched our proprietary 1660

expression of our Corporate Philosophy of love of humanity. We

Foundation that features a direct joint between framing and slab. As a result, none of our buildings were com-

built on this research and experience to establish Sekisui House

pletely or even partially destroyed by large seismic events such as the Great Hanshin-Awaji Earthquake of 1995,

Universal Design (SH-UD) in 2002. Today, we apply SH-UD thatand the 1660 Foundation remains our go-to approach.

makes living easy in all of our detached houses.

In addition, Sekisui House has demonstrated the effects of its aseismic technology

Sekisui House’s Universal Design (Japanese only)

for realizing safety and peace of mind. Seismic resistance, seismic control and seismic isolation technology are our three types of aseismic approaches, and we have

Asset Value Creation through Enhanced Beauty and Branding

been conducting proof-of-concept tests on the seismic resistance of our buildings
since 1979. That none of our buildings were destroyed by the Great Hanshin-Awaji

In 1973, the number of homes exceeded the number of households in all prefectures of Japan, initiating an era ofEarthquake demonstrated not only the effectiveness of our foundations, but also thequality over quantity in the housing market. Sekisui House had been customizing home designs for each customer

outstanding seismic resistance of our structures. In 2003, we announced a seismic

since its establishment, and in 1971 pivoted to higher-quality pre-engineered housing that addressed customer

isolated house, and in 2007, we announced our original SHEQAS seismic control

needs in ways such as upgrading and modernizing its existing design portfolio. In 1978, we began selling oursystem that is certified by the Ministry of Land, Infrastructure, Transport and Tourism.

GRENIER series of homes developed with a full-scale marketing program. We complemented our emphasis on

18

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

The Sekisui House Technology and Mindset Behind Our Material Issues

tangible features such as performance and construction method with com-

communities. Sekisui House constantly innovates to improve housing performance whilepelling design and lifestyle proposals to brand the series as homes with adeveloping towns around an ethos of the commons that emphasizes lifestyles with abeautiful external appearance and way of life.

focus on community connections and the environment. We have consistently improved

In 1984, we launched IS FLAT homes, which were first to use our inde-

the sustainability of towns with initiatives that have included people-centered town devel-

pendently developed Dyne Concrete exterior wall materials. Customer

opment in harmony with the environment launched in 1989; town security strategies forresponse was highly favorable, thanks to the expressive exterior design, tex-

living with peace of mind initiated in 2002; initiatives for eco-friendly towns that employ

ture and sophisticated elegance of Dyne Concrete, as well as its excellent fire resistance, thermal and sound insu-

fuel cells launched in 2007; and initiatives to support community formation by planninglation, durability and strength. IS FLAT expressed Sekisui House’s vision of housing as a social asset that holds its

and providing community spaces and events from 2009.

value, offers affluence and comfort, is suitable for long and narrow or irregular urban lots, and can be passed for a

We also apply the expertise we have gained in community develop-

century, from parents to children to grandchildren. In 1987, we launched our best-in-class IS STAGE product thatment to Sha Maison rental housing, GRANDE MAISON condominiums,

featured improved thermal and sound insulation and expansive interior spaces. Our IS series has continued tomixed-use development and office building development. We deploy thisdevelop as a successful brand and flagship product.

expertise internationally, and our commons ethos is central to the

The Bellburn earthenware exterior wall panels we released in 2001 sug-

Gledswood Hills community we designed in Australia. Sekisui House isgest fine stoneware pottery, appealing to customers who are discerning

well known for town development that creates living spaces and environ-about design. Developed for the exterior walls of our SHAWOOD wooden-­ments with consideration for the community and the environment.

frame houses, these panels contribute to the upscale image of the

Sekisui House’s town development (Japanese only)

SHAWOOD brand.
Detached house product information (Japanese only)

Town Development Concepts for Increasing Asset Value Over Time

Extended Useful Life of Housing for the Era of the 100-Year LifespanSekisui House is extending the useful life of homes through after-sales maintenance and the remodeling businesses as part of providing homes for the era of the 100-year lifespan. We systematized the management ofSince initiating full-scale town development, Sekisui House has

owner information and began visits to owners in 1985, then opened our first customer service center in Tokyo in

been committed to creating sustainable towns where asset

1987. We now have 30 customer service centers throughout Japan, reflecting how highly we value our custom-

value increases over the years and residents can live comfort-

ers. We also entered the remodeling business in 1999 by opening our first remodeling centers in Kanagawa andably well into the future. This is the essence of our concept ofOsaka. We provide attentive service even after we deliver homes to customers so that they can enjoy living that iskeinen bika—creating a landscape that grows more beautiful“comfortable—now and always” over 20, 30 or even 50 years as their family structure and lifestyle change. To thisover time. Houses form the basis of daily life, and together

end, in 2005, we spun off the remodeling business into Sekisui House

form a town, which is a setting that supports the lives of theRemodeling to make lifestyle proposals and consistently provide satisfac-

inhabitants. Interaction among the residents of a town nurtures the local community and culture, and eventuallytion. Collaboration with our customer service centers enhances our ability

the formation of social assets, leading to regional revitalization. Sekisui House therefore complements fundamen-

to make proposals.

tal town development components, such as building layout plans and road design, with an emphasis on greenery, parks and common spaces as mechanisms that encourage interaction between residents and revitalize

Robust after-sales support (Japanese only)19

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

The Sekisui House Technology and Mindset Behind Our Material Issues

Contributing to a Sustainable Society

local fauna. In the more than 20 years since the initiative waslaunched, over 19 million trees have been planted. In 2021, we

Our Social Mission: From Reducing Environmental Impact to Decarbonization

employed macro analysis to quantitatively evaluate the effectivenessof this initiative in preserving biodiversity, and shared the results withsociety at large. In 2022, we held the project’s second forum.

Sekisui House announced its Environmental Future Plan in 1999 and initiated full-scale environmental measuresthroughout the Group to fulfill its social mission as a housing manufacturer. The energy used from housing con-

Our use of FairWood for sustainable timber procurement is another key initiative to preserve biodiversity.

struction through residence and disposal accounted for about 20% of total energy consumption in Japan at that

FairWood ensures stable access to sustainable, renewable resources, and we are proactively working with ourtime. We therefore placed the effective use of resources and energy at the center of the environmentally responsi-

suppliers to maximize ecosystem networks through our businesses. In addition, in 2007, we formulated andble housing strategies we formulated. We began by creating an environmental charter with three basic environ-

implemented our own set of ten Wood Procurement Guidelines.

mental guidelines at its core: preserving the global environment, improving the living environment and contributing
to society. We subsequently established environmental action guidelines to build on our basic guidelines with thefollowing four strategies for specific actionable goals: (1) reduce CO2 emissions by improving insulation, (2) effectively use resources and reduce waste, (3) improve the value of housing stock by extending the life of buildingsand (4) promote community-friendly town development.
Well before the term “decarbonization” came into common use, our action guidelines and strategies for specificactionable goals reflected the climate change issues that have come to the fore worldwide as a result of global

In addition, Sekisui House believes it must recycle resources to support the lives of all
people. We were among the first in the construction industry to establish resource recycling
centers at each of our factories in 2003. In addition to recycling waste and suppressing its
generation, we are also focusing on after-sales service and the remodeling businesses sothat the materials in housing can continue to be used over the long term as social stock,with the goal of making optimal use of resources throughout the product lifecycle.
Housebuilding in harmony with the environment (Japanese only)

warming. They are representative of our corporate commitment and social mission
as a housing manufacturer to think about and act on solutions to environmental
issues. Today, our basic environmental guidelines and environmental action guide-

Diversity and Inclusionlines are applied in our ongoing environmental initiatives, such as ZEH, to makeSekisui House a leading company in ESG management within the housing industry.

Continually Enhancing Human Resource Development in Step with Evolving Needs

Sekisui House’s environmental initiatives (Japanese only)

Biodiversity Conservation and Resource Recycling through Our Business Activities

Sekisui House has been focusing on developing its people since its founding in 1960. We initially emphasizedon-the-job training through actual work, but in the 1980s, competition in the housing industry intensified, driven
by diversifying lifestyles brought on by high economic growth. We quickly accelerated human resource develop-

Since 2001, Sekisui House has been implementing the Gohon no ki Project to promote ecosystem-friendly land-ment, including training for sales personnel to meet needs for reinforced sales capabilities.

scaping and greening to conserve biodiversity through its businesses. “Gohon no ki” means “five trees” inAmid these changes, in 1987 we established education and training guidelines that set forth our basic policy

Japanese, and the project concept encourages planting native tree species suitable for gardens—three of every

for developing employee skills. This policy defines training as the development of the people we need to provide

five for birds and two for butterflies. One of the goals is to maintain and revive the ecosystem network by connect-

products and services that result in high customer satisfaction, people who excel at work and business, and peo-ing residential gardens, admittedly small areas, in residential areas and cities in order to link them with local natural

ple who are creative and innovative. Based on this policy, we have dramatically improved our employee training

areas such as satoyama, the disappearing native landscape of Japan, thus supporting the habitats and activities ofsystems and further enhanced their content. We also have a well-developed in-house certification program to20

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

The Sekisui House Technology and Mindset Behind Our Material Issues

help technicians improve their skills. Certification presently extends to qualified in-house personnel in the design

Sekisui House’s construction framework (Japanese only)

and construction departments, encompassing Chief Architects, Chief Constructors, Structural Planning

Sekisui House’s construction business/Sekisui House Construction (Japanese only)

Specialists and Platinum Specialists. In addition to such initiatives to hone specialized skills, we are currently promoting frameworks to enhance the skills and motivation of all employees to increase their autonomy. An additional

Respect for Diversity and Self-Directed Careers to Make Employees Happy

personnel development theme is self-directed career development, aimed at nurturing people who can achievecustomer satisfaction because they proactively take action to independently

Employee happiness is essential to make home the happiest place in the world. The workplace is akin to a homedevelop their own capabilities based on a personal vision of their future. We

for employees, so we seek to make it happy for them by respecting employee diversity, enhancing relevant sys-believe that the alignment of such human resources with the various directions intems, advancing workstyle innovation and empowering self-directed career development.

which the Company is pushing will generate unlimited human resource value.

Since 2004, Sekisui House has introduced various systems with an emphasis on diverse

P.187–191 Developing Human Resources

workstyles. Notable examples are the expansion of the childcare support program in 2006
and the nursing care support program in 2014. We also launched a childcare leave program

Training That Imparts the Technology and Spirit of Sekisui House to Technicians

for eligible male employees in 2018, and introduced a new eight-week post-partum leave
program for eligible male employees in 2021 to improve the quality of childcare leave for men.

The Sekisui House Group shares the spirit of “a community with a common destiny.” It emerged when the

The launch of the Career Challenge System is representative of our efforts to support career

Company name changed from Sekisui House Industry to Sekisui House in 1963 and runs through our Corporate

advancement and self-directed development. We initiated Sekisui House Women’s College in 2014 to systemati-

Philosophy of love of humanity. Formalized in 1989, this love serves as our core value and forms the basis of ourcally and effectively develop talented female employees for promotion to managerial positions. We also intro-

contribution to society, to which we all belong.

duced career interviews in 2021 based on extensive communication between managers and team members. By

The spirit of “a community with a common destiny” is not limited to our inner circle. The housing industry
depends on wide-ranging cooperation among many people, so strong ties with partner building constructors andpromoting self-directed career development among employees, we help them to establish a personal career
vision rather than one provided by Sekisui House, and to take on the challenge of actualizing their vision.

other companies are key. Sekisui House opened a vocational training school for technicians in Kanagawa in 1982

In terms of respect for diversity, we are expanding opportunities for employees to participate in their own way

to improve construction quality by enhancing Group capabilities, imparting technologies and developing people.

regardless of nationality, race, ethnicity, gender, sexual orientation, gender identity, age, disability or educational

Through 1987, we added schools in Ibaraki, Shiga and Yamaguchi, bringing the total to four locations nation-

background. We established a system for registering partners in common law or same-sex marriages in 2019 as

wide.1 These schools differ significantly from general training centers. They cover not only practical techniques forpart of efforts to promote understanding and support for the professional participation of LGBTQ individuals andhousing construction, but also subjects ranging from socially responsible behavior and adult education to theother sexual minorities in the workplace, which we see as important to our goal of providing housing that offers

spirit of the Sekisui House Group. We believe that the Group’s spirit is key to making customers happy, so wepeace of mind and happiness for all. In recognition of these efforts, we received Rainbow Certification under themust impart it to human resources along with practical skills.

PRIDE Index 2022. We also established the Promotion of Employment of

Our unique examination and certification system helps to enhance our construc-

Persons with Disabilities Office in 2020. Furthermore, we employ manytion capabilities. We initiated Chief Technician certification in 1983, then estab-people of different nationalities and cultural backgrounds, mainly in ourlished the Sekisui House Remodeling Meister System to improve construction

international operations, and have a support system that helps non-­quality at remodeling sites. Moreover, our spirit of a community with a common

Japanese technical trainees work with peace of mind at the technicaldestiny expands our focus to developing people at partner building constructors.

training facility we opened in Vietnam in 2019.

1 Currently three locations, following the closure of the Kanagawa school.

P.44 Technical and Construction Human Resources Support Our Core Competencies

Diversity & Inclusion

21

Value Report 2023

Sekisui House’sMaterial Issues

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Realizing Customer Happiness

Creation of High-Quality Housing Stock and KPIs

Aiming to deliver the highest quality and technology,
Sekisui House provides housing of value in which customers can live for generations by pursuing beautiful
exterior design and outstanding housing performancethat realizes safety, peace of mind and comfort.

Value
Provided

Safety, peace of mind and comfort

Safety, peace of mind and comfort are the most basic and important factors in housing. Sekisui House regards providing value in the form of these factors to customers, to help them realize long-term happiness, as its mission. To
better understand this value from the customer perspective and monitor progress, we have established two KPIs. The
FY2022 results are as follows.

1. Detached house customer satisfaction rate
FY2021 result

96.0%(Target: 95% or higher)

FY2023 target

96.3%

95% or higher

FY2021 result

97.9%(Target: 97% or higher)

FY2022 result

FY2023 target

97.8%

97% or higher(Target: 97% or higher)

This indicator shows the percentage of customer survey

This indicator shows the occupancy rate of Sha Maison rent-

responses that selected one of the top three options foral housing managed through subleasing.2 In FY2022 it met

satisfaction.1 In FY2022 it remained high, at 96.3%. We

our target, at 97.8%. In addition to continuing to provide newreceived favorable feedback thanks to improvements madehigh-quality, high-performance rental housing, such as Sha

based on previous survey results and the provision of ser-

Maison ZEH and properties with hotel-like styling, we are pro-vices based on the comprehensive strengths of our sales,moting renovations of existing properties, including changing

design, construction and after-sales service staff.
1 Detached house and rental housing owners are surveyed one year after move-in andtwo years after closing, respectively. The survey includes an overall satisfaction rating on a seven-point scale (very satisfied, satisfied, fairly satisfied, neutral, slightly
dissatisfied, dissatisfied and very dissatisfied); evaluations of satisfaction with thebuilding, its various components, energy generating equipment and Sekisui House
staff; and a section for comments. Survey results are used to enhance service,develop new components and products, and improve design and construction.

Target unmet

2. Rental housing occupancy rate

FY2022 result(Target: 95% or higher)

Target met

floor plans and installing new equipment. In addition, we arepromoting happiness in rental living through efforts to integrate technologies, lifestyle design and services, such as theprovision of services through an app for residents.
2 The Sekisui House Real Estate companies have been offering subleasing for more than 40 years, reducing the hassle and risk of operating rental housing for owners
while realizing stable-long term operations. Owners are paid a fixed monthly rent for the property regardless of vacancies, and the Group provides total leasing andoperational support encompassing finding tenants and building maintenance and management.

22

Value Report 2023
SEKISUI HOUSE

Value
ProvidedLong-Term Vision andMaterial Issues

Contents

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Increasing the asset value of housing requires more than the basic housing functions of safety, peace of mind and comfort. We believe it isalso important to make lifestyle proposals in line with customer preferences and life plans, and, from the perspective of community development, to focus efforts on keinen bika, the concept of creating a landscape that grows more beautiful over time. The Sekisui House Grouphas designated three KPIs for understanding the value it provides through asset value creation. The FY2022 results are as follows.

Asset value creation

Target met

Target unmet

3. New proposals of technologies, lifestyle design and services
FY2021 result

FY2022 result

FY2023 target

Launched Family
Suite Home Premium II

Launched
SUITE CONCIER

Only results are disclosed

This indicator highlights achievements related to new proposals that integrate the advanced technologies Sekisui
House has accumulated, the lifestyle design proposals
developed by the Human Life R&D Institute, and intangible
assets (services) in such areas as health, connectedness
and learning. In FY2022, we launched SUITE CONCIER, aServices to redecorate familiar spaces to feel special

service that helps customers realize happy living.

4. Platform House Concept to help customers achieve happiness in the era of the
100-year lifespanServices that further enrich daily living

5. Internal standard for evaluating detached houses with exterior design and greenerythat beautify the community (residence evaluation)

KPI until FY2022
FY2021 result

Launched PLATFORM
HOUSE touch

FY2022 result

Adoption of PLATFORM
HOUSE touch in neworders received

43%

The Platform House Concept is an approach to housebuilding that entails providing services in the areas ofhealth, connectedness and learning to help residents accumulate intangible assets. In FY2022, PLATFORM HOUSE
touch was adopted in 43% of new detached house orders
received, despite sales restrictions due to the global semiconductor shortage. Going forward, we will roll out theseofferings at Group companies and expand services.

FY2023 target

FY2021 result

FY2022 result

Expand toGroup companies

68%% overall
Third-range products: 83.9%(Target: 50% or higher)

77.5(Target: 70% or higher overall;
Third-range products: 85% or higher)

This indicator is calculated based on our residence evaluation,1
which we created for detached houses in 2017 to promote the creation of beautiful houses that will be assets to their communities.
Houses are evaluated on 10 items related to landscaping andgreenery planning and building exterior design to objectively assess
consideration for the environment and townscape. In FY2022,
77.5% of our detached houses met the internal standard, once
again meeting the annual target, but this figure was 83.9% for thirdrange houses, falling short of the target.
1 Houses are given a rating from one to five stars; the KPI is the percentage with four stars or higher.

FY2023 target

80% or higher overall
Third-range products:
90% or higher

23

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

6. Internal standard for evaluating the townscape attractiveness of rental housing that

Target met

Target unmetemphasizes resident safety, peace of mind and comfort (Sha Maison Gardens)
FY2021 result

55%(Target: 50% or higher)

FY2022 result

FY2023 target

56%

57% or higher(Target: 55% or higher)

For rental housing, we have established “four environmental premiums1” as a unique standard for evaluating properties in terms of townscape attractiveness and the resident’s perspective. Properties deemed highly appealing areinternally deemed “Sha Maison Gardens.2 ” In FY2022, 56% of properties met this standard, up from the previous
year, helping to improve living environments for residents and asset value for owners.
1 This KPI is calculated as the percentage of rental housing that satisfies our criteria across all four of the following categories: 1. Enhancing townscape attractiveness,
2. Keinen bika, the concept of creating a landscape that grows more beautiful over time, 3. Safety and peace of mind, and 4. Comfort.
2 Refers to properties that receive at least four stars in our four environmental premium evaluation.

Value
Provided

Extended useful life of housing

The construction industry is facing calls to transition from a consumption-based model of building and demolition to a stock-based model of building
high-quality structures, properly maintaining them, and using them with care over the long term. Aiming to maximize asset value for owners, the Sekisui
House Group has designated the extended useful life of housing as a form of value it provides and established two related KPIs for its efforts to promote
the transition to a stock-based model. The FY2022 results are as follows.

7. Percentage of detached houses certified as Long-Life Quality Housing
FY2021 result

93.4%

FY2022 result

92.1%(Target: 90% or higher)

FY2023 target

90% or higher

8. Ratio of SumStock housing in the Group’s existing home transactions
FY2021 result70%

FY2022 result

FY2023 target

63%

800 contracts

This indicator shows the portion of the detached houses provided byThis indicator shows the portion of existing houses han-the Group that have received official certification as meeting the stan-dled for resale by the Group that are SumStock certi-

dards of the Japanese government’s Long-life Quality Housing

fied.4 Under the SumStock initiative, the Sekisui House

Certification Program.3 In FY2022, it remained roughly level with theReal Estate group applies clear standards to accurately

previous year at 92.1%, reflecting our use of superior technologies toevaluate the asset value of high-quality existing houses

provide housing that is safe and comfortable over the long term.

built by Sekisui House. We are promoting Group coordi-

3 Standards for detached houses: Houses must meet certification standards in such areas as
anti-degradation measures, seismic resistance, energy efficiency, ease of maintenance and updating, living environment, floor area, maintenance and preservation plan, and disaster considerations.

nation to extend the useful life of housing and promote
the resale circulation of existing houses. In FY2022, thisKPI came to 63%, below the annual target.

(indicator changed to the numberof contracts from FY2023)(Target: 75% or higher)

Renovation
upon moving inSekisui House
Consultation
to sell house

Homeowner

Periodic inspections
Customer Service
Centers
Sekisui House
Remodeling

SumStockappraisals andbrokerage

Sekisui House Real
Sales information

Estate companies

4 Houses in Japan are used for an average of about 30 years, far shorter thanin most other countries. In 2008, in response to the need for mechanisms topromote the use of high-quality existing houses as social assets passed on from one resident to the next, 10 major homebuilders established the Provision of Quality
Housing Stock Association, which certifies housing built by its members that meets common standards as SumStock housing.

24

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Material Issue Initiative Themes and KPIs

Value Provided

Safety, peace ofmind and comfort

Asset value creation

Extended useful lifeof housing

No.

Indicator

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

To create high-quality housing stock, we have designated the following KPIs for the three years of the Sixth Mid-Term Management Plan, groupedby three types of value we provide: Safety, peace of mind and comfort; asset value creation; and extended useful life of housing.

Officer remuneration
indicator PSU1

Mid-Term
Management
Plan

1

Fifth

2

3

Sixth

Used aspresident
commendation
ESG indicator

FY2022

FY2023

FY2024FY2025

Targets

Results

Targets

Targets

Targets

Remarks

1

Detached house customer satisfaction rate

95% or higher

96.3%

95% or higher

95% or higher

95% or higher

2

Rental housing occupancy rate

97% or higher

97.8%

97% or higher

97% or higher

97% or higher

3

Housing units sold in the overseas business (New)

—

—

—

10,0004

New proposals of technologies, lifestyle designand services

SUITE CONCIER
launched

—

—

—

5

Patent applications (R&D) (New)

109

100

100

100

70% orhigher overall

77.5%
overall

80% orhigher overall

80% orhigher overall

80% orhigher overall

6Internal standard for evaluating detached houses
with exterior design and greenery that beautify thecommunity (residence evaluation)

Third-range
products:
85% or higher

Third-range
products:
83.9%

Third-range
products:
90% or higher

Third-range
products:
90% or higher

Third-range
products:
90% or higher

4 stars or higher

7Internal standard for evaluating the townscapeattractiveness of rental housing that emphasizes
resident safety, peace of mind and comfort (Sha
Maison Gardens)

55% or higher

56%

57% or higher

58% or higher

60% or higher

4 stars or higher

8

Rental housing units renovated (New)

6,035

6,800

7,600

8,400

9

Percentage of detached houses certified asLong-Life Quality Housing

90% or higher

92.1%

90% or higher

90% or higher

90% or higher

10

Ratio of SumStock housing in the Group’s existinghome transactions(Contracts reached for the resale of SumStockexisting houses)2

75% or higher

63%

800

860

900

1 PSU = Performance Share Unit (performance-related stock remuneration): PSU1 = FY2020 to FY2022; PSU2 = FY2021 to FY2023; PSU3 = FY2022 to FY2024
2 Beginning with the target for FY2023, this indicator has been changed from the percentage of SumStock housing to the number of contracts reached for SumStock housing.

—

Only results aredisclosed25

Value Report 2023

Sekisui House’sMaterial Issues

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Realizing Societal HappinessContributing to a Sustainable Society and KPIs

Sekisui House views harmony between people,
communities and the Earth, as well as solvingsocial issues, as its social mission, and works tocontribute to a sustainable society though its businesses, including the supply chain.

Value
ProvidedApproximately 16% of all CO2 emissions in Japan are attributable to the residential sector. Given this, enhancing and reinforcing measures toimprove thermal insulation and save energy in Japan’s housing is essential. As a housing provider, the Sekisui House Group believes that toaddress this issue, it must first promote the uptake of energy efficient housing. Accordingly, we have established eight KPIs related to the value we
provide in the form of decarbonization. The FY2022 results are as follows.

Decarbonization

9. Ratio of detached house ZEH / 10. Number and ratio of ZEH units for rent /11. Number and ratio of ZEH condominiums for sale
Detached
housesRentalhousing

Condominiums

FY2021 result

FY2022 result

FY2023 target

92%

93%

90%

(Target: 89% or higher)(Target: 90% or higher)

8,501 units

65% / 15,064 units(Target: 1,800 units)

192 units / 39.4%(Target: 196 units / 35%)

(Target: 50% / 2,500 units)

585 units / 88.8%(Target: 540 units / 85%)

70%

Target met

Target unmet

Rental Housing This indicator shows the portion of orders for Sha Maison rental housing received during the fiscal        year that were ZEH units.4 In FY2022, this came to 15,064 units, up significantly from the previous fiscal year. Sha
Maison ZEH can reduce CO2 emissions by 93%5 compared with ordinary rental housing, and the benefits to residents of being able to sell electricity to the grid have been well received. By promoting the widespread use of thishousing, we will help realize a decarbonized society.
Condominiums This indicator shows the cumulative number and        percentage 6 of completed ZEH units among Sekisui House’s
GRANDE MAISON condominiums for sale. In FY2022, the cumulative total reached 585 ZEH condominium units and a ratio of100%

Detached Houses        This
indicator shows the portion of detached houses1 that Sekisui House built during the fiscal

year that were ZEH.2 In FY2022, this came to 93%, once again meeting the annual target and far exceeding theZEH rate for Japan as a whole of 18.5%.3 The cumulative number of ZEH houses sold since we launched sales in
FY2013 reached 76,509 (as of March 2023).
1 Excluding built-to-order and built for-sale housing in Hokkaido
2 Net zero energy house, a house that aims for an annual primary energy balance of zero through energy efficiency and energy generation while providing a comfortableindoor environment
3 Data based on ZEH builder performance reports from the Sustainable open Innovation Initiative

88.8%, achieving the annual targets. Using double-glazed windows
with excellent thermal insulation performance, we maintain theviews afforded by large windows, a major appeal of condominiums,
while also meeting ZEH standards and preserving comfort.
4 ZEH Ready or higher grade units (includes only units in which individual residents can sell electricity to the grid; number of units was used as a KPI through FY2021).
For multi-unit housing complexes, the government defines four types of ZEH standards for both buildings and individual units: “ZEH” is capable of reducing net primaryenergy consumption by 100% or more; “Nearly ZEH” represents a reduction of more than 75%; “ZEH Ready” represents a reduction of more than 50%, and “ZEH
Oriented” represents a reduction of more than 20%.
5 Calculated by Sekisui House for the 447 Sha Maison ZEH units built in FY2019 based on the primary energy consumption calculation results of the Building ResearchInstitute’s energy consumption performance calculation program (excludes energy consumption for cooking and household electronics).
6 Cumulative number of completed units ranked ZEH Oriented or higher grade. The percentage is that of ZEH Oriented or higher grade units among all units sold in thefiscal year.

26

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

12. Number of Idocoro Dan-netsu houses (location-based insulation upgrades)
FY2021 result

1,338 units(Target: 1,200 units)

FY2022 result

FY2023 target

1,601 units

1,800 units(Target: 1,250 units)

Mid-Term Management Plan for
Sustainable Growth

FY2021 resultNewhousing

This indicator shows the number of houses that underwent Idocoro Dan-netsu remodeling to efficiently improve
ing room and kitchen area, where people spend most of their time. This kind of remodeling offers comfortable living
even in existing houses that are more than 20 years old. In FY2022, the number came to 1,601 houses, once again
meeting our annual target.
1 Idocoro Dan-netsu remodeling comprises two product types for houses that are more than 20 years old and have poor thermal insulation performance: “Premium,”
which aims to increase insulation performance to the level of newly built ZEH, and “Basic,” which aims to effectively improve insulation performance with just one dayof construction work.

BeforeAfter

Financial Data, Company
Information and Share Information

13. Rate of CO2 emissions reduction from new housing /14. Rate of CO2 emissions reduction from business operations

1

thermal insulation performance through partial insulation and insulation remodeling focused on the living room, din-

ESG Management
G: Governance E: Environment S: Social

Business
operations

50.0%(Target: 45% reduction
by FY2030)

Target unmet

FY2022 result

FY2023 target

55.3%

55% reduction by FY2030(Target: 45% reduction by FY2030)

46.6%(Target: 75% reduction
by FY2030)

Target met

50.9%(Target: 75% reduction by FY2030)

75% reduction by FY2030

New Housing       This indicator shows the rate of reduction in CO2 emissions attributable to energy consumption at

the residential stage of new housing built by the Sekisui House Group (compared with FY2013).2 In FY2022, thiscame to 55.3%, once again meeting our annual target.
Business Operations This indicator shows the rate of reduction in CO2 emissions directly attributable to the Group’s          business operations (Scope 1) or indirectly attributable through purchased electricity and other energy (Scope 2)
compared with FY2013.3 As a result of such initiatives as electrifying all Company vehicles,4 converting Company
business locations to net zero energy buildings (ZEB) and promoting Sekisui House Owner Denki5 with the aim ofachieving RE100, in FY2022 this figure reached 50.9%, up from the previous fiscal year.

BeforeAfter

2 S cope 3, Category 11 emissions reduction relative toFY2013 levels. The scope of emissions was broadened for
FY2022 and, for comparison, the scope of emissions in
FY2013 was also broadened accordingly.
3 For more details, see the note on page 140.
4 Includes battery electric vehicles, fuel cell vehicles, plug-in
hybrid electric vehicles and hybrid electric vehicles
5 An initiative to achieve RE100 by purchasing excess electric power from owners of homes equipped with solar
power generation systems that have reached the post-FIT
period (past the end of the feed-in tariff system’s purchaseperiod) for use in the Group’s business operations.

Green First Club CO2 Emissions Reduction Project
Owners canparticipate at
any time

Implementation

Green First Club

Individual
reduction
efforts

FY2021 result

33.5%(Target: 25%)

• Confirms participant eligibility• Manages participant data
• Reports monitoring data
• Orders preparation of results
reports, etc.

Credit revenue
Photovoltaic power generation system
Cogeneration system

15. RE100 achievement rate

Application for approvaland certification
Operation / Management
Sekisui House, Ltd.

Used for all social
contribution activities

16. Supplier science-based target-setting rate
FY2022 result

FY2023 target

FY2021 result

FY2022 result

FY2023 target

55.1%

100% by FY2040

22.2%

31.9%

80% by FY2030(Target: 35%)

This indicator shows the portion of all electricity used by the Sekisui House Group that is renewable energy pur-This indicator shows the percentage of our major suppliers that have set SBT-verified targets.7 In FY2022, it waschased through Sekisui House Owner Denki as part of efforts to achieve RE100. In FY2022, it was 55.1%, meeting

31.9%, up from the previous fiscal year.

our annual target.

7 Science Based Targets, a scheme for verifying corporate greenhouse gas emissions reduction targets as in line with the goals of the Paris Agreement.

6

6 RE100 is an international initiative of major companies around the world aimed at using 100% renewable energy. In 2017, Sekisui House became the second company
in Japan and the first in the housing industry to join RE100.

27

Biodiversity Conservation

Mechanisms andCatalysts for Creating Value

97.2%(Target: 97.2%)

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Following the rise of climate change countermeasures, there is growing momentum for biodiversity conservation around the world, leading to calls for going beyond merely conserving nature and wildlife by implementing nature-positive measures that help to restore
nature. The Sekisui House Group has established two KPIs for biodiversity conservation initiatives aiming to have nature-positive effects
intended to help restore severely degraded green spaces in urban areas and reduce deforestation. The FY2022 results are as follows.

17. Sustainable wood procurement rate
FY2021 result

Mid-Term Management Plan for
Sustainable GrowthTarget met

18. Biodiversity-friendly tree planting (Gohon no Ki Project)

FY2022 result

FY2023 target

97.1%

97.4%

(Target: 97.4%)(Cumulative trees planted)

FY2021 result

FY2022 result

FY2023 target

18,116 thousand

19,003 thousand

20,000 thousand(Target: 18,000 thousand)(Target: 19,000 thousand)This indicator shows the portion of wood purchasedThis indicator shows the cumulative number of trees plantedby the Group that has one of the top two ranks (S orin customer gardens under the Gohon no Ki Project,1 a projectA) on our four-rank scale based on quantitative eval-launched in 2001 to promote biodiversity-friendly landscaping

uations of the sustainability of wood purchased fromduring housing construction. In FY2022, it was 19,003 thou-

suppliers in accordance with the Wood Procurement

sand, once again achieving the annual target.

Guidelines we established in 2007. In FY2022, it fell

1 The Gohon no Ki (“5 trees”) Project is based on the approach that “three trees are forbirds, two trees are for butterflies, and all are local native tree species.” The project proposes the use of native tree species that are beneficial to birds and butterflies in gardens.

short of the annual target, at 97.1%.

Target unmet

Gohon no Ki Project

Garden Garden

Town
GardenPark

Satoyama
ForestValue
ProvidedLong-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

ForestSatoyama

Value Report 2023

Satoyama network

Value
Provided

As we contemplate risk scenarios that include demand for higher-quality recycling and increased processing costs for plastic waste materials derived from fossil fuels, there is

Resource recyclinga growing need to effectively use and recycle resources and shift awareness toward a plastic-free future. Accordingly, the Sekisui House Group has designated three KPIs
related to the value it provides in the form of resource recycling. The FY2022 results are as follows.

19. Waste rate (new construction)
FY2021 result

5.4%(Target 5.5%)

20. Waste recycling rate (new construction) / 21. Waste recycling rate (maintenance and remodeling)
FY2022 result

FY2023 target

5.6%

5.0%

(Target: 5.2%)

This indicator shows the amount of raw materials usedin production and resource inputs for the Sekisui Housea decrease in raw materials used in production andresource inputs, and, relative to this, a slight increase inwaste. As a result, this indicator came to 5.6% in
FY2022, falling short of the annual target.

New
construction

Waste Generated Per Residential Building Built by
the Sekisui House Group

Group’s new housing construction that ends up as
waste. An increase in non-housing properties has led to

FY2021 result

1999

Approx.

3.3 t

Streamlined toreduce waste

approx. 50%
2021

Approx.

1.7 t

100%

recyclingfor zero waste

Maintenance

100%(Target: 100%)

95.6%(Target: 90% or higher)

FY2022 result

FY2023 target

100%

100%

(Target: 100%)

94.6%(Target: 90% or higher)

90% or higher

New construction This indicator shows the portion of waste generated in the construction of new housing that is         recycled. Since achieving zero waste at new construction sites in FY2005, all waste collected at our resource recycling centers is recycled. As a result, this indicator has been 100% every year.

Zero
waste

Maintenance This indicator shows the portion of the waste generated in the maintenance, repairs and remodeling       of existing properties built by the Group that is recycled. In principle, we operate on the assumption that all waste
will be recycled, as for new construction, but construction materials that contain hazardous substances, such as
asbestos, cannot be recycled.

28

Value Report 2023

Value
ProvidedLong-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management
G: Governance E: Environment S: Social

22. Percentage of employees joining employee-company joint donation programs(Sekisui House Matching Program employee participation rate)
FY2021 result

FY2022 result

FY2023 target

31%

32%

—
Only results will be disclosed(Target: 35%)

FY2021 result

FY2022 result

5 prefectures: 14 buildings
1,053 rooms

10 prefectures:
23 buildings, 1,848 rooms(Target: 5 prefectures:
14 buildings, 1,053 rooms

employee donations. This corporate program was launched in FY2006 to solve social issues related to children and

The Trip Base Michi-no-Eki Stations

the environment and thus contribute to community well-being by supporting NPOs and other organizations that

Project is a regional revitalization project

carry out social activities. In FY2022, the participation rate was 32%, falling short of the annual target.

that we are developing with MarriottInternational. It proposes a style of travel

Sekisui House Matching Program Frameworkthat encourages the exploration of lesser-­known destinations to discover their unique

Employees

SekisuiHouse

Contributes the matchingamount as grants

Sekisui House Matching Program Association

Activities supporting children and the environment
Administrative board

Six board members as well as auditors and external advisors engage in screening.
(Secretariat: ESG Management Promotion Headquarters)
Application

charms through use of a system of roadside rest stations known as “Michi-no-Eki.”
We have adopted the number of hotel

Program for joint donations with employees

Screening and grants

Grant recipient organizations: Volunteer organizations, NPOs, educational institutions and others

Target met

23. Trip Base Michi-no-Eki Stations Project, a project for regional revitalization

This indicator shows the rate of employee participation in the Sekisui House Matching Program, which matches

Desired amount withheld
from salaries for donation(Participation in the programis voluntary)

Financial Data, Company
Information and Share Information

For the happiness of communities, and to realize dignified living for people everywhere, we seek to solve social
issues from the two approaches of business activities as a housing manufacturer and social contribution activities.
We have designated two KPIs related to the value we provide in the form of coexisting with local communities
through our businesses and social contribution. The FY2022 results are as follows.

Coexisting with Local Communities(Target: 30%)

Mid-Term Management Plan for
Sustainable Growth

rooms built by the Sekisui House Group
under the project as a KPI. In FY2022, weadded nine buildings with 795 rooms infive new prefectures, bringing our cumulative totals to 23 buildings with 1,848
rooms in 10 prefectures and meeting ourannual target.

(Target: 9 prefectures:
20 buildings, 1,582 rooms)

Target unmet(Cumulative)

FY2023 target

14 prefectures:
29 buildings, 2,336 rooms

29

Value Report 2023

Value
ProvidedLong-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Occupational health andsafety & supply chain

Mechanisms andCatalysts for Creating Value

2.49(Target: 2.15)

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

The Sekisui House Group advances initiatives aimed at greater safety and well-being on construction sites via the thorough andongoing practice of basic safety activities. In addition, working in cooperation with diverse suppliers, we promote sustainable procurement based on the CSR Procurement Guidelines. We have established five KPIs related to the value we provide in the areas ofoccupational health and safety, as well as the supply chain. The FY2022 results are as follows.

24. Frequency rate of accidents in the construction division that result in lost worktime
FY2021 result

Mid-Term Management Plan for
Sustainable Growth

FY2022 result

FY2023 target

2.55

2.27

(Target: 2.13)

Target met

Target unmet

25. Occupational illness frequency rate in the construction division
FY2021 result

0.20(Target: 0.33)

FY2022 result

0.35(Target: 0.31)

FY2023 target

0.30

This indicator shows the frequency of construction site accidents resulting in lost work time among contractors ofThis indicator shows the frequency of occupational illness originating from construction sites among contractors of

Sekisui House, Sekisui House noie and Konoike Construction (including sole proprietors and employers). It is calcu-

Sekisui House, Sekisui House noie and Konoike Construction (including sole proprietors and employers). It is calcu-

lated as the number of fatalities and injuries requiring at least one day of lost work time for recovery due to occupa-

lated as the number of cases of occupation illness requiring at least one day of lost work time for recovery per mil-tional accidents per million working hours. In FY2022, it was 2.55, not meeting the target.

lion working hours. In FY2022, it was 0.35, not meeting the target.

26. CSR procurement coverage

27. CSR procurement score

KPI until FY2022

FY2021 result

FY2022 result

FY2023 target

91.9 points

92.1 points—

FY2021 result

93.8%(Target: 89.0%)

KPI until FY2022
FY2022 result

FY2023 target

94.8%

—

(Target: 90%)

This indicator shows the portion of all Group suppliers for which we carried out CSR evaluations (procurement value
basis; includes major raw material manufacturers). In FY2022, it was 94.8%, fully covering major suppliers.

(Target: 91.5 points)(Target: 92.0 points)

This indicator is the score determined via CSR evaluations of all suppliers1 (out of a maximum of 100 points). In
FY2022, it was 92.1 points, once again meeting the annual target.
1 From FY2023, this KPI has been changed to “CSR procurement human rights and labor supply chain scores.”28. CSR procurement human rights and labor scores
FY2021 result

90.9 points(Target: 90.4 points)

FY2022 result

92.5 points(Target: 91.0 points)

P.218 4. Metrics and Targets

KPI until FY2022
FY2023 target—

This indicator is the score for just the human rights and labor portions in the CSR evaluations of all suppliers (out ofa maximum of 100 points). In FY2022, it was 92.5 points, once again meeting the annual target.

CSR Procurement Guidelines30

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Material Issue Initiative Themes and KPIs

Value Provided

No.

Indicator

Mechanisms andCatalysts for Creating Value

Resource recycling

Coexisting with
Local Communities

Financial Data, Company
Information and Share Information

by five types of value we provide: Decarbonization; biodiversity conservation; resource recycling; coexisting with local communities; and occupational health and safety & supply chain.
Officer remuneration
indicator PSU1

Mid-Term
Management
Plan

1

Fifth

2

3

Sixth

Used aspresident
commendation
ESG indicator

FY2022

FY2023

FY2024FY2025

Targets

Results

Targets

Targets

Targets

90%

93%

90%

90%

90%

50%

65%

70%

73%

75%

13 Ratio of ZEH condominiums for sale

85%

88.8%

100%

100%

100%

Number of Idocoro Dan-netsu houses
14(location-based insulation upgrades)

12 Ratio of ZEH units for rent

Biodiversity
conservation

G: Governance E: Environment S: Social

To contribute to a sustainable society, we have designated the following KPIs for the three years of the Sixth Mid-Term Management Plan, grouped

11 Ratio of detached house ZEH

Decarbonization

ESG Management

Mid-Term Management Plan for
Sustainable Growth22Remarks

Only units whereindividual residents
can sell electricity

1,250

1,601

1,800

—

—

15 Rate of CO2 emissions reduction from new housing

—

55.3%

—

—

—

55% by FY2030

Rate of CO2 emissions reduction from business
16
operations

—

50.9%

—

—

—

75% by FY2030

17 RE100 achievement rate

35%

55.1%

—

—

—

100% by FY2040

18 Rate of electrified Company vehicles (New)

—

11%

19%

32%

35%

100% by FY2030

19 Supplier science-based target-setting rate

—

31.9%

—

—

—

80% by FY2030

97.4%

97.1%

97.4%

97.5%

97.5%

88%

91%

92%

93%

100% by FY2030

19,000 thousand

19,003 thousand

20,000 thousand

21,000 thousand

22,000 thousand

Cumulative trees planted

20 Sustainable wood procurement rate
21 Rate of zero-deforestation timber procurement (New)22 Biodiversity-friendly tree planting (Gohon no Ki Project)
23 Waste rate (new construction)

5.2%

5.6%

5.0%

—

—

24 Waste recycling rate (new construction)

100%

100%

100%

100%

100%

25 Waste recycling rate (maintenance and remodeling)

90% or higher

94.6%

90% or higher——

Percentage of employees joining employee-company
26 joint donation programs (Sekisui House Matching
Program employee participation rate)

35%

32%

—

—

—

Only results will be
disclosed from FY2023

9 prefectures:
20 buildings
1,582 rooms

10 prefectures:
23 buildings
1,848 rooms

14 prefectures:
29 buildings
2,336 rooms—

3,000 rooms

Cumulative

2.13

2.55

2.27

2.25

2.12

0.31

0.35

0.30

0.30

0.30

—

85.7 points

85.8 points

85.9 points

86.0 points

27

Trip Base Michi-no-Eki Stations Project, a project forregional revitalization

28

Frequency rate of accidents in the construction
division that result in lost worktime

Occupational HealthOccupational illness frequency rate in the29
and Safety &construction division
Supply Chain
CSR procurement human rights and labor supply
30

chain scores (New)

1 PSU = Performance Share Unit (performance-related stock remuneration): PSU1 = FY2020 to FY2022; PSU2 = FY2021 to FY2023; PSU3 = FY2022 to FY2024
2 PSU1 and PSU2 are determined using the number and ratio of ZEH units for rent31

Value Report 2023

Sekisui House’sMaterial Issues

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Realizing Employee Happiness

Diversity and Inclusion and KPIs

To make home the happiest place in the world,
employee happiness is essential. Sekisui House promotes diversity and inclusion to further its humanresource development aimed at creating happy
workplaces that are akin to home for employees.

Value
Provided

Promote diversity

The Sekisui House Group is constantly working to create environments and mechanisms that enable employees and the Company to sustainably
grow together in line with its policy for promoting diversity based on the three pillars of promoting the participation of women, utilizing diverse
personnel and promoting diverse workstyles. We have designated five KPIs related to the value the Group provides by promoting diversity. The
FY2022 results are as follows.

29. Number of female directors of the Board (non-consolidated basis) /30. Number of female managers (Group basis)
FY2021 result
Femaledirectors

Femalemanagers

3 persons

FY2023 target

3 persons

3 persons or more

Full-time
employees

300 persons

New
graduates(Target: 3 persons or more)

273 persons / 4.31%

302 persons / 4.60%(Target: 240 persons or more)

31. Ratio of full-time female employees (Group basis) /32. Ratio of female new graduates hired (Group basis)

FY2022 result(Target: 3 persons)(Target: 260 persons)Target met

Female directors of the Board To promote diversity on our Board of Directors, we have made the number of female             FY2021 result

FY2022 result

FY2023 target

28.1% / 6,454 persons

28.9% / 6,743 persons

29.2%(Target: 27.5%)

41.2% / 278 persons(Target: 41.1%)(Target: 28.0%)

44.6% / 350 persons(Target: 42.0%)

Full-time female employees            Topromote the professional participation of

directors of the Board an indicator. In FY2022, it was three, meeting our annual target.

female employees, we have made the percentage of full-time Group2

Female managers This indicator shows the number of female employees in        employees who are women an indicator. In FY2022, it was 28.9%, ormanagerial positions. The targets for this indicator are also targets of Sekisui

6,743 persons, meeting the annual target.

House’s Action Plan for the Promotion of Active Participation by Women1

Female new graduates hired            This
indicator shows the percentage of new

based on the Act on Promotion of Women’s Participation and Advancement

graduates hired by the Group as full-time employees who are women,in the Workplace. In FY2022, this was 302 persons, or 4.60% of all manag-

and is used in Group hiring plans designed to promote diversity. Iners, meeting the annual target.

FY2022, it was 44.6%, or 350 women.

1 This plan applies to Sekisui House, Sekisui House Real Estate, Sekisui House Construction, Sekisui House noie and Sekisui House Remodeling.

2 Sekisui House, Sekisui House Real Estate, Sekisui House Construction, Sekisui House noie and Sekisui House Remodeling

40.0%

Target unmet

32Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

33. Employment rate of persons with disabilities (non-consolidated basis)
FY2021 result

2.90%(Target: 2.61%)

FY2022 result

Financial Data, Company
Information and Share Information

Target met

Target unmet

FY2023 target

2.97%

2.97%

(Target: 2.61%)

This indicator shows the percentage of Company employees who have disabilities. In FY2022 it was 2.97%, meeting our annual target (as of April 2023, the legally mandated rate was 2.30%). We will continue to actively promote
the employment of persons with disabilities, aiming to employ and retain these individuals at every worksite.

Value
ProvidedIn order to continue providing new value to customers, all our employees must be mentally and physically healthy, and the Sekisui House Group must

Employee health and happinesscreate environments that allow employees to work happily and enthusiastically. We have established four KPIs related to the value we provide in the formof employee health and happiness. The FY2022 results are as follows.

34. Rate of employees opting for the secondary medical checkup
FY2021 result

97.8%(Target: 89%)

FY2022 result

98.7%(Target: 98.0%)

35. Walking Challenge participants and average step countFY2023 target

FY2021 result

95%

19,691 persons /5,641 steps(Target: Sekisui House employees,
Group general managers)

FY2022 result

100%(Target: Implementation at 100% of
workplaces, including Group companies)

37. Well-Being Circle total score
FY2023 target

100%

This indicator shows the implementation rate of ESG dialogues2 at workplaces. These dialogues are an initiative toencourage all employees to internalize ESG and create opportunities for them to take proactive action and innovate
toward our vision for ESG involving all employees of “an enterprise that exists within the concept of ESG.” In FY2022,
we implemented ESG dialogues at 100% of workplaces, including Group companies, meeting the annual target.
2 An initiative for holding discussions on such themes as well-being in groups of four to five people at worksites—(Only results are disclosed)

1 Among our male employees over 40, medical checkup results indicate that obesity risk exceeds 50%, lipid risk is roughly 70% and blood sugar risk is just under 50%.
These percentages are high compared to other companies in the health insurance union to which we belong. Recognizing that preventing lifestyle-related diseases(including metabolic syndrome) is an urgent health issue, we began development of an app in FY2019. We launched the Walking Challenge event, in which employees
record their daily steps to increase their health awareness while engaging in fun competition with other employees or departments.

36. ESG dialogue implementation (workplace basis)
FY2021 result

20,816 persons /6,600 steps

FY2023 target

This indicator shows the number of employees who participated in Walking Challenge1 and their average daily step
counts. Walking Challenge events promote walking to improve lifestyle habits and prevent lifestyle-related disease
with the aim of reducing the number of employees deemed at risk of such disease based on health checkup results.
In FY2022, it was 20,816 persons, with an average step count of 6,600 steps, up from the previous fiscal year.

This indicator shows the portion of employees who opt for optional
secondary medical checkups during annual mandatory checkups. It
has been adopted to promote the maintenance and improvement of
employee health. Figures for FY2022 and earlier are for sales divisions
only. From FY2023 onward, we plan to disclose it for all divisions of
Sekisui House (non-consolidated basis).

Sekisui House employees,
Group general managers

FY2022 result

FY2021 result

FY2022 result

FY2023 target

65.75 points

65.86 points(Only results are disclosed)—

Since FY2020, we have implemented the Well-Being Survey of all employees to provide an indicator of overall
employee well-being encompassing both their professional and private lives, elucidate the relationship between individual and workplace well-being, and create environments in which employees can enjoy professional satisfaction
and happiness. From these surveys of well-being for individuals and organizations, we have selected the average
total score of the Well-Being Circle section,3 which is designed as a multifaceted diagnosis of employee happiness,
to use as an indicator. In FY2022, it was 65.86 points, up from the previous fiscal year.
3 The average score of 34 items in 11 categories within the Well-Being Circle portion of the Well-Being Survey.

33

Value Report 2023

Contents

SEKISUI HOUSE

Value
ProvidedLong-Term Vision andMaterial Issues

Diverse Workstyles / Job Satisfaction /Human Resource Development /Self-Directed Career Development

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

The Sekisui House Group is promoting workstyle innovation and the development of a corporate culture thatallows employees to chart their own career vision, aiming to create workplaces where employees can work
happily and enthusiastically. We have designated four KPIs related to the value we provide in the form of
diverse workstyles, job satisfaction, human resource development and self-directed career development. The
FY2022 results are as follows.

Target met

Target unmet

38. Take-up rate for eligible male employee childcare leave
FY2021 result

100%(Target: 100%)

FY2022 result

FY2023 target

100%

100%

(Target: 100%)

This indicator corresponds to the Group-wide paternity leave usage rate targeted in Sekisui House’s Action Plan for
the Promotion of Active Participation by Women and is calculated as the portion of male employees with children
less than three years old who take at least one month of childcare leave. In FY2022, it was 100%, once again meeting the annual target.

39. Monthly average working hours per person

40. Annual paid leave take-up rate and number of days taken

FY2021 result

FY2022 result

FY2023 target

177.64 hours

170.73 hours

175 hours(Target: 176 hours)(Target: 175.5 hours)

FY2021 result

52.7% / 9.5 days
(Target: 58%)

FY2022 result

73.1% / 13.1 days
(Target: 60%)

FY2023 target

70%

This indicator shows the average monthly work hours per Group employee.1 It has been adopted to promote work-

This indicator shows the rate of annual paid leave usage among Group employees.2 It was adopted to promote ini-style innovation. In FY2022, it was 170.73 hours, meeting the annual target.

tiatives to encourage employees to take at least five days off per year and reduce total working hours, as mandated

1 Includes managers, excludes employees on leaveby the Act on the Arrangement of Related Acts to Promote Work Style Reform. In FY2022, it was 73.1%, for an
average of 13.1 days, meeting the annual target.

41. Cumulative number of workers who have acquired major qualifications required forspecific duties
FY2021 result

FY2022 result

FY2023 target

22,940 persons

23,608 persons

24,100 persons(Target: 22,700 persons)(Target: 22,900 persons)This indicator shows the cumulative number of Group employees who have acquired any of 11 major qualifications
required to perform certain duties at the Group, including the four national qualifications of first-class architect, firstclass building operation and management engineer, second grade financial planner and registered real estate transaction agent. In FY2022, it was 23,608, once again meeting the annual target.

2 Includes managers

34Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Material Issue Initiative Themes and KPIs

Value Provided

No.

Indicator

Mechanisms andCatalysts for Creating Value

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

To promote diversity and inclusion, we have designated the following KPIs for the three years of the Sixth Mid-Term Management Plan, grouped bythree types of value we provide: Promote diversity; employee health and happiness; and diverse workstyles and job satisfaction/self-directed
career development.
Officer remuneration
indicator PSU1

Mid-Term
Management
Plan

1

Fifth

2

3

Sixth

Used aspresident
commendation
ESG indicator

FY2022

FY2023

FY2024FY2025

Remarks

Targets

Results

Targets

Targets

Targets

3 persons or more

3 persons

3 persons or more

3 persons or more

3 persons or more

260 persons

302 persons(4.60%)

300 persons

310 persons

320 persons or more

33 Ratio of full-time female employees

28.0%

28.9%
(6,743 persons)

29.2%

29.5%

29.8%

34 Ratio of female new graduates hired

42.0%

44.6%
(350 persons)

40%

40%

40%

2.97%

2.97%

2.97%

2.97%

2.86%

2.86%

2.86%

2.86%

98.0%

98.7%

95%

97%

100%

Scope changed
from FY20232—

20,816 persons
6,600 steps

—

—

—

Only results are disclosed

100%

100%

100%

100%

100%

—

65.86 points

—

—

—

100%

100%

100%

100%

100%

31 Number of female directors of the Board
32 Number of female managers

Promote diversity

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Employment rate of persons with disabilities

35

Employee healthand happiness

Upper row: Sekisui House (non-consolidated basis)
Bottom row: The 33 domestic consolidated companies subject tostatutory requirements to hire persons with disabilities (including
the Company)

36

Rate of employees opting for the secondary medical
checkup37

Walking Challenge participants and average stepcount

38 ESG dialogue implementation (workplace basis)
39 Well-Being Circle total score
Take-up rate for eligible male employee childcare
40
leave

41 Monthly average working hours per person

Diverse workstyles
and job satisfaction/
Human resource
development andself-directed career

2.61%

175.5 hours

170.73 hours

175 hours

175 hours

175 hours

42 Annual paid leave take-up rate

60%

73.1%
13.1 days

70%

70%

70%

43 Investment in human resource development (New)—¥886 million¥1,435 million¥1,478 million¥1,522 million

22,900 persons

23,608 persons

24,100 persons

24,600 persons

25,100 persons

—

—

100%

100%

100%

46 SHIP registration rate and number of posts (New)

—

26.9%
2,176

30%
2,500

33%
2,700

36%
3,000

Participants in self-directed career development-­
related training (New)—16,987 persons

18,936 persons

20,505 persons

22,030 persons

44

Cumulative number of workers who have acquired
major qualifications required for specific duties

45 DX training participation rate (New)47

1 PSU= Performance Share Unit (performance-related stock remuneration): PSU1 = FY2020 to FY2022; PSU2 = FY2021 to FY2023; PSU3 = FY2022 to FY2024
2 Figures for FY2022 and earlier are for sales departments only. Figures from FY2023 onward are for all departments of Sekisui House (non-consolidated basis).

Only results are disclosed

Employees are counted
for each qualification
they hold35

Value Report 2023
SEKISUI HOUSEContents

Section2

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

36

Mechanisms andCatalysts for
Creating Value
Value Creation Process

37

Sekisui House’s Operating Environment,
Risks and Opportunities

38

Management Resources(Four Types of Capital)

39

The Sekisui House Group’s
Human Capital Management

41

Business Models

50

Value Chain

51

Core Competencies

53

Stakeholder Engagement

54

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

Value Creation ProcessLove of humanity is the core of Sekisui House’s Corporate Philosophy. Drawing on this philosophy, technology and people, we have achieved numerous innovations. Our history since the Company’s founding can be broken down into 30-year phases. In the first phase, we emphasized safety andpeace of mind, and in the second, comfort and eco-friendliness. Now, in our third phase, we are emphasizing health, connectedness and learning.
Based on our love of humanity—the very DNA of Sekisui House—and the innovations accumulated over three phases of our corporate story, we

The Sekisui House
Global Vision

identify risks and opportunities in our operating environment and use resources effectively and efficiently to expand our businesses and accelerate
growth with the goal of creating corporate value and achieving our global vision.
Sekisui House’s
Operating Environment
P.38

Management Resources(Four types of capital)

Material Issues

P.39

Make home thehappiest place in the world

Business Model and Outputs

P.15

P.50

PeopleTangibles(Manufactured capital andnatural capital)
Production bases in Japanand overseas, Resource
Recycling Centers, etc.

Opportunities

Funding

Contributing
to a Sustainable
Society(Financial capital)
Healthy finances, cash
flow generation, ongoinginvestment in the foundation for growth, etc.

RisksIntellectual andSocial Assets(Intellectual capital andsocial/relationship capital)
Patents, design rights, theComprehensive Housing
R&D Institute, cumulative
number of dwellings built,
partner building constructors, etc.

The Building of Sekisui House—Our Corporate Story

Phase 1: Safety and Peace of Mind

P.12

Building a solid
customer baseDevelopment
business

Expanding the
supplied housing
Built-to-orderbusinessbusiness

Providing high-value-added
houses and buildings

P.13

Our Corporate Philosophy of Love of Humanity

Propose happiness throughthe integration oftechnologies, lifestyle
design and services

Make Sekisui House
technologies the global
de facto standard

Become a leading company in
ESG management

Expand businesses
and accelerate
growthThe Sekisui House
Concept of Happiness
Customer happinesse c o m p e te n cie sSocietal happiness

P.53

Employee happiness

ESG management

P.11

Phase 2: Comfort and Eco-FriendlinessSuppliedhousingbusiness

Securing funds
for growthinvestments

C or

Diversity andInclusion

Residential
domainOverseas business

Creation ofHigh-Quality
Housing Stock

Domestic business

Megatrends(Human capital, investment
in human resources)
Group employees, female
managers, first-classarchitects, etc.

Phase 3: Health, Connectedness
and Learning

P.14

37

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Sekisui House’s Operating Environment, Risks and Opportunities
Amid the accelerating pace of social change, a successful approach to value creation must be based on more than formulating business plans based on currently predictable factors. Centered on sustainability, the Sekisui
House Group analyzes medium-to-long-term issues that affect value creation to identify risk factors and opportunities for future business development and reflect them in medium-to-long-term strategic business planning.

Megatrends

Specific Risk Scenarios
Impact of extreme heat on lifestyles

Climate change

Biodiversity
conservation
Resource recycling

Economic andpolicy changes

Globalization

Demographic
changes

Technologicalinnovation

Specific Examples of Opportunities CreatedImpact of extreme heat on business (production, construction sites, etc.)

Promoting net zero energy houses (ZEH)
Promoting net zero energy buildings (ZEB)

Impact of increasingly severe natural disasters

Popularizing highly durable (long-lasting) homes, etc.

Increased costs due to introduction of carbon tax

Growing adoption of renewable energy• Initiatives to protect biodiversity from the effects of global warming• Demand for effective use and re-use of water resources

Changes in growing ranges and areas suitable for plants used for greening

Effective landscaping proposals for shrubs and trees

Demand for water-saving businesses and facilities

Popularization of water-saving housing facilities• Demand for effective use and re-use of resources• Change in awareness toward a society without plastic

Demand for higher-quality recycling

Promotion of recycling business through the use of high-level, thorough sortingand “wide-area certification”• Acceleration of decarbonization due to concerns about
global warming• Geopolitical risks materializing and increasing• Response to pandemics• Promotion of workstyle innovations• Labor shortages and acceptance of foreign workers• Home ownership support policies• Acceleration of business globalization• Increase in foreign visitors to Japan• Inadequate number of hotel rooms• Severe demographic graying• Total population reduction• Concentration of population in urban areas• Social participation of the millennial generation• Longer lifespans and rising death rate
• Rising health consciousness• Coming of the IoT/AI era• Advances in robotics technology

Increased processing costs for plastic waste materials derived from fossil fuels
Rising material and energy costs

Minimizing impact by reflecting changes in sales prices and through costmanagement

Global spread of infectious diseases

Development of technologies for preventing the spread of infectious diseases in
the home, expansion of online content and sales tools

Reduced workforce due to declining employee satisfaction, turnover, andwork-hour regulations should reforms not progress

Improved productivity through better employee satisfaction, recruitment of
talented personnel

Turnover and reduced productivity due to worsening working conditions

Ensuring a high-quality workforce through improvements in the working
environment

Changes in housing demand, shift away from home ownership

Various government support measures for home purchasing, expanding proposals
that reflect community and customer needs

Intensification of competition

Development of overseas business

Loss of opportunities to adapt, shifts in demand due to changing conditions

Capturing long-term demand

Accidents in the home, lack of care services

Expanding medical and nursing care, providing health-conscious housing

Decline in the number of new housing starts, decline in the occupancy rateof properties under management, worsening problem of unoccupied houses

Provision of good-quality housing

Decline of rural areas

Increased need for regional revitalization

Lost opportunities due to an inability to meet the needs of millennials

Expanding digital marketing opportunities

Delay in employees returning to work

Increased opportunities for nursery school intake, improved child rearing support
systems

Increasing complexity and difficulties with asset inheritance

Increased need for circulation of existing housing and real estate management trusts

Competition to be first in advanced health-related technology

Promoting the sale of housing that contributes to health

Loss of business opportunities, growing need for security measures

Providing highly convenient housing

Discontinuity in transfer of construction skills

Improving construction efficiency

38

Value Report 2023
SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Contents

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

39

Management Resources (Four Types of Capital)
People (Human capital/Investment in human resources)

Tangibles (Manufactured capital and natural capital)

Based on our Corporate Philosophy of love of humanity, we have formulated and published the Sekisui HouseGroup Human Rights Policy, and we aim to create workplaces where all employees can practice a culture ofinnovation and communication. In line with our belief that the growth of employees is essential to the growth of
the Sekisui House Group, we are proactively hiring and developing diverse human resources, providing support
for skill enhancement through in-house certification programs, and working to appropriately allocate humanresources Group-wide. Through these measures, and by maximizing the value of our human resources by sharing
a common vision, we aim to increase corporate value.

Manufactured capital

Natural capitalIn our domestic businesses, we have production
bases (factories) with production lines that are thekey to production of homes with individual specifications in the built-to-order business, as well as distribution bases that deliver materials to construction
sites nationwide. We are working to reduce the environmental impact of our inter-factory distribution
through a modal shift to rail transport. In addition, weare carrying out capital investment in component
production facilities to improve production efficiency
and in the development business.

1

Consolidated employees:

29,052

Incl. overseas employees: 1,417• Sales representatives:• Technical staff:
Female employees inmanagerial positions:

7,108
8,442

First-class architects:2
Employeeswith major
national
qualifications

302

Employment rate of persons
with disabilities (Group basis):1

2.86%

Take-up rate for eligible male
employee childcare leave:100%

1 Rate at 33 domestic consolidated companies subject to statutory requirements to hire persons with disabilities (including theCompany)

Employeeswith internal
certifications3

3,417First-class building operationand management engineers:2

2,904

Second grade financial
planners:2

4,560

Registered real estatetransaction agents:2

8,170

Chief Architects:
Chief Constructors:
Structural Planning Specialists:
Platinum Specialists:
CS Meisters:

319
143
214
45
63

2 Sekisui House and Major Domestic Group Companies (excluding Konoike Construction)
3 As of April 1, 2023; Sekisui House (non-consolidated)

P.41 The Sekisui House Group’s Human Capital Management
P.86 Human Resources Strategy  P.191 In-house certification programs

FY2022

We conduct sustainability-conscious CSR procurement. In addition to our FairWood procurement practices and acquiring forest certification, we pursue
sustainability on the basis of coexistence andco-prosperity with our suppliers through measures
including due diligence in procurement and promotion of local production for local consumption ofdomestic lumber. In addition, we are advancing proprietary initiatives to reduce energy consumption andenvironment burden.

2

Capital expenditure:¥95.3 billion

1 2   Production
bases:

6

5 in Japan, 1 overseas
Distribution bases:
P.51 Value Chain
P.175 Factory Site Report
Production system (Japanese only)

40

3

3 Sustainable wood procurement rate:
  

4

97.1%

Eco-friendly landscaping and greening

19,003 thousand trees
CO emissions:
82 thousand t-CO
Supplier science-based target-setting rate: 31.9%
RE100 achievement rate
(Sekisui House Owner Denki):
55.1%
Waste emissions:
1,069 thousand tonnes   Resource Recycling Centers: 23 across Japan(Gohon no Ki Project):2

4P.136 Contributing to a Decarbonized Society
P.146 Biodiversity Conservation
P.154 Initiatives to Realize a Circular Economy
P.216 Supply Chain Management

2

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

40

Management Resources (Four Types of Capital)

Funding (Financial capital)

Intellectual and Social Assets (Intellectual capital and social/relationship capital)
Intellectual capital

To support sustainable growth, we must establish a strong financial base, prepare for various risks in the market
environment, and maintain the investment capacity to make swift and flexible investment decisions. We emphasize credit ratings as a standard for evaluating financial health and appropriate levels of financial leverage andhave set the targets of a D/E ratio of about 0.5 times and a debt repayment term (net debt/EBITDA) of less thanabout 1.5 years, premised on maintaining an AA rating in Japan and A rating overseas. By applying these guidelines, we will maintain a balance between aggressive investment for growth and financial soundness.
Equity CapitalInterest-Bearing Debt

(Billions of yen)
2,000

1,326.5(Billions of yen)
800

1,632.8

1,473.9

600

562.9

549.8

2020

2021

607.1

Social/relationship capital

The Sekisui House Group advances cutting-edge
research and development in multifaceted areas.
These encompass quality enhancements and newtechnologies for our detached houses, rental housing
and other buildings, as well as development related
to happiness, comfort and the environment. We arealso working to foster a culture of innovation, proactively promoting technological development andinnovation to power the sustainable growth of the
Sekisui House Group.

A solid customer base boasting the industry’s highest
cumulative number of dwellings built together withthe construction capabilities required to achieve it—these are two of our core competencies, which areintegral to the Sekisui House Group’s connection
with society. We have built a framework for construction in which the Sekisui House Construction companies and partner building constructors are united by
the spirit of “a community with a common destiny,”
and established an after-sales service systemthrough our Customer Service Centers, which are
key to long-term relationships with homeowners.

400

1,000

200
0

0
2020

2021

2022

(FY)

D/E ratio(Times)
0.5
0.4
0.3
0.2
0.1
0

2022

(FY)

Free Cash Flow
0.42

0.37

(Billions of yen)
100

0.37

1

96.4

FY2022      Research and50

development expenses:
4.3

0Equity capital:
Interest-bearing debt:

2021

2022

(FY)

¥1,632.8 billion¥607.1 billion

D/E ratio:
Free cash flow:
P.74 Financial and Capital Strategy
P.78 Financial Analysis

0.37 times-¥39.9 billion(39.9)
2020

2021

2022

(FY)

           Realestate investment:
Fifth Mid-Term Management¥9.5 billion

Patents held:

-50
2020

2

Results (three-years)¥1,977.4 billion

Long-term credit ratings:

AA
AA- (Rating and Investment Information)
A (S&P Global Ratings)	 (Japan Credit Rating Agency)

Debt repayment term
(Net debt/EBITDA):

0.93 years

Design rights held:

787
359

Platform House Concept•H ED-Net in-home early detection network for acute illnesses• PLATFORM HOUSE touch smart home service• SUITE CONCIER website introducing lifestyle services
12

Comprehensive Housing R&D Institute

Human Life R&D InstituteTomorrow’s Life Museum (TLM)
Research centers (Konoike Construction: Osaka, Tsukuba)
P.51 Value Chain
P.87 Technology and R&D Strategy
Research and development (Japanese only)
Display houses and hands-on exhibits (Japanese only)

3

4

Cumulative dwellings built (global):

2.62 million

Partner building constructors involved inessential construction processes for
Sekisui House:  
3 Domestic educational training centers
and training schools:
Overseas technical training centers:
4 Customer Service Centers:
  

2,595
3
1

100 (at 30 offices)
1,462 staff

P.51 Value Chain
P.206 Training centers and training schools
P.207 Customer Initiatives
P.210 Coexisting with Local Communities  Sekisui House educational training centers and training
schools (Japanese only)Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

The Sekisui House Group’s Human Capital Management

What People Mean to Us

Diversity and Inclusion
To achieve our global vision to make home the happiest place in the world, we propose the value of happiness by integrating technologies, lifestyle design and services. Truly outstanding ideas arise when diverse people with varied values gather in friendly competition to learn from and improve one another.
At its highest level, this gathering of people can encompass not just the 29,052 employees of the Sekisui House Group, but the 125
million people of Japan and even all 8 billion people on Earth. By bringing together diverse people with whom our vision and strategy
resonate, we hope to chase even larger dreams and create a more prosperous world. That is the ambition of the Sekisui House Group.

Innovation and Communication
In this era of VUCA1, we are confronted at every turn by challenges with no clear answer. In such circumstances, we must work
together, each individual contributing their ideas, discussing them openly while trying various approaches to steadily achieve better
results. This will sometimes yield success, and other times failure; what matters is not fearing failure, but learning from it to achieve

Satoshi Tanaka
Representative Directorof the Board
Executive Vice President,
Executive Officer
In charge of Division of
Administration and
Human Resources

People: The Driving Force of the Sekisui House Group
Since our founding, we have placed great value on people and striven to grow our business alongside our employees. After all, our lives are, first and foremost, our own. To
make the most of our one and only life, we must each choose and pursue our own path.
So, why is it that we come together at the Sekisui House Group? Because we canachieve more when we work together with others who share our aspirations. Rather
than each setting sail alone, we board the larger vessel of the Company. Individuals—
each bringing their own abundant individuality, unique perspective and values—gather todiscuss, cooperate and persevere together. The Company will continue to push ahead
so that we can continue to sail forward with all our employees.

future success. There can be no embrace of challenge without failure, and no progress without the embrace of challenge.
At times, we will have to go back to square one to rethink not just our solutions, but whether we are solving the right problems in
the first place. But, by doing so, the Sekisui House Group creates new value through the aggregation of each individual’s creativity,
ingenuity and communication within an open workplace culture.
1 VUCA: Volatility, uncertainty, complexity and ambiguity

Win-Win Relationships between Company and Individual
When talking about “employing human resources,” it can sound rather top-down andpatronizing, but we believe that, in reality, company and individual are equal partners.
Employment is the condition of both a company and an individual selecting one other.
Similarly, rather than the company developing and utilizing human resources, we think
the correct framing is one in which a company provides a platform that allows humanresources themselves to succeed and grow.
Individuals enhance their own value as human resources and at the same time bringgrowth to the company, contributing to the realization of a more prosperous world. A
growing company can then provide a platform for greater success, empowering individuals to grow even more. This virtuous cycle comes out of the kind of win-win relationshipbetween company and individual to which the Sekisui House Group aspires.

41

Value Report 2023
SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Contents

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Human Capital Management in Action

The Sekisui House Group’s Approach to Human Resource Value
Human Resource Value = Employee Autonomy × Alignment of Efforts

Human Resource Value Enhancement 
Drives Growth

The Sekisui House Group sees human resource value as the product of employee autonomy and the alignment of the efforts of its people.
Human resource value enhancement is a growth driver for

These two factors multiply one another, so when employees use Company resources to pursue autonomous career development while

the Sekisui House Group. We aspire to invest in humanaligning their efforts with the Company’s vision and business strategy, we are sure that the value created will result in tremendous growth.

resources to raise their value, making both individuals andthe organization stronger to provide new value to custom-

Corporate value enhancement

Miwa Yamada

Realizing our global vision to make home the happiest place in the world

Chairperson of the Social
Improvement Subcommittee
Executive Officer
Head of Diversity andInclusion Promotion
Department

Human resource value enhancement
Employee autonomy

Alignment of efforts

ers and society.
It is our employees that will make this aspiration a reality.
To achieve our global vision to make home the happiest
place in the world, we must first make our employees
happy. In other words, we think it is crucial that we makeSekisui House—the professional “home” of employees—
the world’s happiest company.

Enhancing Human Resource Value as a Foundation for Well-Being
Our conception of employee autonomy is, necessarily, not something imposed on
employees, but that emerges from them—not for the sake of the Company, but in an
employee’s own pursuit of a happier life. To understand and address issues in this area,in 2020 we commenced the Well-Being Survey. The well-being of both individuals andSupporting self-directed
career development• Self-directed career development education• Career development support
system• Sekisui House Innovation &Performance (SHIP) Awards
Program

Promoting DE&I
• Promoting the participation ofwomen• Promoting the participation of
global human resources• Promoting the participation ofpeople with disabilities• Promoting employee understanding of the LGBTQ community

Promoting diverse
workstyles

Building a foundation
for well-being• Enhancing the diversity ofworkstyle programs• Expanding systems for fairevaluations• Creating a workplace culturethat ensures psychological safety• Assisting the pursuit of family
happiness (encouraging male
employees to take childcare
leave, nursing care leave, etc.)• Supporting health improvement
efforts• Continuing the Well-Being Survey

Alignment of efforts• Nurturing leaders capable ofdisseminating our Corporate
Philosophy and strategies• Securing staffing in line withstrategies and optimally
allocating employees

the workplace as a whole has increased through efforts to foster a workplace culture inwhich every individual can examine what well-being means to them and, through dialogue, take action toward that ideal.
Employee happiness can become the foundation for contributing to customer andsocietal happiness, which in turn enriches employee happiness. The enhancement ofsocial and economic value achieved through this cycle of well-being is Sekisui House’s
ESG management in action.
The following Human Resource Value Story highlights some of our initiatives to

Employee happiness
The diverse people of the Sekisui House Groupenhance human resource value. Through employee autonomy and the alignment of ourefforts, we will continue working to enhance human resource value as a part of our business strategy aimed at enabling employees and the Company to grow together.

42

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Human Resource Value Story: Supporting Self-Directed Career Development

Sekisui House Innovation & Performance (SHIP) Awards Program
Fostering an Innovative Corporate Culture

Innovation Category/ Performance Category

SHIP is a Group-wide initiative to foster innovation through com-

SHIP comprises two categories. In the innova-

munication. All employees are eligible to participate. The programtion category, teams of five or more post ideas

combines the former Innovation Competition that we held to com-on SKIdea. They exchange opinions with othermemorate Sekisui House's 60th anniversary with awards we have

SKIdea users and recruit other employees whoheld in the past, such as those for technical development andare enthusiastic about their ideas, practicing

business achievements.

innovation and communication while refining

Implementation of Ideas Winning SecondPlace at the First Annual SHIP’s

SHIP(Sekisui House Innovation & Performance Awards)

Five ideas entered by 27 employees were second-­
place winners in the first annual SHIP program. Four

Innovation
Category

Performance
Category

Ideas related to
new businesses
and technologies,
in-house programs,
ESG, etc.

Initiatives such as
business transformationand new productdevelopment that havehelped enhance
corporate value

members of top management served as coordinators
to support these teams in implementing their ideas
over the course of the following year.

SHIP’s focus is on innovation and communication; employees

their proposals until they are ready to submit

propose ideas to one another to spark innovation through active

their official entry. The performance categorycommunication. By thus fostering an innovative corporate culture,recognizes outstanding employee performance.

the program creates opportunities for employees to take initiative

Entrants submit presentations summarizing initiatives they have implemented and include

exhibit artwork by people with disabilities. Since theand supports their self-directed career development. The program

what makes them unique, their results and their impact.

final judging in March 2022, about 90 artworks havefurther aims to create a virtuous cycle of innovation and corporate
value enhancement.
In the program’s second year, employees submitted 1,496

at realizing a more diverse society by creating places to

The program is aimed at fostering autonomous individuals and organizations that con-been displayed on the temporary fencing erectedtinuously generate innovation through cross-organizational communication, recognition foraround construction sites and at Company event ven-

outstanding efforts and horizontal development.

ues. We are currently advancing preparations to turn

entries, up 77.5% from the previous year. In addition, the numberof employees registered with our internal app SKIdea1 surpassed

One of these ideas was titled “Sekisui Art Festival ×
Supporting Artists with Disabilities.” The idea is aimed

this into an ongoing project.

Six-Month Finalist Selection Process

20,000. This platform enables employees to see and comment on
posts from other employees and request to join teams, helping

The 1,496 entries submitted by employees were evaluated by a panel of 70 executives

foster an innovative corporate culture.

and managers from across the Group over a six-month period. The 10 innovation category

Innovation Category
Performance Category

843
366
477
FY2021

entries and 10 performance category entries that made it through the second round of
judging proceeded to the final round on June 9, 2023. The finalist presentations to top

1,496

management and the ensuing award ceremony were livestreamed to Group offices and559

employees worldwide, inspiring them to work toward the same recognition.

Left: Award ceremony at the first annual SHIP; Top right: Trial display of local art
on temporary fencing; Bottom right: A final presentation at the first annual SHIP

20,919937
FY2022

Ideas entered

The 2nd Annual SHIP Journey

9,064
FY2021

FY2022

Employees registered on SKIdea

1 SKIdea: Short for Sekisui House Group Knowledge & Idea. This app, developed in-house, is a platform for bringing together the knowledge, experience,skills and outstanding ideas of Sekisui House employees. The app allows users to see and likeposts about ideas individuals have and request to join groups.

Start of posting/entries opened

Entries closed

First-round judging

Second-round judging

Final judging/Award ceremony
June

September 2022

NovemberDec.– Jan.

Mar.– Apr.

2,176 posts

1,496 entries

110 remaining entries

20 remaining entries

20,919 employees
registered on SKIdea

6,295 entrants

858 remaining entrants

150 remaining finalists

Gran Prix andother prizes announced

Developmentwith support
from management

Implementationof ideas
Jun. 2024

Note: Employees that entered multiple ideas
are counted for each idea.

43

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

Human Resource Value Story: Supporting Self-Directed Career Development

Technical and Construction Human Resources Support Our Core Competencies
Delivering the Highest Quality and Technology as aCollective of Professionals
Since its founding the Sekisui House Group has prioritized safety,
peace of mind and comfort, and focused efforts on developing
technical human resources. Building on a culture that embraces
and develops the ambitious efforts and diverse ideas of passionate
technicians, through the efforts of our many human resources, wehave grown into a collective that delivers the highest quality andtechnology to customers. Specifically, we have established largescale research and development facilities to support the activities ofdiverse personnel, acquired and protected patents for technologies
created within the Group, established a proprietary production system for individual houses extending from production to shipment,
built mechanisms to nurture design personnel, and built relationships with partner building constructors, among other initiatives.
We share with our partner building constructors a commitment tomaking customers happy through the highest quality and technology. Based on mutual respect as a “community with a common destiny,” we work to build equitable relationships, improve work
environments and conditions, and develop human resources. We
currently accept personnel from construction companies at threeeducational training centers and training schools located acrossJapan, providing support to help them quickly gain the skills needed
to contribute in the field and continue enhancing their skills over time.
East Japan Training Center/
East Japan School (Ibaraki)
Central Japan Training Center/
Central Japan School (Shiga)West Japan Training Center/
West Japan School (Yamaguchi)

Cumulative trainees who have completed courses atour educational training centers and training schools(As of January 31, 2023)

3,033

 ekisui House’s Educational Training Centers and Training Schools
S(Japanese only)Technological Development

DesignConstruction

R&D and Production: 902 employees

Design and Survey: 2,237 employees

Construction: 2,182 employees

R&D Division: Creating Sekisui House
Proprietary Technologies

Reinforcing Design Capabilities in Line with
Business Strategy: Raising the Ceiling

Aiming to generate homeowner value, we implement wide-­
ranging research and development into technologies, lifestyle
design and services, centered on the residential domain. These
efforts span from the development of advanced technologies forsafety, peace of mind, comfort and health to surveys andresearch aimed at proposing services for happy living.

We have established an in-house certification program for individuals that meet advanced certification standards. In order tomeet the diverse needs of our customers, we continuously
improve the skills and motivation of our design personnel todevelop a high-level design team.

• Patents held: 787• R&D department employees with PhDs: 12

Production Division: Supporting High-Quality
Production
Under an advanced quality control system for pre-engineered
housing, we promise consistent high quality for all homes basedon the professional expertise of our human resources boasting
advanced skills in manufacturing and deep knowledge of internal
inspection standards.

• Registered internal inspectors: 1,603¹• External manufacturing skill certifications: 3,475¹
1 As of April 2023

• In-house certifications (as of April 2023)
Chief Architects: 319
Platinum Specialists: 45
Structural Planning Specialists: 214

Securing Human Resources and Building a
Platform for Developing Young Talent: Raising
the Floor
We offer student internships to motivate talented young people
to join the Company at an early stage and strive to quickly develop human resources through systematic training and on-the-job
training for junior employees (up to the fifth year of employment).

• Interns accepted (FY2022): 514

A Shared Commitment to Making Customers
Happy Through the Highest Quality andTechnology as a “Community With a Common
Destiny”
We have built a direct sales and design-build system and support
partner building constructors’ efforts to hire and develop diverse
human resources. Through these efforts, we contribute to local
job creation.
Diverse human resources
Reinforcing construction
management

Raising humanresource value by
fostering individuals
with numerous skills
Further improving
working conditions

Sekisui House onsite
supervisors, etc.:
2,182
Recruitment support

A community
with a common
destiny

Sekisui House
Construction
construction workers:
4,941²

Talent development
support
Leveling construction
volume across the year
to maximize revenue

Sekisui House
Association
construction workers:
3,117²

2 As of March 31, 2023

First-class architects: 2,6573
First-class building operation and management engineers: 1,6743

3 Sekisui House (non-consolidated);
employees in technical positions

Sekisui House Educational Training Center and Training School Graduates in Action
My Training Helped Boost My Confidence Onsite
Since I was little, I always liked making things, and I got interested in construction by helping my dad
with his amateur carpentry projects. I chose to become a carpenter because it combines theseinterests—­making things and construction. The basic knowledge and applied practice I got at theeducational training center and training school have been very useful in my work. Thanks to theunderstanding and support of the more experienced carpenters I work with, I have been able to workwith junior female carpenters, as well. My favorite part of interior carpentry is the moment when thelines of a mere frame turn into the planes of a building as the wall boards are put up. There is a special satisfaction in seeing something I helped build become a completed home.
See videos of people who have attended our training schools (Japanese only)

Kiri Nakata

Soga Construction, Co., Ltd.

Graduated from the Morioka Technical High School construction anddesign course. Now in her fourth year with Soga Construction. Began
work in interior carpentry after completing a six-month course at a
Sekisui House training school in 2019.

44

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

Human Resource Value Story: Promoting DE&I

Promoting the Participation of Women
A Female Workforce More than Double theConstruction Industry Average

Retaining and Developing Female Sales Representatives

Supporting Career Development for Women in TechnicalPositions

Aiming to better retain female sales representatives, we hold annual interThe construction industry as a whole is characterized by a low
number of female employees. Sekisui House is tackling this issue
head-on. The entire Group has committed to the active participation of women as essential to the Group’s growth and is working
toward this end.
In 2006, the Group announced a commitment to Human
Resource Sustainability as key business strategy initiative.
Accordingly, we are working to proactively hire and develop female
employees. As of January 2023, the Group-wide ratio of full-time
female employees stood at 28.9% (6,743 employees), more thandouble the average ratio in the Japanese construction industry.
In addition, we have enrolled employees in the Sekisui House
Women’s College each year since 2014. This program seeks todevelop next-generation leaders and has helped produce rolemodels and increase the number of female employees aspiring totake their careers further. The number of female employees inmanagerial positions has risen from 15 in 2006 to 302 in 2022,
and we aim to surpass 320 in 2025.
Ratio of full-time female employees (%)
25.8

26.5

25.5

25.4

27.3

28.1

26.8

27.2

23.6 24.3

25.1

24.0

24.3

Sekisui House Group
Average across all industries
Construction industry average

14.2

13.9 14.3

14.5 13.7

14.2

2012

2016

2017

2019

2021

21.5

21.3

2013

21.8

2014

2015

2018

2020

28.9

To help develop the careers of front-line female technicians and expand thequickly detect and address any issues related to their health or the work-

range of their professional activities, we have held the Company-wideplace environment. Furthermore, propelled by the forceful leadership of top

Women’s Onsite Supervisor Meeting since 2014. Furthermore, we have run

management, we have held the Nationwide Women’s Sales Representative

the Female Onsite Supervisor Support Program since 2015, holding semi-

Conference every year since 2007. Through the sharing of positive exam-nars and sharing examples of ways that employees have successfully bal-

ples and creation of role models, the conference is helping to increase theanced work and home life. Women are also stepping up as leaders, serving

number of female chief managers and area sales leads across the country.

as technology leads and architect leads, and acquiring in-house certifications for their outstanding skills, performance and reliability.

(FY)

2005

2006

2007

…

Position type

Careerconversion program
development
and promoFemale sales representativetion support Expanded hiring of
female sales
representatives

Creating
employee-­friendly
workplaces

2014

2016

2017

Sekisui House
Women’s College

development and retention
promotion structure establishedCompany-wide Women’s Onsite Supervisor Meeting
Promotion Committee for the Active Participation of
Women in Technical Positions

Nationwide Women’s
Sales Representative
Conference

2015

2018

2019

2020

2021

2022

Formulated action plan based on the Act on
Promotion of Women’s Participation andAdvancement in the Workplace

Sekisui House Construction
Women’s College
Female Onsite
Supervisor
Support
Program

Sekisui House Remodeling
Leaders College

Support for early return
to work after leave
Support for full-timeand Sunday work

Established counseling counter
Work-from-Home
for work-life balance
SystemExpanded nursing care support program

Systems that supportbalancing cancer and infertility
treatment and work

Sales

Technical

Managerial

The Right Environment to Continue Utilizing my Experience and Abilities

2022 (FY)

Figures from the “Basic Survey of Employment Equality,” Ministry of Health, Labour andWelfare of Japan

Sekisui House Women’s College graduates(cumulative total of eight graduating classes)

views with women who are in their first three years in sales positions to143

After college, I went to work at a house builder. I returned to work after having my first child, but balancing child rearing and work
proved difficult, and I eventually resigned. After some time as a stay-at-home mother and then working part-time, I came to work inremodeling sales at Sekisui House Remodeling in 2011. I chose the Company because it allowed me to use my past experience andoffered the options of a four-day work week and shortened work hours. The sales representative job can be difficult, but the work suitedme, and I did well in it. I became an area sales lead in my fifth year and was selected for the first class of the Sekisui House Remodeling
Leaders College¹ before being appointed sales lead² in 2023. Marriage and childbirth are commonly seen as career enders for women,
but in remodeling sales, my experience in child rearing and first-hand understanding of family life have been major assets.
1 A Sekisui House Remodeling central management candidate development program   2 Central chief manager of office sales representatives(of which, 92 from the first seven classes have been promoted to managerial positions)

Initiatives for Promoting the Active Participation of Women

Yuri Maeda
Sales Lead
Kyushu Minami Branch
Sekisui House Remodeling, Ltd.

45

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Human Resource Value Story: Promoting Diverse Workstyles

ESG Dialogue
ESG Dialogue Involving All Employees

Dialogue Instead of Debate

Aiming to become a leading company in ESG management,

Each group participating in the ESG dialogue consists of four to

Sekisui House strives to help employees take ownership of andfive employees of varying job rank and employment type. With one

internalize ESG considerations. As part of these efforts, we have

employee appointed as a facilitator to encourage conversation andhosted ESG dialogues since October 2020. Sekisui House defines

lead others to appreciate new ideas, participants engage in dia-internalizing ESG as enabling each employee to take proper action

logue on a theme of their collective choice. The dialogue is

without having to think about it. Instead of taking a top-down

designed to help employees discover their personal definition of

approach or handling ESG as existing within the Company, we are

ESG, determine their personal goals and otherwise gain in-depth

focused on employee dialogue toward the goal of securing aunderstanding of ESG.

shared recognition that the Company exists within ESG.

Our ESG dialogue is distinguished by its focus on conversation,

Positive Changes through Dialogue
In FY2022, ESG dialogues held at the Company spanned approximately
42,870 hours. Results of post-dialogue questionnaires indicated tangible progress in the dissemination of ESG awareness among staff at 92% of worksites.
Comments contributed by respondents included “Each employee began tothink spontaneously instead of following someone’s lead” and “In the course of
dialogue, my peers became more proactive and began making positive
remarks.” Also, results indicated that respondents noticed changes at 81% of
workplaces. Some of these respondents commented that “Steady efforts are
now under way to foster an organizational culture that emphasizes mutual
understanding, cooperation and open communication” and “The dialogue
greatly helps develop relationships of trust,” while others indicated noticeable
improvement in communications within worksites. These questionnaire results
suggest that our ESG dialogue was effective.

To this end, we deem it important to allow each employee tonot debate. We encourage participants to listen to and affirm oth-verbalize their experience and value systems even as they expand

ers’ opinions while expressing their thoughts in their own words. In

their perspectives by learning about concepts and ways of thinking

this way, we seek to empower employees to play a proactive rolethat are different from their own. In FY2022, we hosted dialogues

in ESG management and take autonomous action informed by aon themes selected by participant groups related to individual androbust sense of ownership. With this in mind, we are working toworkplace happiness, innovation and other topics. A cumulative

create mechanisms to encourage employees to take self-directed

total of 42,873 employees from all worksites took part in theaction, including the selection of dialogue themes and the nomina-

dialogues.

tion of facilitator candidates.

The disseminationof ESG awarenessamong employees

ESG Management Starting from Dialogue“Progressed” or“Somewhat progressed”

Through ESG dialogue, we also strive to create a workplace culture that ensures psychological safety for every employee,­providing a calm atmosphere that enables them to feel confident in
expressing what they really feel, irrespective of job rank or employ-For us to become a leading company in ESG management and be

ment type.

continually sought after by society, it is important that employees
think about how to respond to all stakeholders while providing the872value of happiness. All employees must be empowered to take
Employee participants in FY2022
ESG dialogues

461

19,930text, we have positioned ESG dialogue as the starting point of our

22,943

recognizing, understanding, embracing and acting on ESG.

(February to July 2022)

24
FY2020

FY2021

FY2022

ESG Dialogues Heldself-directed action and achieve innovation to this end. In this con-

(August 2022 to January 2023)

platform designed to ensure the participation of all employees in

P.98 A Platform That Links Recognition and Action

Results of questionnaires following the FY2022 ESG dialogue(Drawn from 580 worksites holding 872 dialogue sessions)92%

Changes taking
place at workplaces“Noticeable” or“Somewhat noticeable”

81%

At the beginning, some participants seemed to be nervous, as they were notaccustomed to dialogue of this kind. Aware of this, we strove to offer an environment in which everyone felt free to share their desires and thoughts. As a result,since taking part in ongoing dialogue sessions, employees are becoming more
active in workplace communications. This, in turn, is leading to the creation ofan open and empathetic workplace culture that enables everyone to feel safe. In
addition, some worksites now hold ESG dialogues on a monthly basis byaccommodating employee requests for more dialogue opportunities.

46

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Human Resource Value Story: Building a Foundation for Well-Being

Encouraging All Eligible Male Employees to Take Childcare Leave
Supporting Happiness for Employees andTheir Families

Granting Childcare Leave of at Least One MonthSekisui House is strongly determined to support happiness for
employees and their families. In line with this determination, in
September 2018 we launched a male employee childcare leave (paternity leave) program. The development of this program started fromincorporating opinions voiced by employees and their families. Today,
male employees who take childcare leave under this program often
receive words of encouragement from customers. Looking ahead, we
will further enhance the program to support employee autonomy andstep up initiatives to build a foundation for employee well-being.
Features of the Company’s male employee childcare leave program include paying salary for the first one month of childcare leave
and allowing applicants to divide their leave into as many as four separate periods before their child’s third birthday. The program isdesigned to help resolve economic anxieties about childcare leave
while enabling employees to flexibly take leave in light of their individual and family circumstances. In April 2021, the program was
upgraded in response to requests from employees’ families toimprove flexibility by allowing employees to take childcare in one-day
units until eight weeks after childbirth.
At Sekisui House, all eligible employees have taken childcare leaveof one month or longer since the full-scale launch of this program in
February 2019. Moreover, the ratio of eligible employees who utilized
childcare leave has been 100% at Group companies since April 2021.
Take-Up Rate for Eligible Male Employee Childcare Leave (%)
Sekisui House (non-consolidated)
Average for all industries (nationwide)95

100 100 100 100

70

2

3

2013

2014

2.65
2015

3.16

2016

5.14
2017

1 Calculated by multiplying the ratio of eligible employees who have taken paternity leave by the average number of days of paternity leave

Male employees at
Sekisui House

Male workers in general(nationwide average)

31

1.22

Take-up rate for eligible male
employee childcare leave 100%²
Average days of leave
31

Take-up rate for eligible male
employee childcare leave 13.97%³
Average days of leave
8.74

2 Pertains to male employees who have taken leave granted under the Sekisui House
program (childcare leave of at least 31 days before the child’s third birthday)
3 Source: “Basic Survey of Employment Equality,” Ministry of Health, Labour and Welfare(regarding male workers who began taking childcare leave by October 1 of survey years)
4 Based on a Sekisui House survey (White Paper on Paternity Leave 2022)

Happiness That Comes from Childcare Leave
Male employees of Sekisui House spend a weekly average of 17.8 hours on homemaking and childrearing (nationwide average: 12.4 hours). Moreover, 98.6% of our male employees derive happinessfrom these responsibilities (nationwide average: 81.4%). These figures indicate that our male
employees proactively enjoy homemaking and child rearing, and find happiness in these activities.5
We have also developed the Family Meeting Sheet, a tool for facilitating discussions regarding handling child rearing and homemaking based on users’ ideals for families. In FY2022, we recorded 13,404
downloads of this sheet from the Company’s website. Moreover, we have designated September 19 asa childcare leave awareness day. In addition, in 2019, we began issuing the White Paper on Paternity
Leave as well as hosting a forum focused on childcare leave taken by male employees. Through such
efforts, we strive to contribute to the widespread utilization of childcare leave across Japan.
5 Source: White Paper on Paternity Leave 2022

Quality Family Time

23

19

In FY2022, the average length of childcare leave taken by male employees amounted to 31 days,
with 100% of eligible employees taking leave. Comparisons of these figures with the nationwide
average (8.7 days in FY2021; with only 13.97% of eligible workers taking leave) suggest that male
employees at Sekisui House take childcare leave around 25 times1 longer than the average for maleworkers in Japan.
Sekisui House’s ideal for society is to eliminate barriers to taking childcare leave and spending
quality time with family for all males. To achieve this ideal, we are striving to develop optimal working
environments while helping supervisors raise their awareness regarding the growing importance ofpaternity leave. Moreover, we use the Company intranet to showcase male employees in a widerange of jobs who have taken childcare leave. We also hold photo exhibitions that feature fathers
taking care of their children and other events. In these ways, we strive to facilitate deeper appreciation of childcare leave among the entire workforce and foster a culture of mutual support.

Average days of paternity leave per person

6.16
2018

7.48
2019

12.65
2020

13.97
2021

2022 (FY)

Employee satisfaction with the paternity leave program (satisfaction
among spouses of male employees who have taken childcare leave)

98.2%(78.2%; nationwide average)

Source: Questionnaires undertaken by the Sekisui House Group of employees who utilized theSpecial Childcare Leave Program

In 2019, I took leave for one month straight when my wife was reinstated to her workplace after the birth of our first son.
My wife was happy about my decision, telling me that during my childcare leave, she appreciated the greater emotional
support I provided. Afterward, I felt a sense of fulfillment but, at the same time, thought that I hadn’t done enough for myfamily. This led me to take five months of childcare leave upon the birth of our younger son in 2022. Taking care of a­five-year-old and a newborn was often quite hard, but I nevertheless felt an immense sense of happiness spending quality
time with my family. Those five months flew by. Given another opportunity, I would take childcare leave for at least one
year. Moreover, I would love to encourage younger fathers to take long-term childcare leave.
IKUKYU.PJT (Japanese only)

Yuki Sakai
Design Section,
Chiba Branch,Sekisui House, Ltd.

47

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Human Resource Value Story: Building a Foundation for Well-Being

Well-Being Survey
Making the Status of Employee and Workplace
Well-Being Visible

Well-Being Circle Happiness Score Reveals Happiness andUnhappiness among Workers

We believe that supporting well-being for each employee will result ingreater well-being for the entire Group and eventually enable us to
improve well-being for our customers and society as a whole. Basedon this belief, in November 2020, we began conducting the WellBeing Survey targeting all employees. Under the supervision ofProfessor Takashi Maeno of Keio University Graduate School, a leading expert in business administration focused on employee well-­being, we became the first company in Japan to undertake themultilateral measurement of employee and workplace well-being andanalyze correlations between the two. In this way, we strive to makethe status of well-being visible to inform specific measures to help
each employee pursue happiness on their own terms.

The Well-Being Circle diagnostics for measuring the happiness of individuals
showed that Sekisui House employees had higher scores in 33 out of 34 items
compared with averages for businesspeople in Japan. Our employees had notably high scores for gratitude and willingness to recommend their workplaces toothers. Moreover, their scores for positive emotions grew year on year by a larger
margin than last year. On the other hand, they had lower scores on stress- andhealth-related items. These findings suggest that the improvement of both emotional and physical health must be a particular area of our focus going forward.
In addition, a rising sense of overworking is a matter of concern. This item has
strong correlation with a sense of being subjected to unreasonable treatment at
workplaces. With this in mind, we implement ESG dialogue and career interviews
to counter these issues. We also strive to raise the ratio of annual paid leave utilization in light of survey findings suggesting employees need to relax and unwind.

The Four Factors of Happiness Advocated by Dr. Takashi Maeno of
Keio University Graduate School
Let’s try!

Be yourself!

Thank you!

It will turnout all right!

Note: Based on survey and analysis, the sense of overworking has greater correlation with a sense of being
subjected to unreasonable treatment and the perceived need to relax and unwind than with working
hours themselves.

Factor 1: Let’s try! (self-realization and growth)
Factor 2: Thank you! (connection and gratitude)
Factor 3: It will turn out all right! (positive and optimistic)

Gratitude

Positive emotions

Highest among Four
Factors of Happiness

Increased robustly
year on year

+3.67
over nationwide average+2.66
over nationwide average+0.77
year on year

67.91

Factor 4: Be yourself! (independent and self-paced)

Willingness torecommend our workplaces

+0.07

66.49

These surveys also suggest that results for such items as “encouraging newchallenges” and “recognition from others” (e.g., a sense of being favorably
esteemed by colleagues) are positively affected by the implementation of ESG
dialogue and career interviews, along with the Sekisui House Innovation &Performance (SHIP) Awards Program.

Total Well-Being Circle happiness score

Encouraging New Challenges

Recognition from Others(Points)
68(Points)64

65.51
FY2020 22,907
respondents

65.75
FY2021 22,516
respondents

65.86
FY2022 22,828
respondents

67

65
64

65.41

65.77

62
61

64
2020

60
2021

2022

(FY)

475

(attended by a total of
22,771 employees)

Holding Quarterly Happiness Workshops
Starting from March 2022, we held Happiness Workshops on four occasions for employees who stepped up to plan and implement measures toenhance the well-being of their workplaces. These workshops involved
dialogue sessions utilizing dialogue cards designed to measure participant happiness/unhappiness, as well as brainstorming ideas for creatinga happier workplace. Through these activities, we strive to empower
more employees to serve as advocates for workplace well-being.

60.99

61.46

60.03
2020

2021

2022

Example Initiatives at Branches
Guided by its chief manager’s strong aspiration to make his branch thehappiest workplace in the world, one of our branches has held training
and workshops on an ongoing basis since November 2020. This branchalso issues Praise News, an in-house newsletter, to create a workplaceculture that encourages employees to commend one another and invigorates workplace communications.

63

66

Our ESG dialogue, which is aimed at
encouraging each employee to take a
fresh look at their individual and workplace
well-being, draws on results of the WellBeing Survey to facilitate small-group discussions on this subject.

ESG dialogue sessions
exploring individual andworkplace happiness(FY2022)+6.16
over nationwide average-0.12
year on year

We have conducted three rounds of surveys since 2020. These surveys
revealed that the Sekisui House Group has high scores for Factor 2,
especially “gratitude” and “altruism,” indicating that our fundamental
philosophy of love of humanity is widespread among employees.
Moreover, the total Well-Being Circle happiness score increased forthe second consecutive year, with results for each year exceeding the
average score for businesspeople in Japan.

year on year

Boosting the Happiness of Employees
and Workplaces via Ongoing Dialogue

Wordmap Based on Post-Workshop Questionnaires Show Participant
Awareness and Impressions

Notably higher thannationwide average

55.57

Utilizing Findings from the Well-Being Survey

(FY)

48

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Human Resource Value Story: Alignment of Efforts

Building a Sustainable Leadership Pipeline
Executives

Executive officers
Operating officers

Evaluation and training

Oriented to innovation
A desire to contribute to the Company by providing
new value to customers using a systematic
approach that gives rise to organizational innovation

Managers

Securing competent leaders capable of disseminating our Corporate
Philosophy and business strategy among autonomous employees
and fostering organizational strength is essential to the Sekisui HouseGroup’s efforts to provide happiness to its customers and society as
a whole.
Accordingly, we strive to enhance the content of, and implement, job
rank-based training for managers with the aim of securing greater
capabilities to realize collective achievements, develop human resources
and invigorate our organization. We have held the Keiei-juku management training program since 2018 with the objective of selecting andtraining future leader candidates in each organization (for the positionsof branch manager, head office senior manager, factory manager, etc.).
We also launched the SHINE! Challenge Program (short for Sekisui
House Innovators and Entrepreneurs Challenge Program) in 2019.
Through these measures, we continually endeavor to systematically
produce strong candidates for leading the business into the future.
Also, we conduct multi-rater assessments for all managers ingroup leader positions or higher. Feedback gleaned via these assessments is utilized to formulate action plans aimed at facilitating positivechanges in their management behavior. We give periodic coaching tohelp them reflect on their mode of operations and enhance their management capabilities.

Leadership Pipeline for Cultivating the Next Generation of Business Leaders

MBO/Multi-rater
assessment

Heads of branches

Organization heads

Selection and training
Creative with change
Able to initiate change as an industry leader rather
than needing to catch up to change

Responsive to change

Candidates for heads ofbranches, head office
departments and factories

Keiei-jukuManagers

Sekisui House Keiei-jukuManagerial promotion assessment

new ideas as the business climate changes

Training
SHINE!
Challenge Program

Expand scope of responsibility, develop new business, etc.

Young human resources(aged 35 and under)

Discover and cultivate candidates to become business leaders
SHINE! Challenge Program
Sekisui House Innovators and Entrepreneurs Challenge Program

In 2021, we began holding the Succession Plan Council to identify candi-

Succession Plan Council

dates for executive officers, operating officers and others in key positions

Securing and Optimally Allocating Human Resources
Based on Strategic Needs
We systematically hire and nurture human resources necessary toachieve sustainable growth by assessing human resource needs
based on the business strategies of each business unit to optimally
allocate human resources. We also utilize diverse hiring methods,
such as referral recruiting, as well as multiple recruiting media, while
proactively enhancing the on-boarding program to help employees
quickly contribute after joining the Company.

Heads of head office
departments
Heads of factories

Selection and training of next-generation
organization heads

Able to respond with problem-solving skills andRegular employees

Nurturing Leaders Who Will Disseminate Our
Corporate Philosophy and Strategy(general managers of head office divisions and technology and production
divisions). This council is aimed at deliberating the nomination of thesecandidates in a highly transparent manner from a diverse, Company-wide
perspective. Specifically, the council prepares individual training plans for
all candidates and conducts periodic progress reviews on these plans inorder to further enhance our leadership pipeline. In 2022, the council
expanded the scope of efforts to identify candidates to include branchheads, the Head of Technology and the Head of General Affairs

Employed executive officers andoperating officers, generalmanagers of head office divisions

Branch heads, the Head of Technology
and the Head of General Affairs

Number of positions discussed: 69
Number of candidates: 150

Number of positions discussed: 140
Number of candidates: 274

Succession readiness rate(candidates/positions)

Candidate availability rate(candidates/positions)217%(FY2022)

196%(FY2022)49

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

Business Models
Based on a management foundation that incorporates ESG initiatives, as well as its unique value chain andcore competencies, the Sekisui House Group has established business models that create value for diverse
stakeholders through collaboration among Group companies.
Our operations in Japan utilize three business models. The first is the model of the built-to-order business,
which has established a solid customer base by providing high-value-added houses and buildings. The second is the supplied housing business model, which draws on this customer base to conduct remodeling, rental

beautiful communities that are a pleasure to live in. As we make growth investments for the future, we are alsoestablishing a sustainable value creation process. We plan to establish the same three business models overseas through further expansion of the built-to-order business.
The Sekisui House Group will steadily achieve sustainable growth as it works to become a global company.
Since 2010, we have continued to grow by reducing our emphasis on the built-to-order business through amore optimally balanced business portfolio. By leveraging high-quality housing stock to accelerate growth in
the supplied housing business and increasing asset turnover in our development business, among other measures, we are enhancing all three of our core businesses to create a base for generating growth.

Domestic and Overseas Business Operations
Built-to-orderbusiness

Building a solid
customer baseDevelopment
business

Residential
domainSuppliedhousingbusiness

Securing funds
for growthinvestments

Expanding the
supplied housing
Built-to-orderbusinessbusiness

Providing high-value-added
houses and buildings

C or

e co m p e te n ciesBuild a solid customer base by providing high-value-added houses
and buildings

Supplied housingbusiness

Draw on the customer base from the built-to-order business to
conduct remodeling, rental housing management and otheroperations

Development
business

Invest profits from the built-to-order and supplied housing businesses in high-quality urban redevelopment and the development
of beautiful communities that are a pleasure to live in.

ESG management

Overseas businessbusiness model, development, which focuses on high-quality urban redevelopment and the development ofDomestic businesshousing management and other operations. The profit from these businesses is then invested in our third50

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Value Chain
The Sekisui House Group aims to create happy homes by constantly evolving the basic performance and environmental technologies that are important for residents, and by combining
research and proposals for new ways of living. Our unique value chain is the source of this value creation.

Overview

ResearchandDevelopment

Product
Development,
Design andTechnologies

Strengths andDifferentiating Features

We aim to further enhance the technologies for safety, peace of mind, comfort
and eco-friendliness that we have developed since our founding, building onthese to advance R&D into technologies,
lifestyle design and services that can be
integrated to provide happiness in the eraof the 100-year lifespan (in health, connectedness and learning) in order to makehome the happiest place in the world.

• O pened the Comprehensive Housing
R&D Institute in 1990, the largest of its
kind in the world• Opened the Human Life R&D Institute in2018, Japan’s first institute specializing
in research on well-being• Research and development that leverages our extensive, industry-leading residential database and expertise• Research from the perspective of customers at Nattoku Kobo Studio (HomeAmenities Experience Studio), a handson research facility

Our objective is to remain a leader indeveloping products that deliver the highest quality and technology and meet customer needs. The products we create
based on this mission are houses thatrealize customers’ dreams through customized designs using our advanced
design proposal capabilities.

• Various original technologies that areahead of the times and unrivaled byother companies• 3,417 first-class architects• Chief Architect, an in-house system ofcertification for our top creators, fosters
excellent in-house architects

Sales

Measures to Step Up

Related Material Issues

Risks and Opportunities

Creation of high-quality housing stock• Loss of business opportunities
due to insufficient or delayed
response to technological innovation and social issues•
I ncreasingly severe natural
disasters due to climate change• R&D to address disaster risk and extend
the life of houses• R&D into environmental technologies
for housing that promotes health• R&D related to achieving a sustainable
society• R&D based on co-creation with sales,
technology, production and otherdepartments• R &D through external collaboration(with other companies, academia, etc.)• R einforcement and development of
R&D talent• Changing lifestyles and diversifying values• Diversifying performance requirements for housing (eco-friendliness, disaster resilience, infection
control measures, etc.)• D esign R&D to promote customer
well-being• Development of environmental technologies to realize a sustainable society• Development of original technologies tocreate high-quality housing stock• Intensifying competitive environment• Changes in housing policy; changes in and end of support measuresfor home purchases• Promotion of long-life quality housing• Proposals for the creation of assets thatoffer value not only for customers but
for the local community• Strengthening of cooperation within the
Sekisui House Group to reliably capturebusiness opportunities• P romotion of active participation byfemale sales representatives• Safety, peace of mind
and comfort• Asset value creation• Extended useful life of
housing

Contributing to a Sustainable Society• Decarbonization• Biodiversity conservation• Resource recycling

Diversity and inclusion• Diversity promotion• Self-directed careerdevelopment• Human resource
development

Creation of high-quality housing stock• Safety, peace of mind
and comfort• Asset value creation• Extended useful life of
housing

Contributing to a Sustainable Society• Decarbonization• Biodiversity conservation• Coexistence with local
communities(Sixth Mid-Term Management Plan)

Diversity and inclusion• Diversity promotion• Self-directed careerdevelopment

In sales, which are the front line of customer contact, we stay closely attuned toour customers to offer value proposals
for their ideal house, based on our philosophy of love of humanity. Our aim is tobuild strong and lasting relationships oftrust with our customers.

Please see Section 4 for details.
   P.133-180 Environment   P.181-218 Social•E stablished reliability and track record• Closely attuned to customers based on
our love of humanity• Consulting capabilities that enable us to
identify latent needs and expectations topropose housing where people can live
happily for years to come• Proposal capabilities for public and corporate business in addition to housing
for private individuals• Human resource
development

Creation of high-quality housing stock• Safety, peace of mind
and comfort• Asset value creation• Extended useful life of
housing

Contributing to a Sustainable Society• Decarbonization• Biodiversity conservation• Coexistence with local
communities

Diversity and inclusion• Diversity promotion• Self-directed careerdevelopment• Diverse workstyles• Human resource
development51

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Value Chain
Strengths andDifferentiating Features

Overview
Building a house requires tens of thousands of components. Sekisui House
works with diverse suppliers to promotesustainable procurement based on its
CSR Procurement Guidelines.

Procurement• A strong supply chain structured forcoexistence and co-prosperity with
suppliers• CSR procurement as a signatory of theUnited Nations Global Compact¹• F airWood procurement based on our
Wood Procurement Guidelines
1

Production

Construction

After-sales
serviceSekisui House
Sekisui House
Remodeling
Sekisui House Real
Estate Holdings

Our unique production system manages
each process from manufacture to shipping for each individual home. Under anadvanced quality control system forpre-engineered housing, we promise
consistent high quality for all homes.

P.219 P articipation in International
Initiatives and Activities with
Government and Industry Groups• Strong production and quality control
system through the use of robotics andcutting-edge information technologies
such as AI, IoT and big data
• Flexible production lines and distribution
systems enable production on a houseby-house basis• In-house development of production
technologies incorporating cutting-edge
technology

We have established a design-build system encompassing our wholly owned
Sekisui House Construction companies,
and the Sekisui House Association,
which is made up of partner building
constructors. Together, they promote
superior construction systems, excellent
construction quality environments, andthe development of construction
techniques.

• Construction capabilities of eight Sekisui
House Construction companies andabout 7,000 partner building constructors
united by the spirit of a community with acommon destiny• G roup-wide system for construction
quality control, continuous improvement,
and record management and storage• T hree education and training centersthroughout Japan and a technical training
center in Vietnam for developing outstanding people as the Group’s future leaders

To ensure comfortable living, now andalways, we consider proper after-sales
service to be part of the intrinsic value ofa home and provide lasting peace ofmind with long-term support systems,
such as our initial 30-year warranty program and U-trus System• Commitment to customer service that
impresses customers• Extensive after-sales service organization of approximately 1,500 employees• System for centralized management ofmaintenance information from new construction onward

Measures to Step Up

Related Material Issues

Risks and Opportunities

Creation of high-quality housing stock• Rapid increases in raw material
prices and supply constraints• Impact of natural disasters andgeopolitical risks• Human rights risks in the supply
chain• Impact of wood procurement on
ecosystems and forests• Increasing the resilience of the entire
supply chain, including secondary andtertiary suppliers• S trengthening and promoting CSR
procurement for coexistence andco-prosperity with suppliers• Promotion of supply chain decarbonization and respect for human rights• Cultivation of FairWood procurement andpromotion of zero deforestation efforts• Rapid increases in raw material
prices and supply constraints• Rising logistics costs and driver
shortages• Shortages of production line labor• R&D aimed at decarbonization• C yberattacks on production
systems• S trengthening of quality control byenhancing the use of cutting-edge
technologies and promotion of production and logistics reforms• Rationalization of production throughautomation and creation of comfortableworkplace environments• Decarbonization through means including raw material recycling, energy saving
and energy transition• Reinforcing information security• Decrease in construction capabilities due to aging and shortages of skilled personnel• S hortage of human resources
due to increase in employee turnover and decrease in new hiring• D ecrease in construction site
productivity due to deteriorationof the natural environment
caused by climate change• Occupational accidents and accidents involving the general public• Enhancement of work efficiency andconstruction environments to make construction sites safer and workers happier• Hiring and training human resourcesthat have multiple perspectives• S trengthening of cooperation with
Konoike Construction, which has
strengths in construction of houses
using traditional methods and in thecivil engineering business• Decline in customer satisfaction
due to delays in response• Risk of leakage of customer andother information• Building solid relationships of trust withowners•E nhancement of responsiveness by
accepting phone calls 24 hours a day,365 days a year, and by using AI chat bots
• Strengthening of information management system and handling• Safety, peace of mind
and comfort• Asset value creation• Extended useful life of
housing

Contributing to a Sustainable Society• Decarbonization• Biodiversity conservation• Resource recycling• Coexistence with local
communities• Supply chain

Diversity and inclusion• Diversity promotion• Human resource
development• Self-directed careerdevelopment

Creation of high-quality housing stock• Safety, peace of mind
and comfort• Asset value creation• Extended useful life of
housing

Contributing to a Sustainable Society• Decarbonization• Biodiversity conservation• Resource recycling

Diversity and inclusion• Diversity promotion• Human resource
development• Self-directed careerdevelopment

Creation of high-quality housing stock• Safety, peace of mind
and comfort• Asset value creation• Extended useful life of
housing

Contributing to a Sustainable Society• Resource recycling• Occupational health andsafety• Supply chain

Diversity and inclusion• Diversity promotion• Diverse workstyles• Human resource
development

Creation of high-quality housing stock• Safety, peace of mind
and comfort• Asset value creation• Extended useful life of
housing

Contributing to a Sustainable Society• Coexistence with local communities

Diversity and inclusion• Diversity promotion• Human resource
development• Self-directed careerdevelopment(Sixth Mid-Term Management Plan)

52

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: SocialCore Competencies
Our core competencies are our three greatest strengths—technical capabilities and construction capabilities driven by Sekisui House technologies, and a solid customer base derived from the industry’s highest number ofdwellings built—as well as our unique value chain. This value chain maximizes value that contributes to happiness for customers because the Sekisui House Group handles all processes relating to homebuilding, from basic
R&D to product development, design and technologies, sales, procurement, production, construction and after-sales service. These core competencies are the source of the value we create.

Technical Capabilities

Construction Capabilities Universal design for “comfortable living—now and always” SHEQAS for proven safety and peace of mind, Airkis for a better indoor air quality andother original technologies Green First ZERO and other environmental technologies Original Dyne Concrete and Bellburn exterior wall panel manufacturing technologies Staff with diverse qualifications, including first-class architects and building operation andmanagement engineers Enhanced workforce skills and ability to make proposals through an in-house system of
qualifications (Chief Architect, etc.) New value proposals through the integration of technologies, lifestyle design and services

Customer Base Sekisui House Construction companies, which are wholly owned subsidiaries of Sekisui
House, use a design-build construction system Loyal cooperative system for construction through the Sekisui House Association Enhanced construction capabilities though skills development at educational training
centers and training schools Acquisition of model approval for shortened construction timeframes Enhanced workforce skills and ability to make proposals through an in-house system of
qualifications (Chief Constructor, etc.)

Technologies: Seismic resistance (SHEQAS, Flexible ß System), insulation performance
Lifestyle design: Sekisui House Universal Design, Slow Living housing design, Green First ZERO (ZEH)
Services: Platform House Concept (HED-Net in-home early detection network for acute illnesses,
PLATFORM HOUSE touch) Owners of the 2.62 million dwellings we have built (including those overseas), the most in
the Japanese housing industry An after-sales service system featuring after-sales maintenance through 30 Customer
Service Centers across Japan for customer peace of mind after they take possession of
their houses Long-term relationships with rental housing owners through Sekisui House Real Estatecompanies Owner referrals and a high repeat rate
 Relationships with homeowners through after-sales maintenance, including remodelingand renovation work
 Direct sales / Long-term warranty system (lifetime warranty) Enhanced workforce skills and service capabilities through an in-house system of qualifications (CS Meister, etc.)

Maximizing Customer Value That Contributes to Happiness through Group Synergies
Product
development,
design andtechnologies

Research &development

Sales

Procurement

Production

New Technologies

IoT

AI

Robotics

After-sales
service

Construction

Open Innovation

Blockchain

Advancing and Extending
Our Core Competencies

Industryacademia
collaboration

Investment
in startups

Businessalliances

M&A

53

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Stakeholder Engagement
The Sekisui House Group identifies various issues and expectations through engagement with stakeholders, including customers (homeowners), consumers (prospective customers), suppliers, business partners, employees,
shareholders and other investors, and local communities. We work to create value unique to Sekisui House by diligently addressing these issues and expectations.
Key Stakeholders

Responsibilities

Main Examples of Engagement

Results of Initiatives

Customers(homeowners)

Constantly remaining closely attuned to our customers, we work to provide value from our customers’ point of view to increase their satisfaction.

• Customer surveys• Informative magazines published ascommunication tools–K izuna (detached housing, twice annually)–M aisowner (rental housing, twice annually)–g m (condominiums, three times annually)

Consumers(prospective
customers)

We will proactively disclose information so that we
can establish relationships of trust, with the goal of
creating enriching homes and environments.

• Nattoku Kobo Studio (Home Amenities
Experience Studio) at the Comprehensive
Housing R&D Institute• Tomorrow’s Life Museum• Sekisui House Eco First Park
• SUMUFUMU TERRACE facilities• Sumaijuku online seminars• Enhanced development of new products and technologies• Accumulation of big data relating to housing

Business
partners

We will engage in fair and equitable transactions
while fostering relationships of mutual benefit inorder to develop together with our business partners by satisfying customers.

• Sekisui House Association and the
Sekisui House Cooperation Association
Sekisui House Primary Work Constructor
Association• Annual activity policy briefing session• CSR procurement (adhering to our
CSR Procurement Guidelines)• Supplier assessments• Establishment of construction site environments that facilitate work
(streamlining and standardization of work)• Establishment of a robust,
sustainable supply chain

Employees

We respect individuality so that employees canmake the most of their individual capabilities. We
nurture a spirit of embracing challenges throughmeaningful work; create a healthy, happy workplace environment and systems that allow
employees to develop their careers autonomously;
and work to improve employee satisfaction.

• ESG Dialogue• Human relations training (annually)• Compliance training• Well-Being Survey• Sekisui House Women’s College• Career interviews• Hito in-house online magazine• Sekisui House Innovation & Performance(SHIP) Awards Program• Challenge 6 initiative (six challenges forphysical and mental health)• Active participation of women and diverse
human resources• Human resource training anddevelopment• Occupational health and safety(including pandemic countermeasures)• Maintenance and improvement of
employee well-being• Innovation

Shareholders
and otherinvestors

We engage in fair and highly transparent corporate management with the aim of remaining anenterprise with high social value. We do so inorder to improve our corporate value throughsound growth that returns profits to shareholders
and other investors.

• Financial results presentations and management
plan briefing sessions• Meetings with institutional investors and analysts• General Meeting of Shareholders• Publication of Value Report (Integrated Report;
includes TCFD and TNFD reporting)• Publication of Business Report(twice annually)• Issuance of IR News Mail
• Factory tours for individual shareholders• Return of profits to shareholders• Enhancement of information disclosure• Building relationships of trust with shareholders andinvestors through active dialogue

Localcommunities

In order to protect the global environment andenable all people to enjoy a rich and fulfilling life,
we will strive to cooperate with, participate in andgive back to society by fostering local culture andprosperity while making the most of our uniqueness as a housing company.

• Sekisui House Matching Program for joint
donations by employees and the Company• Collaboration with NPOs such as Uzo Nishiyama
Memorial Library and Kids Design Association• Rokko Island Fund for Kobe Town Development
charitable trust• Providing training in the SDGs using casestudies• “A Letter from Dr. Forest” and happy homes
educational programs for elementary andjunior high school students• SDGs training, presentations ofmodel initiatives• Living that offers safety and peace of mind
• Community development for crime
prevention and disaster preparedness• Fostering of future generations (Kids First)• Support for the independence of disastervictims and people with disabilities• Operation of the Net Owner’s Club• Customer Service Center Owner Desk
• SUITE CONCIER website introducing
lifestyle services• Longer useful lives for housing• Improved customer satisfaction• Enhanced after-sale support• Creation of high-quality housing stock• Support for a diverse society• Regional revitalization• Coexistence with local communities• Social contribution activities(including initial disaster response
and recovery and reconstruction
support)54

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Stakeholder Engagement

Customer Engagement

Connecting with Customers to Provide Value through HappinessTo continue providing new value as a partner in happiness, the Sekisui House Group works to enhance cus-

Customer Service Centers (Customer Service Center
Owner Desk, Ie-Log and surveys)

tomer engagement, and in doing so also promote societal happiness and employee happiness.

We established to the Customer Service Centers to heardirectly from customers and ensure that their feedback is dulyreflected. We receive customer feedback in the course of
periodic inspections and through surveys, and leverage it inour businesses. Through Ie-Log, which stores data on individual homes, and the Customer Service Center Owner Desk
we aim to strengthen customer support and enhance customer satisfaction.

Our top priority in customer engagement
Since its founding, Sekisui House has valued communication, particularly hearing directly from customers, and consistently maintained a stance of putting customers first. In 1964, we made the major transition from conventionalsales (through sales agents) to a direct sales and design-build business model, in which we take responsibility forHome Visit Days (Tours of Completed Homes)
We hold home visit days, in which customers who have built homes with
Sekisui House let us give tours to customers who are starting the process ofbuilding a home. These
tours allow customers tohear actual homeowners
talk about their homes intheir own words, enablingengagement both with andbetween customers.

every step from sales to design, construction and after-sales service. Since then, we have continued to reflect customer feedback in our design process, products and services. This stance of valuing customers has been passed

Family Suite / Family Suite Home Premium

down to the Sekisui House Group today, helping us propose homes that contribute to customer happiness.

Facilities for Realizing Customer Happiness
The Comprehensive Housing R&D
Institute and Nattoku Kobo Studio
The Comprehensive Housing R&D Instituteis not only a facility for engineering research,
but also a venue for customer interaction
and participation, creating housing fordiverse lifestyles.
At Nattoku Kobo Studio (Home Amenities
Experience Studio), a hands-on researchfacility within the institute, customers
experience the institute’s proposals andprovide direct feedback, helping reflect
consumer perspectives in research.

1964

Established the direct sales anddesign-build system

1983

Display houses and hands-on exhibits (Japanese only)

Human Life R&D InstituteTomorrow’s Life Museum (formerly the Sumai-no-Yume-Kojo centers)

The Human Life R&D Institutestudies well-being in daily living from a variety angles, suchas family bonding and personal fulfillment.
By integrating technologies with lifestyle design, the
Human Life R&D Institutedevelops proposals for waysof living that make home thehappiest place in the world.

History of Initiatives toPromote Customer Happiness

1990

1987

Our Tomorrow’s Life Museum (TLM) facilities are located adjacent to each of our factories and allow visitors to experience thelifestyle design proposals for happy homes developed by the
Human Life R&D Institute.
In order to better meet diversifying housing needs, we createdthe TLM facilities by evolving theformer Sumai-no-Yume-Kojo centers, which provided tours andexperiences mainly centered ontechnological aspects of housing.

1992

Established theLaunched
Comprehensive
Sumaijuku seminars
Housing R&D Instituteand Nattoku Kobo Studio(Home Amenities Experience Studio)

Established the Customer Service Centers

Launched factory tours

1989

The Family Suite concept was created by applying the Human Life R&D
Institute’s research into happiness to new structural technologies. Family Suite
Home Premium was developed to better meet needs related to increased timespent at home as a result of the COVID-19 pandemic. Because they canaccommodate diversifying housing needs, these proposals have been selectedby many customers.

Launched home visit days

Outlook
Our diverse initiatives, developed and evolved through ongoing communication with customers, entered a new phasebeginning in 2020. Going forward, we seek to create intangible assets through the Platform House Concept and otherinitiatives centered on health, connectedness and learning to help foster happiness in the era of the 100-year lifespan.
At the same time, by taking the value in the form of happiness we have built up though engagement with customers inJapan and spreading it overseas, we will advance toward our global vision to make home the happiest place in the world.

1997

2021

Established the Sumai-no-Yume-Kojo centers

2018

Established the Tomorrow’s Life Museum(TLM) facilities

Established the Human Life R&D Institute

2020
2006

Launched townscapevisit days

2010

Launched the
Sha Maison Festival

Established the Customer Service Center
Owner Desk

Happinessin the era of the
100-year lifespan55

Value Report 2023
SEKISUI HOUSEContents

Section3

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

56

Mid-Term
Management Plan for
Sustainable Growth
Evolution of Our Businesses and Business Model
Based on the Residential Domain
57
Evolution of Our Mid-Term
Management Plans
Sixth Mid-Term Management Plan
(FY2023−FY2025)
Business Strategy

58
59

Built-to-Order BusinessSupplied Housing Business
Development Business Message from the Officer in Charge of
the Overseas Business
Overseas Business

61
64
67

Financial and Capital Strategy

74

Financial Analysis
ESG Strategy

78
82

Environmental StrategyImprovement of Social Value
Human Resources Strategy Technology and R&D Strategy:
Sekisui House Technology
Digital Transformation (DX) Strategy

83
85
86

70
71

87
90

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Evolution of Our Businesses and Business Model Based on the Residential Domain
Sekisui House was founded in the pre-engineered housing business in 1960, and in the 1970s entered the development business, including urban development

Shift in Profit Mix

and the sale of condominiums. In the 1990s, we established detached housing brands with the lightweight steel-frame IS series and wooden-frame SHAWOOD(Operating profit; Billions of yen)

261.4

houses. We then entered the three-floor house market with the heavy-gauge steel frame ß System construction method and, with the creation of the Sha Maison
rental housing brand in 2000, all of the current elements of the built-to-order business were established. In 2004, we established Sekisui House Remodeling, andsince then, the full-scale development of the remodeling business has contributed greatly to the creation of high-quality housing stock in Japan.

56.3

However, in 2008, the financial crisis caused a decline in business performance, leading to the first annual net losses in the Company’s history. The major

business with an eye to securing an exit strategy for projects in the urban redevelopment business. These and other efforts have greatly changed our mix of busi-

71.9

ness models, which before was heavily reliant on detached houses (built-to-order), a market that is expected to shrink in the future. This, along with our entry into
the overseas business, has transformed out portfolio. Compared with FY2010, when 76% of operating profit came from the built-to-order business, today the

Net sales(Billions of yen)
3,000

1960
Founding
Entered the pre-engineered housingbusiness (Built-to-order)
1961
Launched the mainstay Sekisui House Model B(lightweight steel-frame, one-story houses)

2,500

2,000

1968
Launched first large-scale built-for-salecommunity developed in-house (Development)(Construction started in 1969, completed in 1971)

Overseas49.2

Development

78.2

Suppliedhousing

20.9

in 2010, we announced our first Mid-Term Management Plan. Since then, we have expanded the range of our housing-related businesses and entered the REITManagement Plan, we are aiming for ¥3,676.0 billion in net sales and ¥318.0 billion in operating profit.

73.8

2.2

impacts on the Company, including a downturn in orders for housing, led us to revise our business model, which was centered on the built-to-order business, andportfolio is balanced across four businesses. In FY2022, we recorded record high net sales and operating profit. For FY2025, the final year of the Sixth Mid-Term

57

109.9

Built-to-order

76%

FY2010Built-to-order

35%

FY2022

Note: The breakdown shown here does not include other businesses,
corporate expenses or intersegment eliminations.

1976
Entered the urban development business(Development)
Established Sekiwa Real Estate(now Sekisui House Real Estate)
Launched the rental housing management
and brokerage business (Supplied housing)1984
Launched the lightweight steel-frame
IS series (Built-to-order)2000
Launched Sha Maison rental housing(Built-to-order, supplied housing)1995
Launched SHAWOOD wooden-frame
housing (Built-to-order)

2004
Established Sekisui House Remodeling(Supplied housing)1977
Launched condominium development(Development)

1997
Entered the 3-story house market withthe development of the heavy-gauge
steel frame ß System (Built-to-order)

2009
Launched business in Australia(Overseas business)

Operating profit(Billions of yen)
350

2010
Entered the REIT business (Development)(exit strategy for the urban redevelopment
business)

300

250

2019
Entered the architectural/civil engineeringbusiness (Built-to-order)(made Konoike Construction
a consolidated subsidiary)

200

150

100
1,500

Operating profit (right axis)

50

FY2025 targets:

1,000

3,676.0 billion
Operating profit: ¥318.0 billion
Net sales: ¥

500

0
1960

Net sales (left axis)

0

(50)

(100)
1970

1980

1990

2000

2010

2020

2025 (FY)Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

Evolution of Our Mid-Term Management Plans
In 2010, to commemorate the 50th anniversary of Sekisui House’s founding and the cumulative number dwellings built surpassing 2 million, we formulated our first Mid-Term Management
Plan. Under the Second Mid-Term Management Plan (launched in FY2012), we designated “deployment of growth strategies focused on the residential business domain” as our management policy. Since then, we have worked to expand our businesses domain centered on housing. In FY2020, we designated “make home the happiest place in the world” as our global
vision, working to grow into a global company that leverages the core competencies developed since our founding and offers integrated technologies, lifestyle design and services basedon the residential domain. Under the Fifth Mid-Term Management Plan, based on the fundamental policy of “further strengthening core businesses and embarking on new businesses,” weGlobal Visionoffered a variety of high-value-added proposals integrating technologies, lifestyle design and services. As a result of these efforts, in the plan’s final year (FY2022), we recorded record highnet sales and profit. The Sixth Mid-Term Management Plan maintains the basic tenets of the fifth plan while laying out further growth strategy, fundamental policy and key measures.

Working to Address Our Material Issues

FY2014−FY2016

FY2017−FY2019

Third Mid-Term
Management Plan

Fourth Mid-Term
Management Plan

FY2020−FY2022

FY2023−Y2025

Fifth Mid-Term Management Plan

Sixth Mid-Term Management Plan

Fundamental Policy

Fundamental Policy

Fundamental Policy

Fundamental Policy

Strengthening Group synergies
and taking on new challenges in
the residential-related business

Building the foundation for the
residential-related businesstoward BEYOND 2020

Further strengthening core businesses
and embarking on new businesses

Stable growth in Japan andproactive growth overseas

Key Measures

Key Measures

Key Measures

Built-to-order businessSupplied housing business

Built-to-order businessSupplied housing business

Built-to-order business

Enhance product appeal,ability to make proposals
and construction capabilities

Enhance cooperation within
the Group

Lead the industry as the top
brand and take on the challenge of a new built-to-orderbusiness

Expand the businessdomain by creating newmarkets, taking advantageof existing houses• Implement three brandstrategies• Promote focused S and A
area marketing

Development business

Overseas businessConduct quality community and town development
Build brands overseas
Establish asset value for the future

Development business

Focus on balance between
growth investments and theasset turnover ratio

Increase business opportunities
by providing high-value-­added
houses and housing environments in overseas markets

Main Management Indicators (FY2016 Results)

Main Management Indicators (FY2019 Results)

Net sales¥2,026.9 billion

Net sales

Development business•P ursue ROA management•G enerate stable profit byimproving turnover andacquiring prime land

Key Measures

Supplied housing business

Built-to-order businessSupplied housing business• Actively deploy proposal-basedand energy efficient remodeling• Strengthen rental housing management and the brokerage businessthrough change in company nameto “Sekisui House Real Estate”• Strengthening our detached housebrands• Enhancing the Sha Maison brand• Constructing a stable foundation tocreate sustainable value• Practicing property managementthat offers enhanced services• Proposals to extend the life of our
housing stock and to enhance its
asset value

Overseas business

Development business

Overseas business• Start the global rollout of
Sekisui House technologies
and advance to the next stage• Developing cities and rural areas
through area marketing and investment decisions from a medium- tolong-term perspective• Aiming to achieve a supply of
10,000 houses overseas by 2025 in
the detached houses business• Maximizing profit and achieving stability by diversifying partners andstrengthening alliances in the development business

FY2025 Targets

Main Management Indicators (FY2022 results)¥2,415.1 billion

Net sales¥2,928.8 billion

Operating profit¥184.1 billion

Operating profit¥205.2 billion

Operating profit¥261.4 billion

Ordinary profit¥190.9 billion

Ordinary profit¥213.9 billion

Ordinary profit¥257.2 billion

Profit attributable to owners of parent¥121.8 billion

Profit attributable to owners of parent¥141.2 billion

Profit attributable to owners of parent¥184.5 billion

EPS¥175.48

EPS¥205.79

EPS¥276.58

ROE

11.3%

ROE

11.5%

ROE

11.9%

Net sales

Operating profit
ROE¥3,676.0 billion¥318.0 billion
Steadily 11% or higher

Make home
the happiest
place in the
world

58

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Sixth Mid-Term Management Plan (FY2023–FY2025)—Stable Growth in Japan and Proactive Growth Overseas
Based on our fundamental policy under the Sixth Mid-Term Management Plan, “growth in Japan and proactive growth overseas,” we are implementing growth strategies both in Japan and overseas. Specifically, the Group will strive to deepen and expand its existing businesses by taking full advantage of its core competencies, namely, technical capabilities, construction capabilities andthe customer base, and by leveraging its unique value chain, supported by Sekisui House Group companies that together handle the entirety of housing construction processes. At the same time,by transferring Sekisui House technologies cultivated in Japan to pursue business development overseas, addressing changes in society and the business environment and leveraging digital technologies, we will develop and expand new businesses.
In Japan, to reinforce our detached house brands, we will enhance our three-brand strategy, launching a new skeleton and infill business and strengthening first range offerings. At the same time,
we will enhance the Sha Maison brand based on thoroughgoing area strategy and reinforce corporate and public real estate (CRE and PRE) businesses. By doing so, we seek to expand our business domain and achieve stable growth in Japan. In addition, we will continue to develop new business by promoting the Platform House Concept of equipping houses with services supporting thehealth, connectedness and learning that will underpin new lifestyles (under which we launched services during the period of the Fifth Mid-Term Management Plan), as well as such initiatives as utilizing the Internet of Things (IoT). At the same time, we will incorporate new uses of digital transformation (DX) in services and management operations and leverage Sekisui House technologies in theoverseas business to expand new businesses.
In this way, during the period of the Sixth Mid-Term Management Plan, we will practice ambidextrous management, both exploiting and exploring, while advancing growth strategies domesticallyand overseas to further enhance corporate value.
New

Zone B

Expanding existing businesses

Strengthening the 1st range

Market(Sekisui House noie)

Reinforcing the 2nd and3rd ranges

Strengthening CRE/PRE businessAppealing to emotions(ESG Solutions)(Introducing the “life knit design” concept)

Accommodating elderly residents

Enhancing the ratio of products
made internallyZone A

Zone D

Rolling out Sekisui House
technology overseas

Strengthening the 1st range:
Skeleton and infill business

Strengthening lifestyle proposals

Strengthening the S area,
our greatest focus

Promoting exterior business

Strengthening ZEH rental housing andadapting for long-life quality housing

Zone C

Selling services externallyStrengthening Trip Base business

Platform House Concept• In-Home Early Detection Network (HED-Net)• Services focused on health, connectedness andlearning

Zone DDX for rental housing

Strengthening CRM1

Existing
1 Customer Relationship Management: Management systems and methods that aim to build and maintain good customer
relations, create value and enhance earnings by centrally managing data gained from customers and utilizing it in a

Existing

Expanding existing
businesses

Developing new
businesses

Add new elements to existing businessfoundations to create new businesses.
Leverage data and DX in the environments surrounding our businesses
and customers to create businesses
and maximize value.

Developing new businesses

Organizational timely and appropriate mannercapabilities/
Technologies

Zone B

Zone C• Providing services for residents using blockchain

Managing corporate housing

Further develop and strengthen thebusiness strategies advanced under
the Fifth Mid-Term Management Plan
into a platform based on the built-toorder business.

(Enhancing the earthquake resistance ofregular wooden-frame houses)

Large-scale exterior construction
and landscaping business(vertical integration M&A)

Strengthening existing businesses

Strengthening
existing businesses

Horizontally roll out strengths of existing
businesses across the Group and add
new elements to expand businesses.

Expanding new businesses(Full-scale launch of SHAWOOD)

Zone ANew

Expanding new
businesses

Aim for medium- and long-term growthin new businesses. Pursue businesspossibilities, such as applying elementsof new businesses to additional fields,
to create value and achieve growth.

59Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Sixth Mid-Term Management Plan (FY2023–FY2025)

Earnings Plan and Segment Changes— Introducing Individual Management Methods for Each Business to Better Align Business Strategy andOrganizational Structure and Enhance Capital Efficiency

The success of the Fifth Mid-Term Management Plan’s business strategies laid growth foundations for further success andOld (–FY2022)

New (FY2023 –)Built-to-order

led to record-high net sales and operating profit in FY2022.

1.Buildings

Custom detachedhousesUnder the Sixth Mid-Term Management Plan, based on thefundamental policy of stable growth in Japan and proactive

1.Sekisui House

growth overseas, we are targeting net sales of ¥3,676.0 billion
and operating profit of ¥318.0 billion in FY2025, the final year
In addition, from FY2023, we have reorganized our seg-Architectural/
civil engineeringments as shown at right to better align segment reporting with

Supplied housing

the state of our actual businesses today.
Earnings Plan

Exterior

Rental housingof the plan.

Real estate
management fees

3,676.0

2,928.8

1

2.Konoike
Exterior
Construction Group2

1.Rental housing
management

Remodeling

2,446.9

3,080.0

Development

2,589.5
261.4

265.0

275.0

Condominiums

230.1

Overseas
Sixth Mid-Term
Management Plan
(targets)

Other businesses

Sales of built-to-order and built-for-sale houses(including exteriors)

Sekisui House1
Sekisui House noie

Rental housing
and commercial
buildings

Contracting and selling rental housing (Sha Maison) andcommercial and office buildings (including exteriors)

Sekisui House1

Architectural/
civil engineering

Design and construction of conventionally built structures
Design and construction for civil engineering

Konoike Construction
Group

Rental housing
management

Leasing and management operations for rental housing(Sha Maison)Sekisui House
Real Estate Group

Remodeling

Remodeling of housing built by the Company (detachedhouses and rentals)
Remodeling of properties in general

Sekisui House Remodeling1
Sekisui House Real EstateGroup1

Supplied housing

Net sales

2021

Operating profit

4

Sekisui House
Real Estate Group

2022

1
2
3

2023

2024

2025

5

Development
Real estate andbrokerage

Brokerage and sales of land for housing and existing homes Sekisui House
Brokerage and sales of real estate (land, buildings) operated Sekisui House Real Estatefor profit
Group

Condominiums

Development, sales and management of condominiums

Sekisui House-Affiliate subsidiaries

Urban
redevelopment

Development and management of hotels and other properties, mainly in urban areas / Trip Base in regional areas

Sekisui House-Affiliate subsidiaries

Overseas
Other businesses

Overseas subsidiaries
Domestic subsidiaries
1 Including Sekisui House Construction companies as subcontractors

Fifth Mid-Term
Management Plan
(results)
2020

2.LandUrban
redevelopment

186.5

2.Brokerage

3

Houses for sale

318.0

Main companies

Detached houses(Billions of yen)

3,270.0

Overview

Built-to-order

(FY)

4
5

Architectural/civil engineering:	1. Changed Sekisui House’s built-to-order business to “rental housing and commercial buildings”
2. No change of Konoike Construction’s built-to-order business from “architectural/civil engineering business”
Real estate management fees:
1. C hanged the rental housing management business to “rental housing management” 2. Changed the brokerage business to “real estate and brokerage”
Houses for sale:
1. Changed the building business to “detached houses” 2. Changed the land business to “real estate and brokerage”
Condominiums, Urban redevelopment: Changed the real estate business handled by the Sekisui House Real Estate Group to “real estate and brokerage”
Other businesses:
Changed exteriors to “detached houses” and “rental housing and commercial buildings” depending on building use

60

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

61

Business Strategy

Built-to-Order BusinessThis business builds detached houses, rental housing and otherproperties under contract with property owners. The detachedhouses business promotes three brand strategies, according toprice range, that offer added value in housing alongside high-quality, high-performance products. The rental housing and commercial
buildings business provides high-quality, hotel-like rental housing,

Detached houses
Rental housing andcommercial buildings
Architectural/
civil engineeringcommercial buildings and other properties centered on majorurban areas across Japan as its priority strategic focus.

Review of the Fifth Mid-Term Management Plan and Strategies Going Forward
In the detached houses business, we advanced the key measure “imple-

and nursing facilities due to the COVID-19 pandemic. Nevertheless, in rent-

ment three brand strategies.” The business environment was challenging,

al housing, we advanced the key measure “promoting focused S and A

Net Sales(Billions of yen)
Before segment reorganization

area marketing.” Sha Maison properties built using our unique Flexible ß

900prices, but we minimized the impact on business through internal efforts,

System construction method for 3- to 4-story buildings, which combines

600

including building Ouchi-de-Sumai Zukuri content that allows us to consult

outstanding structural resilience and customizability, helped to increase the300

with customers online, as well as reducing costs at factories.

rate of ZEH units and brand penetration, leading to strong orders received.

0

In the first price range, orders for Sekisui House noie brand houses grad-

The architectural/civil engineering business secured a profit amid a harshbusiness environment, driven by an increase in environment-related

our mainstay second range, the IS series and SHAWOOD saw an increase

construction.

in average unit price thanks to high-value-added product propositions inte-

Under the Sixth Mid-Term Management Plan, we will work to enhance our

grating technologies, lifestyle design and services. These included Family

three-brand strategy in the detached houses business while promoting CRM

Suite Home Premium, which addresses lifestyle changes arising from thestrategy and integrating technologies, lifestyle design and services to further

COVID-19 pandemic by enabling residents to spend time at home in great-

reinforce our detached house brands. In the rental housing and commercial

er comfort, SHAWOOD KOKAGE LOUNGE and other new living spacebuildings business, we will work to strengthen area marketing, provide

offerings, as well as Green First ZERO net zero energy houses (ZEH), thehigh-value-added Sha Maison products, and strengthen the corporate real

SMART-ECS next-generation indoor environment control system, and theestate (CRE) and public real estate (PRE) businesses in order to further

PLATFORM HOUSE touch floor plan-linked smart home service. In the third

enhance the Sha Maison brand. In the architectural/civil engineering busi-

range, similarly, orders for high-end products increased.

ness, we will use environmental solutions and civil engineering technologies

In the rental housing and commercial buildings business, growth was
weak in orders for non-residential properties such as hotels and medical

as drivers to reinforce housing and non-housing architectural construction.

1,250.0

1,200

with the impacts of the COVID-19 pandemic and rising lumber and steelually increased due to stronger information links with Group companies. In

After segment reorganization

1,500

1,077.3

998.6

984.9
302.8

261.9

298.7

358.7

384.0

426.1

323.3

352.7

352.4

2020

2021

2022

1,368.0

1,336.0

273.0

291.0

296.0

506.3

535.0

558.0

577.0

476.4

482.0

487.0

495.0

2022

(Before(Afterreorganization) reorganization)

Detached houses
Architectural/civil engineering

1,290.0

267.3

2023

2024

2025 (FY)(Plan)

Rental housing and commercial buildings(formerly the rental housing business)

Operating Profit and Operating Margin(Billions of yen)
Before segment reorganization(%)
After segment reorganization

160
120
80
40

113.6
95.3

15.1

16.0

9.7 47.0

11.4

0
2020

56.0

2021

11.8

109.9
13.2

10.2

42.4

32.2

136.0

127.7

58.4

2022

2022

(Before(Afterreorganization) reorganization)

Detached houses
Architectural/Civil engineering
Operating margin (Right scale)

2023

11.3

2024
(Plan)

Rental housing and commercial buildings(formerly the rental housing business)

2025

30
20
10

51.0

47.0

44.0

41.4

89.0

86.0

11.0

10.5

10.2

40
14.5

13.5

10.0
82.0

74.4

38.3

146.5

154.5

0
(FY)

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Built-to-Order Business

Detached Houses

Highlight

Reinforcing the First Range with the Skeleton and Infill BusinessHousing that does not meet modern standards for earthquake resistanceor energy efficiency is a major issue in Japan. To correct such housing,
Sekisui House has launched the skeleton and infill business1 as a joint effort
in partnership with local builders (construction companies). Centered on
new wooden-frame building methods that utilize Sekisui House’s technicalcapabilities and various types of support that utilize its comprehensive
strengths, this new business will create high-quality housing stock.

Strengthening our detached house brands by enhancing our strategies for each price range

Business Policy

1

Strategy23Enhancing our three-brand strategy
Promoting CRM strategy
Integrating our technologies, lifestyle design and services

1 Skeleton and infill: A construction method involving clearly distinct building skeletons (building
frames) and infill (interiors, room layouts, etc.)

Enhancing our three-brand strategy
We have divided our offerings into three price ranges. By implementing
strategies and measures tailored to the price and product specifications ofIn the second and third ranges, we will provide integrated technologies,

Design-build construction undertakenby the Sekisui House Group

lifestyle design and services to make unique residence proposals.

each, we will reinforce our detached house brands.

Installing Sekisui House’s technologies
Construction by and quality of Sekisui
House Construction companies
Wide-ranging support from Sekisui House

In addition, we will roll out life knit design, a new design concept aimed

In the first range, we will create packages for and strengthen the online

at proposing housing where attachment grows over time based on appeal

presence of Sekisui House noie. In addition, we will begin a new skeleton

to emotions through beautiful design and genuine materials. At the sameand infill business with the mission of enhancing the performance oftime, we will implement customer relationship management (CRM) to rein-

wooden-­frame housing and creating high-quality housing stock in Japan.

force customer relationships.

Regional strategies ofpartner companies
 roposals based on local characteristics
PStrong procurement and sales capabilities
in local areas
Customer engagement rooted in local
communities

Highlight

1st Range

2nd Range

Establishing asystem capable ofselling 1,000 units
per year

Externallytransplanting
SHAWOOD
technologies

in FY2025 bystrengthening sales
and products

Aiming to supply
300 buildings
in FY2025   Sekisui House noie (Japanese only)

Reinforcing the following two areas
to supply technologies,
lifestyle design and services(1) Appealing to emotions: Supplying
beautiful design and genuine materials(2) Strengthening CRM: Scientific approach to
DX of customer engagement

3rd Range

The DESIGN OFFICE team,which comprises experts in various fields,
uncompromisingly provides
totally unique residence proposals

S

Sekisui House
Skeleton(foundation and frame)

I Partner Companies
Infill(exterior and interior)
Sekisui House’s Unique Technology

Foundation direct joints

Newly developed for traditional shakubased modules, widely used in Japan,
by building on technologies and construction methods for SHAWOOD

life knit design—Design Concept for Housing where Attachment Keeps
Growing over TimeCreating high-quality housing stock by providing houses where attachment keeps growing

Point #1
Designing spaces with universal
beauty that reflects emotions

Point #2
Providing genuine materials thatage beautifully over time

Point #3
Selecting eco-friendly materials

62Value Report 2023
SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Contents

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Built-to-Order Business

Rental Housing and Commercial Buildings
Business Policy

Highlight

Striving to supply high value-added properties based on area strategy and enhancing the Sha Maison brand
1 Strengthening area marketing—Price leader strategy
2 High value-added Sha Maison   Sha Maison rental housing (Japanese only)

3 Strengthening CRE and PRE businesses   Sha Maison ZEH Life (Japanese only)

Further Enhancing the Added Value of Sha Maison
Sekisui House’s Sha Maison ZEH allows residents to sell electricity generated
onsite, accommodating resident needs for utility cost savings and ethically conscious lifestyles. As with detached houses, we are promoting a shift to long-life
quality rental housing, further enhancing added value that benefits both owners
and residents.
We will promote our price leader strategy, mainly in the S and A areas, and reinforce efforts to effectively use land owned by sole proprietors, corporations (CRE)and public entities (PRE).

Promoting the acquisition of long-life quality housing certifications
ZEH rental long-life quality housing (excess electricity sold by residents)

Common area

Strategy

Elevator

ZEH

ZEH

Tenants cansell electricity

ZEH

ZEH

Tenants cansell electricity

ZEH

ZEH

Tenants cansell electricity

Architectural/Civil Engineering
Business Policy

Constructing a stable foundation to create sustainable value for customers and society driven by eco-friendly
measures and technical capabilities
1 Architectural construction: Expanding and enhancing our channels for receiving orders—Non-residential and residential

Strategy

2 Civil engineering: Differentiating through eco-friendly measures and technologies—Civil engineering technologies andenvironmental solutions

Expanding and Enhancing Our Channels for Receiving Orders
In housing construction, we will leverage synergies within the Sekisui House Group to increase orders.
In non-housing, we will reinforce our proposal and technical capabilities, focusing on expanding building
uses, such as distribution centers and data centers.

Reinforcing Environmental Solutions
Leveraging the proprietary technologies of Konoike Construction, which boasts strengths in the environmental field, we will further develop environmental technologies and strive to increase orders for environmentrelated construction, mainly in soil and water purification to meet tightening environmental regulations, photovoltaic power generation, locally rooted micro-hydroelectric and biomass-fired power generation.
In non-housing, we will reinforce our proposal and technical capabilities, focusing on expanding building
uses, such as distribution centers and data centers.
   Konoike Construction environmental solutions (Japanese only)

Ratio of sales fromenvironment-related
construction projects
to net sales

FY2025:20%

FY2030:30%

Synergies through Reinforced Collaboration with Konoike
Construction
Since its founding more than 150 years ago, Konoike Construction has
developed sophisticated technical capabilities in architectural and civilengineering. By integrating its management resources in these areas with
the Sekisui House Group’s management resources in the residential
domain, we aim to mutually enhance our proposal and sales capabilities
while reducing overall construction costs through joint materials purchasing and joint usage of our respective construction capabilities. Because
Konoike Construction and Sekisui House each specialize in different business domains, since 2015 we have been advancing cooperation within
the Group to generate synergies and achieve business expansion byleveraging our respective strengths.
Housing
Non-Housing• Growing orders for housing• Proposal capabilities forconstruction
growing building uses
• Collaborative construction with
• Reinforcing technicalSekisui House Construction
capabilities• Faster, more efficient construction

Konoike Construction completed the construction of thePrime Maison Ryogoku condominium building in
February 2019 using materials shipped from Sekisui
House factories. While most high-end condominiums arebuilt using reinforced concrete, in light of the project’s
location and construction conditions, a steel-frame structure was used. Part of the exterior was clad in Sheltech
Concrete, which Sekisui House also uses for 3- and 4-story housing, andsome of the interior materials were produced in Sekisui House factories. By
prefabricating a portion of the interior materials, the construction period
was shortened and construction precision enhanced. Going forward, in
addition to generating synergies like these, we will work together toimprove work conditions, a pressing issue in the construction industry.
In addition, in September 2022, as part of the Sekisui House Group’s
efforts to realize carbon neutrality, Konoike Construction launched efforts
to switch to 100% renewable energy for the electricity used at its construction sites. Going forward, Konoike
Construction will roll out this initiative at construction sites across Japan, aiming to transition to 100% electricity derived from renewableenergy in business operations by 2030.

63

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

64

Business Strategy

Supplied Housing BusinessThis business provides remodeling for owners of our detachedhouses, rental housing and other properties as well as operational
support for rental housing. In the rental housing management business, we work to maximize asset value by reinforcing communica-

Rental housing
management
Remodelingtion with owners and are improving services for tenants through DX
in rental operations. In the remodeling business, we proactively
conduct proposal-based and energy efficient remodeling.

Review of the Fifth Mid-Term Management Plan and Strategies Going Forward
In the rental housing management business, we worked to reinforce ourremodeling, such as Family Suite Renovation, which addresses needs relat-organizational structure as a key measure in order to promote further

ed to more comfortable living and changes in lifestyle, as well as energy effi-

growth of the rental and brokerage businesses.

cient remodeling, which includes Idocoro Dan-netsu thermal insulation

In February 2020, the Sekiwa Real Estate companies were renamed

upgrades focused on areas of the home where customers spend the mostSekisui House Real Estate, and in February 2022, we established Sekisuitime and the installation of Ene-Farm, storage cells and other energy genera-

House Real Estate Holdings as an intermediate holding company to over-tion and storage equipment. In addition, since the merger of Sekisui House

see the Sekisui House Real Estate companies. Through these efforts, weRemodeling East, Central and West in November 2020, the ongoing integra-

worked to improve the consistency and quality of services for tenants.

tion of their varied expertise has led to an increase in the portion of orders for

Turning to relationships with owners, of the more than 690,000 rental units

large-scale remodeling projects over ¥5 million, improved the profit margin

that we manage through the subleasing of properties and other arrange-and greatly contributing to net sales.

ments, for those that no longer meet current needs due to their age, we

Under the Sixth Mid-Term Management Plan, in the rental housing man-proactively propose full renovations, such as changing the floor plans.

agement business, we aim to significantly transform customer experiences

Through such initiatives, we maintained high occupancy rates and rents

and operational processes by using digital technologies to digitize proce-and saw continued stable business growth.

dures and realize self-guided tours. By doing so, we will pursue growth

In the remodeling business, we advanced the key measure “actively
deploy proposal-based and energy efficient remodeling.”

through business opportunity creation.
In the remodeling business, we will proactively implement proposal-­

The COVID-19 pandemic made it difficult to visit customers’ homes directly,

based remodeling to update the ways housing is used in line with lifestyle

but we conducted online consultations using the Ouchi-de Remodelingchanges and energy efficient remodeling to update existing insulation. At(Remodeling from Home) tools and held hands-on tours for small groups at

the same time, we will focus on the remodeling of rental housing to

our Tomorrow’s Life Museum facilities. We also advanced proposal-basedenhance satisfaction for tenants and improve asset value for owners.

Net Sales(Billions of yen)
Before segment reorganization

After segment reorganization

900

741.1

698.7
600

156.1

141.0

300

785.1

584.9

557.6

882.0

845.0

817.0

784.2
165.9

166.9

179.0

619.2

617.2

638.0

188.0

200.0

657.0

682.0

0
2020

2021

2022

2022

(Before(Afterreorganization) reorganization)

2023

2024

2025

(FY)

(Plan)

Rental housing management (formerly the real estate management fees business)
Remodeling

Operating Profit and Operating Margin(Billions of yen)
Before segment reorganization(%)
After segment reorganization

90

78.2

76.0
60

64.3

27.5

25.5

10.3

30 9.2

10.0
50.4

43.8

49.0

47.5

9.4

9.2

8.9

8.9
50.6

30.0 20

27.0

24.0

22.4

20.4

30

83.0

78.0

73.0

70.0

10
53.0

51.0

0

0
2020

2021

2022

2022

(Before(Afterreorganization) reorganization)

2023

2024
(Plan)

Rental housing management (formerly the real estate management fees business)
Remodeling (Left scale)Operating margin (Right scale)

2025

(FY)

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

Supplied Housing Business

Rental Housing Management
Practicing property management that offers enhanced services to owners and tenants

Business Policy

1 For Owners: Maximizing asset value   —Diverse solution proposals    —Strengthening relations with owners

Strategy

Units under Management and Occupancy Rate
(Thousands of units)
97.8
1,000

97.7

97.7

97.9

97.8

674

691

(%)
100
80

800
600

619

639

657

40

200

20
0

0
Units under management

2019

2020

2021

2022

2 For Tenants: Strengthening services    —Creating services that utilize blockchains   —Centralizing services

Strengthening Tenant Services
To provide tenants of Sha Maison rental housing with better services, we are creating services that utilize blockchains, such as systems to handle utility fees and other procedures
online and enable self-guided property tours. These services will enable the one-stop handling of procedures when moving in or out of a property, such as those related to utilities and

60

400

2018

Highlight(FY)

Occupancy rate teady increase in the number of units underS
management thanks to the supply of newly built
properties

Launch of Sekisui House Real Estate Holdings
Further Strengthening Collaboration within the GroupSekisui House Real Estate Holdings Co., Ltd., a holding company for
Sekisui House Real Estate companies, began operations in February
2022. The head office of Sekisui House has delegated authority to thisintermediate holding company to maximize the value of the Sekisui
House Real Estate Group and enhance the management of each operating company through initiatives in the following areas:
1. Formulate a growth strategy for the Sekisui House Group’s realestate business
2. C ontrol the direction of each operating company
3. Identify real estate and growth investments with a broad view of thereal estate business4. Improve services for Sha Maison tenants

administrative bodies. In addition, we are promoting online service provision using dedicatedapps to centrally handle resident inquiries and applications for services.

Creating services that use
blockchains

Centralizing services

One-stop handling of various procedures andSimultaneously strengthening our ability to meet

applications using the unique traits of blockchainstenant needs and streamlining operations by cen-(nearly half of tenants use these services.)

trally managing tenant contacts via an app linked
with call centers.

Cumulative applications
64,247

 nhanced value of the Sha Maison brand has led
E
to a high occupancy rate
39,666

Sekisui HouseIntermediate holding company

Sekisui House Real Estate Holdings

Sekisui House Real Estate Tohoku

Sekisui House Real Estate Tokyo

Sekisui House Real Estate Chubu

Sekisui House Real Estate Kansai

Sekisui House Real Estate Chugoku& Shikoku

Sekisui House Real Estate Kyusyu

Sekisui House Real Estate Partners

Strengthening
engagement
through theapp

17,1162,232

Stable improvement in earnings power
Launch

Jun.
2021

Dec.

Jun.
2022

Dec.

Rental business

Brokerage and agency
sale business   Sekisui House Real Estate Holdings(Japanese Only)

Development andbuilt-for-sale business65

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Supplied Housing Business

RemodelingBusiness Policy

Proposals to extend the life of our robust housing stock and enhance its asset value backed by our trackrecord in supplying a cumulative total of 2.5 million units
 etached Houses: Strengthening large-scale remodelingD   —Proposal-based remodeling   —Energy efficient remodeling
1

Strategy

Highlight

2

 ental Housing: Asset value-enhancing
Rrenovation   Remodeling business (Japanese only)

Rental housing

Detached Houses
To strengthen large-scale remodeling of detached houses, we are advancing two types of remodeling: proposal-based remodeling to update residences in line with changes in family composition or

Proposal-based remodeling: 45%
Energy efficient remodeling: 35%

latter, the SMART-ECS next-generation indoor environment control system.
1

on its popularity for newly built houses, in 2019 we launched Family Suite
Renovation, a version of the proposal for remodeling existing homes.

es on creating moments of happy time for both halves of married couples.
Many customers are increasingly spending time at home and with theirspouses due to changes in their life stage and in society. By incorporating the space of children’s rooms or storage areas that are no longer
needed into the master bedroom, we offer a new way of living that keeps

28th-year
renovation

couples from feeling cramped together, allows them each time and space2

For owners of properties built
from 1990 to present

Rental housing (Sha Maison)
Renovation

Idocoro Dan-netsu

Warm in winter, cool in summer; thermal insulation
enhancement, mainly in the central living space

SMART-ECS renovation

Energy generation remodeling

Private power generation using storage cells andEne-Farm

Fresh air/ventilation system + air purification

Era without
ventilation systems

into home where happiness grows the longer you reside in them. Basedof their own, and facilitates comfortable, refreshing sleep.

For owners of properties built
between 1960 and 2000

Era of lowperformanceinsulation

concept was developed through the Human Life R&D Institute’s researchdetached houses launched in August 2020, this remodeling proposal focus-

31st-year
renovation

Targets for remodeling by type (FY2025)

proposals have been well received, as has, in thebased around a spacious living room in newly built detached houses. The

Developed from the Family Suite Home Premium concept for newly built

lifestyle, and energy efficient remodeling to update thermal insulation and install the latest energy-­
equipment. In the former, our Family Suite Renovation

The Family Suite was launched in 2018 as a new proposal for family living

Personal Suite Renovation, meanwhile, was launched in October 2022.

Strengthening Large-Scale Remodeling of Detached Houses

conserving, energy-producing and energy-storing

Personal Suite Renovation
—Creating Happy Moments for Couples

1992
New energyefficiency
standards

1999
Next-generation energy-­
efficiency standards
2003
24-hour ventilation systems
become mandatory

Era of high-­
performanceinsulation
Era of ventilation
system installation
as standard

Enhancingasset value

Higher rents
Higheroccupancy rates

Increase in owner satisfaction and units
under management (newly built/ repeat)
FY2025 Targets

Rental housing renovations: 8,400 units
Note: Around 6,000 units were renovated in FY2022

A room remodeled to let the couple feel close but not cramped

66

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

67

Business Strategy

Development BusinessThis business starts with investments such as acquisition ofland for development into houses for sale, condominiums forsale or rent, or office buildings to help create high-quality, ver-Real estate andbrokerage
Condominiums

dant communities with good asset value. We emphasize ROAfocused management in development that generates stable

Urban redevelopment

earnings by improving asset turnover and acquiring prime land.

Review of the Fifth Mid-Term Management Plan and Strategies Going Forward
In the development business, we advanced the key measures “pursue ROA

The urban redevelopment business sold office buildings and hotels,

management” and “generate stable profit by improving turnover and acquir-

including its stakes in Grand Front Osaka and W Osaka, as well as Primeing prime land.”

Maison rental condominiums developed by the Company to Sekisui House

In the real estate and brokerage business, we actively worked to purchase

Reit, Inc. and institutional investors, working to improve the asset turnoverprime land. At the same time, in response to lifestyle changes brought about

ratio. Occupancy rates remained firm for Group-owned properties, includ-by the COVID-19 pandemic, we used livestreamed online property tours,

ing office buildings and Prime Maison properties developed by thesuch as Ouchi de Tochi Sagashi, and focused efforts on promoting sales toCompany. However, earnings from hotels decreased as a result of factors

customers considering acquiring land in suburban areas that offer more

including a decline in the number of tourists due to the impact of thegreenery, spacious lots and beautiful townscapes. Orders were strong.

COVID-19 pandemic.

The condominiums business advanced the development and closings ofUnder the Sixth Mid-Term Management Plan, we will leverage the brandits high-value-added GRANDE MAISON condominiums using a thoroughstrength of GRANDE MAISON and Prime Maison, focusing on supplying

area strategy as well as environmental performance and lifestyle proposals

high asset-value properties in rigorously selected areas while advancing

cultivated in the custom detached houses business, and sales were strong.

mid- and large-scale urban development projects that will become symbols

We also proactively acquired properties in prime locations in the four metro-of the surrounding communities, such as ZEB offices, hotels and commer-

politan areas of Tokyo, Nagoya, Osaka and Fukuoka. In addition, ascial facilities tailored to urban centers. In suburban areas, we will work toannounced in October 2021, we are reinforcing our decarbonization efforts

develop beautiful and appealing residential land while advancing the region-by making all units ZEH in GRANDE MAISON condominiums sold fromal revitalization-based hotel business, primarily focusing on the Trip Base

FY2023 onward.

Michi-no-Eki Stations Project.

Net Sales(Billions of yen)
Before segment reorganization

After segment reorganization

600

513.0

464.4
400

384.8
321.1
104.9

200

135.3
102.7
90.6

77.0
191.4

139.1

0
2020

2021

404.2
86.1

90.8

97.1

238.2

221.0

2022

96.0

110.0

95.0

279.0

296.0

2023

2022

522.0

487.0
124.0

(Before(Afterreorganization) reorganization)

2024

90.0
100.0

332.0

2025

(FY)

(Plan)

Real estate and brokerage (formerly the houses for sale business)
Condominiums
Urban redevelopment

Operating Profit and Operating Margin(Billions of yen)
Before segment reorganization(%)

After segment reorganization

60

49.2

45
30
15

38.3

32.9
10.3

10.0 12.4

8.8
7.5

0
2020

10.6

9.0
20.7

14.5

2021

13.4

2022

47.5

44.5

36.4
13.7

16.0

11.1

2022

(Before(Afterreorganization) reorganization)

2023

12.0 20

11.0

9.1
23.0

17.5

9.1
25.5

2024
(Plan)

Real estate and brokerage (formerly the houses for sale business)
Condominiums
Urban redevelopment (Left scale)Operating margin (Right scale)

30

7.0

8.0
5.1

11.2
16.5

18.0
15.0

40

57.0

2025

28.5

10

0
(FY)

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Development Business

Real Estate and Brokerage / Condominiums / Urban Redevelopment
Business Policy

Strategy

Developing cities and rural areas through sophisticated area marketing and investment decisions from a
medium-to long-term perspective
1 Urban redevelopment of four main metro areas    —Housing (GRANDE MAISON and Prime Maison)    —Non-residential (offices, hotels and commercial
facilities)

Condominiums

 evelopment business that contributes to regionalD
revitalization    —Development of residential land for detachedhouses (house sales and brokerage)   —Regional revitalization facilities
2

Rental condominiums

Non-residential urban development

Highlight

Improved Asset Efficiency through Reinforced Collaboration with
Sekisui House Reit
Sekisui House Reit, Inc. was publicly listed in December 2014, with
Sekisui House as its sponsor. Since merging with and absorbing Sekisui
House Residential Investment Corporation in May 2018, it has grown intoa diversified REIT, today ranking 11th in asset size among the 60 J-REITs.
By applying a growth strategy that makes full use of the comprehensive
strengths and expertise of the Sekisui House Group and reinforcing collaboration with the Company, Sekisui House Reit contributes to investment recovery and the enhancement of asset efficiency in thedevelopment business.

Sekisui House Reit’s Portfolio(As of March 2, 2023; acquisition price basis)

Hotels (1 property)

3.1%

Portion of portfolio acquired fromthe Sekisui House Group:

79.2%¥439.2 billion / 67 properties
Housing(113 properties)

We are striving to enhance the GRANDE MAISON
condominium brand in the markets of Tokyo,
Nagoya, Osaka and Fukuoka. Our policy is toacquire high-value-added land, carefully selected
for low-rise to tower buildings, and construct condominiums for sale with all units ZEH as a basic
specification from FY2023.

We sell high-grade rental condominiums under thePrime Maison brand, mainly in the Tokyo metro
area. We recoup our investments through sales toinstitutional investors, REITs and others once completed buildings are operating stably. We will accelerate our strategy, from acquiring land to exiting, toraise the asset turnover ratio.

Residential land development

Regional revitalization facilities

We sell ready-built detached houses and residential land lots after acquiring land in areas
around Japan. In addition, we conduct brokerage and resale of existing houses. We supply
ready-built detached houses and develop
beautiful residential land with high asset value,
focusing on upgrading greenery in the environment and the resale of existing houses.
   Sekisui House’s development business (Japanese only)

The business implements large-scale urban redevelopment that includes office buildings, luxury
hotels and commercial facilities. We leverage ourconcepts and know-how as a living environment
design company to create properties that will
become symbols and assets of surrounding
communities.

   GRANDE MAISON Condominiums (Japanese only)

We utilize land owned by local municipalities,
universities, public organizations and others;
promote the Park-PFI business; and provide realestate solutions aimed at solving urban issues,
such as those related to medical care, nursing
care and welfare. We will continue to develop
Trip Base Michi-no-Eki Stations Project (development of lodging facilities at roadside rest areas).
   TRIP BASE Michi-no-Eki Stations Project (Japanese only)

48.8%

Asset size

121 properties¥554.4 billion

Of which, portion acquired fromSekisui House:¥397.0 billion / 52 properties
Office buildings(7 properties)

48.1%

Parent/sponsor of the asset
management company
Sekisui House
Wholly owned

2

Asset management company
Sekisui House Asset Management, Ltd.
3

1

Investment
corporation

Pipeline support companies
Six Sekisui House Real Estate companies
1. Asset management agreement   2. Sponsor support agreement
3. Agreement on preferential negotiation rights, etc.
   Sekisui House Reit, Inc.

68

Value Report 2023
SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Contents

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Development BusinessCondominiums: Notable Projects

Highlight

Opening of the The Ritz-Carlton, Fukuoka
 RANDE MAISON Mizonokuchi no MoriGT akatsu-ku, Kawasaki City, Kanagawa; to becompleted in late November 2023

This next-generation residence offers advanced services and environmental performance.

The First Marriott International Luxury Hotel in Kyushu

The property uses a world-class facial recognition system and boasts ZEH-M Oriented

The Ritz-Carlton, Fukuoka opened on June 21, 2023, becoming theand low-carbon building certifications.

sixth Ritz-Carlton Hotel in Japan. It stands adjacent to the Tenjin district, an area of concentrated shopping, tourism and business. Just a
5-minute walk from Tenjin Station, the hotel boasts an incredibly convenient location. With sweeping views only afforded by the upper
floors of a high-rise, the hotel features 167 guest rooms and offers six

Main entrance

Entrance lounge

Four-seasons forest

restaurants and bars where guests can enjoy fine dining and cocktails.
In addition to the conference rooms and ballrooms for business andspecial events, The Ritz-Carlton, Fukuoka features a romantic chapel
for weddings or other celebrations. With an indoor pool, a gym, andbrand’s famous The Ritz-Carlton Spa, the hotel offers the ultimate
guest experience together with legendary service to create unmatched

Common corridor space

and unforgettable memories for guests visiting Fukuoka.
In The Ritz-Carlton, Fukuoka is designed to express Fukuoka’s

Urban redevelopment: Notable Projects

unique blend of old and new, respecting local traditions and culture inthis cosmopolitan area while weaving together people and the city, as ukuoka Daimyo Garden CityFC huo-ku, Fukuoka City; opened in
January 2023

symbolized by the local Hakata-ori textiles incorporated into the décor.
18th floor hotel lobby
featuring a miniature
Japanese dry gardenThis new large-scale complex was built byDaimyo Project TMK, a company formed by aconsortium comprising Sekisui House andfour other companies. Office space, a hotel

View from the west side of the plaza View from the east side of the plaza
toward the Event Hall
toward the Community Building(The Ritz-Carlton, Fukuoka), shopping andcommunity facilities surround a vast open
plaza, creating a borderless, cosmopolitan

Guest room

environment where diverse people can cometogether. The property is helping drive
Fukuoka’s evolution into a leading city in Asia.

Conference Lounge

Fukuoka Daimyo Garden Bio Square
shopping floor

Arrival lobby on thefirst floor of the hotel69

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Message from the Officer in Charge of the Overseas Business

Our Dedication to the Overseas Business—a Growth Driver for Sekisui House

major initiatives. The first is to expand our sales area in the United States
through M&A to secure new platforms. Specifically, we aim to expand fromthe west coast and southern regions where we currently operate into thesoutheastern United States. The second is to roll out our SHAWOOD
wooden-frame housing. Due to global climate change, demands for housing performance are changing year by year. Of our detached houses in ourdomestic business, 93% are ZEH, and our technical capabilities developedin Japan for withstanding increasingly severe natural disasters, such asresilient foundations and external walls, will serve as a valuable cornerstone

Toru Ishii
Director of the Board
Senior Managing Officer
In charge of Division of
Development Businessfor the overseas business going forward. A pilot project for the SHAWOOD
brand that we implemented in Las Vegas was well received by the market,
reaffirming our confidence that our efforts are on the right track. Following

SHAWOOD pilot project in Las Vegas

this success, in 2023, we are commencing a project of more than 50 new   Global SHAWOODSHAWOOD houses in the Sommers Bend community in California.

aim to establish business foundations through M&A.

Leveraging strengths in safety, comfort and design, we will establish a mar-In this way, we will continue implementing aggressive growth strategies

The Overseas Business, operating in the United States and other countries,

ket advantage with SHAWOOD, primarily in areas with high volumes offor the homebuilding business to develop the overseas business portfolio

has grown to account for approximately 18% of total net sales in FY2022.

high-price new home closings.

from its previous focus on the development business into a dual-pillar

In the past, our business in the United States was mainly in development,

In the U.S. multifamily business, we aim to diversify our partnerships andbut we have been expanding the homebuilding business; in addition tobuild a structure for collaboration to promote new development and imple-

Sixth Mid-Term Management Plan,

Woodside Homes, we welcomed Holt Homes to the Group in December

ment diversified investment and recovery aligned with each business area.

we aim for the overseas businessstructure of development and homebuilding. In FY2025, the final year of the2021 and Chesmar Homes in July 2022. Our collaborative efforts with

In Australia, we are engaged in the condominium development businessto account for approximately 25%

these three U.S.-based companies have been successful, driving businessand homebuilding business. By implementing area strategies and establish-of net sales and approximately

performance. We have set and are working toward the target of supplying

ing our brands, we aim to further expand our business in Australia into a

30% of operating profit. We will

10,000 homes in the overseas business annually by FY2025, the final year

second pillar of the overseas business, following to the United States. In

continue advancing the overseasof the Sixth Mid-Term Management Plan.

Singapore, we will work to strengthen relationships with local partners Far

business as a growth driver sup-East Organization and Frasers Property, while in the United Kingdom, we

porting the Sekisui House Group.

Under the Sixth Mid-Term Management Plan, we will implement two

70Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating ValueBusiness Strategy

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

71

Overseas Business Regions and Major Projects

Overseas Business

United Kingdom

TehalehWashington©2022 Steven J Magner
Photography, LLC

China

The Merian
California

We sell detached houses and residential land and develop condominiums for sale or rent andNevadaUnited Statesother properties in the United States, Australia and elsewhere. Using the Sekisui House technologies we have cultivated in our domestic businesses in areas including safety, peace ofWest Village
Brisbane

provide new value in housing to maximize the happiness of our customers and society.
   Sekisui House Global site

Texas

Singaporemind and comfort, we will help resolve social issues in each country and conduct initiatives to

One Holland Village
Holland Village

Ingleburn Centre
Near Sydney

Review of the Fifth Mid-Term Management Plan and Strategies Going Forward

Australia

Gledswood Hills
SydneyUtah

Washington

Net sales / Operating Profit / Operating Margin(%)(Billions of yen)

Under the Sixth Mid-Term Management Plan, we will advance business

1,000

ness by transferring Sekisui House technologies internationally and integrat-with a focus on aggressive expansion. In the development business, by

800

ing the housing technologies the Group has cultivated in Japan with lifestyleworking with new partners, we aim to expand our business areas from their600

design proposals and services.

current location along the U.S. west coast into cities in the sun belt and400 370.6
10.7
200

In the overseas business, we are focusing on creating value through happi-

Under the Fifth Mid-Term Management Plan, we focused on enhancing

east coast gateway regions. By diversifying our portfolio in terms of part-

quality. In cooperation with Woodside Homes, we worked to transfer

ners, business areas and products, we seek to enhance business stability

Sekisui House technologies by, for example, applying the Company’s

and scale. In the homebuilding business, we will implement M&A targeting

40

2020

2021

builders to horizontally expand our successful business model. At the same

States. These efforts were well received locally and have become a strengthtime, we will focus on reinforcing Group governance, aiming to expand

for Woodside Homes. In addition, we steadily advanced preparations forbusiness in an orderly and controlled manner. In addition, we will transfer

launching general sales of SHAWOOD homes in the United States. In order

Sekisui House technologies to the two recently acquired Group builders

Net Sales by Country

to expand the successful homebuilding business model that we have pio-and builders acquired going forward, elevating lifestyle design proposals

China

neered with Woodside Homes, we conducted further M&A in 2021andinto a strength of all Group builders. We also aim to stably expand theAmerican customers. In Australia, we will strengthen systems aimed at fur-and share our dream of realizing this vision in the United States. In the multi-

ther business expansion, while in the United Kingdom, we aim to securefamily business, we worked to strengthen cooperative relationships with anopportunities for new initiatives. By thus reinforcing businesses and pursu-

outstanding local partner. In select cities where growth is expected, we

ing new initiatives in each country where we operate, we will strive todeveloped and leased high-added-value rental housing, steadily advancing

expand the overseas business portfolio and secure greater stability.

sales of such properties at optimal times to maximize profit.

8.7

49.0
2023

10.0
93.0

54.7
2024

2025

10
0
(FY)

(Plan)

areas of the United States we have not yet entered and acquire additional

these companies resonated with our Corporate Philosophy and global vision

20

10.2

73.8
2022

30

482.5

14.2

50.1

39.7

0

ucts based on the two-by-four housing construction common in the United

SHAWOOD business to provide new value in the form of happiness to

630.6

521.1
388.9
12.9

strengths in lifestyle design proposals to customer engagement and prod-

2022, welcoming Holt Homes and Chesmar Homes into the Group. Both of

50

927.0

Net sales
Operating profit (Left scale)Operating margin (Right scale)

5%Australia

15%

Australia

12%

FY2022
Net sales¥521.1 billion

United States

83%

FY2025Net sales plan
¥927.0 billion

United States85%

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Overseas Business

U.S. (Homebuilding business, master-planned community business)

Highlight

Business Policy

Expanding our sales area through M&A and comprehensively promoting the transfer of technologies,
including product and lifestyle proposals

Strategy

2 Technology transfer
1 Builders M&A    —Strengthening governance for the Group’s builders    —Transferring Sekisui House technologies    —Proactively promoting intragroup collaboration    —Expanding our own brand (SHAWOOD)    —Entering the southeastern United States through M&A

Entering the southeastern U.S. through M&A

Technology Transfer and Expansion of SHAWOOD
As we work to develop markets through Woodside Homes, Holt Homes andChesmar Homes, we are advancing the transfer of Sekisui House technologies with an eye to launching lifestyle proposal products, promoting customer

West
Woodside Homes
Holt Homes

approaches based on data analysis and engraining brand loyalty. At the same

Expandinto Southtime, we will roll out SHAWOOD, our brand of houses that features outstanding safety, comfort and design, mainly in areas with high volume closings ofSouthhigh-priced new houses, such as California, Nevada, Arizona and Utah.

Texas
Chesmar Homes

Rollout of SHAWOOD

OR

2023
Launched prototype
sales in Sommers Bend,
California

Western U.S.

Housing sales

Roughly 25% share of the
U.S. market

Roughly 60% share of the
U.S. market

High-end homes above $750K

High-end homes above $500K

Approx. 36,000

Approx. 122,000

Housing sales: Approx. 150,000 (FY2022)
High-end market: 24% of homes are
priced above $750k
Harbor and transport: Easy marinetransport, short land-travel distance

Housing sales: Approx. 394,000 (FY2022)
High-end market: 31% of homes are priced
above $500K
Harbor and transport: Easy marine transport,
SHAWOOD business also feasible

Data source: U.S. Census
Because data on homes priced above $750,000 was not available for the southern United States for2022 onward, figures for homes priced above $500,000 are shown.

Salt Lake City

Northern California

Southern U.S.

Housing sales

ID
WY

NV
2024
Closing on 150 units,
mainly in California and
Nevada2025

CA
Central Valley

Southern California

Las Vegas

UT

Meet Our Group Builders—Working Together to Create Value
through Happiness
Our U.S. homebuilding business kicked off in earnest when we welcomed Woodside Homes into the Sekisui House Group in 2017. Since
then, the transition to a lifestyle proposal-based, value-oriented business tailored to customer lifestyles has proceeded smoothly, and wehave welcomed two new builders into the Group. Each of these companies differs in its corporate culture, business strategies and business area. To bring them together to advance operations as unitedmembers of the Sekisui House Group, we are building a cooperative
framework centered on SH Residential Holdings (SHRH). We haveselected a local hire—the longtime CFO of Woodside Homes—toserve as CEO of SHRH, and are working to transfer Sekisui House
technologies and enhance governance systems in order to generatevalue through happiness.

Holt Homes
Holt Homes joined the Group in December 2021 and operates in
Oregon and Washington. Holt has established a particularly strong
presence in the Portland market, where the development permitting
process is especially strict and barriers to entry are high. To expand
from its focus on first-time homebuyers,
Holt is focusing on uncovering customers beyond the entry-level and tapping
into the needs of potential customers todevelop new markets.

Chesmar Homes
AZ
Phoenix

NM

Closing on 300 units in
California, Nevada, Arizona
and Utahindicates the volume of closingsin each area of new houses forover $750,000

CO

Chesmar Homes joined the Group in July 2022. Based in Texas,
Chesmar operates mainly in Houston, Dallas, Austin and San Antonio.
Chesmar stands out for its corporate culture that emphasizes humanhappiness as well as its high customer satisfaction and the ability of its
design experts to flexibly accommodate
customers. Chesmar is proactively
developing the high-end market andmay be part of the SHAWOOD rollout inthe future.

72

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Overseas Business

U.S. (Multifamily business)
Business Policy

Promoting new development while diversifying business areas and partnerships
1 Partnerships    —Diversifying business areas and partnerships

Strategy

2 Portfolio    —Diversified investment and recovery aligned with thebusiness area

37th
parallel northMultifamily businessWe are working to expand and diversify our business area, from the west coast gateway region where we haveoperated until now, to include the sun belt and east coast gateway regions. In addition to the urban mid- tohigh-rise projects we have implemented to date, we are shifting to a project mix that includes suburban low- to
mid-rise and rural low-rise projects to diversify our investments. We will build a high-quality portfolio by maximizing profits through asset turnover while keeping a close eye on market conditions.

©2022 Steven J Magner Photography, LLC

Area of Holland
Partner Group

Target area

Australia, Singapore, and the United Kingdom
Business Policy

Aiming to secure robust business foundations and, to this end, striving to establish our brand capabilities and strengthen relationships with local partners in a way alignedwith each country’s market conditions

Strategy

Australia

Singapore

United Kingdom

Developing our operations into the second largest pillar of the overseas business throughthe execution of area strategies and the establishment of our brand presence

Securing close partnerships withprominent corporations in Asia

Executing M&A to transfer
our technologies and expand
into new business fields

We are working to develop closer partner-

We will develop businesses focused

Condominiums Development Business

Homebuilding

We are developing condominiums, commercial facilities and complexes in

We are steadily working to acquire land for the SHAWOOD business inships with leaders in Asia’s real estate sector.

on pursuing the possibilities of pre-Sydney and Brisbane. We aim to transition to a more efficient portfolio

the high-end markets of Sydney’s suburbs (northern coasts, southern

We will advance joint business based onengineered housing while tacklingthat balances medium- to long-term large projects, in which we cancoasts and northwestern and South Coast areas) and to realize an inte-

win-win relationships that combine theirsocial issues arising from the hous-leverage our strengths, and short-turnaround projects, and to establish

grated system for processes from the receipt of inquiries to after-sales ser-strengths with ours.

ing shortage and delivering higher

brand equity via condo-

vice following closing inquality housing. We are also con-minium product planningorder to enhance brandsidering M&A with builders capable

based on analyses ofrecognition.

of embodying the core technological foundations of Sekisui House.

local needs.
   Projects USA   Projects Australia   Projects Singapore

73Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Financial andCapital Strategy
Working toward our global vision, we will leverage thereciprocal effects of reinforced ROE management and
ESG management to sustainably increase corporate value.

The Role of Financial and Capital Strategy in Realizing the Global Vision
As expressed in its global vision, “make home the happiest place in the world,” Sekisui House is in the business ofproviding happiness through housing—a product that is an integral and long-lasting part of customers’ lives—andthrough services for better living. Over the long term, to live up to the trust placed in us by customers and otherstakeholders, it is vital to make ongoing investments in continued business growth. To enable such investment, wemust secure the requisite investment capacity and maintain our robust financial base.
Under the Fifth Mid-Term Management Plan (FY2020–FY2022), to work toward our global vision, the fundamental
policy of our financial and capital strategy was to lay solid foundations for growth, striking a balance among investment for growth, efficiency, healthy finances and shareholder returns. Even amid a challenging business environmentthat included the effects of the COVID-19 pandemic, business performance surpassed our initial plans, and we madestrong investments in growth, including M&A, while simultaneously improving our financial soundness. In terms ofcapital efficiency, against our target of stable ROE of at least 10%, we achieved ROE of 11.9% in FY2022, the plan’s
final year, and as for shareholder returns, we increased dividends for an eleventh consecutive year and repurchased a

Yosuke Horiuchi
Representative Director of the Board
Vice Chairman, Executive Officer
In Charge of Division of Finance and ESG

total of ¥50 billion in Company stock over the three years of the plan.
Building on these achievements, under the financial and capital strategy of the newly launched Sixth Mid-Term
Management Plan (FY2023–FY2025), we are working to further reinforce and advance ROE management and ESG
management as we aim to sustainably increase corporate value.

74Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Financial and Capital Strategy

 e aim for sustainable improvement in ROE by strengthening our ability to create cash returns
Wthrough the enhancement of capital efficiency and the promotion of growth investments.
We work to reduce capital costs through the further promotion of ESG management.
 e enhance corporate value through the reciprocal effects of enhancing ROE and promotingW
ESG management.
ROE (Return on Equity)

Sixth Mid-Term Management Plan (Ending FY2025)

Fifth Mid-Term Management Plan

Sixth Mid-Term Management Plan

ROE

Stably 10% or more

Stably 11% or more

Around 12%

Profit margin=

Around 6%

×

Turnover rate

Leverage

Around 1

× Around 2 times

Enhancing corporate value
Enhancing PBR (market cap)

PBR = ROE × PERStrengthening the ability togenerate cash returns

Enhancing evaluations insociety and markets

Enhancing ROE

Enhancing PER (reducing capital costs)

properties under management and helps maintain high occupancy rates in the rental housing management and operational support businesses within the supplied housing business, contributing to stable growth and revenue.
The targets of the supplied housing business, including for remodeling, are the owners of the properties we havebuilt, whose numbers increase each year, and the delivered buildings themselves. While asset-light, this business’s
targets thus continue to grow, so we expect ongoing stable growth going forward. We are proactively investing thecapital provided by the built-to-order and supplied housing businesses into the development and overseas businesses, which require significant capital investment, including for the purchase of land. By doing so, we are building abusiness model that provides big returns through high-quality development.
By thus utilizing the specific characteristics of each business model and the links between them, we will realize stable growth in Japan, even amid population decline, and proactive growth overseas.
Furthermore, to raise ROE, working out strategy down to the actual front lines of each business is crucial.
Beginning in FY2023, we have introduced management methods for each individual business to further enhance thelink between the business strategy and organization and revised the composition of the reportable segments. We will
clarify how each business division should work to increase ROE, which we have set as a KPI for the Group, and alignour efforts to increase corporate value.

Linking to future returns
Enhancing capital efficiency

Promoting growth investments

Enhancing ROA

Real estate investments,
growth foundation investments

Appropriate financial
leverage levels

New businesses, M&A

Promoting sustainability
Promoting ESG management,
maximizing human resource value

Building medium- to long-term
relations with shareholders
Stable shareholder returns
Proactive dialogue, disclosure

Enhancing ROE by Utilizing the Unique Revenue Structures of Each Business Model
The Sekisui Group boasts the highest cumulative number of dwellings built of any housing manufacturer in the world.
Over more than 60 years, we have built and honed our core competencies—our technical capabilities, construction
capabilities and customer base—and developed four business models using our unique value chain: the built-toorder business, supplied housing business, development business and overseas business. These business models
all have different revenue structures. Leveraging the specific characteristics of each, under the Sixth Mid-Term
Management Plan, we aim to stably generate ROE of 11% or more.
In FY2022, the Sekisui House Group recorded operating profit of ¥261.4 billion, of which, ¥188.1 billion, or about
70%,1 came from the built-to-order business (contracting of custom detached houses and rental housing and architectural/civil engineering) and the supplied housing business (real estate management, remodeling, etc.). These are assetlight business models that do not require major capital investments, and are closely linked to one another. For example,
within the built-to-order business, in the rental housing construction contracting business, we concentrate management
resources in urban areas via thorough area marketing strategy. As a result, we build rental housing in prime locations andwith excellent conditions that enjoys consistently high occupancy. This, in turn, increases the number of newly built
1 Calculated based on the FY2022 segments. The ratio after segment reorganization is 76%.

Investing in Foundations for Growth to Support Aggressive Real Estate Investment andOngoing Corporate Growth
In terms of growth investment, we will continue to aggressively invest in real estate as a field where strong growth isforecast. Because real estate investment generally entails risk, we carefully select investment areas, set a hurdle rate(the minimum acceptable internal rate of return) based on the cost of capital as an investment criterion and prioritize
asset turnover in making investment decisions. For the development busiInvestment in Real Estate (Billions of yen)ness and overseas business, in which the scale of assets is particularly large,
Domestic Overseas
Total
business business
we emphasize ROA and work to improve asset efficiency through ongoing
1,300.0 1,700.0 3,000.0
Investment
monitoring. In these ways, we maintain appropriate financial discipline to(962.9)(1,014.4)(1,977.4)
1,300.0 2,000.0 3,300.0
control risk while advancing aggressive investment.
Recovery(857.6)(1,280.7)(2,138.3)
Based on the Sixth Mid-Term Management Plan’s fundamental policy ofNote: Figures in parentheses indicate results under
the Fifth Mid-Term Management Plan.
“stable growth in Japan and proactive growth overseas,” we plan to invest ¥3
trillion over three-year period of the plan, comprising ¥1,300 billion in domesInvestment in Foundations for Growth(Over Three Years)
tic investment (up approximately ¥330 billion from the previous mid-term¥100 billionplan) and ¥1,700 billion in overseas investment (up approximately ¥680 bilInvestment inlion). Furthermore, in order to explore the possibilities of a variety of businesses in Japan and overseas, we have allocated ¥200 billion for investment in
new businesses and M&A and ¥100 billion for investment in foundations for
growth, including human resources, IT, DX, R&D and enhancing productivity.

Foundations for
GrowthNew businesses,
M&A(Human resources, IT, DX,
R&D, and enhancing
productivity)¥200 billion(Promotion of proactive
growth for overseas business)75

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Financial and Capital Strategy

Applying Sekisui House’s Business Models in the United States

improving productivity, including the proactive use of AI and IoTtechnologies.

In the U.S. housing market, built-for-sale homes are the mainstream—the business model of providing housing that isboth custom-built and pre-engineered, as Sekisui House does, does not exist there. Woodside Homes, which joined
the Group in 2017 via M&A, is therefore pioneering this business model in the United States. Unlike typical built-for­-

Maximizing Human Resource Value to Increase
Corporate Valuesale housing, after receiving the construction permit, starting foundation work and receiving the sales permit,
Woodside meets with customers to consider a range of options, providing a new kind of homebuying experience.

It is no exaggeration to say that Sekisui House has prioritized

Based on this business model, Woodside Homes has seen strong growth. I believe this is because Woodside’s

human resource development at every step of its history. We con-employees have embraced Sekisui House’s approach to housebuilding. This is one more reason that, when selecting

sider investment in human capital a particularly important aspectcompanies for M&A, I think we should focus on how closely candidates align with our vision and whether we will beof investment in the foundation for growth. In addition, under ourable to work together to provide high-quality housing.

global vision, we are now focusing Company-wide efforts on sup-During the period of the Fifth Mid-Term Management Plan, U.S.-based builders Holt Homes and Chesmar Homes

porting the self-directed career development of employees to fos-become part of the Sekisui House Group through M&A. We have set the target of supplying 10,000 detached hous-

ter an innovative corporate culture. Since 2021, we have been

es per year in overseas markets by FY2025. In FY2022, we supplied 3,753 in the United States; we estimate that we

holding career interviews five times a year. Separate from perfor-

can increase this to around 6,000 to 7,000 in FY2025, the final year of the Sixth Mid-Term Management Plan, via themance review meetings, these regular meetings of employeesorganic growth of our three U.S. builders. In the United States, following the rapid increase in home mortgage rates,with their supervisors are opportunities for employees to chart

we will need to carefully monitor housing demand. However, we have so far not seen any decrease in latent demand

their own career vision and examine what they can do to achieve

for new houses, so we will advance considerations of additional M&A to welcome new partners to the Group in pur-it and grow. We believe that such initiatives will create virtuous

suit of further growth.

cycles, increasing human resource mobility and thus fostering an
innovative corporate culture over time.

The Financial Impact of Productivity Improvements

In addition, the Sekisui House Innovation & Performance (SHIP) Awards Program, launched for all employees in
2022, is already showing signs of creating virtuous cycles—from the excitement of the award ceremony to the wave ofAs part of investments in the foundation for growth, we invest in improving productivity at factories on an ongoingpositive responses from employees. The number of ideas entered in the program’s second year was up dramaticallybasis. Take, for example, our proprietary Flexible ß System construction method used for heavy-gauge steel framefrom the first, and I feel that the program’s theme of “innovation and communication” has really reached employees.

three- and four-story houses and rental housing. Because we have obtained type-approval for this construction

With the help of such initiatives, I hope that we can make Sekisui House a company full of people who think for them-method, we are able to forgo some building inspections and structural calculations, shortening the construction peri-

selves and step up. We seek to maximize our human resource value and, by doing so, increase our social value andod. Furthermore, because its heavy-gauge steel rigid structure does not require major pillars, it enables highly flexible

corporate value. We will not hold back on investment or support to this end.

spatial design that can accommodate narrow or irregularly shaped urban lots and facilitates appealing design.
Proprietary construction methods like this are a strength of Sekisui House, helping shorten construction time,

Maintaining Appropriate Levels of Financial Leverageenhance design and strengthen cost competitiveness, and because they are our own, the resulting improvements infactory productivity generate a significant positive financial impact for the Group.

Under the Sixth Mid-Term Management Plan, we plan to aggressively make growth investments, including real estate

Under the Sixth Mid-Term Management Plan, we plan to invest in heavy-gauge steel frame production lines to opti-

and M&A, and we emphasize credit ratings as a standard for evaluating appropriate levels of financial leverage. Bymize our supply structure in line with the growth of the rental housing business, and we will advance investment inmaintaining financial soundness commensurate with business risk, we aim to maintain ratings of AA in Japan and A

76

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

77

Financial and Capital Strategy

overseas. Specifically, based on the assumption of maintaining these rat-

Enhanced engagement with shareholders and investors is key for the Sekisui House Group to grow sustainably

ings, we have set the targets of a D/E ratio of about 0.5 times (comparedand increase its corporate value. We will continue to proactively conduct investor relations activities and appropriately

with a target of under 0.45 in the previous mid-term management plan) andreflect your suggestions and opinions in our management.

a debt repayment term (net debt/EBITDA) of less than about 1.5 years (lessthan 1.0 year under the previous plan). By applying these guidelines, we will
maintain a balance between investment and financial soundness.
Long-term credit ratings (as of March 2023)
Japan Credit Rating Agency (JCR)

AA

Rating and Investment Information (R&I)

AA-

S&P Global Ratings (S&P)

A

ROE Target and DuPont Analysis Projection
×Total asset
turnover ratio

×

ROE =

Profit margin

Fifth Mid-Term Management Plan
(final year results)

Financial leverage

11.9%

6.3%

1.01

1.84 times

Sixth Mid-Term Management Plan
(three-year period targets)

Steadily 11% or higher

Sixth Mid-Term Management Plan
(final year targets)Around 12%

Around 6%

Around 1

Around 2 times

ROE
D/E Ratio

Debt Repayment Term

(Times)0.5(Years)
1.5

0.4
0.3

0.42

0.2

0.37

0.37

0

0

-0.5
2020

2021

2022

Fifth Mid-Term
Management Plan

2023

2024

2025

0.93

0.5

0.1
(FY)

0.13

10

Target: Below about
1.5 years

2021

2022

Fifth Mid-Term
Management Plan

2023

2024

2025

11.0

11.6

9.5

Steadily 11% or higher

9
2017

2020

11.9

11.5
10.8

(0.18)

Sixth Mid-Term
Management Plan (Target)

Target

11.6

11

1.0

Target:Around 0.5 times

(%)
12

(FY)

Sixth Mid-Term
Management Plan(Target)

TargetStable Returns and Improved Value for Shareholders
In FY2022, we paid annual dividends per share of ¥110, up ¥20 year on year. For FY2023, we plan to pay dividends
per share of ¥118, for a 12th consecutive year of dividend increases.
Maximizing shareholder value is a top priority for Sekisui House. Under the Sixth Mid-Term Management Plan, in

Target

2019

2020

2021

2022

Fifth Mid-Term
Management Plan

2023

2024

(yen)
400

EPS

300
200
100

193.06
77

79

Dividends per share

Minimum
dividend:¥110 per share

181.18
81

84

90

110

(FY2022 level)

118

0
2017

2018

2019

2020

Fourth Mid-Term
Management Plan

2021

2022

Fifth Mid-Term
Management Plan

2023

2024

193.06186.53205.79181.18227.37276.58295.05

77

79

81

84

90

110

118

Management Plan, we aim to reduce these holdings to 3% or less of consolidated net assets (from 4.6% as of

Dividend
payout ratio (%)

39.9

42.4

39.4

46.4

39.6

39.8

40.0

January 31, 2023).

Note: EPS for FY2024 and FY2025 is calculated based on the forecast average number of issued and outstanding shares in FY2023.

EPS (Yen)

2025

Sixth Mid-Term
Management Plan (target)

Dividends per
share (Yen)In addition, we will gradually reduce cross-shareholdings to improve the balance sheet. Under the Sixth Mid-Term(FY)

331.20227.37205.79186.53303.35295.05276.58stabilize shareholder returns, we have set ¥110 as the minimum for annual dividends per share and will flexibly implees of up to ¥40 billion (up to 18 million shares).

2025

Sixth Mid-Term
Management Plan (target)

EPS and Dividends per Shareaddition to our existing policy of targeting a medium-term average dividend payout ratio of 40% or more, to further
ment purchases of Company stock to increase shareholder value. In FY2023, we plan to implement stock repurchas-

2018
Fourth Mid-Term
Management Plan

303.35331.20

Average dividend
payout ratio
40% or more(FY)Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

78

Financial Analysis
Results by Segment

The Sekisui House Group Scope of Consolidation
The Sekisui House Group comprises Sekisui House, Ltd., 345 consolidated subsidiaries and 40 equity-method
affiliates. The FY2022 consolidated financial statements reflect the operating results and financial position of theseBuilt-to-Order BusinessIn the built-to-order business, net sales totaled ¥1,077.3 billion, up ¥78.6 billion, or 7.9% year on year, but operatingcompanies.

profit was ¥109.9 billion, down ¥3.7 billion, or 3.3% year on year. By segment, the custom detached houses busi-

Operating Results

ness saw decreases in both sales and profit, and the architectural/civil engineering business saw increased sales but
decreased profit, while the rental housing business secured increases in both sales and profit, driving the performance of the built-to-order business.

Consolidated net sales increased ¥339.2 billion year

Net Saleson year, or 13.1%, to a record high ¥2,928.8 billion,(Billions of yen)

due to increased sales from all business models.

3,000

Consolidated operating profit increased ¥31.3 billion year on year, or 13.6%, to a record of high¥261.4 billion, due to increased revenue in the houses for sale and urban redevelopment businesses as

2,000

2,160.3

2,415.1

2,589.5(Billions of yen)

521.1

352.7

388.9

370.6

389.8

245.9

to the increase in operating profit.
Profit attributable to owners of parent increased¥30.6 billion, or 19.9%, to ¥184.5 billion.
Notably, overseas net sales increased ¥132.1 billion, or 34.0%, to ¥521.1 billion, and overseas operating profit increased ¥23.7 billion, or 47.3%, to¥73.8 billion.

42.4

298.7

2,025.3

1,914.3

2,076.2

2021

Japan

2018
2019
Overseas

2020

2021

2022

(FY)

2021

2022

2021

2022

2022

(%)

30

300
261.4
230.1

205.2
44.5

16.3

8.8 172.8

8.5

160.7

186.5

73.8

50.1

20

Rental housingbusiness

Architectural/Civil
engineering business

13.7%

15.1
5.8%

-0.1% YOY

+11.0% YOY+14.1% YOY

2021

2022

Custom detachedhouses business-9.8% YOY

2021

2022

13.2
4.4%

2022

(FY)

Rental housingbusiness

Architectural/Civil
engineering business+4.2% YOY

-12.8% YOY

Operating margin(Billions of yen)

7.6 146.8

Supplied housing business net sales totaled ¥785.1 billion, up ¥44.0 billion, or 5.9% year on year, and operating profit
was ¥78.2 billion, up ¥2.1 billion, or 2.9% year on year. By segment, the remodeling business and real estate management fees business both saw increases in sales and profit, growing the supplied housing business.
Segment Net Sales

39.7

8.9

180.0

8.9

10

Segment Operating Profit(Billions of yen)

584.9

187.6

0

619.2

(Billionsof yen)of yen)(Billions

0
2018

Japan

14.6%

(Billions of yen)Supplied Housing Business(Billions of yen)

100

10.9%

Operating Profit

Operating Profit

189.2

58.4

38.3

2021

(FY)

Custom detachedhouses business(Billions of yen)

200

56.0

2,407.7

2,200.6

decreased revenue in the built-to-order business.
Consolidated ordinary profit increased ¥27.1 billion

384.0

352.4

261.9

0

ness resulting from housing sales and progress inyear on year, or 11.8%, to ¥257.2 billion, mainly due

Segment Operating Profit(Billions(Billions ofyen) of yen)

426.1

12.0%

1,000

well as an increase in revenue in the overseas busiproperty sales in the United States, despite

Segment Net Sales

2,928.8
2,446.9

2019

2020

2021

2022

(FY)

156.1

165.9

2021

2022

25.5

27.5

16.4%

16.6%

50.4

50.6

8.6%

8.2%

2021

2022

Overseas
2021

2022

Remodeling business

Real estate management
fees business+6.2% YOY

+5.9% YOY

(FY) (FY)

2021

2022

Remodeling business

Real estate management
fees business+7.9% YOY

+0.4% YOY

Operating Profit

Operating margin(FY)Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

Financial Analysis

Net Sales and Operating Profit by Segment (FY2022)

Development Business
Development business sales totaled ¥464.4 billion, up ¥79.6 billion, or 20.7% year on year, and operating profit
was ¥49.2 billion, up ¥10.9 billion, or 28.5% year on year. By segment, the houses for sale business, condomini-

The major changes to the Group business portfolio achieved since FY2021 were highly evident in the composition ofums business and urban redevelopment business all saw increases in both sales and profit, growing the develop-

net sales and operating profit for FY2022.

ment business.

In FY2010, the built to order business accounted for 51%, about half, of total net sales. In FY2022, this figure was

Segment Net Sales

Segment Operating Profit(Billions of yen) 238.2(Billions of yen)

191.4
90.6

(FY)

itectural/Civil
eering business

2021

2022

2021

90.8

2022

Houses for salebusiness

Condominiums
business+24.4% YOY+0.3% YOY

102.7

2021

2022

(FY)

(FY)

Architectural/Civil
Urban redevelopment
engineering businessbusiness+31.7% YOY

the same 13-year period, Group net sales have doubled to ¥2,928.8 billion. The change in the composition of oper-

20.7

14.5

135.3

38%, with the remainder well balanced across the supplied housing, development and overseas businesses. Over

7.6%

8.7%

2021

2022

ating profit is even more pronounced: where the built-to-order business accounted for 76% in FY2010, the expan-

15.0

12.4

13.4

13.8%

14.7%

151
11.0%

11.1%
132

2021

2022

2021

2022

sion and growth in profit generation of all four businesses has led to total FY2022 revenue of ¥261.4 billion, 4.6 times

11.2

the FY2010 level.
(FY)Houses for salebusiness

Condominiums
business

Urban redevelopment
business+42.8% YOY+7.3% YOY

+33.5% YOY

Operating Profit

These achievements are the result of the Group’s ongoing efforts to reform its profit structure in line with the
expansion of its business centered on the residential domain, which has resulted in a shift from a business portfolio
centered on the built-to-order business to a well-balanced business composition.

Operating margin

Net Sales(Billions of yen)Overseas Business

Operating Profit(Billions of yen)(Billions of yen)

261.4

Overseas business net sales totaled ¥521.1 billion, up ¥132.1 billion, or 34.0% year on year, and operating profit was

2,928.8¥73.8 billion, up ¥23.7 billion, or 47.3% year on year.
Segment Net Sales

Segment Operating Profit(Billions of yen)(Billions of yen)

521.1

12.9%

14.2%

2021

2022

1,488.3
2021

2022

(FY)

Overseas business

Overseas business+34.0% YOY+47.3% YOY
Operating Profit

Overseas

Development

49.2

Development

Supplied
Housing

78.2

Supplied
Housing

109.9

Built-to-Order
35%

Overseas

464.4

785.1

73.8
50.1

388.9

73.8
521.1

Operating margin

(FY)

252.7

56.3

453.4

20.9
1,077.3732.8

FY201051%

Built-to-Order
38%(Contribution
to net sales)

FY202271.9

FY20102.2

76%(Contribution
to profit)

FY2022

Note: The above segment breakdown does not include other businesses, corporate expenses or intersegment eliminations.

79

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

80

Financial Analysis

Financial Position

Cash Flows

Total assets as of January 31, 2023 increased 7.4% from a year earlier to ¥3,007.5 billion. Current assets increased
7.2% to ¥2,093.8 billion, primarily due to an increase in real estate for sale. Non-current assets increased 7.7% to¥913.6 billion due in part to an increase in goodwill.
Total liabilities increased 4.7% from a year earlier to ¥1,339.9 billion, mainly due to an increase in borrowings,
despite a decrease resulting from the redemption of bonds.
Net assets increased 9.6% from a year earlier to ¥1,667.5 billion, mainly due to the recording of profit attributableto owners of parent.

Cash Flows from Operating Activities
Net cash provided by operating activities increased ¥7.4 billion to ¥125.4 billion due to factors including profit before
income taxes of ¥267.7 billion.

Cash Flows from Investing Activities
Net cash used in investing activities increased ¥51.7 billion year on year to ¥165.4 billion. Cash used in the purchaseof property, plant and equipment, including real estate for lease, increased ¥9.2 billion to ¥92.1 billion.

Cash Flows from Financing Activities
Net cash used in financing activities increased ¥44.0 billion year on year to ¥155.7 billion. Dividends paid increased¥10.7 billion to ¥66.4 billion, and outflows from the redemption of bonds came to ¥120.0 billion.

(Billions of yen)

2,634.7

2,413.0

1,306.8

1,196.9

Total assets

2,625.8

2018
Net assets

2019

2020

(Billions of yen)

Total assets ¥3,007.5
Total assets ¥2,413.0
Total current
liabilities¥781.3

Total current
assets¥2,093.8

Total current
liabilities¥1,044.6
Total non-current
liabilities ¥295.3

Total non-current
liabilities ¥434.7

Total non-current Total net assets¥1,196.9
assets¥843.7FY2018 year-end

2,801.1

1,520.92021(Billions of yen)

400
300
200
100
0
-100
-200

1,667.5

2022

363.7
125.0

191.9

(70.1)

Total non-current
assets¥913.6

Total net assets¥1,667.5

FY2022 year-end

Comparing the consolidated balance sheet
at the FY2018 and FY2022 year-ends, total
assets increased ¥594.5 billion to ¥3,007.5
billion at the end of FY2022. Within this, theincrease of ¥524.5 billion to ¥2,093.8 billion
in current assets is especially striking, while
non-current assets rose ¥69.9 billion to¥913.6 billion. Looking at liabilities and net
assets, current liabilities rose ¥263.3 billion
to ¥1,044.6 billion, non-current liabilities
decreased ¥139.4 billion to ¥295.3 billion,
and net assets increased ¥470.6 billion to¥1,667.5 billion, marking a reduction in
long-term liabilities alongside a major
increase in net assets.

(31.0)

Trade receivables¥42.5

Other assets¥103.9Cash and deposits¥343.3

Real estate
for sale¥1,079.4
Non-current
assets¥843.7

Other liabilities¥429.1

2019
Cash flows from investing activities

Tradepayables¥147.4

Interest-bearing
debt ¥639.5
Shareholders’equity¥1,150.8

FY2018 year-end

Other assets¥168.4

Other net
assets ¥46.0(65.2)(148.1)

Cash and deposits¥332.9Trade receivables¥157.1

Total assets ¥2,413.0

96.4

125.4

118.0
4.3

2018

(FY)

298.5

54.9

Cash flows from operating activities

Balance Sheet Comparison

Total current
assets¥1,569.3

1,368.8

3,007.5(95.5) (77.6)(113.7) (111.7)

2020

2021

Cash flows from financing activities(Billions of yen)

Total assets ¥3,007.5
Other liabilities¥505.9Real estate
for sale¥1,435.4

Non-current
assets¥913.6Trade
payables¥226.8Interest-bearing
debt ¥607.1

Shareholders’equity¥1,468.2

FY2022 year-end

Other net
assets¥199.2(39.9)(165.4) (155.7)
2022

(FY)

Free cash flow

Within current assets, real estate for saleaccounts for a large portion of the total, having
increased ¥355.9 billion from FY2018 to¥1,435.4 billion at the FY2022 year-end. Thissignificant growth was due to proactive realestate procurement amid the favorable performance of real estate businesses in Japan andoverseas as well as the M&A of builders in the
United States. In contrast, interest-bearing
debt decreased slightly over the same four
years, reflecting the effective use of capital
based on financial discipline. Within net assets,shareholders’ equity increased ¥317.3 billion
to ¥1,468.2 billion at the FY2022 year-end following efforts to expand equity.

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

81

Financial Analysis

Financial Resources for Capital and Liquidity of Funds

Targeted Performance Indicators

The Group mainly requires funds for working capital as

D/E Ratio

In order to promote business efficiency, we aim to

ROA/ROE

well as for investments such as the acquisition and devel-(Times)strengthen our balance sheet and raise asset efficiency

(%)

0.6

0.54

opment of real estate (including inventories). Working
capital comes from internal funds, borrowings or short-

0.46
0.4

0.42

0.37

seek to improve the ratio of profit to total assets (ROA)

0.37

and the ratio of profit to equity capital (ROE), aiming for

12

10.8

8

ROA of 10% and ROE of 11% or more. In FY2022,

0.2

selecting the most suitable funding method from thesediverse options, we secure stable financial resources and16

in each of our businesses. Through such efforts, weterm bonds (commercial paper), while funds for investment are mainly raised through bonds and loans. By

PBR: Stock price at end of period ÷ Shareholders’ equity per share

8.3

8.8

2018

2019

2020

2021

2022

(FY)
ROA

Other performance indicators, etc.

2018

2019

2020

11.47

11.14

Debt Repayment Term

Return on Invested Capital (ROIC)PER/PBRaround 0.5 or less and 1.5 years or less, respectively,(Years)(%)(Times)

2.00

12

12

1.50

1.37

8

8.6

9.1

2021

2022

7.2

7.8

8.2

8.5

8

6.9

(FY)

10.18
8.86

8.72

0.93

1.00

overdraft contracts with multiple financial institutions,
thereby ensuring ample liquidity.

7.3

ROE

ratio and debt repayment term (Net debt ÷ EBITDA) ofcies. We have also entered into commitment line and

11.9

0

0

soundness we have set medium-term targets for the D/E

rating agencies and A ratings from overseas rating agen-

11.0
9.5

4

ROA was 9.1% and ROE was 11.9%.

reduce financing costs. In addition, to maintain financial

premised on maintaining AA credit ratings from domestic

11.5

4

4

0

0

0.50
0.13

0.01

0

2018

2019

2020

2021

2022

(FY)

(0.18)(0.50)
2018

2019

2020

2021

2022

0.95

1.27

1.04

1.06

0.99

2018

2019

2020

2021

2022

(FY)

PER: Stock price at end of period ÷ Net income per share
PBR: Stock price at end of period ÷ Shareholders’ equity per share(FY)

Equity Capital/Equity Capital Ratio(%)
EnterpriseMultiple (EV/EBITDA)(Billions of yen)(%)(Times)

2,000

100

12

1,600
1,200 1,182.8
800

49.0

1,266.1

48.1

1,326.5

50.5

1,473.9

1,632.8

80
60

52.6

54.3

40

8

6.59

7.02

2018

2019

6.31

6.26

6.59

2020

2021

2022 (FY)

4

20

400

0

0
2018

2019

Equity capital (Left scale)

2020

2021

2022 (FY)

Equity capital ratio (Right scale)0Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

ESG Strategy—Enhancing ESG Management Centered on Our Material Issues
Building on the ESG Management Foundation We Have Established, We Are Enhancing Initiatives to Generate Social Value andIncrease Corporate Value
In order to be continually sought after by society as a leading company in ESG management, it is important to proactively consider how we can provide happiness to all kinds of stakeholders and take action accordingly. Based on our fundamental policies of helping resolve environmental issues through residences, making employee autonomy a growth driver, and innovation and communication, we will further enhance ESG management centered on our material issues. At thesame time, to develop human resources who internalize and take ownership of ESG and think and act autonomously, we will advance ESG management that involves all employees, an approach unique to the Sekisui House Group.
Fundamental policy

Material Issues

Become a leading company in ESG management
Creation ofHigh-Quality
Housing StockContributing
to a Sustainable
Society elping resolve environmental issues
Hthrough residences

Diversity andInclusion

Making employee autonomy a growth driver
Innovation and communication

Customer happiness

Our
Medium-Term
VisionWe aim to practice our Corporate Philosophy while transforming into autonomous individuals and organizations
with the power to innovate. We have therefore identified three key elements for promoting ESG management:
participation of all employees, forward-thinking initiatives and improvement of external evaluations. For the participation of all employees, which we regard as especially important, we are constructing platforms for implementation, including ESG dialogues involving all employees (launched in 2020) and holding the Sekisui House
Innovation & Performance Awards as a mechanism to foster innovative ESG management.
Going forward, we will further develop these efforts, striving to increase corporate value through autonomous
individuals and organizations that have internalized and take ownership of ESG.

Societal happiness

Employee happiness

Promoting ESG management that involves all employees, an approach unique to the Sekisui House Group
Deepening ESG dialogue while
expanding the scope of counterparts
P.46 ESG Dialogue

Fostering a corporate culture
supportive of spontaneous creativity
 .43 Sekisui House Innovation &P
Performance (SHIP) Awards Program

Setting ESG indicators andpursuing their improvement
P.22 Creation of High-Quality Housing Stock and KPIs
P.26 Contributing to a Sustainable Society and KPIs
P.32 Diversity and Inclusion and KPIs
 .125 Themes and KPIs for Initiatives That Provide aP
Basis for Our Material Issues

Key Themes

E

Taking on ongoing issues as well as new issues in theenvironment fieldS

Enhancing our corporate value via improvement in humanresource value and social value

G

Strengthening corporate governance with regard to the two
aspects of senior management and business management
Driving forces of innovation and communication

Decarbonization

1. Further promoting Sha Maison ZEH
2. Developing foundations for promoting ZEB
3. Ensuring the early realization of RE100 and SBT targets by accelerating initiatives relative to general aspects of business activities, including supply chains

Improvement in
human resource value

Enhancing the combination of employee autonomy × alignment of efforts

Senior managementlevel

1. Moving forward from the development of a corporate governanceframework to the new stage of realizing its functional effectiveness2. Increasing the sophistication of stakeholder engagement

Biodiversity

1. Rolling out the Gohon no Ki Project across the Group while expanding thescope of external partnerships
2. Further strengthening and promoting sustainable wood procurement

Improvement insocial value

Helping resolve social issues via business and other corporate activities

Business managementlevel

1. Rolling out Group governance systems on a global basis
2. Fostering a corporate culture based on mutual trust achieved via
robust communications

Resource recycling Upgrading the zero-emission system into a circular economy
P.83 Environmental Strategy

P.85 Improvement of Social Value
P.41 The Sekisui House Group’s Human Capital Management

P.102 Direction of Governance Reinforcement Measures under the Sixth Mid-Term
Management Plan

82

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

ESG Strategy—Environmental Strategy

Environmental Strategy
Sekisui House Group’s environmental strategy kicked off in 1982 with the launch of a passive solar house as a strategic product. In 1999, we announced the Environmental Future Plan, the cornerstone of our environmental strategy thereafter,
which lays out our ideals and basic policy for initiatives. Since then we have we have been conducting various initiatives to effectively reduce the impact of our business activities on the global environment. In particular, positioning popularizing
energy-saving housing as a core measure to help prevent global warming, we began by making double-glazed windows a standard feature, followed by high-efficiency thermal insulation and water heaters, and the launch of sales of GreenFirst houses with solar cells and fuel cells. Then, in 2013, we were among the first in the industry to begin sales of a net zero energy house (ZEH).
In terms of business activities that include the value chain, in 2017 we were the first in the Japanese construction industry to join RE100, and in 2018 we announced our participation in the SBT Initiative; we continue to work toward our targets under these initiatives. We have also endorsed the TCFD recommendations and conduct disclosure in accordance with them. To promote biodiversity conservation, since 2001 we have been conducting the Gohon no Ki Project to promote the use of mainly native species in landscaping and greening. Other efforts not directly related to climate change include proactive initiatives to promote biodiversity and resource recycling.
In ways such as these, as it has since 1999, the Sekisui House Group continues to deepen and develop its environmental strategy based on an approach of integrating the resolution of various environmental issues into its business.

The Evolution of the Sekisui House Group’s Environmental Strategy
2023
1982
Launched the PSH-21 passive solar
house utilizing natural energy

2001
Launched the Gohon no Ki
Project for landscaping using
trees native to each area

Announced
Our Eco-First Promise and2050 Vision
Shifted management focus
to decarbonization aheadof other companies

2009
Launched Green First
eco-friendly homes

2002
Started zero-emission operations,
recycling 100% of waste

SocialTrends

2013
Launched Green FirstZERO net zero energy
house

1 Figure for April 2022–March 2023

Joined the RE100 initiative
First company in Japan’sconstruction industry to join

Declared compliancewith the Paris Agreement

2040

50% renewable energy
ratio for electricity usedin operations

100% renewable energy
for electricity used inoperations

2030

2018

2050

Scope 1 and 2: 75% reduction (compared with FY2013)
Scope 3, Category 11: 55%
reduction (compared with
FY2013)

Received validation from SBTi

2015

2030

2018
Endorsed the TCFD Recommendations

Achieve carbon neutrality (zeroCO2 emissions throughout product lifecycles) in our business

2021
Quantitative evaluation ofcontribution to biodiversityof the Gohon no Ki Project

2005

2015

2018

2030

2050

United Nations Conference on
Environment and Development(Earth Summit) held in Brazil

Kyoto Protocol takes effect

Adoption of Paris Agreement

Katowice climate package adopted at COP24

Japan targets 46% reduction ingreenhouse gases (comparedwith FY2013)

Japan aims to becomecarbon neutral

2008
Hokkaido Toyako Summit held

1993

1980

Achieved 93% detached house ZEH1
Achieved 65% ZEH rental housing

1992

Basic Environmental Law comes
into force in Japan(Years)

2022
2017

2008

Announced the Environmental
Future Plan

SekisuiHouse
Initiatives

Launched the Green First HYBRID model,featuring a combination of solar panels,
fuel cells and storage batteries

Issued the Declarationof Sustainability

1999

Announced the Sixth Mid-Term
Management Plan

2011

2005

2000

21st Conference of the
Global Warming of 1.5°C Special Report published by IPCC
Parties to the United Nations
Framework Convention on Climate Change (COP21)

2022

2015

Kunming-Montreal Global Biodiversity Framework adopted

United Nations adopts Sustainable
Development Goals (SDGs)

2010

15th Conference of the Parties to the Convention on Biological Diversity (COP15)

2020

2030

2050

83

Value Report 2023
SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Contents

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

ESG Strategy—Environmental Strategy

Decarbonization

Biodiversity

Further Promoting Sha Maison ZEH

Further Advancing the Gohon no Ki ProjectIn 2018, Sekisui House completed a Sha Maison rental housing
property with all ZEH units, the first such property in Japan. Since

Results

Targets

then, we have advanced the full-scale promotion of Sha Maison ZEH.

70%

73%

75%

2023

2024

2025

65%

By installing photovoltaic panels for each unit, we are promoting
ZEH at the unit level that allows individual residents to sell electricity.
We expect this to increase satisfaction for ethically minded residents

35%

and contribute to stable long-term operations for owners, thusincreasing rental income for Sekisui House Real Estate. We believethat by providing the benefits of enhanced comfort and reduced utility costs, this housing will help convert residents into ZEH fans,

2021

2022

(FY)

increasing demand for ZEH in the rental housing market.
In FY2025, the final year of the Sixth Mid-Term Management Plan,

Further promoting Sha Maison ZEH

we aim for 75% of Sha Maison units provided to be ZEH.

Since 2001, Sekisui House has been conducting the Gohon no Ki Project to promote landscaping of customers’ gardens. In 2021, to mark the project’s 20th year, we published the results of quantitative evaluations of the project’s
effects undertaken in collaboration with the Kubota Laboratory at the Faculty of Science, University of the Ryukyus.
These evaluations found that the project resulted in an approximately tenfold increase in the number of tree species
planted in urban residential areas nationwide, which was shown to lead to a doubling of the number of bird species
and a fivefold increase in the number of butterfly species that residential districts attract.
Using these results, we aim to expand the range of our activities to promote awareness and action both in andoutside the Sekisui House Group by, for example, promoting the Gohon no Ki Project’s nature-positive effects on cities and working with municipalities to promote related educational activities inschools. Recently, we have also been working to evaluate the effects of the project
on health and well-being through joint research with the University of Tokyo. Throughsuch efforts, Sekisui House’s landscaping business helps to both preserve biodiversity and provide customers with the added value of happier homes via gardens where
they can enjoy birds and butterflies.
Urban biodiversity forum: Gohon no Ki Project and other nature-positive initiatives (Japanese only)

Building a Foundation for Promoting ZEB
In addition to promoting ZEH detached houses, rental housing and condominiums, we are also advancing the shift
toward net zero energy buildings (ZEB) in commercial buildings. We are developing ZEB designs and proposals thatmaximize added value, including enhanced comfort, reduced utility costs, advantages in business continuity planningand CO2 reduction.
ZEB and ZEH-M (Japanese only)

Decarbonizing Business Activities Including the Supply Chain
To promote the decarbonization of business activities, we continue to advance energy saving measures at offices andFurther Strengthening Sustainable Wood Procurement
Sekisui House is advancing sustainable work procurement based on the approach of
No Deforestation, No Peat, No Exploitation (NDPE) adopted by international consensus. As part of these efforts, focusing on preventing the loss of natural forests, wehave adopted the rate of zero-deforestation lumber procurement as a new KPI andbegun efforts at achieving a rate of 100% by 2030.
P.26 Contributing to a Sustainable Society and KPIs

P.146 Biodiversity conservation

P.152 Disclosure in Line with the Taskforce on Nature-related Financial Disclosures (TNFD) Draft Recommended Disclosures

production facilities and the electrification of company vehicles. In addition, we are working to gain the understanding
and support of housing owners to promote their participation in Sekisui House Owner Denki, a unique initiative of theCompany, as we work to achieve the target of RE100. Furthermore, to decarbonize the supply chain, we hold periodic
seminars for suppliers, promoting awareness and understanding of the importance of setting
SBT targets and working together to advance effective initiatives to reduce CO2 emissions.
P.26 Contributing to a Sustainable Society and KPIs
Sekisui House Owner Denki (Japanese only)

P.136 Contributing to a Decarbonized Society

Resource Recycling
Upgrading the Zero-Emission System into a Circular Economy
Sekisui House aims to provide high-quality housing stock and promote its circulation while striving to reduceresource usage in business activities. During the period of the Sixth Mid-Term Management Plan, we plan to commence full-scale initiatives to evolve our existing systems into a circular economy that minimizes impacts on natural
capital to the greatest extent possible through technological development in the area of resource recycling.

84

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

ESG Strategy—Improvement of Social Value

Improvement of Social Value
To better improve social value—one of the key themes of our ESG strategy—we have designated key measures from the perspectives of improving human resource value and improving social value.
Sekisui House believes that by combining employee autonomy with the alignment of efforts, it can increase Group human resource value and has therefore made doing so a key measure under its human resource strategy. We have designated four themes in this area: 1 Supporting self-directed career development, 2 Promoting DE&I, 3 Promoting diverse workstyles and 4 Building a foundation for well-being. Based on these, we will strategically work to reform systems,
foster organizational culture and advance initiatives while supporting and promoting employee autonomy. Furthermore, to align the efforts of the autonomous employees developed through these efforts, we will implement the key measures of
1. Nurturing leaders capable of disseminating our Corporate Philosophy and strategies, and 2. Securing staffing in line with strategies and optimally allocating employees.
To improve social value, we will steadily implement measures under the four themes of 1 “Kids First,” 2 “Green First,” 3 Respect for human rights and 4 Regional revitalization businesses. By doing so, we will seriously work to addresssocial issues, aiming to create and provide value through the various initiatives of the Sekisui House Group and thereby contribute to society.

Improvement in Human Resource Value

Improvement in Social Value

Human Resources Strategy Key Measures

Employee autonomy
1 Supporting self-directed

3 Promoting diverse• Self-directed career development
education• Career development support system• Sekisui House Innovation & Performance(SHIP) Awards Program• Enhancing the diversity of workstyleprograms• Expanding systems for fair evaluations• Creating a workplace culture that
ensures psychological safety

career development

Alignment of efforts

workstyles

2 Promoting DE&I

4 Building a foundation for• Promoting the participation of women• Promoting the participation of global humanresources• Promoting the participation of people withdisabilities• Promoting employee understanding of the
LGBTQ community• Assisting the pursuit of family happiness(encouraging male employees to takechildcare leave, nursing care leave, etc.)• Supporting health improvement efforts• Continuing the Well-Being Survey

well-being• Nurturing leaderscapable of disseminating our Corporate
Philosophy andstrategies• Securing staffing in linewith strategies andoptimally allocating
employees

1 “Kids First”

3 Respect for human rights• Providing children with opportunities fordiverse emotional experiences• Helping children develop housing literacy• Continuing to run the Children’s Fund,part of the Sekisui House Matching
Program corporate program to match
employee donations• Promoting human rights due diligencefor suppliers• Promoting human rights due diligence interms of global hiring

2 “Green First”

4 Regional revitalization•D rawing public attention to ethically
conscious lifestyles through thepromotion of ZEH• Securing public support for the Gohon
no Ki Project• Creating, managing and circulating
high-quality housing stock•C ontinuing to run the Eco-Fund, part of the
Sekisui House Matching Program corporate
program to match employee donations• Developing and creating employment for
housing construction workers• Promoting the Trip Base Michi-no-Eki
Stations Project• Delivering proposals on the effective
utilization of PRE (public real estate)business85

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

ESG Strategy—Human Resources Strategy

Human Resources Strategy

Key Measures under the Sixth Mid-Term Management Plan

Looking Back on the Four Reforms under the Fifth Mid-Term Management Plan

Employee Autonomy

To maximize the happiness of its customers, employees and communities, under the Fifth Mid-Term Management
Plan, the Sekisui House Group advanced the following four human resources strategy reforms.

1 Career consciousness reform: Self-directed careers
Our self-directed career development approach continued to take root among
employees, as indicated by a rise in scores for items related to employee autonomy
on the Governance Awareness Survey (an employee awareness survey) conducted byGroup companies. In addition, the revamped internal human resources recruitment
system has been proactively used for self-directed career development, with 84 applications for the seven positions posted.

2 Leader appointment reform: Leadership pipeline
We worked to enhance the leadership pipeline by expanding the scope of multi-rater
assessments to include managerial positions with authority over employee assessments and by selecting and developing successor candidates for key positions(employed executive officers, operating officers, general managers of head office andtechnology and production divisions, branch heads, the Head of Technology andHead of General Affairs.

3 Group human resources interchange reform:
Group human resources database

We enhanced our human resources database both quantitatively and qualitatively,
for example, enabling users to search Group-wide human resource data and creating a training program utilizing department-specific skill sheets.

4 Governance reform: Appropriate deployment of Group
governance specialists

In Group governance, we increased the rate of divisions with governance specialists(usually persons in charge of general affairs) to 95% and launched a common Group
educational program alongside the creation of training opportunities by individualGroup companies. Through such efforts, we made significant progress in reinforcing
governance Group-wide.

PolicyFoster awareness of self-directed
career development
Key Measures• Rebuilt the Self-Directed Career Development
Course career training program• Self-directed career development course•Communication through career interviews•Use of the Human resources recruitment system

PolicyEnhance the leadership pipeline
Key Measures• Successor management for key positions• Expanded scope of multi-rater assessment

Key Measures
In light of the steady progress made under the Fifth Mid-Term Management Plan tofoster self-directed career development mindsets, under the Sixth Mid-Term
Management Plan, we will work to build growth cycle mechanisms by which individuals can realize their career goals and thereby further increase human resource value
through the initiatives listed at right.
Specifically, we will improve the visibility of employee skills and experience using thehuman resources database and build platforms for learning by expanding e-learning. In
addition, we will provide opportunities for proactive career development as well as leavesystems and advanced study support systems to facilitate self-directed career development. Through such efforts, we aim to expand measures to support employee growth.

Aims

Key Measures

Support learning and skill growth• Improve visibility of employee skills andexperience• Build platforms for learning

Provide a variety of opportunities
for proactive career development• Invigorate human resources recruitment• Use career declaration tools

Enable a variety of workstyles tosupport autonomous employees• Leave systems for self-directed careerdevelopment• Advanced study support systems(graduate school support)• Increase external assignments, internalside job system

We aim to enable employees who are highly motivated to grow to benefit from growthmechanisms and leverage the resources of the Sekisui House Group to achieve professional success. Going forward, we will communicate examples of successes
achieved by such employees to other employees to strongly motivate them to utilize similar growth cycles. We expect this toaccelerate the enhancement of overall human resource value.

Alignment of Efforts
PolicyExpand data input into the humanresources database
Key Measures• Expand data
• Increase usage frequency

PolicyReinforce Group-wide governance
Key Measures
Appropriate deployment of governancespecialists

Key Measures
For each division of the Sekisui House Group to implement its specific strategies, external human resources are increasingly important. Through the measures listed at right,
we aim to better understand the gaps between the human resources we need andthose we currently have in both quantitative and qualitative terms and then increase theachievement of each division’s strategies through personnel hiring and reallocation.
During the Fifth Mid-Term Management Plan, we made significant progress inenhancing the leadership pipeline of the Company, so we will now expand the scopeof leader development to the entire Sekisui House Group.

Aims

Key Measures

Human resource planning• Better understand gaps between
needs and current conditions• Plans for human resource recruitment,
transfer and allocations, and internal
development

Leader development• Apply leadership pipeline mechanisms
to Group companies• Reinforce governance specialists anddevelop next-generation successors

Demand is particularly rising for human resources with governance knowledge,
advanced expertise or overseas work experience. We aim to use technology to improve operational efficiency and recruit
human resources from a longer-term perspective, considering how operations will change several years down the line. Byadvancing such initiatives, we hope that leaders at each site will become aware of the need to concretely estimate the numberof personnel and required skill sets from the perspective of strategy execution and for the leaders themselves to continue growing by expanding their perspectives to include Group-wide personnel transfer and allocation.

86

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

ESG Strategy—Technology and R&D Strategy

Technology and R&D Strategy: Sekisui House Technology
Since its founding, Sekisui House has aimed to deliver the highest quality and technology, helping solve the housing-related social issues of each era while growing its technology and R&D efforts. This evolution continues today. Looking at ourhistory in 30-year segments, the Company’s first phase began in 1960 with the realization of pre-engineering processes for reinforced concrete foundations and lightweight steel framing, providing housing that offers safety and peace of mind
at a time of housing shortages in Japan. In the second phase, our technologies for realizing comfort and eco-friendliness in housing grew in response to the emergence of demand for more affluent lifestyles alongside the issue of global warming. We were the first housing manufacturer to adopt next-generation energy-saving specifications as standard and then evolved these features to realize net zero energy houses (ZEH) and adopted the Airkis and other high-quality indoor air
systems. The combination of these technologies with reinforcements to structural framing gave rise to Family Suite, which provides indoor spaces that are spacious and open while comfortable to live in. In addition to greatly improving comfort
and reducing environmental impact through cutting-edge technologies, in the wake of the 1995 Great Hanshin-Awaji Earthquake, we developed the SHEQAS seismic control system and worked to evolve our technologies for safety and peaceof mind based on seismic resistance. In the third phase, we continue to focus on the residential domain, working to solve social issues through the integration of technologies, lifestyle design and services with a focus on health, connectedness and learning as we advance R&D into new technologies with the aim of making home the happiest place in the world.

Services

Phase 3 (2020–)•   Platform House Concept

Health, Connectedness
and Learning(Japanese only)

Sixth Mid-Term Management
Plan Measures

Design R&D

Value to Provide in 2030

Evolved Health,
Connectedness and Learning
Supporting value creation for customers

Providing high added value
Lifestyle
DesignPhase 2 (1990–)
Comfort and
Eco-Friendliness•    Green First houses (Japanese only)•    Slow Living housing design (Japanese only)•    Family Suite (Japanese only)

Environmental
technology development•   Airkis (Japanese only)

Evolved Comfort and
Eco-Friendliness
Creating multidimensional value by
combining technologies

Developed advanced technologies
Technologies

Phase 1 (1960–)
Safety and Peace of Mind

• Pre-engineered housing• Seismic resistance verification•
Long-term warranty system(Japanese only)•   SHEQAS (Japanese only)•    Flexible ß System (Japanese only)•   SHAWOOD construction method (S-MJ system)(Japanese only)

Original technology
development• Large, open spaces

Evolved Safety andPeace of Mind
Contributing to society with ourtechnologies for safety and peace of mind

Improved housing performance

TechnologicalFoundations• First-generation CAD
developed• AES estimate and order system• OES component development
system• SIDECS developed• Strategic individual house database project• CRONOS component development system•   Chief Architect internal certification program(Japanese only)

Building technologicalinformation foundations
and developing technicalpersonnel

Evolved TechnologicalFoundations withdigital transformation (DX)Supporting value creation for customers

87Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

ESG Strategy—Technology and R&D Strategy

Safety and Peace of Mind

Comfort and Eco-Friendliness

Sixth Mid-Term Management Plan Measures

Sixth Mid-Term Management Plan Measures

Original Technology Development

Environmental Technology Development

Product technologies are crucial to safety and peace of mind. In this area, we advance R&D of original technologies

Looking at lifestyle design in the areas of comfort and eco-friendliness, we will proactively advance R&D into environ-

adapted to evolving needs to local conditions.

mental technologies that contribute to the creation of high-quality housing stock and a sustainable society.

Approximately 30% of existing houses in Japan do not meet Japan’s current seismic resistance standards. To

Specifically, we will support the following efforts with technological development: 1. Maintain a high rate of ZEH

address this issue, we have developed a version of the foundation direct joints used in our SHAWOOD wood-among new detached houses, 2. Increase the ZEH rate and promote long-life quality housing measures for Sha

en-frame housing for use in traditional “shaku”-based modules in an effort to increase the seismic resistance of other

Maison rental housing and three- to four-story houses, 3. Promote ZEB for non-housing properties and 4. Promotewooden-frame housing through our skeleton and infill business. In addition to new home construction, we are pro-remodeling of existing houses to realize high thermal insulation performance.

moting and evolving our seismic resistance remodeling technologies for existing wooden-frame houses, such as ourshape memory load-bearing walls introduced in 2022, to contribute to the creation of high-quality housing stock.
Overseas, we aim to create
world-leading high-quality housing
stock by analyzing the characteristicsof the areas where we do business toadvance development aimed atapplying the SHAWOOD construction methods we have developed inJapan as well as Sekisui House technologies for making optimal lifestyle
design proposals.

production, increasing our “material to material” initiatives. At theInsufficient earthquake resistance(5.0 million units)

same time, we will further advance R&D aimed at “house to17%

Before new seismic
resistance standards(8.4 million units)29%

After new seismic
resistance standards(20.8 million units)

From the perspective of promoting a circular economy, we will develop technologies to reuse and recycle leftovermaterials and scraps from new construction sites and factory

house” reuse and recycling in the future. In addition, working
Detached house+
townhouse stock:

toward carbon neutrality, we are implementing R&D of technolo-

29.2

gies to use wood effectively and reduce CO2 emissions from amillion units

variety of other perspectives.

71%

About 30% of existing detached houses inJapan do not meet current seismic resistancestandards, and 17% are deemed to haveinsufficient seismic resistance.

In the area of comfort, we will promote R&D into environmental technologies related to the senses in terms of sound, heat,Foundation Direct Joint

air, light and smell while linking these efforts to health.
Value to Provide in 2030

Value to Provide in 2030

Evolved Safety and Peace of Mind

Evolved Comfort and Eco-FriendlinessSekisui House has led the way in comfort and eco-friendliness for housing and residents by promoting the adoption

Our technologies for safety and peace of mind, including seismic resistance, have continuously grown and developedof technologies for saving, generating and storing energy through its efforts related to ZEH and response to the ther-over our history of more than 60 years and are already highly advanced. We will further reinforce these technologies in

mal insulation performance grades set out in the Housing Quality Assurance Act of Japan.

preparation for increasingly frequent and severe natural disasters to provide safety and peace of mind in housing

In 2030, we aim to provide housing that offers comfort now and always for each individual customer. In terms ofthroughout Japan. At the same time, we will advance the use of our technologies for safety and peace of mind aroundeco-friendliness, we will accelerate initiatives aimed at carbon neutrality and a circular economy as we advance R&D

the world.

aimed at evolving housing to be friendlier to the planet.

88Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

ESG Strategy—Technology and R&D Strategy

TechnologicalFoundations

Health, Connectedness and Learning
Sixth Mid-Term Management Plan Measures

Sixth Mid-Term Management Plan Measures

Design R&D

Building Technological Information Foundations and Developing Technical Personnel

In the service aspect of health, connectedness and learning, we

An important aspect of building a next-generation technological platform will be the effective use of technologicalhave launched life knit design, a design concept for housing

data. During the period of the Sixth Mid-Term Management Plan, we will overhaul our technological system foun-where attachment continues to grow over time. The key points ofdations by introducing a next-generation design system and building a technological data platform.

life knit design are (1) Designing spaces with universal beauty that

With our next-generation design system, we aim to increase speed, enhance compatibility with internationalreflects emotions, (2) Providing genuine materials that age beauti-

building information modeling (BIM) formats, and expand tutorial functions for human resource development. At

fully over time and (3) Selecting eco-friendly materials. It is a new

the same time, our technological data platform will enable the integrated management of data not only related todesign approach for the era of the 100-year lifespan that provides

sales, design and component surveys, as in the past, but also data extending to R&D, production, distribution

value closely aligned with the sensibilities of residents. By reinforc-

and construction. Through the analysis and use of such data, we will realize operational process innovation,enhance quality and improve operational efficiency while providing new value to customers.

ing design capabilities and deepening human attachment tohousing, life knit design will contribute to the creation ofhigh-quality housing stock.

Design concept for housing whereattachment keeps grows over time

To develop human resources to support our technological capabilities, we will expand our human capital andcreate happy work environments for technical personnel. We will

In addition to building design, we are reinforcing landscaping

also promote an autonomous growth program that includes thedesign. We will also examine ways of integrating cutting-edge

use of practical skill sheets to enable employees to understandtechnologies into design methods, such as using digital technolo-

their own abilities and formulate career development routes ingy to provide hands-on virtual simulations of the use of livingline with actual work duties. Furthermore, to increase time spent

spaces. Furthermore, under the “Kids First” concept, we will pro-on creative work, we will study the use of digital assistance tech-pose lifestyles and spaces that center children and advance R&D

nologies in design, including the use of AI and other tools to

into product technologies to make these possible, thereby con-streamline routine request procedures.

Development

Maintenance

Sales

Technologicalinformation 3D comprehensive
house data
foundations

Construction

Technology data platform
Distribution

DesignSurveying

Production

tributing to children’s emotional development.
Value to Provide in 2030
Value to Provide in 2030

Evolved Health, Connectedness and Learning

Evolved Technological Foundations with Digital Transformation (DX)
Building on our technological foundations, which comprise our technology data platform and technical personnel

In 2030, Japan is expected to face severe demographic graying, a low birthrate, a declining population and a risingdatabase, we will create new value leveraging DX (IT) in 2030. For example, we will reinforce development capabili-

number of households. To respond to these social conditions, Sekisui House will promote health, connectedness

ties and create sophisticated cost management technologies for price setting through the analysis of product life-and learning through housing from a variety of perspectives, including housing that is rich in feeling and promotes

cycle management (PLM) data; implement high-level human resource development that transcends conventional

well-being with an emphasis on individuality and personalization, as well as housing that offers virtual worlds throughorganizational frameworks; and work to maximize employee happiness by formulating new evaluation methods. In

the integration of evolving digital technologies. By doing so, we aim to make home the happiest place in the world.

these and other ways, we are expanding the ways we approach utilizing our technological foundations.

89

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

ESG Strategy—Digital Transformation (DX) Strategy

Digital Transformation (DX) Strategy
The History of Sekisui House’s Digital Technology

Approach to Digital Transformation (DX)Sekisui House has developed digital technology mainly in three areas: office work, computer-aided design (CAD) andproduction. For office work, we began operation of SABICS to manage contracts, sales and receipt of payments in
1978, followed by the AES estimate and order system in 1980 and the CANVAS business operations system in
1999, among others. In CAD, we started with a first-generation system developed especially for housing in 1974,
and after going through several iterations we began operation of SIDECS in 1999. We also took the first step into theage of total product proposal presentations through linkage with peripheral systems. For production, we began operation of OES, a system for developing components, in 1980. By developing the building components we use fromblueprint data created using CAD, we have achieved efficient production and advanced quality control at our factories. Through a strategic project we started in 2010, we have used this infrastructure to create a centralized databaseof information on individual customers’ houses from our initial contact with them to after-sales service and remodeling. This platform underpins Sekisui House’s DX.
Sekisui House thus has a history of leveraging its competitive advantages in the industry by introducing digitaltechnology that increases efficiency and helps to manage and improve overall quality in step with changes in thebusiness environment. Today, the IT Design Department plays this role. The former Information Systems Department,
which was part of the Management Division, merged with the CAD/AES Center in 2009 to become the IT Business
Department. In 2013, this department merged with technical IT departments from the Production Division,Development Division and elsewhere, and from 2018 it was made part of the Business Strategy Division. In 2022, as
the IT Design Department, it is working to transform Sekisui House’s businesses to pursue new potential from IT.

We believe that the role of DX in the Sekisui House Group’s business strategy lies firmly within the boundaries of its
businesses. Based on this understanding, we apply digital technologies as a means to transform our businesses.
The extensive customer information and design data we have collected and managed over more than 60 years since
our establishment provide a foundation for the application of these technologies. While using the data we have accumulated to conduct advanced competitive IT that applies AI, IoT and blockchain technology, we also conduct defensive IT, which entails raising operational efficiency through system-level reforms and upgrades in addition to
constructing and stably operating system infrastructure. Furthermore, we are working to improve corporate value by
establishing IT governance for strategic control of risks and returns for each investment in information systems
according to uniform rules.
In recent years, responding to labor shortages and workstyle reforms has become an urgent issue. The COVID-19
pandemic beginning in 2020 necessitated new ways of working, such as remote work, that can be done anywhere.
Our top priority in addressing this issue was speed. As a result of the smooth introduction of new workstyles, remote
work is now firmly established at Sekisui House. We have identified work premised on printed documents and personal seals and are promoting more efficient and effective ways of getting these tasks done. Moreover, as remote
work has brought the effective use of online communication methods to the fore, we are ambitiously working to
improve performance by using such new communication tools not just internally but also for meetings and consultations with customers and suppliers.
We will continue to approach IT from both competitive and defensive strategic perspectives as we promote DX tocreate value for all our stakeholders.

History of Utilizing Information at Sekisui House
1970

1980

1995

2009

2013

2022

Machine Calculation
Section, Accounting
Department

Computer
Department

Information Systems
Department

IT Business
Department

Merger with technical
IT departments

IT Design
Department

Office work
systems

1978

1999

2010–2014

2013–

SABICS begins operation

CANVAS begins operation

Host-based management system forcontracts, sales and receipt of payments

Nationwide rollout of business systemusing relational database and PC software

Strategic individual house
information database project

Company-widerollout of tablets

Restructuring of operations for
Company-wide optimization

Introduction and use of 18,000
tablets for all operations

1974

1999

First-generation CAD begins operation

SIDECS begins operation

2011

Centralized processing at 2D CAD
center for minicomputer operation

Company-wide CAD integration
Design using CAD on individual PCs

SIDECS-II begins operation

CAD systems

Production
systems

Purpose of
information
utilization

1970

1980

1988

2004

SEPIAS begins operation

Linkage to production order data

New component development system

Automated development system begins operation
Design data must be re-input because
CAD is not yet linked to the system

Digital ordering linked to SIDECSCAD integration instead of linkage

Business efficiency and automation

Information systems creation stage

Office automation promotion stage

1980

1990

Competitive IT Strategy (SoE)1

Utilizing customer andbusiness data

Improvement of businessaccuracy and linkage

Company-wide business
optimization

Workstyle innovations/Management and business expansion

Open systems/Analysis anduse of information in eachbusiness system

Centralized information
management and businessrestructuring/ Company-wide
utilization of information

Visualization and Company-wide utilizationof information
Creation of new value from information2010

New technology
applications

2013

Workstyle innovation
Increased productivity

Defensive IT Strategy (SoR)2

2013–

Systems
Maintenance

2000

Innovation

Customers
Greater trust
Increased satisfaction

Employees

Company-wide centralized
management including CAD data

OES begins operation

Management of accounting information

Overview of Our IT Supporting DX

Infrastructure
construction

1 SoE: System of engagement   2 SoR: System of record

Stable operation

Sekisui House
Increased corporate value
Contribution to business90

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

ESG Strategy—DX Strategy

DX Strategy in the Sixth Mid-Term Management Plan

Highlight 1

The Sekisui House Group is working to create new customer experience value, maximize business opportunities andSince our founding, we have been closely attuned to our customers to provide value through housing. Amid thetransform its operations by using wide-ranging data about its housing-related businesses and customers alongsideongoing shift to digital contact with customers, we are promoting CRM with the mission of enhancing the value of theadvanced digital technologies. In particular, under the Sixth Mid-Term Management Plan, we are focusing on cus-

entire customer experience, from housebuilding to after customers take possession. To date, we have establishedtomer relationship management (CRM), the Platform House Concept and DX for rental housing as priority initiatives.

and promoted after-sales services for customers that include the Customer Service Center Owner Desk, which

In CRM, in order to make proposals to customer segments that we have previously been unable to address indetail due to the limits of management resources, we will take a scientific approach to sales activities and create newcustomer experience value by analyzing a diverse range of existing customer data in order to contribute to customer

Customer Relationship Management (CRM)

accepts inquiries 24 hours a day, 365 days a year, and the Smart Inspection system, which uses multiple advanced
devices for housing inspections. Through such services, we strive to enhance customer satisfaction.
Under the Sixth Mid-Term Management Plan, we will focus efforts on initiatives to further enhance experience value
for customers considering housebuilding in order to increase the effectiveness of our proposals and efforts to reach cus-

happiness and strengthen our earnings power.
Under the Platform House Concept, we will install housing with numerous services centered on health, connectedness and learning as we accumulate and utilize living environment data to provide customer happiness.
In DX for rental housing, we will transform experiences for customers considering moving into our Sha Maison

tomers. Specifically, we plan to accumulate and improve the usability of such data as the digital responses of customers
when approached through digital promotions, as well as their display house visit history. This will enable us to scientifically analyze their latent and apparent needs in order to propose optimal solutions and thereby efficiently secure orders.

rental housing by using blockchain and other digital technologies to digitize and move various procedures online,from property searches, tours and move in all the way to move out. By doing so, we aim to enhance customer con-EmergeDiscoverCompareBelieve

Accomplish

NurtureAdvocate

Demand for housing
acquisition andrebuilding emerges
in such life stages asmarriage, childbirth,child rearing andretirement.

People begin gathering information
regarding interiors,
layouts, etc., to discover their ideal
home.

People compare andexamine housebuilders
based on their reputation, impressions of
their staff and the balance between the pricing and genuine valueof houses they provide.

People build confidence in a particularhousebuilder after
making comprehensive
judgments about thestaff and the affinity of
its proposal with theirown value system,budget considerations
and family needs.

An agreement issigned to determine
design, specifications,construction period,
etc., as future homeowners have growing
expectations for life
with their new house.

Homeowners nurture their housing via
maintenance andremodeling so their
attachment grows
over the passage oftime.

Homeowners recommend the valueof our brand to
those around thembased on the happiness they have builtwith their housing.

venience and our operational processes.
To realize these three DX strategies, we will need to utilize not only the various data that exists within the Group,
but also external data from third parties. As such, we will build a foundation for DX from the perspectives of databases, rules (operations), and human resources to enhance the efficacy of each strategy.
Customer relationship management(CRM)• Strengthening our earnings power bytaking a scientific approach to sales activities• Creating new customer experienceand value by analyzing a diverse
Highlight 1
range of existing customer data

Platform House Concept

DX for rental housing• Installing numerous services• Accumulating and utilizing living
environment data
Highlight 2• Utilizing blockchain technology to establish data linkages with partner companies• Introducing electronic procedures
while enabling self-guided
Highlight 3
property tours

An approach that unearths
latent needs and promotes
personalization and appeal

Scientific analysis of customer
needs to deliver optimal
solution proposals
Digital approach

Promotion/
Mass communications

Utilizing diverse data from the entire Group and third parties

Web

YouTubeCommercials

In-person approach

Instagram

Web

News

SNS

Seminar
Display Home

Event

Support to be extended
until completion anddelivery
DigitalapproachSNS

Provision of customercentric services that help
nurture beloved houses

Digital approachIn-person
approachIn-person approachShow room

Web

Construction site

SNS

Periodic Inspection
Remodeling

Event

Foundations for realizing data utilization
Digital technologies aimed at resolving issues arising from the labor-intensive nature of the industry

Developing an integrated
customer database

Ensuring robust security andIT governance on a global basis

Nurturing digital specialists capableof achieving operational improvement and creating new value

Integrated customer database
Needs
database

Visitordatabase

Consultation
database

Building
database
Specification
database

Maintenancedatabase
Remodelingdatabase

Lifestyledatabase

Living environment database91

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

ESG Strategy—DX Strategy

Highlight 2Highlight 3

Platform House Concept

DX for Rental Housing

As a core initiative for our global vision, we are promoting our Platform House Concept to help residents achieve hap-

Our DX for rental housing refers to the use of digital technologies across all processes related to the Sha Maison rent-piness in the era of the 100-year lifespan.

al housing customer experience from move in to move out in order to enhance resident experience value andIn services focused on connectedness, we offer PLATFORM HOUSE touch, a smart home service installed in

improve operational efficiency.

housing. Using intuitive controls based on a diagram of the house’s floor plan, users can check whether doors and

For the property search phase, we will reinforce DX for the Sha Maison property information site for prospective

windows are closed and locked to prevent crime, get alerts of heat stroke risk from humidity sensors and respond bytenants to improve convenience. For the subsequent property tour phase, we are implementing proof-of-concept tri-

remotely operating air conditioners from outside the home, improving living convenience. This service has been wellals of self-guided tours to better meet the diverse needs of prospective tenants. For move in, we aim to shift all pro-

received by customers. In health-focused services, we plan to install HED-Net, an in-home early detection network

cedures online, including allowing customers to apply electronically, using IT to provide legally required explanations

for acute illnesses, in homes going forward.

of important matters, and signing agreements electronically. In addition, we will promote inter-company data linkages

Under the Sixth Mid-Term Management Plan, we will provide highly convenient services that connect homes andusing blockchain technologies for utility and IT infrastructure service applications, such as water, gas and Internet, tofamilies by applying IoT and AI functions to our accumulated big data on housing. At the same time, we plan to add

realize fully online, one-stop procedures. After move in, we will offer a range of procedures and services throughsuch services to the offerings of Sekisui House Remodeling and roll them out to GRANDE MAISON condominiums.

tenant apps. Finally, for move out, we will enable tenants to handle all move-out procedures online.
By thus advancing DX across all processes from move in to move out, we will further enhance the Sha Maison brand.

Installing service after service

Significantly transforming customer experiences and operational process by using digital technologies todigitize and move online various procedures and realize self-guided tours
1st installation step

2nd installation step

3rd installation step

Future installations

Customers considering moving
into rental housing
Property searches

Floor plan-linked home remote control
Floor plan-linked self-monitored home security
Floor plan-linked living environment monitoring

Curation of services related
to health, connectedness
and learning

Fifth Mid-Term Management Plan: Starting from detached houses

PFH System
Data Lake

Edge computing
Strengthening in-home
information security

Big data only possible
with a housing
manufacturer

Analyzing accumulated
data and feeding itback to individuals andfamilies based on
scientific data analysis

Health services
HED-Net, preventive medicine,
in-home medical care

Sixth Mid-Term
Management Plan:
Sekisui House Remodeling
Sekisui House noie
GRANDE MAISON
Expanding to othernon-residential businesses

We will continue to increase services
to acquire detailed data on life stage
changes, lifestyles, and residential
logs within each residence

Visiting thesite with thesmartphone

Unlockingthe property
with thesmartphone

Touring
the home

Self-guided property tours using smart locks• Meeting diverse tour needs and contactless needs• Solving issues related to labor-intensive operations
Testing issues and expected effects throughproof of concept (PoC) trials
Target	Nationwide high-price properties
under management (around 4,000
units)
Overview	Testing and building schemes tomove online procedures and operations related to rental applications

Make home thehappiest placein the world
Strengthening the Sekisui House brand (area expansion)

IT-based
explanationof importantmatters

Electronic
agreement

DX of applications
and agreements

DX of property tours

Smartphonebased reservation forhome tours

Further enhancing convenience and providing user services, such as search forroom vacancies, using thehome search site shamaison.
com

Electronic
application

Home tours

DX of home searchesNEXT STEP
External sales of nonSekisui House houses,
condominiums and otherproducts on a trial basis

Home tour
reservations

Tenants (families) livingin Sha Maison

Status	95 self-guided tours conducted, 20%
application rate
(as of December 31, 2022)

Latent customers in each of
the Company’s businesses
Move in tostable home life

Move-out
procedures

DX of procedures andservices during residence

Blockchain
Secure data links
made withcustomer consent
Government andother companies• Service
procedures• Move-in
procedures, etc.

DX of move-out procedures
and cleaning fee settlement• Reducing tenant burdens• Acquiring data related to moveout destination• Maintaining customer engagement through functions that canbe used after moving out

Applicant data(name, new address, etc.)
Inter-company
data linkage

Move out

Tenant apps withdiverse functions• Linked with call centers• Strengthening responsiveness to tenants and making operations more
efficient• Providing Company product data attuned to eacharea

Enhancing customer
experience value

Creating business
opportunities for the Group• Maintaining relations with customers who are fond of Sha Maison• Accumulating data through continuous use of residential services• Appealing to those consideringbuilding or buying residences(CRM to realize Group synergy)

Creating business
opportunities

We participate in inter-company data linkage using blockchains and work to create new value through open innovation with different industries.

92

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

93

Section4

ESG Management
The Outside Members of the ESG
Promotion Committee Share Their Views

94

Stance and Initiatives to Promote
ESG Management (Sustainability)

97

Governance99

Environment

133

Social181

Participation in International Initiatives andActivities with Government andIndustry Groups

219

Independent Third-Party Assurance Report220

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

The Outside Members of the ESG Promotion Committee Share Their Views

Expectations for New Value Creation Initiatives
as a Leading ESG Management Company
As part of our efforts to become a leading company in ESG management, we have established the ESG Promotion Committee, an advisory body to the Board of Directors that
holds vigorous discussions. We asked two outside committee members with expert
knowledge of ESG issues for their opinions on our ESG-related initiatives up to this point,
as well as their future insights on related issues.

Katsuhiko Kokubu

From Inception to Present: Reflecting on the ESG Promotion Committee

Hidemi Tomita

Dean and Professor, Graduate School ofBusiness Administration, Kobe University

Kokubu At the time of the formation of the ESG Promotion Committee in 2020, Sekisui House’s ESG initiatives were already

Representative Director,
LRQA Sustainability K.K.

After earning a doctorate in business administration from Osaka City University, heworked as an associate professor at Osaka
City University and Kobe University before
appointment to his current position in 2001.
Dr. Kokubu specializes in social and environmental accounting and business ethics.
His major publications include Concept ofValue Creation, published by Nippon Hyoron
Sha Co., Ltd.; Emergent Responsible
Management: A Social Connection Model,
published by Nikkei Business Publications,Inc.; From Accountability to Management
Ethics, published by Yuhikaku Publishing Co.,
Ltd.; and The Fundamentals of CSR, published by Chuokeizai-sha Holdings Inc.

advanced. However, I wholeheartedly feel that it has made steady progress since then.
The fact that every single representative director is in attendance for every committee meeting is a good example of the high levelof commitment. To my knowledge, it is not common for all representative directors to attend such committee meetings at other companies. Sekisui House’s activities have reached this unparalleled level because top-level management has taken the initiative toengage in ESG-related activities on a Company-wide basis.
Tomita I too feel that Sekisui House’s ESG activities were already clearly at the top level among its industry peers in 2020. As forthe committee’s operation, one stand-out feature is that the Directors’ seats are set up in the back of the meeting hall. Discussions

tend to become formal when management is positioned in the front, but this setup makes it easy for people closer to the front linesof business to speak up.
Kokubu The fact that the meetings are always full of substance is another good indication of how serious the Company is about its
ESG activities.
Tomita I agree. It’s a rare case indeed for a committee to meet with outside committee members every three months, holding discussions for roughly two hours each time. These discussions, including following up on comments from previous meetings, help

drive the progress of ESG initiatives.

After earning a bachelor of science in engineering in applied physics from the Universityof Tokyo and a master of science in chemicalengineering from Princeton University, Mr.
Tomita served as general manager of Sony
Corporation’s CSR Department, following
its establishment in 2003, for roughly adecade. He has participated in the establishment of international frameworks for CSR bychairing Communication Task Group 2 in theworking group for the formulation of ISO
26000 and by joining the Global Sustainability
Standards Board (GSSB). He is the author of
Sustainable Procurement in the Age of ESG
Investment, published by Nikkei Business
Publications, Inc.

94

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

The Outside Members of the ESG Promotion Committee Share Their Views

I’d like Sekisui House to
rekindle the spirit ofinnovation it had at its
founding and develop new
business models that willlead to ESG value creation.

ber heard this and asked to use the concept within the Company, to which

Sekisui House Group’s Current Position and Reputation

I readily agreed. I have heard that it has indeed been advocated in the ESG

Kokubu There is no doubt that the Sekisui House Group stands in the topclass of ESG management, not only in the housing industry, but also

dialogues.

among Japanese companies in general, and I think that external evaluations

Additionally, the SHIP Awards Program was implemented after we pre-““For example, I sometimes speak about the concept of ESG not existing
within companies, but rather companies existing within ESG. A staff mem-bear that out. However, given that the Company is in the top class within

sented cases of emergent responsibility management. As an outside com-

existing frameworks of ESG management, the next step should be to con-mittee member, seeing people resonating with our opinions and acting onsider what the future holds for ESG management, and to take on the role ofthem is gratifying and has led me to consider what sort of things we should

pioneering that future. Getting a perfect score within a certain criteria set iscommunicate next in order to contribute to ESG management.

good, but if that’s your only focus, you’ll never push past the boundaries

Communication has been fruitful on both ends.

that define those criteria to new heights.

Tomita Even the idea of Sekisui House existing within ESG has been well

If Sekisui House can pioneer ESG initiatives that will change future busi-

digested and understood by many at the executive level. Recent thinking is

ness models, then and only then can it call itself a true leading company inmuch more precise than when they first established the goal of “aiming to

ESG management. That the Company has grown as large as it has, without

be a leading company in ESG management.”a doubt, comes down to its history of business model innovation. I strongly

Kokubu The most concrete change from the committee’s inception to

Another thing is that, during meetings, for example, when I make a com-urge Sekisui House to rekindle the spirit of innovation it had at its founding

date has, of course, been the reinforcement of the concept of value cre-ment to someone who has made a report, a representative director will

and to take on the challenge of developing a new business model or two

ation. A more realistic perspective on value creation has emerged, and insometimes make a comment from a different angle that had not occurredfor ESG value creation.

addition to a greater emphasis on process, ESG value creation is now

to me before. Having multifaceted opinions expressed from varying per-approached from a similar perspective as existing business processes. I

spectives is a sign of a good discussion.

Tomita The statement of new value will be essential for ESG management going forward. The ”perfect score,” to borrow your analogy, is deter-

think that the top management team has also exhibited leadership by clearly

The continuation of these activities is bound to produce results. I am verymined based on the best practices of various industry initiatives to date. It

demonstrating its stance both internally and externally. What do you think?

much looking forward to seeing them in two or three years.

would be nice to see Sekisui House step out of that framework and take

Tomita In terms of leadership, top management’s direct participation in

Kokubu It is essential that activities designed for everyone are not forced

the initiative to define new standards.

the ESG Promotion Committee has created a sense of unity with onsite

on participants. Even for those not currently participating, having each per-

Of course, efforts are already underway to take initiatives a step further,

workers. It is also noteworthy that the direction of the Company as a wholeson consider what they could do is a form of participation in itself. This kindsuch as urging suppliers to set targets that will enable them to obtain a

has become clearer and employee engagement has increased through ini-of broadly conceived participation of all employees is desirable. Creating

Science Based Targets (SBT) validation. While these are meaningful steps, I

tiatives involving employees, such as the ESG dialogues and the Sekisui

systems in which people can participate when inspiration strikes, and inhope to see more major developments toward a better future.

House Innovation & Performance (SHIP) Awards Program. This is a signifi-

which they can really feel that they are contributing to the Company andcant evolution.

society, is important. Endeavors such as SHIP help lay the groundwork for

Kokubu An easy-to-understand approach to considering new ESG business models is to solve social issues. Factors such as the rapidly mounting

Kokubu Something that particularly stands out from my involvement as an
outside committee member is how the Company has incorporated our rec-such systems.

effects of Japan’s low birthrate and aging population, along with the result-ommendations and opinions into its actual activities.

ing depopulation, have made the increase in vacant houses a major issue.
How can Sekisui House, as a housing manufacturer, tackle such issues? At

95

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

The Outside Members of the ESG Promotion Committee Share Their Views

companies may be able to create new value with the acquisition of know-

women living in poverty, and the number of single mothers is growing. How

how. This is a very important initiative that brings us back to the fundamen-

could the Company go about addressing the issue of housing for suchtal question, “For what purpose does a company exist?”

people? Developing new business models is of the utmost necessity when

Recently, digital transformation (DX) such as the Platform House Concept

it comes to solving these issues. To that end, making full use of a system

has also been advancing. This has the potential to change the meaning andlike SHIP, in which people in the field can present their solution ideas forvalue of living, and now, at a time when the boxes we call houses areissues they have firsthand experience with, would be a good idea.

approaching their pinnacle, this technology will bring both new value andness models that promote employment by utilizing the experience andnew meaning.
Kokubu     The
Platform House Concept is extremely innovative. In particular,

skills of seniors. Efforts in this arena should prove to be a net positive stepDX can be a source of growth for Sekisui House in the future, and life-sav-

for the future.

ing technologies such as the HED-Net In-Home Early Detection Network

Tomita Even when considering net zero energy houses (ZEH), I think thefor Acute Illnesses will be extremely significant in daily living in the era of theCompany is approaching the pinnacle of sustainable housing. Therefore, I

100-year lifespan. This platform business is completely different from thehope that in the future Sekisui House can broaden its perspective from “build-previous know-how of housing manufacturers. I hope it will open the door

ing houses” to “living” and consider ways of living that tackle social issues.

to a new era.

There are a variety of issues to be addressed, such as the need for busi-

Future Challenges for Sekisui House’s ESG Management

Tomita In doing so, a possible future approach will be to work not onlywith other companies, but NPOs and other suitable partners to promote

ing was the importance of “making Sekisui House, another home for our
employees, a happy place.”

housing manufacturers work together to conduct scenario analyses and apply
them to the entire housing industry, their accuracy is sure to be enhanced.

The challenge for the future
will be for Sekisui House tobroaden its perspective from‘making good housing’ andmore deeply consider waysof living that tackle social
issues.

customers, but what I mentioned at the ESG Promotion Committee meet-

Kokubu For issues that are difficult for one company to solve, such as

decarbonization, it is imperative for everyone in the industry to join forces. If““

the same time, widening income disparity is giving rise to more young

I would like to see each and every employee enjoy happiness as they

Kokubu I may be repeating myself, but the issue at hand is the creation of
new ESG value.

develop their careers. Even if they ultimately leave the Company, I would

For example, while numerical targets such as reductions in CO2 emis-

like to see Sekisui House prove it is the company employees always contin-

open innovation.

sions or increases in the value of human capital are important, discoveringue to appreciate as having been a great place to work.

Kokubu I thought it was wonderful when I heard that Sekisui had begun
working with local construction companies to implement its own seismic

previously unconsidered social value and giving shape to the ESG value
generated by Sekisui House as concretely as possible will be a major chal-

Kokubu There are more than a few employees at Sekisui House who are
involved in ESG activities not only because it is their job, but also because

resistance technologies to address the issue of the many homes that stilllenge going forward.

they consider it important as human beings.

Generating innovation must be in the very DNA of Sekisui House. By

Going forward, increasing the number of such people will be a driving

nessed firsthand the damage caused by the Great Hanshin-Awaji

incorporating it into ESG management and preparing many possibilities forforce, not only for the betterment of the Company, but also for the better-

Earthquake, I am keenly aware of the need for seismic resistance technolo-

the next sprout, real fruit will be borne. This is what is done in ordinary busi-

ment of society. It is my fervent hope that Sekisui House, as a leading com-gy. Making some of these technologies available to other companies toness. I expect that Sekisui House will be able to innovate based on suchpany in ESG management, will nurture people who are willing to take action

promote their wider use serves the interest of Japan as a whole.

ideas in ESG as well.

regardless of their department.

Tomita The supply of many houses with excellent seismic resistance may
save many lives in the event of a disaster. In addition, local construction

Tomita The Company’s global vision—to make home the happiest placein the world—is primarily focused on the happiness of Sekisui House’s

do not meet earthquake resistance standards. As someone who has wit-96

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

Stance and Initiatives to Promote ESG Management (Sustainability)
ESG Promotion Committee
The Board of Directors has established the ESG Promotion Committee,
which includes at least two external committee members with special
expertise, and has tasked it with exchanging opinions on the progress of
initiatives aimed at enhancing the effectiveness of ESG management, alongwith requisite challenges to be addressed to this end. The committee
meets once every three months, with the content of its discussions being
reported to and examined by the Board of Directors. When the committee
deliberates topics related to risks, its conclusions are shared by the Risk
Management Committee so that these topics are reviewed and managed
within the Group’s overall risk management system.
•	Chairperson: Officer in charge of ESG division•	Outside committee members: 2
	Katsuhiko Kokubu (Dean and Professor, Graduate School of Business
Administration, Kobe University)
Hidemi Tomita (Representative Director, LRQA Sustainability K.K.)•	Internal committee members:	Head of the ESG Management Promotion Headquarters, the respective
chairpersons and vice chairpersons of the three ESG subcommittees(Environmental Subcommittee, Social Improvement Subcommittee andGovernance Subcommittee), etc.
Note: Directors of the Board, Audit and Supervisory Board members and officers in managing officer
positions or higher attend committee meetings as observers.

The ESG Promotion Committee has established three subcommittees, eachof which respectively promotes one aspect of ESG: the Environmental
Subcommittee, the Social Improvement Subcommittee and the Governance
Subcommittee. The chairpersons of these committees are appointed fromamong individuals in charge of relevant operations, with each subcommittee
setting goals and key performance indicators. The subcommittees collaborate with each division and Group companies inside and outside of Japan,
and take the lead as flag-bearers of our ESG management principles, while
implementing effective initiatives. In addition, the subcommittees disseminate these initiatives and promote their greater understanding among all
employees by creating progress reports, providing feedback on issues andproposing improvements to the dissemination process.
Established in June 2020, the ESG Management Promotion Headquarters
acts in collaboration with business units within the Company as wellas Group companies in Japan and overseas to further promote ESG

management based on discussions at the ESG Promotion Committee.
Under this structure, we have identified three key elements for promoting
ESG management: participation of all employees, forward-thinking initiatives
and improvement of external evaluations. Among these, we consider theparticipation of all employees a matter of foremost importance and, to thisend, we have reorganized our conventional programs for employee dialogue
and training into “ESG Basics.” These programs now constitute fundamental initiatives focused on developing foundations for ESG management. In
these ways, we have developed a platform that encourages all employees
to recognize, understand and embrace ESG and act accordingly.
Also, the Sekisui House Group aims to maximize customer value
through its initiatives to address social issues, facilitate social sustainability
and contribute to SDGs.
Main Agenda of the ESG Promotion Committee for FY2022
Schedule

Main agenda

8th• Formulation of corporate story andreview of material issues
March 1 • Identification of KPIs based on material issues• R eformulation of Value Creation
Process• Overview of FY2022 response to the
TCFD

9th

May 20• Pre-issuance reporting on the Value
Report 2022
• Reporting on the first round of SHIP
and its future direction• Second round of Well-Being Survey
Reports• Happiness Health Management• B eneficiaries of FY2022 Sekisui
House Matching Program• Human capital-driven enhancementof corporate value and information
disclosure

10th

July 19• Follow-up reporting on progress in thefirst round of SHIP idea solicitationand policies for screening criteria to be
applied to the second round• ESG-focused engagement with institutional investors• Initiatives related to carbon neutrality• Nationwide rollout of housing education programs• Initiatives to strengthen governance11th

October11• Mid-term management plan policies• Progress reporting on SHIP

• Initiatives to promote paternity leave• Disclosure of human capital-related
information• Editorial policy for the Value Report2023• Draft of human capital-related information to be disclosed• Results of the Gohon no Ki Project
activities and policies for response to
the TNFD• Themes for FY2023 ESG dialogue• Status of applications for the second
round of SHIP and progress in the
projects of second-place winners forthe first round

2022

12th

2023

January17

In June 2020, the Sekisui House Group established the ESG Management
Promotion Headquarters to administer the planning, drafting and implementation of the Group’s basic ESG management policies. This organizational reform represents a statement of our determination to be a leading
company in ESG management, in both name and reality. It will not only
promote Group-wide initiatives related to ESG management, but also provide support and coordination, information collection and analysis, and unified information dissemination both inside and outside the Company.

ESG Management Promotion Structure
Board of Directors
3 ESG subcommittees

ESG Promotion Committee

1. GovernanceSales

E: Environmental Subcommittee(Chairperson: Head of Environment Improving Department)
Approval• Decarbonized society • Society in which humans andnature coexist • Resource-recycling society• Water resources • Other environmental management

Production andprocurement

S: Social Improvement Subcommittee
Head office(Chairperson: Head of Diversity and Inclusion Promotion Department)
Report• Promoting Diversity • Human resource development• Workstyle reforms • Respect for human rights• Happiness Health Management • Contributing to society

Cooperate

G: Governance Subcommittee

Group companies
in Japan• Fostering an organizational culture to promote
innovation and communication• Strengthening the Group governance system

Group companies
overseas(Chairperson: Head of Investor Relations Department)

Secretariat: ESG Management Promotion Headquarters

Environmental Subcommittee
We promote the decarbonization of all Group business activities, as well as plan andimplement environmental management systems for conserving biodiversity and recycling resources. We also collect environment-related information and disclose this in areport once a year. By doing so, we strive to raise internal and external stakeholders’awareness of the environment and our efforts to reduce environmental impacts.
Environmental initiatives are central to our global vision to make home the happiest
place in the world. We therefore implement sophisticated initiatives to reduce our environmental impact and risk exposure, while creating business opportunities.
Social Improvement Subcommittee
The Sekisui House Group grows when our employees grow. We therefore embraceand make the most of diversity, while instilling a corporate culture of innovation andcommunication throughout the Group. Our goal is to maximize the happiness of ourcustomers, society and employees.
Diversity and inclusion are the practical aspects of our efforts to develop systems,
workplace environments and corporate culture supportive of each employee’s sense ofjob fulfillment and self-directed career development.
Governance Subcommittee
In our ongoing efforts to strengthen corporate governance, we consider it important tocreate an open workplace culture, and therefore we make every effort to ensure all
employees understand and act on our corporate philosophy and the essence of ESG
management. To strengthen Group governance, we have established a system to activate communication among governance specialists, led by managers responsible forgeneral affairs at each organization in Japan and overseas, and are also working tostrengthen the development and conduct appropriate allocation of governance specialists throughout the Group.

97Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Stance and Initiatives to Promote ESG Management (Sustainability)

The participation of all employees is the most important of the three elements

2. Strategy

4. Metrics and targets

Sustainability basic policy

For the detail of metrics and targets associated with each material issue,

in ESG management, so we have structured a platform that encourages allplease refer to the following articles.

A Platform That Links Recognition and Action

Based on NEXT SEKISUI HOUSE 30-year Vision toward 2050, the target

P.22 Creation of High-Quality Housing Stock and KPIyear of its long-term vision, the Sekisui House Group aims to realize its

P.26 Contributing to a Sustainable Society and KPI

global vision of making home the happiest place in the world. We thus

P.32 Diversity & Inclusion and KPI

strive to maximize happiness for customers, society and employees as aP.125 Themes and KPIs for Initiatives That Provide a Basis for Our Material Issues

global company capable of delivering technologies, lifestyle design and services in an integrated manner, with housing as the axis of these offerings.
With the aim of becoming a leading company in ESG management, andin order to achieve our global vision, the Board of Directors has set ESG
initiatives as priorities that support the Group’s management foundation,and the Board is promoting these initiatives by incorporating them into the
Mid-Term Management Plan.
Guided by resolutions by the Board of Directors, the Group has identified
the creation of high-quality housing stock, contributing to a sustainable
society, and diversity and inclusion as material issues when promoting
ESG management. The Group has also defined themes and KPIs in connection with these issues.
In addition, we have sought to analyze medium- to long-term issues that
affect value creation with relation to sustainability, identify risk factors, andposition risks as opportunities for future business development. These inputs
are, in turn, utilized to formulate medium- to long-term business strategies.

3. Risk management

employees to recognize, understand and embrace ESG and act accordingly.

Three Elements of ESG Management Promotion
In order to be continually sought after by society as a leading company in

Find meaning
in recognition

Find meaning inunderstanding

Embraceenthusiastically

Actions for selfdirected change

ESG Basics
Systematic
dialogue andtraining

E-learning
Classes andworkshops

Online seminars
Tsunagari Café
Lunchtime meetings

Sekisui House Innovation& Performance (SHIP)
Awards Program
ESG indicators for a
Presidential Award

ESG Management Basics: The Starting Point for
ESG Implementation

ESG management, it is important to think and act on how we respond toall stakeholders and how we can make them happy.

ESG Basics draw on our corporate philosophy to provide all employees

We have therefore identified three key elements for promoting ESG man-with a management platform for implementing fundamental actions foragement: participation of all employees, forward-thinking initiatives, andbuilding an ESG management foundation. We have systematized our con-improvement of external evaluations. Forward-thinking initiatives are newventional dialogue, employee survey-­challenges that the Group consistently takes on to solve social issues,

based dialogues, training and othersuch as Green First ZERO, the Well-Being Survey and childcare leave forelements into three categories ofmale employees. In terms of the participation of all employees, by fostering

ESG dialogue, human relations

employees who can internalize and take ownership of ESG and take action

training and compliance training.

accordingly, we believe the path to becoming a leading company in ESG

ESG dialogue

We have determined core future

ESG Basics

themes for each category, and will

management will open.

The Sekisui House Global Vision

Make home the happiest place in the world

deploy them when implementing
ESG dialogues and other elementsof the ESG Basics that are the(Platform)
Human
relationstraining

Compliancetraining

starting point on action for ESG.

Risk-related topics are discussed by the Risk Management Committee andS

reviewed and managed within the Group’s overall risk management system.
For more details, please also refer to the following articles.
P.106 Risk Management Committee
P.142 Disclosure in Line with Task Force on Climate-related Financial Disclosures(TCFD) Recommendations

Propose happiness throughthe integration of technologies,
lifestyle design and services

Make Sekisui House
technologies the global
de facto standard

Become a leading company in ESG management
Participation of all employees

Forward-thinking initiatives

Improvement of external evaluations

Vision for ESG Involving All Employees

An enterprise that exists within
the concept of ESG

E

Sekisui
House

G

98

Value Report 2023
SEKISUI HOUSEContents

G
GovernanceLong-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

99

Message from the Chairpersonof the Board of Directors

100

Corporate Governance101

Promoting Compliance

117

Strengthening Risk Management

121

Themes and KPIs for Initiatives That
Provide a Basis for Our Material Issues

125

Shareholder and Investor Engagement

126

Message from the Audit andSupervisory Board

127

Directors of the Board andAudit and Supervisory Board Members

128

Value Report 2023
SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Contents

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

G Message from the Chairperson of the Board of Directors
Progress in the Strengthening of Corporate Governance at Sekisui House

Toshifumi
Kitazawa
Independent Outside
Director of the Board(Chairperson of theBoard of Directors)
Has held positions including President & Chief
Executive Officer, and Vice
Chairman & Director at
Tokio Marine & Nichido
Fire Insurance Co., Ltd.
Appointed Independent
Outside Director of theCompany in April 2020.

Progress in the Strengthening of GovernanceSekisui House was incorporated in 1960 and will celebrate its 64th anniversary in 2023. Since 2018, the Company has proactively undertaken governance reforms to ensure its ability to achieve sound and sustainable growth
while continuously delivering safe and comfortable housing. Examples of various reforms we have achieved thus far include securing a highly transparent
decision-making mechanism that requires substantial discussion among
executives through the establishment of Management Meetings. In addition,
to ensure the independence of the Board of Directors and enhance the diversity of its composition, we have incrementally increased the proportion ofoutside directors. Furthermore, we have defined the retirement age for representative directors while abolishing executive advisor and advisor systems.
Meanwhile, we have clarified the skill matrix for Board members in addition toinitiating the disclosure of remuneration paid to individual internal directors of
the Board. In these ways, we have pushed ahead proactively with initiatives
to update our management structure in terms of fairness and transparency.

Sekisui House also considers the further enhancement of consolidated
governance for all Group members to be a matter of importance.
Accordingly, the Group is currently promoting the integration of Group companies operating in various regions. Specifically, Sekisui House Real Estate
Holdings, Ltd. was established in November 2021 and is now tasked withfunctioning as an intermediate holding company. This move is yet anotherexample of our measures to achieve even stronger corporate governance.
All outside directors are aware of the profound importance of strengthening governance and believe that doing so is essential to ensuring soundand sustainable growth for Sekisui House. Based on this awareness, wehave overseen the governance reforms undertaken thus far. For example,
Outside Director Yukiko Yoshimaru was appointed as the Chair of the
Personnel Affairs and Remuneration Committee in April 2020. She now
takes full advantage of her immense knowledge and experience in humanresource management and diversity promotion as she takes the lead in thedecisive and proactive reform of nomination and remuneration systems.
Also, in April 2021, I was appointed as the Chairperson of the Board of
Directors. I am currently striving to ensure that the Board of Directors
operates in a fair, transparent and vibrant manner.
Sekisui House strives for its global vision of “making home the happiest
place in the world” through its business. To achieve this vision, I believethat the proactive upgrading of the Company’s governance systems willremain essential going forward.

Features of Sekisui House’s Board of Directors andInitiatives to Enhance Its EffectivenessSekisui House’s Board of Directors consists of five internal directors and fiveoutside directors, and I was appointed from among the outside directors toserve as the Chairperson. All five outside directors boast experience in leading positions in diverse fields. In addition, three outside directors are women.
For the Board of Directors to proactively deliberate on a variety of management issues, it is essential to empower outside directors to accurately
understand Sekisui House’s business operations. Accordingly, the Officeof Directors of the Board plays a central role in setting up individualinterviews for these directors and internal directors, organizing tours visiting construction sites and production facilities, hosting inspections of overseas business bases and inviting local senior managers to engage in theexchange of opinions with them. This office also takes a proactive stancetoward holding study sessions focused on an array of topics. In sum, outside directors are given robust opportunities to enhance their understanding of Sekisui House’s business.
Moreover, outside directors are free to observe various in-house meetings, including the Management Meetings, and, accordingly, well-positioned
to closely study agenda topics before attending Board of Directors meetings. This is why they can deliberate agenda items more in depth.
The Board of Directors provides key functions of strengthening governance and supervising executives. When it comes to addressing long-term
growth strategies, including those under the Sixth Mid-Term Management
Plan launched in April 2023, outside directors participate in discussion
from early stages. In the course of multifaceted discussions regardingthese topics, I have personally striven to offer optimal advice and otherwise facilitate meaningful deliberation in a way that helps executives examine diverse talking points and prevents them from overlooking
opportunities for sound growth.
The Board of Directors needs to continue operating in a manner that is
highly effective, qualitatively well-balanced and appropriate. The Board
should undergo objective assessments to determine whether it is evaluatedas such. In this light, conducting annual evaluations by third-party organizations is a viable option. Since 2018, Sekisui House has commissioned athird-party firm to evaluate the effectiveness of the Board of Directors.
Based on analysis of the results provided by this firm, the Board of
Directors is engaged in initiatives to further upgrade its functions.
As stipulated under the Sixth Mid-Term Management Plan, Sekisui
House is about to enter a new stage of growth in terms of both stable andfurther expansion in Japan and fresh growth in the U.S. and other overseas operations through the utilization of its superior technical capabilities.
With this in mind, the Board of Directors intends to continue to upgrade
the Company’s governance systems so that it remains capable of achievingrobust and sound business growth at home and abroad.

100Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

G Corporate Governance
Basic Approach
In accordance with our corporate philosophy of love of humanity, underwhich we pursue truth and trust, deliver the highest quality and technology,
and create enriching homes and environments, the Group considers corporate governance to be one of its major management challenges. The
Sekisui House Group has improved the effectiveness of its corporate governance to increase corporate value while sustainably earning the trust ofshareholders, investors and other all stakeholders, and has put in place asystem that enables speedy management marked by integrity. The
Company discloses to its stakeholders the Sekisui House, Ltd. Basic
Policy1 on Corporate Governance, in which the fundamental concept andthe framework of the Company’s corporate governance is established.
The Sekisui House Group positioned 2018 as the first year of governancereforms. We have steadily implemented each initiative to build a resilient
management base for long-term sustained growth in corporate value.
Integrity—sincerity and high moral values—is central to our governancereforms. This concept resonates with our philosophy of love of humanity,
and with our stance of truth and trust. We prioritize integrity in all corporate
activities, from the actions of the Board of Directors to personnel evaluation, sales, production and construction, and will continue implementing
reforms as a leader in ESG management.
1 Details regarding the Basic Policy on Corporate Governance are available on our website.

Basic Policy on Corporate Governance

Changes in Governance2018 First year of corporate governance reforms
	Increased the number of outside directors of the Board fromtwo to three and the number of outside Audit and Supervisory
Board members from three to four
1. Introduction of a mandatory retirement age of 70 for representative directors of the Board
2. Appointment of women as outside officers
3. Increase the transparency of and enliven meetings of theBoard of Directors
4. Establishment of Management Meetings
5. Clarification of departments under the control of directorsof the Board
6. Evaluation of the effectiveness of the Board of Directors
7. Ensuring the independence and strengthening the checkand-balance functions of the heads of general affairs ofsales administration headquarters and branches
8. Increasing the integrity of branch heads
9. Introduction of a restricted stock remuneration system (2019)10. Abolition of the bonus system for outside directors of theBoard (2019)2020	Revised the basis for proportional allocation of remunerationand determined appropriate remuneration levels
	Increased the number of outside directors of the Board fromthree to four	Established the ESG Promotion Committee (reorganization of
the CSR Committee)

Composition of the Board of Directors and Audit and Supervisory Board
Ratio of outside
Ratio of outside members(Upper row) Directors of the Board
directors of the Board (Board of Directors / Audit(Lower row) Audit and Supervisory Board members
and Supervisory Board)

2018

27.3%

41.2%

2020

33.3%

44.4%

2021

40.0%

50.0%

2022

50.0%

53.3%

2021
Reform of the executive officer system
	Outside director of the Board appointed as Chairperson of theBoard of Directors
	Disclosed individual remuneration of internal directors of the Board
2022	Increased the number of outside directors of the Board fromfour to five

Male internal officer

Female internal officer

Male outside officer

Female outside officer

Corporate Governance Highlights (As of April 26, 2023)
Composition of the Board of Directors
and Audit and Supervisory Board

Ratio of outside directorsof the Board

Ratio of outside Audit andSupervisory Board members

Ratio of outside officers

Ratio of female officers

50.0%

60.0%

53.3%

26.7%

(5 of 10)(3 of 5)(8 of 15)2

(4 of 15)3

2 5 of 10 directors of the Board and 3 of 5
Audit and Supervisory Board members

3 3 of 10 directors of the Board and 1 of 5
Audit and Supervisory Board members

101Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Corporate GovernanceDirection of Governance Reinforcement Measures under the Sixth Mid-Term
Management Plan
The Sekisui House Group has been conducting governance reforms that balance enhancing the effectiveness ofgovernance with sustainable corporate growth. We have steadily implemented 28 specific initiatives over the five
years since the beginning of 2018, which we positioned as the first year of governance reforms. These initiatives

include the introduction of a mandatory retirement age of 70 for representative directors of the Board, establishmentof Management Meetings, and clarification of departments under the control of directors of the Board. Under the
Sixth Mid-Term Management Plan, we aim to enter a new stage of exercising even stronger governance functions
building on the corporate governance framework developed thus far. We expect these governance reforms to serve
as a catalyst that helps power robust innovation and communication. In these ways, the Sekisui House Group willcontinue to promote governance reforms for both senior management and business-level management.

1 Senior Management Level

2 Business Management Level

1.	Moving forward from the development of a corporate governance framework to the new stage of realizing its
functional effectiveness
The Board of Directors, now equipped with greater diversity than before, exercises its functions to the fullest.
Facilitating lively Board room discussions in accordance with our global vision
 nhancing the Board of Directors’ functions via the third-party evaluation of its effectiveness	 · E
 elegating authority from the Board of Directors to Management Meetings and other bodies	 ∙ DStrengthening the effectiveness of our senior management candidate pipeline
 trengthening our pipeline by upgrading the selection process for executive officers and operations officers
	 ∙ S he Personnel Affairs and Remuneration Committee monitors the effectiveness of the management pipeline	 ∙ T
2. Increasing the sophistication of stakeholder engagement
Exercising spontaneous judgment for consistent information disclosure
Further upgrading our mode of information disclosure nhancing the content of information being disclosed about the current status of the linkage between tackling	 ∙ Ematerial issues and strengthening corporate governance ecuring consistency in information disclosure and reinforcing its effectiveness as messaging	 ∙ S

1. Rolling out Group governance systems on a global basis	Removing boundaries between domestic and overseas Group entities, with the aim of creating a network based on
mutual trust
Establishing Group governance in the U.S.
	 ∙ Ensuring that our U.S. operations are supervised by clearly defined regional headquarters functions on an ongoing basis	 ∙ Allocating human resources to local subsidiaries based on their functions
Promoting the development of a governance network	 ∙ Stepping up the development of governance specialists and optimally allocating them to Group companies athome and abroad	 ∙ Strengthening corporate functions in place at domestic and overseas Group companies
Enhancing our internal audit structure for global auditing	 ∙ Developing internal audit functions aligned with the size of Group companies at home and abroad as well as
risks specific to each
2. Fostering a corporate culture based on mutual trust achieved via robust communications
	Aiming for the creation of a workplace that ensures psychological safety for employees and empowers them towork vibrantly
Developing an environment aimed at raising compliance awareness among employees	 ∙ Promoting training for all employees while encouraging the active use of internal reporting and consultation systems
Strengthening our capabilities for autonomous organizational management	 ∙ Securing a greater number of leaders equipped with robust integrity

At the senior management level, we will further strengthen corporate governance in the course of the Sixth Mid-Term
Management Plan period by building on the framework developed to date. We consider this period a new stage of fully realizing
the functions of the Board of Directors, whose composition has become more diverse than before, with outside directors andfemale directors accounting for 50% and 30%, respectively, of overall membership.
The Board of Directors will work to enhance its effectiveness and, to this end, proactively utilize periodic, objective­evaluations undertaken by third-party organizations. With regard to business execution, the Board of Directors will advance thedelegation of its authority to Management Meetings and other bodies. In these ways, we will invigorate discussions of mediumto long-term strategies based on the global vision while increasing the sophistication of our corporate governance via thestrengthening of the Board of Director’s’ supervisory functions over business execution.
To reinforce our human resource pipeline for future senior management personnel, we will upgrade the selection process for
Executive Officer and Operating Officer candidates by, for example, monitoring the effectiveness of said process through the
Personnel Affairs and Remuneration Committee.
We will also strive to enhance disclosure of information regarding initiatives to achieve the targets of the Sekisui HouseGroup’s material issues and corresponding governance reform activities in order to enhance stakeholder engagement.

The Sekisui House Group’s strengths are a function of the ability of its front-line organization, including the various sales
administration headquarters, branches, factories and Group companies in Japan and overseas. This is because our front-line
organization is most aware of operational issues from the perspective of customers. Accordingly, we work to reinforce
governance at the business management level to further enhance our front-line capabilities. To this end, we will strengthen
corporate governance while striving to foster a corporate culture based on trust achieved via robust communications.
In particular, to secure robust governance functions sufficient for the growing scope of our U.S. operations, we will augment
regional headquarters functions in the United States and allocate human resources to local subsidiaries based on theirrespective functions. For each Group company at home and abroad, we will nurture and effectively allocate human resources
equipped with expertise in governance while enhancing corporate functions via, for example, the strengthening anddevelopment of internal audit functions. In these ways, we will enhance the effectiveness of our integrated governance network
encompassing the entire Sekisui House Group.
In addition, we will develop an environment that ensures psychological safety for all employees and empowers them to work
vibrantly by fostering a trust-based corporate culture via robust communication.

102

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Corporate GovernanceCorporate Governance System
Corporate Governance System (As of April 26, 2023)
General Meeting of Shareholders
Appoint

Dismiss

Appoint

Appoint

Dismiss

1 The Board of Directors delegates the authority to determine the amount of remuneration
for individual directors to the Personnel Affairs and Remuneration Committee.

Dismiss

Audit
Cooperate

Board of Directors
Recommend

Cooperate

Risk
Management
Committee

ReportInstruct
Cooperate

Internal
Audit Division

Recommend
Supervise

Audit

Discuss
ReportManagement
Meetings
Instruct

ReportConsult

Recommend

ESG Promotion
Committee

Communicate
ReportpolicyReportproposals

ExecuteAccounting Auditor

Consult

Personnel
Affairs andRemuneration
Committee

Supervise

Audit

Consult/
Delegate1

Audit andSupervisory
Board

Divisions of Sekisui HouseGroup companies
Business Execution System• Formulation of medium- to long-term management strategies and plans
and management supervision are functions of the Board of Directors.
Our objective is moderate separation between management supervisoryand business execution functions through the delegation of authority forshort-term and segment-level business execution.
• Our goal in structuring the Board with a 1-to-1 ratio of internal to outside
directors of the Board is to enhance transparency and independence
while fostering fair and healthy tension among members that results ininnovative management.
• The Audit and Supervisory Board conducts interviews with directors of
the Board and representatives of divisions charged with business execution based on audit plans it formulates. These interviews are held toaddress risks and other issues, while onsite inspections are performedon an as-necessary basis. The Audit and Supervisory Board also acts incollaboration with the Internal Audit Division as well as the accounting
auditor. This mutual collaboration is designed to ensure that various
audit activities are undertaken in an efficient and effective manner.

• The Personnel Affairs and Remuneration Committee serves as a consultative body to the Board of Directors. This committee provides the Board of
Directors with opinions with the objective of securing fairness and transparency regarding personnel affairs and remuneration associated withdirectors and executive officers. Furthermore, this body is commissionedby the Board of Directors to determine the amount of individual remuneration to be paid to directors of the Board and entrusted executive officers.
• M anagement Meetings are charged with preliminary discussion ofimportant agenda items to be submitted to the Board of Directors, making decisions on the execution of certain operational matters based on
management policy and business strategy, and sharing information on
business execution policy and issues.
• The ESG Promotion Committee is engaged in the exchange of opinions
regarding progress under the Group’s ESG management initiatives, issues
to be addressed in the course of these initiatives and other relevant topics. As a consultative body to the Board of Directors, this committee isthus enhancing the effectiveness of the Group’s ESG management.

• The Risk Management Committee aims to develop appropriate risk management systems and ensure the effective operation of these systems, tothis end acting as a consultative body to the Board of Directors in its
capacity to assess the status of risk management for the entire Group andprovide the Board of Directors with its opinions whenever necessary.
• T he internal audit division acts in collaboration with the Audit andSupervisory Board as well as the accounting auditor to undertake periodic audits of each division of the Company. Similarly, this division also
audits Group companies. Results of audits are directly reported to theBoard of Directors on a regular basis.

Internal Control System
Based on the Companies Act and the Regulation for Enforcement of theCompanies Act, the Company developed and manages an internal control
system, with basic polices deliberated by the Board of Directors. The
Auditing Department, a specialized internal audit division, conducts onsite
audits to confirm whether internal controls and internal management are
being conducted appropriately and properly based on laws and regulations and internal rules to ensure effective management, and when necessary suggests corrective actions. Results of these audits are reported todirectors of the Board and Audit and Supervisory Board members as well
as related departments, in addition to regular reports at meetings of theBoard of Directors. Moreover, the Auditing Department and the accounting
auditor cooperate to execute effective internal audits.
We dispatch directors of the Board and others to conduct internal controlof Group companies, including those overseas, and receive reports on their
management status and important work execution. In addition, theCompany’s internal audit division periodically audits major Group companies
and has strengthened the audit system for overseas Group companies by
setting up an International Auditing Office within the Auditing Department.

Accounting Auditor
Our policy for deciding on the appointment and reappointment of theaccounting auditor is to have the Audit and Supervisory Board set the
selection criteria and comprehensively evaluate items including the quality
control system, independence, expertise, audit plan, audit system andestimated audit remuneration of the accounting auditor.

103

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Corporate Governance

Major Organizations/Committees and Their Roles
Board of Directors
The Board of Directors consists of ten directors of the Board (seven men andthree women) including five outside directors of the Board and meets once
per month in principle, with the Audit and Supervisory Board members inattendance. To improve corporate value over the medium-to-long term, theBoard of Directors shall be responsible mainly for establishing management
policies, strategies and plans, and making decisions on the execution ofimportant operations, as well as for supervising and evaluating the executionof duties by directors of the Board and executive officers and for establishingsystems, such as internal control and risk management, to ensure the soundness of management. In addition, to promote the constructive exchange of
opinions, we decided not to combine the positions of Chairperson of theBoard of Directors and the convener. Therefore, an outside director of theBoard, Toshifumi Kitazawa, currently serves as the Chairperson of the Boardof Directors, while Representative Director of the Board, President,
Executive Officer (Yoshihiro Nakai) currently serves as the convener.
The Board of Directors shall have the number of members that is considered appropriate for substantive deliberations, and independent outside
directors of the Board shall be selected so that the ratio of independent
outside directors on the Board of Directors is one-third or more. Moreover,
we formulate a skill matrix based on business strategies and management
plans to help ensure the Board of Directors shall have a well-balanced
composition of members with full awareness of the skills required for the
Board of Directors. Members shall include experts in finance, accounting,laws, compliance and other relevant areas, with consideration for knowledge, experiences, and ability; the number of years in office; and gender,
ensuring both suitable diversity and proper headcount. In addition, we
have established the Office of Directors of the Board as an organization forassisting outside directors of the Board in their duties, and assigned several
employees to it, including full-time staff.

Audit and Supervisory Board
The Audit and Supervisory Board has five members (four men and one
women), of whom three are outside members. It formulates audit plans
and based on those plans it conducts hearings regarding risks and otherissues pertaining to the assigned duties of directors, executive officers, key
office heads, the directors of subsidiaries and others. In addition, Audit
and Supervisory Board members exchange opinions and work closelywith the Internal Audit Division, hold regular meetings with the accounting
auditor and engage in mutual cooperation to ensure that all audit activities
are carried out efficiently and effectively.
Furthermore, we established the Office of Audit and Supervisory Board
members as a dedicated organization to which several employees including
full-time staff are assigned to assist in Audit and Supervisory Board operations. If said employees are concurrently assigned other duties, they mustnot be influenced by guidance or commands from the other division to which
they are concurrently assigned and, with regard to human resource matterspertaining to these employees, the opinions of Audit and Supervisory Board
members must be considered to ensure the independence of such employees with regard to Audit and Supervisory Board operations.

Board of Directors Composition (as of April 26, 2023)
Directors

Outsidedirectors

10
5(7 men, 3 women) (2 men, 3 women)

Ratio ofindependent
outside directors

Ratio of female
directors

Under 50

50-59

50.0%

30.0%

0

3

60 and above

Maximum
No. ofdirectors

Chairperson

7

62.1

12

Toshifumi Kitazawa(Outside Director)

Audit and Supervisory Board Composition (As of April 26, 2023)
Audit andSupervisory
Board members

Outsidemembers

Ratio of outside
members

Ratio of female
members

Under 50

50-59

60 and above

Averageage

Maximum
No. ofmembers

Chairperson

5(4 men, 1 woman)3(3 men)

60.0%

20.0%

0

0

5

67.4

7

Ryuichi Tsuruta(Standing Audit and Supervisory
Board Member, Outside Standing
Audit and Supervisory Board Member)

AgeInitiatives to Enhance the Effectiveness of the Board of Directors
Every year, the Company conducts an evaluation of the Board of
Directors’ overall operation. This includes the evaluation of the development status of systems for supporting directors of the Board as well as
Audit and Supervisory Board members. By doing so, we confirm thestrength of our Board of Directors, the status of improvement in connection with issues identified in the course of the evaluation undertakenin the preceding fiscal year, the future direction for the Board’s operation and other matters. At the same time, we draw on results of thisevaluation to implement specific measures aimed at enhancing theBoard of Directors’ effectiveness to strengthen corporate governance.

Overview of FY2022 Evaluation Results
1. Evaluation methods
As in FY2021, we used an independent third-party evaluation agency toconduct the FY2022 evaluation. The evaluation methods are described
below.
(1) Questionnaires for all directors of the Board as well as all Audit andSupervisory Board members (prepared, distributed and collected by
the third-party evaluation agency)(2) Interviews conducted by the third-party evaluation agency targeting
all directors of the Board as well as all Audit and Supervisory Board
members (around one hour per individual)(3) Reviews of materials used in Board of Directors meetings and minutes of meetings
Main Questionnaire Items

Averageage

Age

Evaluation of the Effectiveness of the Board of Directors• O verall evaluation of the Board of
Directors• Composition of the Board of Directors• P reparatory measures undertaken
prior to meetings• M ode of the Board of Directors’
operations• Content of discussions• Activities undertaken by the Personnel
Affairs and Remuneration Committee• Supervision over business execution• The time allocated to each agenda
item relative to its importance

The results of questionnaires and interviews were evaluated and examined by the third-party agency and summarized into a report. Based on
this report, the Board of Directors held discussions at its February 2023
meeting after receiving explanations from said agency.

104

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Corporate Governance

2. Evaluation of Effectiveness of the Board of Directors(1) Conclusions
The FY2022 evaluation concluded that the Board of Directors’ overall operations were highly effective. In addition,
it was confirmed that general progress was made concerning initiatives to address issues identified in the courseof the previous fiscal year’s evaluation of the Board of Directors’ effectiveness.

1

2

Issues for FY2022

Initiatives and Issues Confirmed through the Board of Directors Evaluation of FY2022

Enhancement of
discussions from a
medium- to longterm perspective• It was confirmed that the Board made progress in terms of incorporating sufficient input from long-termand external perspectives and otherwise implementing various measures to enhance the quality of
discussion.
Main initiatives∙ In the course of formulating the Sixth Mid-Term Management Plan, the Board has engaged in discussion based on a long-term perspective of reflecting on the past 60 years as well as looking ahead tothe next 30 years. Based upon the results of this discussion, the Board proceeded with strategic
deliberations focused on the immediate future of the next three years.
∙ Outside directors participated in the process to formulate said plan from the early stages to contribute to in-depth discussions and planning.
∙ In addition to Board of Directors meetings, separate sessions specialized in deliberating the Mid-Term
Management Plan were convened with the attendance of outside directors. In this way, the Board
strove to enhance the quality of its discussions.
• It is expected that the Board will further enhance discussions of financial strategies.

Strengthening risk
management andGroup governance• In the fiscal year ended January 31, 2023, the new governance structure under Sekisui House Real
Estate Holdings, Ltd. was launched, thereby pushing ahead with governance reforms in a steady andswift manner. Meanwhile, the Board of Directors has been able to engage in in-depth discussions
focused on Group governance in connection with the consolidation of the Sekisui House Construction
companies. Progress was thus confirmed in these and other areas.
Main initiatives∙ The Board of Directors has engaged in even closer collaboration with the Audit and Supervisory
Board toward the strengthening of Group governance. This led to the qualitative enhancement of theBoard of Directors’ discussions.
∙ The Board has examined the allocation of audit departments in place at each headquarters, the introduction of governance specialists at Group companies and the status of in-house discussions
regarding corrections of incentive systems. These topics were addressed as part of deliberations on
agenda items related to the integration and reorganization of Sekisui House Construction companies.
∙ In the fiscal year ended January 31, 2023, the Internal Audit Division delivered a report to the Boardof Directors in accordance with the Corporate Governance Code. This report was then discussed
forthrightly with the incorporation of input from outside officers. The Board of Directors also conducted follow-­up reporting sessions to hear from executives. It is anticipated that the Board will further
deliberate on the desired frequency of these reporting sessions.
• Looking ahead, it is also expected that the Board will enhance the quality of discussions regarding how
to secure and nurture governance specialists from the medium- to long-term perspective, with an eye
to horizontally rolling out the Company’s governance systems to Group companies, including those
operating overseas.

(2) Strengths Supporting the Effectiveness of the Board of Directors
Based on results of evaluation by the third-party agency, the Board of Directors confirmed that its effectivenesshas been supported by the strengths outlined below in 1 to 4.
Strengths

Details (observations by the third-party agency)

1

Strong commitment
to strengthening
governance• Senior management has a strong will to strengthen corporate governance.
• Outside Officers (directors and outside Audit and Supervisory Board members) have been selected who are able tocommit themselves to strengthening corporate governance.

2

Clarification of roles
to be borne by the
Board of Directors• All directors of the Board clearly share the basic governance policy of securing the moderate separation of supervisoryand executive functions based on the current state of Sekisui House.

3

Contribution by
independent outside
directors• The independent outside directors are committed to Sekisui House.
• The diversity of independent outside directors of the Board is outstanding.
• Quality discussions are ensured through the attendance of Outside Officers at the Management Meetings and expansion of opportunities for off-site discussion.

4

Good practices
observed in the
Board of Directors’
operation• The Chairperson of the Board of Directors demonstrates leadership, backed by integrity, at forums including thoseoutside regular Board meetings.
• The Chairperson of the Board of Directors promotes vigorous discussions.
• The function of the secretariat underpins governance reforms.

Progress

Improved(3) Issues for Further Enhancing the Effectiveness of the Board of Directors
As listed below, the Board of Directors identified issues to be addressed in FY2023 based on the findings and proposals of the third-party agency. The Board also confirmed that it will consider the following initiatives going forward.

Improvement
now underway

Issues for FY2023

Details (observations by the third-party agency)

Initiatives to be considered

1

Discussion ofstrategy from aGroup-wide
perspective• There is insufficient discussion of finance strategy incorporating the balance sheet, cash flows, and capital efficiency. Strengthening financial
literacy among both supervisory and executive teams is expected.
• There is room for extensive discussions on medium- to long-termbusiness strategy from a broad perspective, including sharing andutilizing customer assets held across the entire Group.
• There is room for more strategic discussion concerning the DX andhuman resources development already underway.

• To share agenda items for discussion
across the Group.
• To secure insight into matters such as capital cost management and expand discussions as the Board of Directors.
• To encourage initiatives to strengthen the
CFO function on the executive side.

2

Supervision over the
execution of risk
management andGroup governance• The design of a cross-company system of Group governance is desired.
• It will be effective to monitor the promotion of integration processes
at the Sekisui House Real Estate Group and the Sekisui House
Construction Group, analyze their success factors and carry out a
PDCA cycle.
• It is necessary to increase the opportunities for reporting by theInternal Audit Divisions.

• To expand discussions regarding strategies
to strengthen Group governance.
• To follow up on the progress of implementation regarding risk management and Group
governance.
• To discuss the optimal manner and frequencyof reporting by the Internal Audit Divisions.

Advance the“moderate separationof supervision andexecution”• By actively involving independent outside directors of the Board in corporate decision-making processes and aiming for the “moderate separation of supervision and execution,” the Company has progressively
strengthened its governance based on its issues. In the future, anincreasing range of situations will require “executive autonomy” torespond to increasingly sophisticated business issues of the Company.
• The Board of Directors must advance the Company’s governanceby proceeding with the delegation of authority to the executive teamand shifting its focus to the monitoring of execution.

• To advance the method of independent outside directors of the Board’s involvement
through greater executive autonomy.
• To clarify important themes for more extensive discussion by the Board of Directors.
• To implement new methods of deliberationby the Board of Directors (such as collective
deliberation), narrowing-down of proposals,
and more modulated and lively discussions.

3105

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Corporate Governance

Personnel Affairs and Remuneration Committee
As a consultative body to the Board of Directors, the Personnel Affairs andRemuneration Committee provides opinions officers to ensure fairness andtransparency with regard to the personnel affairs and remuneration of thedirectors and executive officers. In addition, the committee, based on delegation from the Board of Directors, determines the amount of remuneration for individual directors and entrusted executive officers.
The committee is chaired by an independent outside director and the
majority of its membership consists of independent outside directors.
Currently, the committee members are comprised of two representative
directors and three independent outside directors, with Yukiko Yoshimaru
serving as the chairperson.
Composition
Chairperson: Yukiko Yoshimaru (Outside Director of the Board)Internal directors of the Board: Yoshihiro Nakai, Satoshi Tanaka
Outside directors of the Board: Yukiko Yoshimaru, Toshifumi Kitazawa,
Keiko Takegawa
Initiatives of the Personnel Affairs and Remuneration Committee Nomination
Main subjects discussed in FY2022• Outside directors’ meeting aimed at evaluation the performance of the CEO• Revision of rules for officer remuneration that aligns with the Sixth MidTerm Management Plan
• Evaluation of officer performance for FY2022 and the determination of
bonuses to be paid to individual recipients• Inclusion of FY2022 performance-related bonuses and Performance
Share Units (PSU) into deductible items for tax purposes•R eference number of share units to be applied to PSU• Determination of performance evaluation indicators (ESG-related items)
for performance share units and target values for such indicators• Process for the selection of officers and the evaluation of their performance as well as pipeline for senior management candidates•U pper limit on the term of directors•R econfirmation of the content of directors’ skill matrix•S election of directors of the Board and entrusted executive officers

Status of external advisors’ involvement in the determination of remuneration
In FY2022, six of 11 Personnel Affairs and Remuneration Committee meetings were attended by remuneration advisors from Willis Towers Watson.

Management Meetings
This body was established to promote the active exchange of opinions
among entrusted executive officers for the purposes of holding prior deliberations on important matters to be submitted to the Board of Directors,
making decisions on the execution of certain operation matters based on
management policies and strategies, and sharing information on businessexecution policies and issues. The committee also welcomes the attendance of outside directors of the Board and Audit and Supervisory Board
members who act as observers.
Composition
Chairperson: Yoshihiro Nakai (Representative Director of the Board,
President, Executive Officer)
Entrusted executive officers: Yoshihiro Nakai, Yosuke Horiuchi,
Satoshi Tanaka, Toru Ishii, Hiroshi Shinozaki, Haruhiko Toyoda,
Keizo Yoshimoto, Kohei Hirota, Osamu Minagawa, Kohei Joki,
Masaru Noma, Takehisa Yanagi, Shinji Aoki, Yoshinori Kimura andYasushi Omura
Note: Outside directors of the Board and Audit and Supervisory Board members may attend as observers.

ESG Promotion Committee
As a consultative body to the Board of Directors, the committee mainly
consists of two or more external committee members who bring specialist
insight, outside directors of the Board, executive officers and others
responsible for business execution. The committee thus enhances theeffectiveness of ESG efforts through means such as exchanging opinions
on the progress of ESG management initiatives and issues.
In addition, we have established the ESG Management Promotion
Headquarters, which further promotes ESG management in cooperation
with Group companies in Japan and overseas based on discussions at the
ESG Promotion Committee.

Composition
Chairperson: Yosuke Horiuchi (Representative Director of the Board,
Vice Chairman, Executive Officer)
Outside members: Katsuhiko Kokubu (Dean and Professor,
Graduate School of Business Administration, Kobe University),
Hidemi Tomita (Representative Director, LRQA Sustainability K.K.)
Internal members: Yosuke Horiuchi, Haruhiko Toyoda, Toshiya Chikada,
Miwa Yamada, Atsushi Yoshida, Kazu Nakayama, Naoki Kawamura,
Ken Kishimoto
Note: Directors of the Board, Audit and Supervisory Board members and executive officers of the rank managing
officer and above may attend as observers

Risk Management Committee
As a consultative body to the Board of Directors, this committee strives todevelop an appropriate risk management structure and secure the effectiveness of its operations. To this end, the Risk Management Committee gains
an understanding of the risk management status of the entire Group and provides opinions to the Board of Directors as necessary. The committee’s risk
assessment process includes risk mapping on the two axes of the frequencyof risk materialization and the magnitude of impact on the Group. By doing
so, the committee identifies important risk items in such areas as “quality
management,” “information security,” “compliance,” “human rights,” “crisis
response,” “the environment” and “labor laws and labor management.” Everymonth, the committee holds meetings to monitor and verify these risk items.
Also, the Quality Management Committee and the Information Security
Committee are placed under the Risk Management Committee to engage
in discussions employing specialist viewpoints and periodically report theirconclusions to the latter.
Composition
Chairperson: Satoshi Tanaka (Representative Director of the Board,
Executive Vice President, Executive Officer)
Vice Chairperson: Keizo Yoshimoto
Internal members: Satoshi Tanaka, Keizo Yoshimoto, Kohei Hirota,
Osamu Minagawa, Masaru Noma, Toru Fujita, Kazu Nakayama,
Takahiro Kishi, Hiroyuki Kitamura and Naoki Kawamura

106Value Report 2023
SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Contents

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

Corporate Governance

FY2022 Attendance at Key Meetings by Directors of the Board
Board of Directors
Name

Title
Members

Attendance
rate

Personnel Affairs andRemuneration Committee
Members

Attendance
rateManagement Meetings
Members

Attendancerate

Yoshihiro Nakai

Representative Director of the Board,
President, Executive Officer and CEO

12/12

Yosuke Horiuchi

Representative Director of the Board,
Vice Chairman, Executive Officer

12/12

13/13

Kunpei Nishida

Representative Director of the Board,
Executive Vice President, Executive Officer

3/3

3/4

Satoshi Tanaka

Representative Director of the Board,
Executive Vice President, Executive Officer

12/12

Toshiharu Miura

Director of the Board, Senior Managing Officer

Toru Ishii

Director of the Board, Senior Managing Officer

11/11

ESG Promotion Committee
Members

Attendance
rate

Attendance
rate

Retired on April 26, 2022
10/10

12/12

13/13

10/10

12/12

13/13

Outside Director of the Board

12/12

11/11

Outside Director of the Board

12/12

11/11

Yoshimi Nakajima

Outside Director of the Board

12/12

Keiko Takegawa

Outside Director of the Board

12/12

Shinichi Abe

Outside Director of the Board

9/9

Retired on April 25, 2023

11/11
Assumed office on April 26, 2022

Chairperson
Note: Attendance as an observer at Management Meetings, the ESG Promotion Committee and the Risk Management Committee is not counted.

FY2022 Attendance at Key Meetings by Audit and Supervisory Board Members
Board of Directors
Members

Notes

5/5

13/13

Yukiko Yoshimaru

Title

Members

13/13

11/11

Toshifumi Kitazawa

Name

Risk Management Committee

Attendance
rate

Audit and Supervisory Board
Members

Attendance
rate

Notes
Retired on April 26, 2022

Haruyuki Iwata

Standing Audit and Supervisory Board Member (full-time)

3/3

5/5

Midori Ito

Standing Audit and Supervisory Board Member (full-time)

12/12

15/15

Takashi Ogino

Standing Audit and Supervisory Board Member (full-time)

9/9

10/10

Ryuichi Tsuruta1

Standing Audit and Supervisory Board Member(full-time: Outside Audit and Supervisory Board Member)

12/12

15/15

Takashi Kobayashi

Outside Audit and Supervisory Board Member

12/12

15/15

Hisako Makimura

Outside Audit and Supervisory Board Member

3/3

5/5

Yoritomo Wada

Outside Audit and Supervisory Board Member

12/12

15/15

1 Mr. Ryuichi Tsuruta, who has been serving as an Outside Audit and Supervisory Board member, assumed the office of Standing Audit and Supervisory Board member on April 26, 2022.

Assumed office on April 26, 2022

Retired on April 26, 2022

107

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Corporate Governance

Skill Matrix and Reasons for Selection of Each Skill Category

Name

Male
FemaleParticular knowledge, experience and abilities expected
Number of years
in office as director
Improvementof the Boardof social
Corporate
Overseas
Technology
Governance(at the close of the
Financialvaluebusinessand
Risk
Ordinary General management
strategy and
HumanBusiness
International
environment
management
Meeting ofaccounting
resource
strategyknowledge
Innovation
Compliance
Shareholders helddevelopment
on April 25, 2023)
Diversity

Yoshihiro Nakai

7

Yosuke Horiuchi

7

Satoshi Tanaka

3

Toru Ishii

3

Hiroshi Shinozaki—

Yukiko Yoshimaru

5

Toshifumi Kitazawa

3

Yoshimi Nakajima

2

Keiko Takegawa

2

Shinichi Abe

1

Skill Category

Reasons for Selection

Corporate management
Business strategy

We are a leading company in the housing industry and have constructed a cumulative total of more than
2.5 million dwellings. In order to formulate sustainable growth strategies in a drastically changing businessenvironment, we need directors with management experience and a proven track record in housing, construction and urban redevelopment. Additionally, to realize one of the tenets of our global vision—to promote proposals for happiness through the integration of technologies, lifestyle design and services—theCompany needs directors of the Board with experience in different industries, especially management
experience and a proven track record in the field of consumer services for health, connectedness andlearning as well as knowledge and experience that contribute to the transformation of business models
through the use of digital technology.

Overseas business
International knowledge

In order to formulate growth strategies and provide management supervision for our overseas business,
which is a growth segment, we need directors of the Board with extensive knowledge of and experience inoverseas business management, living, culture and business environments.

Financial strategy
and accounting

In order to formulate financial strategies that will not only ensure accurate financial reporting, but also build
a strong financial foundation, promote growth investments including M&A to sustainably enhance corporate
value, and strengthen shareholder returns, we need directors of the Board with solid knowledge and experience in finance and accounting.

Technology andenvironment
Innovation

In order to realize the supply of high-quality housing that combines safety, peace of mind and comfort withadvanced technology, and to further advance and develop our advanced environmental technology andsolid construction capabilities, the Company needs directors of the Board who have a track record ofdiverse innovation along with the knowledge and experience to enable proactive efforts to address global
environmental issues from a corporate management perspective.

Improvement of social value
Human resource
development
Diversity

In order to provide homes that make our customers feel more content and address various social challenges
through its business activities, the Company needs to develop human resource strategies that enable each
employee to maximize their potential, and the Company needs Directors of the Board with solid knowledge
and experience in the field of human resources development, including the promotion of diversity, equity andinclusion.

GovernanceRisk management
Compliance

Establishing an appropriate governance system is fundamental for sustainably enhancing corporate value.
In order to improve the effectiveness of management supervision by the Board of Directors, we need directors of the Board with solid knowledge and experience in corporate governance, risk management andcompliance.

Note: The above table lists the particular knowledge, experience and abilities expected of each candidate, and is not an exhaustive list of the candidates’ expertise.

Office of Directors of the Board

Training for Directors of the Board and Audit and Supervisory Members

The Company has established the Office of Directors of the Board as an organization for assisting outside directors of theBoard in their duties, and assigned several employees to it. The office enhances the provision of information to outside
directors, including advance explanations of the agenda of Board of Directors meetings, business inspection tours andmonthly issuance of the Sekisui House Report and other materials that provide an overview of Company and industry trends.
The office’s other initiatives include creating opportunities for outside directors to communicate with the representative
directors and Audit and Supervisory Board members. Outside officers have acknowledged that these initiatives contribute tolively discussions at Board of Directors meetings. The Company will enhance its efforts to further deploy the functions of its
outside directors.

We regularly provide training for directors of the Board and Audit and Supervisory Board members to deepen knowledge ofcompliance and other issues that are necessary or useful for management. In addition, we schedule sufficient time to provide
explanation to newly appointed outside directors of the Board and outside Audit and Supervisory Board members to ensurethat they understand the Sekisui House Group’s businesses, management strategy, business strategy and financial status.

108Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Corporate Governance

Stance on and Procedures for Selection of
Prospective Directors of the Board
The Company shall select prospective directors from among individuals with high integrity (individuals who are sincere, earnest andhighly ethical), high management capabilities, a nature suited topracticing the Group’s corporate philosophy, interest in the Group’sbusiness, deep insight, and a keen sense of contribution to creating
corporate value and improving business performance.
The stance on the selection of prospective directors of the Board
shall be discussed at the Personnel Affairs and Remuneration
Committee, a consultative body to the Board of Directors chairedby an independent outside director of the Board and comprising amajority of independent outside directors of the Board, and determined by the Board of Directors based on the recommendations of
the committee.
Proposals on specific prospective directors of the Board shall be
discussed at the Personnel Affairs and Remuneration Committee
and determined by the Board of Directors based on the recommendations of the committee.
The selection of prospective internal directors of the Board shallbe performed with consideration for the specified qualification
requirements (i.e., individuals embodying the corporate philosophy
and possessing broad perspective) and competence requirements(i.e., having the ability to conceive solutions to external problems,innovativeness for creating new markets, the ability to cooperatewith various stakeholders, and the ability to develop organizations
that enhance the Group’s comprehensive power), and shall be discussed at the Personnel Affairs and Remuneration Committee basedon requirements for human resources and a performance evaluation.

Reasons for Appointing Directors of the Board
Name

Reasons for Selection

Yoshihiro

In the Corporate Management Planning Division, Mr. Nakai exercised
his outstanding conceptual ability and realized many innovative sales
strategies and management policies involving sales offices nationwide.
He consistently played a central role in formulating and implementing
the Group’s management strategies and plans. In particular, since
assuming the post of President, he has focused on demonstrating thecomprehensive capabilities of the Group, with the Corporate Philosophy
as a compass, while strengthening the corporate governance systemand promoting ESG management aggressively.
In the Fifth Mid-Term Management Plan, which he formulated as top
management, he strived to develop human resources with integrity andautonomy under the slogan of innovation and communication, andfocused on aligning the efforts of the whole Group. As a result, theGroup’s performance exceeded the plan.
To launch the Sixth Mid-Term Management Plan—for achieving sustainable growth and increasing the corporate value of the Sekisui
House Group through new development and aggressive growth investment in the lifestyle design and service fields—under his strong leadership and to contribute to the creation of high-quality housing stock, theCompany has reelected him as a Director of the Board.

Nakai

YosukeHoriuchiIn the business field based on “Sha Maison” rental housing, Mr.
Horuichi has contributed to the development of the three- andfour-story rental housing market by leading the area marketing strategy
that is dedicated to responding to the local tenant market. He has also
promoted the expansion of the customer base through means such as
strengthening the corporate real estate (CRE) and public real estate(PRE) businesses with a focus on corporate customers.
He has been in charge of the Finance and ESG Division since 2020
and is working to enhance the Sekisui House Group’s social value
through collaboration with diverse stakeholders as the Chairperson of
the ESG Promotion Committee, which includes outside members. He
also has received a high evaluation from outside the company for proactive disclosure of information including ESG-related information. In
addition, since assuming the post of Representative Director of theBoard in 2021, he has served in a key position at the industry groupand contributed to realizing a more comfortable housing life.
To achieve sustainable growth and increase the corporate value ofthe Sekisui House Group, in strongly promoting the realization of ESG
management, the strengthening of the financial base and the enhancement of information disclosure, the Company has reelected him as a
Director of the Board.

Name

SatoshiTanakaToru
Ishii

Reasons for Selection
Mr. Tanaka has held key positions in a major general trading company.
He has domestic and international management experience, andknowledge and experience in the energy and consumer service sectors. He served as the executive vice president of a trading company
from 2017 to 2019, and has experience as the officer responsible forcorporate staff divisions in positions including CAO, CIO and CPO.
Since assuming the position of Outside Director of the Board of theCompany in 2020, he has continued to serve as a member of the
Personnel Affairs and Remuneration Committee. Since assuming theposition of Representative Director of the Board, Executive Vice
President & Executive Officer in 2021, he has been promoting humanresource strategies such as supporting employees’ self-directed careerdevelopment as the person in charge of Administration and Personnel
Division, and making various efforts to strengthen the effectiveness of therisk management system as the Chairperson of the Risk Management
Committee.
To achieve sustainable growth and increase the corporate value ofthe Sekisui House Group based on his extensive knowledge as a manager and his activities and contributions as an Outside Director of theBoard of the Company, especially in further enhancing the value ofhuman resources in the Group and strengthening the effectiveness ofcorporate governance and risk management system, the Company
has reelected him as a Director of the Board.
Since joining the Company, Mr. Ishii has experienced sales planningwork in the urban development business and engaged in developing
new markets such as the hotel development business and the officedevelopment business. Since 2012, he has been in charge of thedevelopment business, focusing on human resources development
and demonstrating the comprehensive capabilities of the Sekisui
House Group. In the international business in particular, he has
focused on achieving a balance between investment and return, while
realizing M&A mainly in the U.S., which greatly contributed to theachievement of the Fifth Mid-Term Management Plan. He has beensteadily promoting enhancement of the business foundation in newmarkets and development of the organizational structure.
To achieve sustainable growth and increase the corporate value ofthe Sekisui House Group, especially in strengthening our development
business including international business, as well as in enhancing thediversity of our overseas subsidiaries and further strengthening thegovernance system through the integration process, the Company hasreelected him as a Director of the Board.

109

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Corporate GovernanceReasons for Appointing Directors of the Board
Name

Reasons for Selection

HiroshiIn the building business field based on “Sha Maison” rental housing,
Mr. Shinozaki has served as a sales staff, Branch Head, and Head of
Administration Headquarters. As a Managing Officer in charge of
Building Sales Administration since 2021, he has been promoting thearea marketing strategy that is dedicated to responding to the local
tenant market, and proactive initiatives for increasing orders of threeand four-story rental houses, as well as the improvement of sales of“Sha Maison ZEH,” zero-energy rental housing that contributes todecarbonization while increasing profitability. In addition, he is strongly
leading the growth of this business field by utilizing his leadership andstrategic thinking ability such as building a stronger collaborative relationship between the Company and Sekisui House Real Estate Group.
To achieve sustainable growth and increase the corporate value ofthe Sekisui House Group, especially in strengthening the effectivenessof corporate governance and the risk management system involving
Sekisui House Real Estate Group; further developing the building business field by promoting sales of “Sha Maison ZEH,” which contributes
to a decarbonized society; and expanding the business field, theCompany has newly elected him as a Director of the Board.

Shinozaki

YukikoYoshimaru

Ms. Yoshimaru has a wide range of global experience including management experience as a director of domestic and overseas companies and M&A experience at a U.S. subsidiary of a major Japanesecompany. In particular, she has greatly contributed to constructive discussions and strengthening of the effectiveness of the Board of
Directors meetings by providing her opinions based on a wealth ofknowledge and experience in human resources management, diversity
and corporate governance.
In addition, since becoming the Chairperson of the Personnel Affairs
and Remuneration Committee in May 2020, she has been taking aleadership in clarifying the process of selecting and dismissing
Directors of the Board, facilitating the succession planning, andstrengthening remuneration governance. She has been leading therevision of officer remuneration related to the Sixth Mid-Term
Management Plan.
To achieve sustainable growth and increase the corporate value ofthe Sekisui House Group, especially in the formulation of growth strategies from the perspectives of global business and diversity promotion,and in strengthening the management supervision function in areas
including personnel affairs and remuneration, the Company hasreelected her as an Outside Director of the Board.

Name

Toshifumi
Kitazawa

YoshimiNakajima

Reasons for Selection
Having held key positions at a major insurance company, Mr. Kitazawa
has extensive knowledge and experience in areas including global business, M&A, risk management and compliance, as well as abundantachievements and experience as a manager. Since becoming Chairmanof the Board of Directors in May 2021, he has been leading constructive
discussions to strengthen the effectiveness of the Board of Directors
meetings by steering proceedings flexibly to further activate deliberations on medium- and long-term management issues. He has also been
contributing to the enhancement of deliberations as a member of the
Personnel Affairs and Remuneration Committee of the Company.
To achieve sustainable growth and increase the corporate value ofthe Sekisui House Group, especially in the formulation of growth strategies from the perspective of global business, and in strengthening themanagement supervision function in areas including M&A and otherfinancial strategies, risk management and compliance, the Company
has reelected him as an Outside Director of the Board.

Having held key positions in domestic and overseas companies, Ms.
Nakajima has extensive experience in financial strategy, M&A, andother areas by serving as the head of Asian and Japanese subsidiaries
of global financial institutions. She has embodied diversity in corporate
management in an environment where diversity in senior management
is considered to be natural.
Since April 2021, she has been serving as Outside Director of theBoard of the Company and has greatly contributed to constructive discussions and strengthening of the effectiveness of the Board of
Directors meetings by actively expressing frank opinions that promote
appropriate risk-taking and management reform.
To achieve sustainable growth and increase the corporate value ofthe Sekisui House Group, especially in the formulation of growth strategies from the perspectives of global business and diversity promotion,and in strengthening the management supervision function in areas
including M&A and other financial strategies, the Company has reelected her as an Outside Director of the Board.

Name

Keiko
Takegawa

ShinichiAbe

Reasons for Selection
Having held key positions in the Cabinet Office, Ms. Takegawa worked
hard to realize policies related to gender equality, and has extensive
knowledge and experience in the fields of diversity and compliance.
During her tenure at the Ministry of Land, Infrastructure, Transport andTourism, she worked tirelessly across ministries and agencies to develop safe and secure infrastructure for the elderly and disabled.
Since April 2021, she has been serving as Outside Director of theBoard of the Company and has greatly contributed to constructive discussions and strengthening of the effectiveness of the Board of
Directors meetings by providing useful advice from the perspective ofan ordinary citizen and actively expressing frank opinions related tomatters including environmental issues, diversity and human capital.
She has also been contributing to enhancing deliberations as a member of the Personnel Affairs and Remuneration Committee of theCompany since May 2021.
To achieve sustainable growth and increase the corporate value ofthe Sekisui House Group, especially in the formulation of growth strategies from the perspective of diversity promotion, and in strengthening
the management supervision function in areas including quality control,
compliance, and personnel affairs and remuneration, the Company hasreelected her as an Outside Director of the Board.
Having worked for an overseas consulting firm and software vendors, Mr.
Abe was involved in the launch of Google’s cloud business. At that business, he supervised its Asia-Pacific operations. As such, he has extensive
experience in the global business environment in the IT and digital fields.
In particular, when Google launched cloud services business forJapanese companies, he gained the deep trust of many client companies and promoted digital innovation together. Currently, he serves as
Representative Director of the Board, President and CEO of a venturecompany providing teleradiology (remote medical image diagnosis) services, a firm that he has had contact with since its foundation.
Since April 2022, he has been serving as Outside Director of theBoard of the Company and has greatly contributed to constructive discussions and strengthening of the effectiveness of the Board of
Directors meetings by actively expressing frank opinions from the perspective of global operations and digitally-driven business model transformation and disseminating information to promote innovation.
To achieve sustainable growth and increase the corporate value ofthe Sekisui House Group, especially in the formulation of alliances andgrowth strategies in new service business fields, and in strengthening
the management supervision function, including supervision of the areaof human resources development, the Company has reelected him as
an Outside Director of the Board.

110

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Corporate Governance

A More Sophisticated Executive Officer Selection Process election of Entrusted Executive Officers:
S
Implementation of Senior Management Assessment
Senior Management Assessment• Newly appointed candidates undergo performance evaluation, multi-rater
evaluation, as well as Senior Management Assessment conducted by an
external organization.
• A variety of information from sources including extended interviews andmultiple psychological tests is used to comprehensively evaluate current
and future potential.
• The Personnel Affairs and Remuneration Committee deliberates on
appointments based on the external organization’s report on assessment results.
• Assessment results are shared with candidates and used in formulating
future training plans.

Personnel Affairs and Remuneration
Committee supervises the selection anddismissal process.

Division

Directors of the Board who
also serve as entrusted
executive officers
5

Entrusted executive officers
10

Employed executive officers
24

Operating officers
26

Ensuring moderate separation ofsupervision and execution, supervise the divisions for which they are
responsible to achieve the goals of
the Mid-Term Management Plan
while taking responsibility for thosedivisions’ execution of operations.

As director of the Board candidates,
responsible for key areas of their divisions
and for those areas’ execution of operations to achieve the goals of the Mid-Term
Management Plan.

As entrusted executive officer candidates, responsible for business units
and for those business units’ execution of operations to achieve the​
Mid-Term Management Plan.

As employed executive officer candidates, responsible for business units
and for those business units’ executionof operations to achieve the goals of
the Mid-Term Management Plan.

Kazunori Ito / Yuji Yoshiyasu /Takumi Nukanobu / Ken Miyakoshi /Yoshitaka Iwata / Yoshio Ichikawa /Takahiro Kondo / Kenji Konishi

Kenichi Kanazawa / Ichiro Otaka /Yuichi Ihara / Junji Takeuchi /Tomoaki Minobe / Hiroshi Asada /Motomichi Shozu / Akira Kogo /Yasuyuki Tsukada

Yoshihiro Nakai(Representative Director of theBoard, President and CEO) election of Employed Executive Officers:
S
Succession Plan Council Meetings and Human Resource
Promotion Council Meetings

Division of
Built-to-OrderBusiness

Hiroshi Shinozaki(Senior Managing Officer)

Shinji Aoki (Managing Officer)
Yoshinori Kimura (Managing Officer)

Succession Plan Council• We implemented meetings to visualize successors for employed executive officers and operating officers, and to share succession information
among division officers (operating officers and higher).
• We enhance the management candidate pipeline with discussions aboutsharing successor information and training plans.

Division of
Development
Business

Toru Ishii(Senior Managing Officer)

Takehisa Yanagi(Managing Officer)

Human Resource Promotion Council• Entrusted executive officers (managing officer and higher) recommend
candidates for employed executive officer and operating officer.
• Internal directors of the Board and officers participate in Human
Resource Promotion Council meetings, where each director of the Board
discusses the selection of candidates, upon which the President andExecutive Officer determines the appointment plan and submits it to theBoard of Directors for approval.

Human Resource Promotion Council(largely composed of internal directors) deliberates on
selection and dismissal, personnel allocation and training.

Business Strategy
Division

Kohei Hirota (Managing Officer)
Yasushi Omura (Managing Officer)

Toru Tsuji / Hiroaki Takahama /Naoki Tamori

Kazuhito Miyajima

Yoshiyuki Kamiya / Hiroaki Yoshida / Yuta Nakano / Yoshinori Sumitomo /Norio Adachi / Yoichi Komatsu
Naoya Matsui

Division of Financeand ESG

Yosuke Horiuchi(Representative Director of theBoard, Vice Chairman, Executive
Officer)

Haruhiko Toyoda(Senior Managing Officer)

Toru Fujita / Masahiro Kikuchi /Atsushi Yoshida / Miwa Yamada1 /Toshiya Chikada /Hirokazu Kishimoto

Division of
Administration and
Human Resources

Satoshi Tanaka(Representative Director of theBoard, Executive Vice President,
Executive Officer)

Keizo Yoshimoto(Senior Managing Officer)
Osamu Minagawa(Managing Officer)

Kazu Nakayama

Takahiro Kishi / Hideaki Yasunobu /Naoki Kawamura / Hiroyuki Kitamura /Takanobu Haruki

Division ofTechnology andProduction
1 Indicates female members

Kohei Jouki (Managing Officer)
Masaru Noma (Managing Officer)

Hidehiko Nakayama /Kenji Okazawa / Hirokazu Higashi

Yasuyo Sawabe1 / Naoko Yano1 /Koya Matsumura / Atsushi Nakata /Hideo Saito / Masahiro Tanaka /Yoshiyuki Ueno

111

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Corporate Governance

Officer Remuneration
Basic Remuneration Policies(1) To be fair to shareholders, investors, customers, employees and allother stakeholders in accordance with our philosophy of love ofhumanity, a high degree of governance shall be applied in deciding
remuneration to ensure objectivity, transparency and full accountability.
(2) In order to become a leading company in ESG management, we shallfocus on social significance and make a clear commitment to consistently executing innovative growth strategies, and our remuneration
system shall provide sound incentives for consistently increasing corporate value over the long term.
(3) We shall emphasize the link between remuneration and the development and evaluation of the senior management team, motivate the next
generation of managers to grow, and increase the organizational vitalityof the Sekisui House Group over the long term.

Remuneration Governance
To improve the objectivity and transparency of the remuneration determination process, the Board of Directors, by its resolution, delegates theauthority to determine the amount of remuneration for individual directorsof the Board to the Personnel Affairs and Remuneration Committee.

Remuneration for Directors of the Board (including the CEO and
Excluding Outside Directors of the Board)
Remuneration Level
Using objective remuneration market survey data from an external specialist organization (a management remuneration database compiled by Willis
Towers Watson), we select a group of companies to serve as a benchmark
for remuneration and set the amount of remuneration at an appropriate
level commensurate with the size of operations and financial results of the
Sekisui House Group.
Overview of Remuneration Systems and Incentive Systems
Remuneration for directors of the Board (including the CEO and excluding
outside directors of the Board) consists of basic remuneration (fixedamount) and incentive remuneration (variable amount). The latter consistsof three components: Performance-related bonuses (linked with shortterm operating results), Performance Share Units (PSU: linked withmedium-­term operating results) and restricted stock remuneration (linked
with long-term operating results).
The proportion of performance-related bonuses within overall remuneration has been reduced, while the proportion of share-based remuneration
has been increased with the aim of providing sound incentives to pursue
long-term, sustainable improvement of corporate value, in addition to
single-­year operating results targets. The specific ratio for each director of
the Board is set in line with their position-based roles and responsibilities.
Based on this policy, the ratio of basic remuneration, performance-relatedbonuses and share-based remuneration for representative directors of theBoard is set at about 1:1:1 (provided that the Company achieves baseperformance).

Introduction of Shareholding Guidelines
We have established shareholding guidelines for directors (other than outside directors) to ensure their remuneration remains consistently alignedwith shareholder value. As a rule, during their terms of office, directors of
the Board are obligated to maintain ownership of Sekisui House sharesequivalent to baseline monetary values derived from market price andaccording to their positions. The baseline monetary value is twice annual
basic remuneration for representative directors of the Board (including theCEO) and equal to annual basic remuneration for other eligible directors of
the Board.
Stock Remuneration Return (Malus and Clawback Provisions)
In order to control excessive risk-taking by directors (including the CEOand excluding outside directors of the Board) and to ensure sound management, we established malus and clawback provisions in the rules forofficer remuneration. These provisions enable the Company to acquire
shares or PSU allotted to recipients in the form of share-based remuneration free of charge, confiscate such remuneration or demand the return of it
in full or in part (or the amount of money commensurate with share-based
remuneration paid) if the recipient was found to be involved in such serious
events as illicit conduct and legal violations, in the course of, or in connection with, the execution of his/her duties or other actions. The invocation ofthese provisions requires a resolution of the Board of Directors following
deliberations by the Personnel Affairs and Remuneration Committee.

112

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

Corporate Governance

Remuneration and Incentive Framework for Directors of the Board (Including the CEO and Excluding Outside Directors of the Board)Type of remuneration
Fixed

Basic remuneration

Short-term

Variable

Performancerelated bonuses

KPI

Outline and reasons for selection of indicators for performance-related remuneration—

The amount shall be determined according to criteria including representation rights and position, and shall be
paid on a monthly basis.

Consolidated
ordinary profit

The amount to be paid shall be calculated by multiplying consolidated ordinary profit, which is a key management indicator, by a predetermined bonus coefficient for the position of each director (excluding outside directorsof the Board). The bonuses shall not be paid if profit attributable to owners of parent is less than ¥120 billion.

Medium-term

Performancerelated stock
remuneration(PSU)1

ROE and ESG

ROE (a key financial indicator for the medium term) and a non-financial ESG management indicator are used as
performance indicators. The Reference Number of Share Units corresponding to predetermined standards foreach director of the Board (including the CEO and excluding outside directors) position shall be granted. The
number of units to be granted shall depend on the degree of achievement of ROE and ESG management indicators during the evaluation period spanning three consecutive fiscal years. At the end of the evaluation period, thenumber of units to be granted shall be determined within the range of 0% to 150%. Half of the units granted
shall be issued as shares and half in cash for tax payment.
ROE and ESG management indicators shall have an 80:20 weighting in the evaluation, and ESG management
indicators will be rigorously reviewed by the Personnel Affairs and Remuneration Committee to enhance theobjectivity and transparency of the process of goal setting and evaluation.

Long-term

Restricted stock
remuneration
(RS)2

—

Shares of Sekisui House, Ltd. common stock (with transfer restrictions) shall be granted corresponding to thepredetermined basic amount set by position for each director (excluding outside directors). The transfer restrictions shall be lifted in the event that a director of the Board or executive officer stops serving in his or her position.

1 PSU: Performance Share Unit
2 RS: Restricted Stock

Image of Remuneration Composition Ratio for Representative Directors of the Board (including the CEO) at Base Performance
Fixed Remuneration

Variable Remuneration
Performance-Related
Short-Term

Remuneration
Composition Ratio3
Payment Form

Basic Remuneration
Approx. 33%

Performance-Related Bonuses
Approx. 33%
CashMedium-Term

Long-Term

Performance-Related
Stock Remuneration

Restricted StockRemuneration

Approx. 33%4
Stock + Cash5Stock

3 The remuneration composition ratio will vary depending on position, the Company’s performance and the achievement of KPIs. The remuneration composition ratio for representative directors (including the CEO) at base performance is presented.
4 The composition ratio of performance-related stock remuneration to restricted stock remuneration is approximately 1:1 (at base performance).
5 50% of the performance-related stock remuneration will be paid in cash for the purpose of appropriation to funds for tax payments.

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

113

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

Corporate GovernanceTarget Value and Results Basis for Performance-Related Stock Remuneration (PSU1) Paid for FY2020 through FY2022
KPI

WeightingROE(average for three years)

80%

ESG management
indicator

20%

Changes inpayment ratio
0% to 150%

Target value
Maximum

12.00%

Standard

10.00%

Minimum

8.00%

0% to 150%

Results

Payment ratio
by indicator

10.79%

120%

Note 1136%

1 The ESG management indicator used in the determination of the amount of PSU consists of targets determined for the following items; E (Environment): (1) Ratio of
detached house ZEH; (2) Number of Sha Maison ZEH units; S (Social): (3) Number of female managers; (4) Take-up rate for eligible male employee childcare leave; (5)Annual paid leave take-up rate; G (Governance): (6) Reviewing the grand design of governance; (7) Enhancing response to the Corporate Governance Code; and (8)Increasing integrity at business management level. The degree of achievement in items named above was evaluated by the Personnel Affairs and Remuneration
Committee. As a result, the payment ratio vis-à-vis ESG management indicator was set at 136%.

ESG Management KPI and Target Value for Performance-Related Stock Remuneration (PSU2) for FY2021 through FY2023
ESG Management Indicators
Environment

SocialGovernanceTarget (January 31, 2024)

Ratio of detached house ZEH

90%

Number of Sha Maison ZEH units

4,000 per year

Number of female managers

280

Take-up rate for eligible male employee childcare leave

98%

Monthly average working hours per person

175 per month

Responding to Corporate Governance Code according toreviews by evaluation organizations and others

Improve the mode of information disclosure through third-party reviews (comparison of TOPIX100 companies)

Clarifying the authority and responsibilities of the parent company and its subsidiaries; the development and appropriate
allocation of governance specialists

Implement Group company administrative
regulations and evaluate the effectivenessof human resource measures

Weighting40%

Remuneration, etc., to Be Paid to Outside Directors of the Board
Remuneration, etc., to be paid to outside directors of the Board consists of basic remuneration (fixed amount) along withvarious allowances. The latter are determined based on job responsibilities borne by each recipient as Chairperson orother membership at the Board of Directors and the Personnel Affairs and Remuneration Committee in light of their supervisory roles over the Company’s management that require an objective and independent standpoint. The level of basic
remuneration and various allowances is being set in reference to data acquired by external specialist organizations via
objective market surveys of similar remuneration (management remuneration database compiled by Willis Towers Watson).
Remuneration, etc., to Be Paid to Audit and Supervisory Board Members
Remuneration, etc., to be paid to Audit and Supervisory Board members consists solely of basic remuneration (fixedamount) in light of their supervisory roles over the Company’s management that require an objective and independent standpoint. The level of basic remuneration is being set based on job responsibilities borne by each recipient inreference to surveys undertaken by external specialist organizations regarding similar remuneration.
Officer Remuneration for FY2022
Total Remuneration for Parent Company Officers by Category, Type of Remuneration, and Number of Eligible Officers

30%
Officer Category

30%

Directors of the Board(Excluding Outside
Directors of the Board)
Audit and Supervisory Board
Members(Excluding Outside members)
Outside Officers

ESG Management KPI and Target Value for Performance-Related Stock Remuneration (PSU3) for FY2022 through FY2024
ESG Management Indicators
Environment

SocialGovernanceNumerical Target (January 31, 2025)

Weighting

Total
Remuneration,
etc.
(Millions of yen)

Total Remuneration by Type (Millions of yen)
Number of
Restricted
Performance- Performance
Basic
Eligible Officers
Stock
Share Units
RelatedRemuneration
Remuneration(PSU)
Bonuses

817

257

282

168

108

6

80

80

—

—

—

3

195

195

—

—

—

9

Note: The above-listed amount of basic remuneration, performance share units and restricted stock remuneration includes remuneration paid to one director of the Board and two
Audit and Supervisory Board members who stepped aside from their office as of the close of the 71st Ordinary General Meeting of Shareholders held on April 26, 2022.

Ratio of detached house ZEH

90%

Ratio of ZEH units for rent

70%

Number of female managers

310

Take-up rate for eligible male employee childcare leave

98%

Monthly average working hours per person

175 per month

Yoshihiro Nakai

66

81

47

31

226

Responding to Corporate Governance Code according toreviews by evaluation organizations and others

Improve the mode of information disclosure through third-party reviews (comparison of TOPIX100 companies)

Yosuke Horiuchi

54

65

37

25

182

Establishment of governance systems by clarifying Group
company administrative regulations and the development andappropriate allocation of governance specialists

Implement Group company administrative regulations and governance specialist development and assignment

40%

Total Consolidated Remuneration for Directors of the Board (Excluding Outside Directors of the Board)
Remuneration by Type
Name

30%

30%

Basic
Remuneration

PerformanceRelated Bonuses

Performance
Share Units (PSU)

Restricted StockRemuneration(Millions of yen)

Total
Remuneration

Satoshi Tanaka

48

59

32

22

162

Toshiharu Miura

39

38

16

11

105

Toru Ishii

39

38

16

11

105

Note: The above figures are only for individuals receiving total consolidated remuneration of ¥100 million or more and officers who were directors of the Board (excluding
outside directors of the Board) of Sekisui House as of January 31, 2023.

114

Value Report 2023
SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Contents

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Corporate Governance

Enhancing the Group Governance System
Enhanced Group Company Administrative Systems
The Company has designated administrative departments responsible forthe segment-based management and supervision of business activities
undertaken by Group companies. In addition, specialized departments at
the head office of Sekisui House provide functional assistance and management leadership for particularly specialized operations. In these ways,
the Company develops and operates a two-tier administrative system.
Administrative departments require reporting from each subsidiary
regarding the status of business execution on a periodic or ad-hoc basis
while acting in collaboration with the Company’s head office departments insuch endeavors as the development of operational standards. Furthermore,
the head office departments provide subsidiaries with guidance and supervision over their operations in line with missions assigned to each. For
some subsidiaries, the Company dispatches personnel to serve as

directors of their boards or members of their Audit and Supervisory Boards
to exercise supervision over or conduct audits of business execution.

 tart of Operations at Sekisui House Real Estate Holdings,
S
an Intermediate Holding Company
Sekisui House Real Estate Holdings Co., Ltd., a holding company for
Sekisui House Real Estate companies, initiated operations in February
2022. In addition to delegating authority from the head office of Sekisui
House to this intermediate holding company, we have created specialized
departments within the latter and allocated human resources to promote
the strengthening of corporate governance.
Main objectives of the intermediate holding company system:
1. Formulate a growth strategy for the Sekisui House Group’s real estatebusiness

Management Framework for Main Group Companies

International
Business
Department

Overseas Sekisui HouseGroup companies

Group governance network

Development
Department

SH Hotel Management

Group administrative regulations

Condominium
Headquarters

Sekiwa Kanri Kyusyu
SEKISUI HOUSE GM PARTNERS

Sekisui House
Real EstateHD

Sekisui House Real EstateGroup companies

Division of Technology
and Production

Sekisui House
Construction
Business
Headquarters

Sekisui House Construction
companies

Division of Personnel
and Administration

Detached
Housing
Business
Strategy
Department

Sekisui House noie

Division of Finance and ESG

Konoike Construction

Business Strategy DivisionCorporate Management
Planning Department

Sekisui House RemodelingSpecialized departments

IntraGroup Cooperation
Committee

Reorganization of the Sekiwa Construction GroupIn February 2023, Sekiwa Construction was reorganized from 15 companies to eight companies with the aim of enhancing cooperating within the
Sekisui House Group. In conjunction with this move, Sekiwa Construction
was renamed Sekisui House Construction. Furthermore, in order tostrengthen corporate governance for these companies, Sekiwa
Construction Business Headquarters was renamed Sekisui House
Construction Business Headquarters and began operating as a head
office department of Sekisui House.

Promoting Networking for Governance
Administrative Departments

Sekisui House

2. Control the direction of each operating company
3. Identify real estate and growth investments with a broad view of the realestate business
4. Improve services for Sha Maison tenants

Currently, we are promoting the optimal allocation of human resourcescharged with corporate governance based on the close assessment of
their status at main business subsidiaries (Sekisui House Real EstateGroup, Sekisui House Construction companies, Sekisui House
Remodeling, Sekisui House noie and Konoike Construction) as well as
issues they are now confronting. Also, we periodically hold global governance meetings and area governance meetings to provide a place for discussions among Sekisui House Group members, including thoseoverseas, to strengthen corporate governance.

Risk Maps Developed at Group Companies
Risk maps are being developed at main business subsidiaries (Sekisui
House Real Estate Group, Sekisui House Construction companies, Sekisui
House Remodeling, Sekisui House noie and Konoike Construction), with
the Risk Management Committee receiving reporting based on these risk
maps from each company and engaging in periodic discussion regarding
risk recognition.

115

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

Corporate Governance

Cross-Shareholdings
Basic Stance on Cross-Shareholdingsa. The Company shall not enter into cross-shareholdings with business
partners unless it judges that it will be helpful to medium- and long-term
increases in the corporate value through the stable maintenance andstrengthening of relationships with them. In addition, the Company shallcomprehensively verify the economic rationality of transactions with parties that own cross-shareholdings to determine if it will continue thesetransactions.
b. The Company shall analyze the appropriateness of cross-shareholdings
at a meeting of the Board of Directors based on the minimum holdings
required from a perspective of increasing capital and asset efficiency
each year. At the meeting of the Board of Directors, members shallcomprehensively analyze the medium- and long-term economic rationality of each individual stock based on holding objectives and risk andreturn. As a result, the Company shall sell any stock which is no longer
meaningful to continue holding after considering the market environment. Even for stocks considered appropriate to hold, the Company
may sell all or some shares after considering its capital policies and themarket environment.
c. An overview of the analysis at the meeting of the Board of Directors
regarding cross-shareholding shall be disclosed as appropriate in thereports related to corporate governance.
d. When companies holding the Company stock as cross-shareholdings
express an intention to sell such shares, the Company shall not preventthe sale in any way by, for example, insinuating a reduction in their business relationship.

Overview of the Verification with Regard to Cross-Shareholdings
At the meeting of the Board of Directors held in October 2022, theCompany analyzed all listed stocks it holds as cross-shareholding (for 21
different companies, excluding Sekisui House Reit, Inc. and companies towhich the equity method of accounting is applied) in terms of overall significance of owning them based on the status of shareholding, risk andreturn (stock price divergence, dividend yields, ROE, credit rating, etc.)
and importance of transactions.
Furthermore, from the perspective of increasing capital efficiency, theCompany has adopted a policy to reduce cross-shareholdings in phases.
Based on this policy, the Company achieved its target of reducing theratio1 of cross-shareholdings to consolidated net assets to 5% or lessduring the period of the Fifth Mid-Term Management Plan (by January 31,2023). The Company now intends to pursue further reduction ofcross-shareholdings and has set a new target of reducing this ratio to 3%
or less during the period of the Sixth Mid-Term Management Plan (byJanuary 31, 2026).
1 Refers to the ratio of the balance sheet amount of stocks for investment held for purposes other than pureinvestment (including unlisted stocks), stated in the annual securities report, to consolidated net assets.

Stocks sold during FY2022:
Of the 21 companies examined, the Company sold all shares of four
companies and a portion of shares of two companies.
Ratio of cross-shareholdings to consolidated net assets for FY2022:
The ratio on January 31, 2023 was 4.6%.

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

116

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

G Promoting Compliance
1. Governance1. Sekisui House Group Corporate Ethics Guidelines
The Sekisui House Group established Sekisui House Group Corporate
Ethics Guidelines, which provide specific guidance regarding compliancewith laws, regulations, the Articles of Incorporation and other corporate
ethics principles. We strive to ensure that these guidelines are upheld andpracticed by all officers and employees across the Group.
Sekisui House Group Corporate Ethics Guidelines

2. Training to enhance compliance awarenessWe implement Compliance Training targeting all Group employees in orderto foster a robust compliance awareness among the entire workforce of
the Group.

3. Internal reporting system
The Sekisui House Group maintains an internal reporting system (theSekisui House Group Compliance Helpline), which accepts reports andrequests for consultation from its officers and employees, as well as thoseat partner building constructors in ongoing transactional relationships with
the Group. This system is equipped with in-house contact desks alongwith external contacts operated by a law office. In addition, the Sekisui
House Global Helpline is also in place, with an external law office serving
as the contact point for officers and employees at overseas Group companies. The Company’s Board of Directors is periodically briefed on the statusof its internal reporting system to exercise appropriate supervision over it.

2. Strategy
Sekisui House Group Corporate Ethics Guidelines
In October 2003, the Group formulated the Sekisui House Corporate
Ethics Guidelines and put them into effect as the standards to be followedby the Company, its officers and employees. The content of these guidelines is revised as necessary in line with changes in the business environment. We distribute pamphlets containing the Corporate Philosophy andCorporate Ethics Guidelines to all Group employees as part of thoroughgoing efforts to spread awareness, and we have executives and employees submit a Pledge of Compliance with the Corporate Ethics Guidelines
every year.
From the viewpoint of anti-corruption, we have also stipulated a provision regarding entertainment and gifts in these guidelines with respect tocustomers, suppliers, public officials and other individuals. Based on thatprovision, we have established Anti-Corruption Guidelines and are disseminating information on them within the Company.
Sekisui House Group Corporate Ethics Guidelines

Compliance Training Implementation
Until FY2021, we provided all Group employees with annual legal training
addressing laws, regulations, legal risks and other subjects determined aspart of ongoing efforts to foster compliance awareness. In FY2022, wechanged the name of this training to Compliance Training, and began
implementing programs centered on small-group discussions aimed ataddressing case studies of compliance violations, including the violation of
corporate ethics. Through this training, we provide employees with opportunities to spontaneously think about compliance and develop robust
awareness regarding relevant issues. In this way, we are fostering broader
compliance awareness that extends beyond laws and regulations.
We also implement annual Human Relations Training for all Group
employees to raise their awareness of human rights-related issues on an
ongoing basis. This training covers a variety of issues addressed in the
Sekisui House Group Corporate Ethics Guidelines (the prevention of sexual/
power harassment, labor management, mental health-related issues, etc.)
and is aimed at instilling robust knowledge and moral bearing so that each
employee can identify the relevance of human rights-related issues to theiroperations and engage with their colleagues in an even more respectfulmanner. Through this training, we strive to help employees remain attuned
to our corporate philosophy of love of humanity and encourage them toact on this philosophy. In the FY2022 round of this training, we addressedsuch subjects as relationships between business and human rights andthose between children’s rights and corporations. Participants were
engaged in discussions regarding the ways the Sekisui House Groupshould respond to diverse aspects of human rights, such as children’s
rights. We are thus striving to help employees gain a deeper understanding of the importance of human rights protection in the course of businessactivities and raise their compliance awareness.
In order to promote compliance at business bases, we also provide theirsenior managers with risk management training to develop their compliance awareness as leaders. In FY2022, this training was focused on such
subjects as the strengthening of worksite information security, the prevention of harassment and the reduction of overall working hours, and consisted mainly of discussions among participants to enable them to educate
one another on these topics. Even after training, participants are engaged
in ongoing discussions with their peers while operating in their respective
worksites in order to ensure that each remains immensely conscious of
their leading role in terms of promoting compliance throughout the entiretyof the worksites under their supervision. Looking ahead, we will expand
the scope of this training to include senior managers at Group companies
to strengthen our overall Group-wide structure for promoting compliance.

Implementing the Governance Awareness Survey
Every year, we conduct the Governance Awareness Survey targeting all
Group employees. These anonymous surveys are periodically conductedby distributing questionnaires regarding employee awareness of corporate
ethics, conditions of workplace environments and other matters. Throughthese surveys, we strive to accurately assess the current status of ourworkplaces while creating opportunities for the exchange of opinions
among business units based on survey results. In these ways, we utilize
findings from surveys to foster a workplace culture supportive of unfettered communications.

117

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

Promoting Compliance romoting active use of internal reporting systems andP
consultation services
In accordance with the Whistleblower Protection Act, we have in place aninternal reporting system through which the Compliance Office in the Legal
Department accepts requests for consultation or reports regarding any
conduct that violates or may violate laws or corporate ethics. This system
is dubbed the Sekisui House Group Compliance Helpline1 and is available
to all Group employees, while our corporate law office serves as an external point of contact for the same purpose. Moreover, the Human Relations
Office within the Legal Department operates the Sexual and Power
Harassment Hotline to accept requests for consultation regarding humanrights-related issues, including sexual harassment and power harassment
as well as problems associated with interpersonal relationships and otherrelevant subjects. Similarly, this hotline is available to all Group employees.
In addition, the Sekisui House Group Compliance Helpline accepts
requests for consultation from officers and employees at partner building
constructors and suppliers in ongoing transactional relationships with theGroup. This helpline handles reporting on cases that violate or possibly
violate laws or corporate ethics in connection with transactional relationships with the Group. Furthermore, the Sekisui House Global Helpline wasestablished in June 2020 for employees at overseas subsidiaries operating

in English-speaking regions, with an external law office serving as the contact point. (For employees at our subsidiaries in China, we established aseparate contact point capable of accommodating inquiries in Chinese.)
Prior to the June 2022 enforcement of the revised Whistleblower
Protection Act, we established internal regulations regarding the whistleblowing system (Regulations on Sekisui House Group ComplianceHelplines, etc.) in May 2022 to secure compliance with said act. Since
then, we operate this system in accordance with these rules. These rules
stipulate that the system must accept anonymous requests for consultation or reporting while mandating the protection of whistleblowers by, forexample, prohibiting detrimental treatment on the grounds of whistleblowing, banning any attempts to specify their identities and outlining secrecy
obligations to be borne by those handling the system.
Although it is desirable that any issue that arises is first addressed by
the workplace involved, we also believe that ensuring that our whistleblowing system is known by all employees and available to them without any
barriers is essential. Accordingly, we continuously strive to spread awareness of this system through annual Compliance Training (previously
referred to as legal training until FY2021), Human Relations Training andother various training in which all employees participate.
1 This system handles a broad range of issues, including bribery.

Details of the Sekisui House Group’s Whistleblowing System

Flow of Inquiries Accepted by the Sekisui House Group Compliance Helpline

Inquirer
Reports, consultation,questions
Reports,
consultation,questions(+ Interviews)

Notification
regarding thereceipt of reports,
consultation orquestionsNotification
regarding thereceipt ofreports(+ Discuss how to respond)

Compliance Office of Sekisui House
Confirm the facts,
investigate on theoccurrence/absenceof legal violations,etc., and determine
the Company’s
response

Point of contact

Consultation methods

Content of report

Sekisui House Group
Compliance Helpline

Phone
LetterEmailThis includes all cases that violate or could potentially violate laws, regulations, or
corporate ethics for businesses and business activities for Group employees andbusiness partners that the Group has an ongoing relationship with.

Report theCompany’s response

Sekisui House Global Helpline(External) law office

Email (English language
support is available)

Cases at overseas subsidiaries that violate or may violate laws and regulations andcorporate ethics in relation to businesses and business activities.

Phone
Email

Consultation pertaining to sexual/power harassment and other human rights
issues, including concerns and problems related to interpersonal relationships; consultation aimed at creating a comfortable workplace for disabled employees, etc.

Note: We also provide an external (outside the Company) contact for counseling by a professional for Group employees and their families. This contact accepts email-based requests for counseling on an around-the-clock basis.

External contact(Law office)In-house contact (investigate the issue anddetermine how to respond)

Compliance Office(in Legal Department)(External) Sekisui House
corporate law office

Legal Department
Human Relations Office(+ Interviews)

Emails,phone or letter(communicate with relevant
departments depending on
the nature of the issue)

Sexual and power
harassment hotline

Phone or letter

Report results ofinvestigations andthe Company’s
response

Sekisui House’

Information Office of Audit andsharing
Supervisory Board

Members

Report results ofinvestigations andthe Company’s
response

External contact(Law office)Report theCompany’s response

Inquirer
About the Sekisui House Group Compliance Helpline (Japanese only)118

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Promoting ComplianceTax transparency
The Sekisui House Group is committed to complying with tax laws andupholding fairness in its tax affairs in every country in which it operates. We
disclose matters related to transparency in tax affairs in the following article.

check system for branches and the head office to prevent the occurrenceof mistakes for type approval. In addition, to ensure the effective assignment of full-time supervising technicians under the Construction Business
Act, we are checking their assignment status and are continuing to secure
qualified personnel and improve their skills.

are being put in place in various countries around the world, we are making efforts to protect personal information in our international businesses
as well, by developing systems, providing training and other means inaccordance with the businesses we operate in each country to comply
with local laws and regulations.
Sekisui House, Ltd. Privacy Policy

Tax transparency

Personal information protection initiatives
Breakdown of taxes paid in each country
The breakdown of taxes paid by the Sekisui House Group (FY2022) bycountry is as follows.
Country

Amount (millions of yen)Japan74,826

The United States

13,383Australia

99

China

6,177

3. Risk Management
Initiatives for compliance with laws and regulations
The Group obtains permits and licenses based on laws and regulations,such as the Real Estate Brokerage Act, the Construction Business Act,
the Act on Architects and Building Engineers, and the Housing Quality
Assurance Act. At the same time, we conduct business activities basedon administrative regulations, as well as laws and other regulations related
to construction, labor, the environment and other matters involved in executing business. Violation of laws and regulations related to construction inparticular could incur significant expenses for remediation or administrative
sanctions, such as suspension of business that could affect the Group’sbusiness performance.
Measures to prevent compliance violations include a legal and regulatory
check system to verify mistakes and omissions of procedures for design,
according to the Building Standard Law, and we have structured a double

To follow the amendments to the Personal Information Protection Law
enacted on April 1, 2022, we have revised the Rules for Handling Personal
Information. We have also designated the executive officer in charge oflegal affairs as the person in charge of handling personal information, andare working to manage personal information with effective systems. Our
Privacy Policy and Information Security Policy are disclosed on our website.
We handle customers’ personal information at Sekisui House Group
worksites, such as housing exhibitions and land sales offices. In accordance with the Personal Information Protection Law and the Rules for
Handling Personal Information, we have implemented ongoing e-learningand educational training for employees. We are striving to instill robust
knowledge of personal information protection among employees by, forexample, educating them about in-house guidelines regarding compliancewith the Personal Information Protection Law. In addition, we have set up
a specialized Customer Information Service Office within the CS Promoting
Department, and have established a system that supports compliancewith the Personal Information Protection Law for the entire Group.
Among various options, customers may request disclosure, correction,suspension of use or deletion of their own personal data by lodging a
Contact for Inquiries About Customer Information application with theCustomer Information Service Office. In the event of the loss or theft ofcustomers’ personal information, in addition to informing customers about
the issue immediately, we shall post necessary notices on our website
concerning what information was lost or stolen, as well as notices regarding our subsequent handling of the situation. At the same time, we shallmake every attempt to recover this information.
Additionally, in view of the fact that personal information protection laws

Sekisui House, Ltd. Information Security Policy (Japanese only)

Anti-corruption initiatives
Sekisui House strives to maintain a sound and healthy corporate presence. To this end, we believe that we must eliminate any inappropriate
relationships with government officials or politicians and promote appropriate business activities. To ensure fair business practices, improper relationships with government officials and politicians are expressly forbidden in
the Sekisui House Group Corporate Code of Conduct and Sekisui HouseGroup Corporate Ethics Guidelines.
Furthermore, we have established internal anti-corruption guidelines. These
guidelines concretely define the government officials to whom the guidelines
apply and conduct that is generally prohibited in order to prevent improper
relationships or transactions on the part of officers (directors of the Board,
Audit & Supervisory Board members, executive officers and operations officers) or employees (including contract employees and part-time employees).
A single improper action can become a major problem; in light of this danger, when in doubt, we recommend that employees consult with their supervisors, managers responsible for general affairs, or the Head Office Legal
Department before taking action and always maintain appropriate records.

Sekisui House Group Corporate Code of Conduct (excerpt)
Fair business practices
2. We will engage in fair and free competition, appropriate transactions, and sustainable and responsible procurement. We will maintain sound relationships with political and governmental entities.
Sekisui House Group Corporate Code of Conduct (Japanese only)119Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Promoting ComplianceSekisui House Group Corporate Ethics Guidelines (excerpts)
2−4 Restrictions on Donations and Political Contributions(1) Upon donating to various organizations, etc., recognize the roles ofcompanies in society, proactively judge the need for donations, comply with related laws and regulations, and follow proper methods.
(2) Upon making political donations, comply with related laws and regulations including the Public Offices Election Act and the PoliticalFunds Control Act, carefully avoid any and all action that can bemisunderstood as colluding with politicians or public officials bybribery and payoffs, and strive to create healthy and transparent
relationship with all parties.
(3) Receive prior authorization according to internal rules upon making
various donations and contributions.
3−6 Entertaining and Presenting Gifts(1) Do not entertain nor present gifts to public officials or any equivalent
individuals.
(2) Upon entertaining or presenting gifts to business partners, operate
within the range of generally and socially acceptable common sense.
(3) In principle, do not accept entertainment nor gifts from customers
or business partners.
Sekisui House Group Corporate Ethics Guidelinesof our knowledge, no cost was incurred on payments for penalties,​
surcharges or settlements related to corruption.

Marketing and advertising policy

Infractions and penalties related to the environment
There were no major infractions or penalties of environmental laws or regulations in FY2022. There were no accidental spills or other incidents impacting
the environment surrounding our factories. Although we are aware of the needof allowances to secure our preparedness for a major environmental accident
or other incident arising from our operations, we recorded no allowances for
ESG-related issues, including environmental issues, in said fiscal year.

Infractions and penalties related to products and services,
health and safety
In FY2022, there were no legal or regulatory infractions or penalties paid
as a result of violations of laws or regulations related to the provision anduse of our products and services. There were also no infractions of healthand safety related regulations or voluntary standards.

Infractions and penalties related to customer privacy
In FY2022, there were no substantiated petitions for redress related tocustomer privacy infringements or customer data loss.

Legal action related to monopolistic practices

4. Metrics and Targets

In FY2022, the Group faced no legal action, substantial fines or punitive
measures in connection with anticompetition, antitrust or monopolistic
practices, or violations of relevant laws and regulations.

In FY2022, there were no serious violations of laws, regulations or voluntary norms related to bribery or corruption within the Group.

Number of Consultations Received by the Whistle Blowing
System and the Internal Consultation Services

Legal compliance status

5. Activities and Other Related Information

As stipulated in the Sekisui House Group Corporate Code of Conduct, we
provide appropriate and accurate information on products and services to
consumers and customers. We comply with the relevant laws and regulations of the countries where we operate, including Japan’s Act against
Unjustifiable Premiums and Misleading Representations, regulations onreal estate representations, and the Real Estate Brokerage Act. We strive
to consider the perspective of consumers and customers to carry out marketing and advertising in a manner that will not cause misunderstanding.
We produce and supervise advertisements in accordance with an
in-house manual that stipulates rules regarding precautions to be taken
during production and checks by relevant departments as necessary.
At offices that handle real estate advertising, we train a wide range of
employees, not just general managers and supervisors, to help them gain necessary expertise. We have also established a system to check Group websites.

Sekisui House Group Corporate Code of Conduct (excerpt)
Relationship of trust with consumers and customers:
5. Provide consumers and customers with appropriate and accurate
information regarding our products and services, engage in sincere
communications with them, and secure their satisfaction and trust.
The Sekisui House Group Corporate Code of Conduct (Japanese only)



(FY)

2020

2021

2022

Penalties for non-compliance with the anti-corruption policy

Compliance Helpline

5

17

32

In FY2022, no disciplinary action or dismissal took place against any
employee for non-compliance with the anti-corruption policy. To the best

Sexual and power harassment hotline(Of which, harassment-related consultations)

167

169

213

120

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

121

G Strengthening Risk Management
The Group strives to keep itself accurately updated regarding importantrisks that may arise in the course of its business activities while developinga structure to ensure that, if such risks materialize, appropriate measures
are taken in order to mitigate their impact on the Group’s businesses. For
example, strategic risks and financial risks, both of which are considered
important in terms of business management, are discussed by such bodies
as the Board of Directors and the Management Meetings. With regard tooperational risks and hazard risks, the Risk Management Committee(chaired by Satoshi Tanaka, Representative Director of the Board, Executive
Vice President, Executive Officer) is in place, acting as a consultative bodyto the Board of Directors to monitor the status of risk management.
This committee mainly consists of members appointed via a resolution
by the Board of Directors and meets once a month, in principle. Its activities include risk assessments based on interviews with relevant departments and the identification of material risk items in addition to themonitoring of specialized departments at the head office and meetingbodies responsible for such risk items. Through these endeavors, thecommittee summarizes and verifies the development status of theCompany’s risk management structure, with reference to findings from the
Risk Management System Diagram
Board of Directors

Risk Management Committee

Quality Management Committee(secretariat:
Legal Department)

Information Security Committee

Sekisui House departments
Group companies

2. Strategy
Risk management process
We identify risk issues present at domestic offices as well as domestic andoverseas subsidiaries in connection with quality management, information
security, compliance, human rights, crisis management, the environment,labor law, labor management and other themes. This identification draws
on findings from monitoring over these business units in the preceding fiscal year and is informed by interviews with each department in the head
office. The Risk Management Committee then evaluates these risk issues
to determine the probability of their occurrence and degree of their impact
on the Group and selects material risks based on these evaluations. The
departments and meeting bodies responsible for each important risk
theme formulate a basic risk management plan at the beginning of eachfiscal year, report on progress to the Risk Management Committee, andmake improvements based on the opinions and advice offered by thecommittee, in this way using a PDCA cycle for risk management.
With regard to risk management for Group companies, we have clarified
administrative departments charged with overall business management foreach Group member as well as specialized departments charged with taking a cross-sectional approach to risk management in each field of specialty. Under this structure, we promote matrix-based risk management. To
obtain risk information from sources across the Group, we also strive todevelop a governance network that will, in turn, help strengthen check-andbalance functions provided by individuals responsible for general affairs at

each domestic and overseas Group company and invigorate information
sharing among the Auditing, Human Resources and General Affairs, Human
Resources Development, Legal, and other departments charged withadministration and human resource management. As for key business subsidiaries, we require them to acquire the approval of the Company or a resolution of the Board of Directors when they make decisions on the executionof businesses that involve a certain degree of importance. Furthermore,these key Group companies prepare risk maps similar to those prepared by
the Company, with the aim of evaluating important risks. In order to understand risk recognition at these companies, the content of their risk maps isshared by and discussed at the Risk Management Committee.
If certain incidents, accidents or other emergencies occur and lead toeconomic losses for our customers or other stakeholders or somehow
damage their health or should these occurrences result in other phenomenon negatively affecting the Company’s corporate activities, the head
office administrative department reports to the Risk Management
Committee in accordance with the Crisis Response Manual. This manual

Domestic worksites

StrongOur risk management systemmonitoring mentioned above, while giving necessary advice. Also, thecommittee regularly reports on its deliberations to the Board of Directors inorder to be properly verified and evaluated by the latter. Members of thecommittee include representatives from the Internal Audit Division to coordinate its activities with the content of periodic audits.
Moreover, in line with our recognition of the importance of quality control
and information security, we established the Quality Management
Committee and the Information Security Committee within the Risk
Management Committee. These committees take a professional, intra-­divisional approach to reviewing risks as well as countermeasures, andregularly report their deliberations to the Risk Management Committee.

Company-wide impact

1. GovernanceDomestic subsidiaries

Overseas subsidiaries

Degree ofimportance B

Degree ofimportance A

Degree ofimportance A

Degree ofimportance C

Degree ofimportance B

Degree ofimportance A

Degree ofimportance C

Degree ofimportance C

Degree ofimportance B

Probability of occurrence

Risk items labeled with A in terms of degree of importance areprioritized in monitoring by the Risk Management CommitteeHigh

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Strengthening Risk Management

is prepared upon the approval of the Risk Management Committee to clarify the Sekisui House Group’s stance on risk response and concepts
behind it. When the incident is considered to entail a degree of seriousness that exceeds the crisis level defined by the manual, the Crisis
Countermeasure Headquarters will, upon judgment by the chairperson of
the Risk Management Committee, be launched. The headquarters will act
as a dedicated team responsible for preventing any additional fallout fromthe incident, developing a structure aimed at ensuring early resolution, andhandling information disclosure targeting business partners, customers,
regional communities, mass media and all other stakeholders via emergency press conferences and news releases. The flow of the aforementioned procedures is clearly stipulated by the manual.
The relevant departments strive to secure their incident response capabilities, to this end ensuring that the above fundamental policy is known
and well understood by all their employees while conducting ongoingtraining at least once a year. In this way, we expand employee awarenessof crisis response and enhance their skills to respond effectively. We also
update the manual periodically to improve and align its content with predicted types of incidents based on the latest crisis outlook.

3. Risk Management
Quality control
The Group takes all possible measures to ensure the quality of design, production and construction. It also implements a long-term warranty system
and regular inspection service for our detached houses and multi-unit buildings, which are our core products. If serious quality problems occur due to
unexpected human errors or other factors during our long support period,
considerable costs could be incurred or the reputation of the Group could beseverely degraded, which may affect the business performance of the Group.
As a countermeasure, the Quality Management Committee within the
Risk Management Committee promotes unified quality management as anorganization that brings together five study groups for products, design,
production, construction, and customer satisfaction. In particular, theQuality Management Committee helps prevent construction quality defects
through improvements to the quality control priorities that are based on

the annual construction quality management plan formulated at the beginning of each fiscal year, and regularly reports the status of initiatives to the
Risk Management Committee. We are also promoting multifaceted initiatives aimed at securing construction competencies, especially those
closely related to construction quality, such as leveling the amount of construction work, improving onsite productivity, and proactively training construction technicians, including technical trainees from overseas.

Initiatives to strengthen information security
Infection by computer viruses and advanced cyberattacks could allow personal information and confidential information to leak or be tampered with,or cause system shutdowns. This could possibly result in the filing ofclaims for damage from customers or other stakeholders, the loss of market confidence in the Company or other negative consequences thatwould, in turn, affect the Group’s business performance.
To counter the risks described above, the Information Security
Committee within the Risk Management Committee discusses and implements information security and information management measures basedon the Group’s fundamental Information Security Policy, as well as internal
regulations regarding the management of confidential information.
Simultaneously, we strengthen our systems for controlling internal andexternal access to safeguard ourselves from computer viruses and othermodes of cyberattacks and to prevent the leakage or tampering of confidential information. We also endeavor to raise IT literacy among employees by implementing drills on targeted email attacks and otherwise
providing them with training in addition to conducting information security
audits. Moreover, the CSIRT1 is in place within the Information Security
Systems Office of the IT Design Department to serve as a dedicated team
to counter security incidents. With CSIRT’s involvement, we have prepared
incident response plans for both emergency and non-emergency situations. To raise our incident response capabilities and ensure full preparedness for emergency, we also implement drills in which each department
participates on the assumption that a security incident occurred. In addition, we undergo periodic security assessments undertaken by externalorganizations (at least once in two years) as part of efforts to further
strengthen our security governance systems. The status of these initiatives

is reported to the Risk Management Committee on a quarterly basis or,when necessary, on an ad-hoc basis.
We also manage customer information based on our Privacy Policy,
with each organizational unit assigning a manager responsible for handlingpersonal information, implementing safety measures, and establishing asystem to thoroughly inform all employees. At the same time, through periodic online courses, we teach employees how to handle personal information, and we raise awareness of the roles and responsibilities of each
employee regarding the protection of personal information.
Also, the Information Security Promotion Subcommittee is placed within
the Information Security Committee to enhance security awarenessamong employees at each business base and Group company. This subcommittee consists of representatives from all Group business bases andstrives to raise each employee’s security awareness, starting from those insenior management positions, and thoroughly implement security measures. In addition, we have established the Information Security Guidelines
and made them accessible from all Group companies via intranet. Basedon these guidelines, information security self-checks are conducted at all
business bases run by domestic Group companies. Furthermore, allemployees, including those at domestic Group companies, undergo annual
e-learning training on information security and the handling of personal
information, while senior managers at each business base receive risk
management training on an annual basis.
1 CSIRT: Computer Security Incident Response TeamSekisui House, Ltd. Information Security Policy (Japanese only)122

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Strengthening Risk Management

Human rights
If the Group fails to take sufficient steps to address human rights-related
issues associated with stakeholders surrounding it in Japan and overseas, theGroup could possibly suffer reputational damage or loss of social standing.
To address these risks, the Group established the Sekisui House Group
Human Rights Policy in April 2020. In line with this policy, we implement
Human Relations Training and other measures to disseminate up-to-dateconcepts on human rights in conformity with international standards andto properly disclose our relevant initiatives. By doing so, we strive toensure that all employees are regularly educated on this matter. Practicing
this policy, we have also adopted human rights due diligence process tobe implemented in the course of business activities. This process involves
the preparation of human rights risk maps which, in turn, help us identify
important issues regarding human rights and inform our countermeasures.
P.182 Respect for Human Rights

Climate change countermeasures
Primary risks and opportunities arising from climate change are identified
under the initiative of head office and other business departments andreported to the Board of Directors after being discussed by the ESG
Promotion Committee and the Risk Management Committee, both ofwhich act as consultative bodies to the former. When necessary, the mitigation, transfer, acceptance or control of risks is considered and determined under the aforementioned structure.
The content of risks and opportunities is summarized and disclosed inaccordance with the framework provided by the TCFD.
 .142 Disclosure in Line with Task Force on Climate-related Financial Disclosures
P(TCFD) Recommendations

Labor management
Long working hours for employees can lead to the development of healthproblems, including mental illness, and in some cases can lead to extended
leaves of absence.
We counter these risks through labor management that aims to curb
total working hours. To this end, each department has set its target formonthly average total working hours per employee, while each businessbase strives to improve workstyles. Moreover, we have made it a rule toconfirm the status of work at the head office, factories and offices every
month. In addition, the Human Resources and General Affairs Department
promotes effective labor management by implementing monitoring andlabor management training as necessary.
We also believe it is essential to prevent the occurrence of occupational
accidents at business and construction sites. Especially at construction
sites, accidents could occur due to flaws in operational environment, procedures and methods that, in many cases, result in human injuries. If such
accidents involve fatalities or other serious consequences, the Company
may be held liable for resulting damages and thus lose society’s trust.
To prevent the occurrence of occupational accidents, each organizational
unit holds health and safety committee meetings to conduct periodic
inspections of accident prevention measures, examine actual cases ofaccidents, formulate fresh measures aimed at preventing recurrences andpromote other activities.
A particular emphasis at construction sites is creating a safe and secure
work environment based on the annual Company-wide construction healthand safety plan. Under the direction of the Construction Headquarters at
the head office, we also endeavor to reduce high-­frequency accidents
through such countermeasures as the development of a structure
designed to ensure and confirm compliance with operational procedures.

Securing human resources
For the Sekisui House Group to achieve sustainable growth, securing
excellent human resources capable of developing its existing businesses
and taking on challenges in new businesses is essential. We therefore
deem it important to secure such human resources at home and abroad
and to maintain employment for them. If the Group faces a decline in its
hiring competitiveness or a serious outflow of human resources via resignation, the Group could be affected by resulting stagnation in corporate
growth and deterioration in its social reputation.
To counter the aforementioned risks, we have clarified ideal traits forhuman resources necessary to execute our business strategies whilestrengthening branding in the field of hiring. Furthermore, we proactively
push ahead with the diversification of our recruitment pipeline and selection
methods. As part of our personnel system reforms, we have made it possible for employees to choose from multiple career courses in addition to
introducing a personnel evaluation system with upgrades aimed at ensuring fairness and transparency. Through these measures, we help

employees pursue self-directed career development. We also conduct periodic career interviews to provide them with opportunities for dialogue with
their supervisors. By doing so, we aim to foster career awareness among
employees while developing an organizational culture that ensures psychological safety. Looking ahead, we will continue striving to secure humanresources via a twofold approach of strengthening our hiring functions andoffering robust opportunities for employees to achieve personal growth.
P.187-191 Developing Human Resources

Changes in the housing market environment
The Sekisui House Group is engaged in business activities centered on theprovision of housing at home and abroad. Accordingly, the Group’s business performance is highly susceptible to changes in personal consumption, interest rates, land prices, housing-related government policies andtax systems as well as rent prices that may fluctuate due to the aforementioned factors, along with regional economic trends. Going forward, if thebusiness environment evolves upon these changes, the Group’s operating
results could be materially affected.
To counter the risks described above, the Group pursues the flexible
implementation of various measures aimed at adapting to changes in themarket environment. To that end, domestic executive meetings are held
monthly under the leadership of heads of business and administration
headquarters. These meetings help ensure that all attendees are on thesame page about the status of progress in measures undertaken to countermarket trends as well as issues identified in the course of frontline operations. Also, we draw on conclusions of these meetings to formulate freshmeasures aligned with the evolving situation.
We also maintain ongoing informational coordination between each overseas business base and the Company’s head office to update the latter
about the market environment in countries in which we pursue businessexpansion. Based on input afforded by this coordination, specialized departments at the head office engage in market analysis and strategic planning.

Assets held by the GroupThe Sekisui House Group holds real estate for sale, non-current assets,
investment securities and other business assets in Japan and overseas.
The Group may record impairment losses or valuation losses in connection
with these assets due to plunges in their market value or other reasons.

123

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Strengthening Risk Management

Fluctuations in foreign exchange rates could also affect the value of theseassets. The Group’s operating results and financial position could therefore
be impacted by changes in asset value.
To counter the risks described above, the Group has made it a rule toensure that any investment project with monetary value exceeding a certain threshold must undergo preliminary screening by Sekisui House’shead office. Moreover, each such project is sufficiently discussed at
Management Meetings before being authorized. In these ways, we take aprudent approach to making investment decisions. With regard to realestate, we endeavor to stably manage it by acquiring excellent properties
and enhancing the asset turnover ratio. As for cross-shareholdings, we
maintain a basic policy of restricting the volume of such shareholdings to abare minimum level from the perspective of improving capital and asset
efficiency. The appropriateness of such shareholdings is annually verified
by the Board of Directors. At the same time, we strive for the phased
reduction of cross-shareholdings under quantitative targets. To mitigate
the impact of foreign exchange fluctuations, we utilize forward exchange
contracts and other hedging procedures as necessary. In addition, we
conduct periodic assessments of the risk of impairment or valuation losses
associated with our asset holdings and ensure that the occurrence of suchlosses is properly accounted for as necessary.

Fundraising costs
The Sekisui House Group procures funds through borrowings from financial institutions, the issuance of bonds and other measures. Fundraisingcosts may possibly increase upon the occurrence of such events as major
fluctuations in market interest rates, turmoil in the financial market or theradical downgrading of the Company’s ratings by rating agencies. This
could, in turn, impact the Group’s operating results and financial position.
To address these risks, we strive to secure financial soundness and maintain our ratings at an appropriate level, with the aim of reducing fundraisingcosts. We also endeavor to mitigate interest rate fluctuation risks via thediversification of fundraising vehicles and the dispersion of their maturities.

Procurement of raw materials and supplies, etc.
If the Group’s suppliers sustain damage from a major natural disaster orsocial disorder (war, terrorism, infectious disease pandemic, geopoliticalrisk, etc.), the Group may be forced to suspend construction under way

and delay the contracted construction period as these phenomena could
make it difficult for them to maintain the supply of materials. Also, if surges
in raw material and energy prices progress in countries around the world,
procurement costs could further increase and thus impact the Group’s
operating results.
To counter these risks, the Sekisui House Group promotes preparatory
measures described below, assuming such scenarios as a major disasterand the resulting disruption of supply from a certain supplier.
(1) Supply chain: We strive to secure multiple lineups of components, utilize multiple suppliers and establish multiple production bases whilestrengthening our domestic supply bases.
(2) Specifications: We promote a shift to materials that are readily available.
For example, we incorporate components made using general-purpose
materials. We also endeavor to revise product specifications to easematerial procurement.
(3) Information: We develop a supplier database to secure a structure supporting swift response to emergencies.
In addition, we ask our suppliers to strengthen their own supply chains.
This, in turn, makes our entire supply chain more resilient, with a growing
number of suppliers striving to secure their preparedness against emergencies. Furthermore, in the course of procuring materials, we always consider
multiple supplier candidates to ensure price competition. We will also promote favorable procurement conditions via the reorganization and consolidation of suppliers while striving to optimize specifications. In these andother ways, we will endeavor to realize rational prices for procured materials.

Response in the event of a natural disaster
The Sekisui House Group recognizes that it is the mission of housing manufacturers to quickly restore the lives of customers that suffer from large-scale
natural disasters and provide new housing, including emergency temporary
housing. To this end, we have established the Action Program for Handling
Natural Disasters that prescribes Company-wide policies and measures.
In the event of a large-scale natural disaster, the first step toward recovery is to quickly ascertain the condition of employees and their families in
the affected region. The speed of initial responses is linked to the formationof support systems for worksites and rapid response to Company-wide
needs, which in turn enables us to promptly provide support to customers.
For this reason, we not only conduct periodic evacuation drills at each
worksite, but also require all employees to always carry a response survival

card containing safety reporting procedures, instructions on actions to betaken in the event of a natural disaster, and other necessary information.
We confirm the condition of our employees and their families, while setting up a Disaster Response Headquarters at our head office to respondto the disaster by sending relief supplies using each factory as a base for aquick response. We also cooperate with local response headquarters tofacilitate a swift recovery by, for example, organizing disaster aid teams
consisting of employees from across the country.

Business continuity planning
Delays in the initial response due to unclear response plans during largescale natural disasters, infectious disease pandemics or other emergencies could impair business continuity at our locations. This could, in turn,affect the Group’s business performance.
The Sekisui House Group maintains preparedness by establishing its
Basic Policy Concerning Business Continuity Planning. This policy informs
the development of our procedures and systems designed to ensure proper response to a serious incident or hazard risk impacting business management. In this way, we strive to ensure that our core operations remain
ongoing in the face of emergency or can be restored at the earliest possible date even when suspended.
The Group has also formulated the Sekisui House Group Basic Policy
Concerning Disaster Countermeasures. A disaster manual has also beenreleased to every organizational unit, and we are prepared to ensure business continuity at all business sites in the event of a disaster.
In the event that a large-scale disaster hit the head office and made it
hard to maintain its ongoing functions, we will continue important business
operations through offices that can serve as substitute head offices: theTokyo office (Akasaka, Minato-ku) and the Comprehensive Housing R&D
Institute (Kizugawa, Kyoto). This structure is established based on ourdisaster response manual stipulating the launch of the head office Disaster
Countermeasure Headquarters and other measures.
We do business internationally, which puts the employees of overseas
Group companies and employees on international business trips at risk
from natural disasters, terrorist attacks and riots. We have created a
response manual that incorporates a system for prompt information sharing, and we have contracted with a specialized overseas crisis response
support company to have a support system in place for our local employees in the event of an emergency.

124Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Themes and KPIs for Initiatives That Provide a Basis for
Our Material Issues
CategoryNo.

Indicator

Governance2

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

We have identified the following KPIs regarding the “creation of high-quality housing stock,” “contributing to a sustainable
society” and “diversity and inclusion.” These KPIs will serve as guideposts over the course of the three-year period of the
Sixth Mid-Term Management Plan to achieve the three material issues named above.

Officer remuneration
indicators PSU1
1

ESG Management

Mid-Term Management Plan for
Sustainable Growth3

Mid-Term
President
Management Plan commendation
ESG indicators
Fifth
Sixth

FY2023

FY2024FY2025

Targets

FY2022
Results

Targets

Targets

Targets48

Responding to Corporate Governance Code according
to reviews by evaluation organizations and others

9th placeor higher

4th place

9th placeor higher

9th placeor higher

9th placeor higher

49

Strengthening the Group governance system(Group administrative regulations; development andappropriate assignment of governance specialists

Enforceregulations

Enforceregulations

Human resource(HR) development
and allocation

Promote HR
development
and allocation

Secure theeffectiveness of
HR development
and allocation

50

Number of serious violations of laws and voluntary norms

0

0

0

0

0

51

Number of cases brought to Compliance Helpline or
Sexual and Power Harassment Hotline for consultation(Per 1,000 employees) (New)

—

8.5

—

—

—

52

Progress in the strengthening of security measures(% of progress vis-à-vis the annual plan) (New)

—

—

100%

100%

100%

53

Ratio of employees who completed security training (New)

—

—

100%

100%

100%

54

Cumulative number of DX-related projects(linked with Mid-Term Management Plan) (New)

—

—

—

—

—

1 PSU= Performance Share Unit (performance-related stock remuneration): PSU1 = FY2020 to FY2022; PSU2 = FY2021 to FY2023; PSU3 = FY2022 to FY2024

Remarks

Only results aredisclosed

Only results aredisclosed

125

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

G Shareholder and Investor Engagement
In line with its Basic Policy on Corporate Governance, Sekisui House discloses various financial information regarding its financial position and business results, as well as non-financial information regarding management policies,
ESG-related activities and other matters. To address all stakeholders, including shareholders and investors, we
maintain a proactive stance toward information disclosure and strive to remain fair in this endeavor. We also aim toensure that our operations are accurately understood by stakeholders even as we build appropriate relationships oftrust with them. Accordingly, we engage in direct communications and proactive dialogue with stakeholders while
striving to incorporate their opinions to inform our business judgment and other management activities.
To secure sustainable growth for the Sekisui House Group and medium- to long-term improvement in its corporate value, we create opportunities for periodic engagement with shareholders and investors. Through these opportunities, we facilitate constructive dialogue with them. Moreover, we hold IR interviews with analysts and institutional
investors while inviting our investors, both individual and institutional, to attend management plan briefing sessions
and to join tours of our factories. In these and other ways, we strive to enhance direct communications with investors in addition to holding individual meetings with them.

Main Results of Shareholder and Investor Engagement in FY2022
Individual shareholders
and investors

Institutional shareholders(Japan and overseas)

Institutional investors (Japan and overseas)• Ordinary General Meetingof Shareholders• Online factory tours• Corporate briefings
sponsored by the Stock
Exchange• Online corporate briefings
sponsored by securities
firms

•O
 rdinary General Meetingof Shareholders• Individual SR interviews•S mall-group meetings
hosted by outside
directors of the Board•F inancial results andmanagement plan briefing
sessions•B riefing sessions on ESG
and business overview• Financial results briefing
sessions• Management plan
briefing sessions• Individual IR interviews• Briefing sessions on the
Value Report and ESG• Briefing sessions on
overseas business• Small-group meetings
themed on ESG• Participation in conferences
sponsored by securities
firms• Inviting investors to tour
the Company’s properties
and facilities

Organizing online factory tours for individual shareholders

Small-group meetings hosted by outside directors of the Board for institutional shareholders

On November 29, 2022, we held a factory tour at Sekisui
House’s Kanto Factory (Koga City, Ibaraki Prefecture). Since thefactory tour was held online in the previous year to prevent the
spread of COVID-19, this event marked the second instance ofan online factory tour.
As part of this virtual event, we streamed video recordings ofmanufacturing process for DYNE CONCRETE, a proprietary
exterior wall material used in “IS” series steel-framed detachedhouses. These video recordings have rarely been seen byattendees of physical factory tours. We also delivered presentations using animated pictures while introducing case studies ofhomebuilding. Thus, we provided attendees with enriched content afforded only via online tour.
This event also provided opportunities for attendees to gain adeeper understanding of proprietary Sekisui House technologies,
such as cutting-edge robots used in the small-lot production ofmultiple items based on the Company’s unique policy of production involving different specifications for each home, as well as AI
technologies employed to realize both superior efficiency andsophisticated quality control. As a result, questionnaires targeting
attendees revealed that around 80% of them responded favorably by indicating that they were satisfied or somewhat satisfied.
While a tour of manufacturing lines garnered particularly favorable reviews, we also received a number of valuable opinions
that will likely inform the planning of and discussions regarding
similar tours to be organized going forward.

As we aim to become a leading company in ESG management, we consider dialogue with institutional shareholders andinvestors to be a matter of particular importance. In February 2023, we held online small-group meetings for institutional
shareholders, with outside directors of the Board acting as hosts.
Each meeting involved vigorous discussions with institutional shareholders. For example, attendees shared their evaluations of the current executive team while contributing their thoughts on initiatives now under way at the Company to strengthen corporate governance and upgrade processes for determining the nomination of and remuneration for officers. In sum,these meetings have provided us with valuable opportunities to engage in the mutual exchange of opinions on and insights
into key issues that have been regularly addressed by outside directors of the Board.
These meetings were hosted by Director Kitazawa, Chairperson of the Board of Directors, and Director Yoshimaru,
Chairperson of the Personnel Affairs and Remuneration Committee, respectively.

Manufacturing line of DYNECONCRETE, a highest-grade exteriorwall material boasting robust fire resistance, high durability and outstanding
appearance

Virtual tour of the Family Suite livingroom exhibited in Tomorrow’s Life
Museum, a hands-on experiencefacility

Video recordings were streamed tohelp attendees learn about our production capacity for ß beams, which
consist of heavyweight steel frames
for use in three- to four-story housing.

An employee reporter shared her
takes on the Kanto Factory’s workplace environment that boasts ZEB
specifications.

Director Kitazawa, Chairperson of the Board of
Directors, addressing attendees from
10 institutional shareholders

Director Yoshimaru, Chairperson of the Personnel
Affairs and Remuneration Committee, addressing
attendees from 11 institutional shareholders

126

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

G Message from the Audit and Supervisory Board

Takashi Kobayashi

Midori Ito

Outside Audit andSupervisory Board Member

Standing Audit andSupervisory Board Member

Ryuichi Tsuruta
Chairperson of the Audit andSupervisory Board / Outside Standing
Audit and Supervisory Board Member

Takashi Ogino
Standing Audit andSupervisory Board Member

Yoritomo Wada

Outside Audit andSupervisory Board Member

The Audit and Supervisory Board’s Role in Achieving the Global Vision
When determining future corporate value, non-financial information is one of the factors that draws attention. We,
the Audit and Supervisory Board members, would like to express our respect for President Nakai and the rest of
the management team, who have been leading efforts in pursuit of becoming a leading company in ESG management, as well as to all of the employees who are working together to achieve this goal. Under the Sixth Mid-Term
Management Plan, launched in FY2023, Sekisui House aims to further enhance corporate value based on the ESG
management foundations it has built to date. It will be an important role of the Audit and Supervisory Board members to objectively monitor the Mid-Term Management Plan’s progress from a neutral standpoint, providing our
opinions from time to time.
To contribute to the sound and sustainable development of society at large as well as the Company, and to live
up to the roles and expectations entrusted us by all stakeholders, we, the Audit and Supervisory Board members,
while maintaining our status as independent agents, will work in consultation with one another as we audit the execution of duties by directors of the Board and the development and operation of internal control systems. As we
carry out our duties in the current fiscal year, we feel that we must more closely share information with the accounting auditor and the internal audit division, while also maintaining an awareness of the lines between us to maintainindependence. To that end, we will take the initiative to strengthen the three-way auditing coordination among theaudits of the internal audit department, accounting auditor, and the Audit and Supervisory Board members.
The Audit and Supervisory Board consists of five members, three of whom are outside Audit and Supervisory
Board members: Mr. Tsuruta, a second-term standing Audit and Supervisory member with an extensive knowledgeof finance, investor relations and overseas business management; Mr. Kobayashi, a second-term member who is
an attorney with experience as a prosecutor and a wealth of knowledge regarding compliance and governance;and Mr. Wada, who has expertise in accounting and internal control as a certified public accountant. Ms. Ito and
Mr. Ogino are standing Audit and Supervisory Board Members who are extensively familiar with the Company’sbusiness, operations and organization. Outside Audit and Supervisory member Ryuichi Tsuruta has been appointed
Chairperson of the Audit and Supervisory Board, serving as its leader.
The Sekisui House Group is brimming with the potential to bring happiness to society. Part of its global vision—to
make home the happiest place in the world—is a desire to make employees and their families happy, and to makeno employee unhappy. We will watch over the Group with a sometimes stern, sometimes warm gaze to help theGroup give shape to this aspiration while maximizing its potential to achieve sustainable growth.

127Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

G Directors of the Board and Audit and Supervisory Board Members(As of April 26, 2023)

OutsideDirectors

Outside Director of the Board or Outside
Audit and Supervisory Board Member

Independent officer based on the
Independent rules of Tokyo Stock Exchange, Inc.

Particular knowledge, experience and abilities expected
Corporate
management
Business
Strategy

Yoshihiro Nakai
Representative Director of the Board
President, Executive Officer, CEO

Significant concurrent posts at other companies

Apr. 1988 : Joined the Company
Feb. 2012 : General Manager of Corporate Management Planning Department
Apr. 2014 : 	Executive Officer, assigned to the post of Chief Manager of Corporate Management Planning Department
Apr. 2016 : Managing Officer
			 In charge of Corporate Management Planning and Accounting & Finance
Apr. 2016 : Director
Feb. 2018 : President & Representative Director
Apr. 2021 :	Representative Director of the Board, President, Executive Officer, CEO,in Charge of Business Strategy Division and Division of Built-to-Order Business (current position)

None

Number of years in office as director of the Board
7

Attendance at meetings (FY2022)
Board of Directors: 12/12 (100%)

Yosuke Horiuchi
Representative Director of the Board
Vice Chairman, Executive Officer
In charge of Division of Finance and ESG
Significant concurrent posts at other companies
President & Representative Director of Sekisui House Financial
Services Co., Ltd.
Vice President of the Japan Federation of Housing Organizations

Number of years in office as director of the Board
7

Attendance at meetings (FY2022)
Board of Directors: 12/12 (100%)

Satoshi Tanaka
Representative Director of the Board
Executive Vice President, Executive Officer
In charge of Division of Administration and Human Resources
Significant concurrent posts at other companies
Outside Director of Kuraray Co., Ltd.
Independent Director of IHH Healthcare Berhad

Number of years in office as director of the Board
3

Attendance at meetings (FY2022)
Board of Directors: 12/12 (100%)

Apr. 1980 : Joined the Company
Feb. 2010 : General Manager of Tokyo Sha Maison Sales Administration Headquarters
Apr. 2012 :	Executive Officer, assigned to the post of General Manager of Tokyo Sha Maison Sales Administration Headquarters
Apr. 2014 : Managing Officer
			 In charge of Sha Maison Sales (East Japan)
Apr. 2016 : Director
Dec. 2017 :	Assigned to the post of General Manager of Tokyo Sha Maison Sales Administration Headquarters and General Manager of Condominium
Headquarters
Apr. 2018 : Senior Managing Officer			In charge of Transaction Promotion Division, assigned to the post of General Manager of East Japan Building Sales Administration Headquarters
Aug. 2018 : In charge of Transaction Promotion Division and East Japan Building Sales Administration
Feb. 2020 : In charge of Investor Relations Division and Transaction Promotion DivisionJun. 2020 :	In charge of ESG Management Promotion Division, Accounting & Finance Division and Transaction Promotion DivisionFeb. 2021 : In charge of Division of Finance and ESG and TKC Project
Apr. 2021 : Representative Director of the Board, Vice Chairman, Executive Officer (current position)
Feb. 2022 : Acting Head of ESG Management Promotion Headquarters
Feb. 2023 : In charge of Division of Finance and ESG (current position)
Apr. 1981 : Joined MITSUI & CO., LTD.
Apr. 2004 : General Manager of Investor Relations Division of MITSUI & CO., LTD.
Apr. 2007 : General Manager of Corporate Planning & Strategy Division of MITSUI & CO., LTD.
Jul. 2010 : Deputy General Manager of Consumer Service Business Unit of MITSUI & CO., LTD.
Apr. 2011 : Executive Officer; General Manager of Consumer Service Business Unit of MITSUI & CO., LTD.
Apr. 2013 : 	Executive Managing Officer; General Manager of Consumer Service Business Unit of MITSUI & CO., LTD.
Apr. 2015 : 	Senior Executive Managing Officer; COO of Asia Pacific Business Unit of MITSUI & Co., LTD, and CEO of MITSUI & CO. (ASIA PACIFIC) PTE. LTD.
Apr. 2017 : 	Executive Vice President; CAO (Chief Administrative Officer); CIO (Chief Information Officer); CPO (Chief Privacy Officer) of MITSUI & CO., LTD.
Jun. 2017 : Representative Director and Executive Vice President of MITSUI & CO., LTD.
Jun. 2019 : Counselor of MITSUI & CO., LTD.
Mar. 2020 : Outside Director of Kuraray Co., Ltd. (current position)
Apr. 2020 : Outside Director of the Company
Jan. 2021 : Independent Director of IHH Healthcare Berhad (current position)
Apr. 2021 : Representative Director of the Board, Executive Vice President, Executive Officer
			 In charge of Division of Administration and Human Resources (current position)

Overseasbusiness
International
knowledge

Financialstrategy
andaccounting

Humanresource
GovernanceTechnology and development
Risk
Environment
management
Diversity
Innovation
Improvement Complianceof social value

128

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

Directors of the Board and Audit and Supervisory Board Members

OutsideDirectors

Outside Director of the Board or Outside
Audit and Supervisory Board Member

Independent officer based on the
Independent rules of Tokyo Stock Exchange, Inc.

Particular knowledge, experience and abilities expected
Corporate
management
Business
Strategy

Toru Ishii
Director of the Board
Senior Managing Officer
In charge of Division of Development Business
Significant concurrent posts at other companies
None

Apr. 1990 : Joined the Company
May 2012 : General manager of Development Department
Apr. 2014 : Executive Officer, assigned to the post of Chief Manager of Development Department
Apr. 2016 : Managing Officer
Feb. 2019 : In charge of Development Business and assigned to the post of Chief Manager of International Business Department
Feb. 2020 : In charge of Development and Condominiums Business and assigned to the post of Chief Manager of International Business Department
Apr. 2020 : Senior Managing Officer (current position)
			 In charge of Development Business, Condominiums Business and International Business
Apr. 2020 : Director of the Board (current position)
Feb. 2021 : In charge of Division of Development Business (current position)

Number of years in office as director of the Board
3

Attendance at meetings (FY2022)
Board of Directors: 12/12 (100%)

Hiroshi Shinozaki
Director of the Board
Senior Managing Officer
In Charge of Building Sales Administration and TKC ProjectSignificant concurrent posts at other companies
Executive Vice President, Director of the Board of Sekisui House
Real Estate Holdings, Ltd.

Number of years in office as director of the Board
Newly Appointed

Attendance at meetings (FY2022)
Board of Directors: —Apr. 1987 : Joined the Company
Feb. 2010 : Head of Tokyo-Tokken Building Projects BranchAug. 2018 : Head of East Japan Building Sales Administration Headquarters
Apr. 2020 : Executive Officer of the Company, assigned to the post of Head of East Japan Building Sales Administration Headquarters
Feb. 2021 : In charge of Building Sales Administration
Apr. 2021 : Managing Officer of the Company
Feb. 2023 : In charge of Building Sales Administration and TKC Project (current position)
			 Executive Vice President, Director of the Board of Sekisui House Real Estate Holdings, Ltd. (current position)
Apr. 2023 : Senior Managing Officer (current position)
Apr. 2023 : Director of the Board (current position)

Overseasbusiness
International
knowledge

Financialstrategy
andaccounting

Humanresource
GovernanceTechnology and development
Risk
Environment
management
Diversity
Innovation
Improvement Complianceof social value

129

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

Directors of the Board and Audit and Supervisory Board Members

OutsideDirectors

Outside Director of the Board or Outside
Audit and Supervisory Board Member

Independent officer based on the
Independent rules of Tokyo Stock Exchange, Inc.

Particular knowledge, experience and abilities expected
Corporate
management
Business
Strategy

Yukiko Yoshimaru
Outside Director of the Board

OutsideIndependent

Significant concurrent posts at other companies

Apr. 1982 : Joined Oki Electric Industry Co., Ltd.
Apr. 1998 : Director of Oki America Inc. Head of New York Office of Oki Electric Industry Co., Ltd.
Oct. 2004 : Chief Manager of Diversity Development Office of NISSAN MOTOR CO., LTD.
Apr. 2008 : Joined Nifco Inc.
Jun. 2011 : Executive Officer of Nifco Inc.
Apr. 2018 : Outside Director of the Board of the Company (current position)
Jun. 2019 : Outside Director of Mitsui Chemicals, Inc. (current position)
Jun. 2021 : Outside Director of Daiwabo Holdings Co., Ltd. (current position)

Outside Director of Mitsui Chemicals, Inc.
Outside Director of Daiwabo Holdings Co., Ltd.

Number of years in office as director of the Board
5

Attendance at meetings (FY2022)
Board of Directors: 12/12 (100%)

Toshifumi Kitazawa Outside
Outside Director of the Board

Independent

Significant concurrent posts at other companies
Counsellor of Tokio Marine & Nichido Fire Insurance Co., Ltd.
Member of the Board of Directors (Outside)(Member of the Audit & Supervisory Committee) of MUFG Bank, Ltd.
Outside Director of Mitsubishi Logistics Corporation

Number of years in office as director of the Board
3

Attendance at meetings (FY2022)

Apr. 1977 : Joined Tokio Marine & Fire Insurance Co., Ltd.
Jun. 2008 : Managing Director of Tokio Marine & Nichido Anshin Life Insurance Co., Ltd.
Jun. 2009 : Senior Managing Director of Tokio Marine & Nichido Anshin Life Insurance Co., Ltd.
Jun. 2010 : President & CEO of Tokio Marine & Nichido Anshin Life Insurance Co., Ltd.
Jun. 2010 : Director of Tokio Marine Holdings, Inc.
Apr. 2014 : Vice President & Director of Tokio Marine & Nichido Fire Insurance Co., Ltd.
Jun. 2014 : Vice President Executive Officer of Tokio Marine Holdings, Inc.
Apr. 2016 : President & Chief Executive Officer of Tokio Marine & Nichido Fire Insurance Co., Ltd.
Jun. 2016 : Director of Tokio Marine Holdings, Inc.
Apr. 2019 : Vice Chairman of the Board of Tokio Marine & Nichido Fire Insurance Co., Ltd.
Jun. 2019 : Member of the Board of Directors (Outside) (Member of the Audit & Supervisory Committee) of MUFG Bank, Ltd. (current position)
Jun. 2019 : Outside Director of Mitsubishi Logistics Corporation (current position)
Apr. 2020 : Outside Director of the Board of the Company (current position)
Apr. 2022 : Counsellor of Tokio Marine & Nichido Fire Insurance Co., Ltd. (current position)

Board of Directors: 12/12 (100%)

Yoshimi Nakajima
Outside Director of the Board

OutsideIndependent

Significant concurrent posts at other companies
Outside Director of AEON Financial Service Co., Ltd.
Outside Director of Japan Freight Railway Company
External Director of ULVAC, Inc.
Specially-appointed Professor, The Graduate School of Project Design

Number of years in office as director of the Board
2

Attendance at meetings (FY2022)
Board of Directors: 12/12 (100%)

Apr. 1980 : Joined The Yasuda Trust & Banking Co., Ltd. (currently Mizuho Trust & Banking Co., Ltd.)
Feb. 1982 : Joined AVON Product Co., LTD. (currently FMG & MISSION CO., LTD.)May 1997 : Vice President of Citibank, N.A.
Jun. 2000 : Senior General Manager of Societe Generale Securities Ltd.
Apr. 2002 : Vice President of American Express International, Inc. (Japan)
Aug. 2011 : Country Manager (President) of American Express International, Inc. (Singapore)Feb. 2014 : Senior Vice President of American Express International, Inc. (Japan)
Apr. 2014 : President and Representative Director of American Express Japan Co., Ltd.
Jun. 2017 : Outside Director of Yamaha Corporation
Jun. 2017 : Outside Director of AEON Financial Service Co., Ltd. (current position)
Jun. 2018 : Outside Director of Japan Freight Railway Company (current position)
Sep. 2018 : External Director of ULVAC, Inc. (current position)
Apr. 2021 : Specially-appointed Professor, The Graduate School of Project Design (current position)
Apr. 2021 : Outside Director of the Board of the Company (current position)

Overseasbusiness
International
knowledge

Financialstrategy
andaccounting

Humanresource
GovernanceTechnology and development
Risk
Environment
management
Diversity
Innovation
Improvement Complianceof social value

130Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

Directors of the Board and Audit and Supervisory Board Members

OutsideDirectors

Outside Director of the Board or Outside
Audit and Supervisory Board Member

Independent officer based on the
Independent rules of Tokyo Stock Exchange, Inc.

Particular knowledge, experience and abilities expected
Corporate
management
Business
Strategy

Keiko Takegawa
Outside Director of the Board

OutsideIndependent

Significant concurrent posts at other companies
Outside Director of MITSUI MINING & SMELTING CO., LTD.
Specially Appointed Professor of Faculty of Global Business of
Showa Women’s University

Number of years in office as director of the Board
2

Apr. 1981 : Joined the Prime Minister’s Office (currently Cabinet Office)Jul. 2006 : Director of Policy Division for Universal Design, Policy Bureau, Ministry of Land, Infrastructure, Transport and Tourism
Jul. 2008 : Director-General for Policies on Cohesive Society and Minister’s Secretariat of Cabinet Office
Jul. 2009 : Director-General for Gender Equality Bureau of Cabinet Office
Dec. 2012 : Director-General of the Public Relations Office of Cabinet Office
Jul. 2014 : Director of the Gender Equality Bureau of Cabinet Office
Apr. 2019 : Professor (currently Specially Appointed Professor) of Showa Women’s University
Jun. 2019 : Outside Member of the Board of NIPPON TELEGRAPH AND TELEPHONE CORPORATION
Jun. 2019 : Outside Auditor of MITSUI MINING & SMELTING CO., LTD.
Apr. 2020 : Dean of Faculty of Global Business of Showa Women’s University
Apr. 2021 : Outside Director of the Board of the Company (current position)
Jun. 2021 : Outside Director of MITSUI MINING & SMELTING CO., LTD. (current position)

Attendance at meetings (FY2022)
Board of Directors: 12/12 (100%)

Shinichi Abe
Outside Director of the Board

OutsideSignificant concurrent posts at other companies
Representative Director, President and CEO of MNES Inc.

Number of years in office as director of the Board
1

Attendance at meetings (FY2022)
Board of Directors: 9/9 (100%)

Independent

May 1993 : Joined Axiomatics Corporation
Nov. 1995 : Joined Asahi Audit Corporation
Jan. 1998 : Joined J.D. Edwards Japan K.K.
Nov. 2003 : Joined PeopleSoft Japan K.K.
Apr. 2005 : Director, International Business, Availvs Corporation
Dec. 2005 : Director, Applications Business Group, Oracle Information Systems Japan K.K.
Aug. 2006 :	Vice President in charge of Applications Business Headquarters and General Manager of Global Strategic Accounts of Oracle Corporation Japan
Feb. 2011 : Managing Director, Enterprise Business, Google Japan, G.K.
Jan. 2017 : Managing Director of Google Cloud Japan, G.K.
Apr. 2020 : Representative Director, President and CEO of MNES Inc. (current position)
Apr. 2022 : Outside Director of the Board of the Company (current position)

Overseasbusiness
International
knowledge

Financialstrategy
andaccounting

Humanresource
GovernanceTechnology and development
Risk
Environment
management
Diversity
Innovation
Improvement Complianceof social value

131Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

Directors of the Board and Audit and Supervisory Board Members

OutsideAudit and Supervisory Board Members

Apr. 1974 : Joined the Company
Feb. 2014 :	Manager of Diversity and Inclusion Promotion Officeof Corporate Management Planning Department
Apr. 2018 :	Executive Officer, assigned to the post of Chief Manager
of Diversity and Inclusion Promotion Department
Feb. 2020 :	In charge of Diversity and Inclusion Promotion
Apr. 2021 :	Standing Audit and Supervisory Board Member(current position)

Midori Ito
Standing Audit and Supervisory
Board Member

Significant concurrent posts at other companies
None

Outside Director of the Board or Outside
Audit and Supervisory Board Member

Takashi Kobayashi
Outside Audit and Supervisory
Board Member

OutsideIndependent

Significant concurrent posts at other companies
Lawyer of Ono-Kobayashi Law Office

Number of years in office as Audit and Supervisory Board member

Number of years in office as Audit and Supervisory Board member

2

6Attendance at meetings (FY2022)

Attendance at meetings (FY2022)

Board of Directors: 12/12 (100%)
Audit and Supervisory Board: 15/15 (100%)

Board of Directors: 12/12 (100%)
Audit and Supervisory Board: 15/15 (100%)
Apr. 1982 : Joined the Company
Aug. 2014 : General Manager of Utsunomiya Branch
Feb. 2020 :	Deputy General Manager of Auditing Department
Feb. 2021 : General Manager of Auditing Department
Apr. 2021 : Operating Officer
Apr. 2022 :	Standing Audit and Supervisory Board Member(current position)

Takashi Ogino
Standing Audit and Supervisory
Board Member

Yoritomo Wada
Outside Audit and Supervisory
Board Member

OutsideIndependent

Significant concurrent posts at other companies
Certified Public Accountant, Wada CPA Accounting Firm
External Statutory Corporate Auditor of NIPPON SHOKUBAI CO., LTD.
Outside Audit and Supervisory Board Member of TRUSCO NAKAYAMA Corporation

Significant concurrent posts at other companies
None

Number of years in office as Audit and Supervisory Board member

Number of years in office as Audit and Supervisory Board member

1

3Attendance at meetings (FY2022)

Attendance at meetings (FY2022)

Board of Directors: 9/9 (100%)
Audit and Supervisory Board: 10/10 (100%)

Board of Directors: 12/12 (100%)
Audit and Supervisory Board: 15/15 (100%)

Ryuichi Tsuruta
Outside Standing Audit andSupervisory Board Member

OutsideIndependent

Significant concurrent posts at other companies
Representative of CG Consulting
Special Instructor of The Graduate School of Project Design

Number of years in office as Audit and Supervisory Board member
5

Attendance at meetings (FY2022)
Board of Directors: 12/12 (100%)
Audit and Supervisory Board: 15/15 (100%)

Apr. 1978 :	Joined Matsushita Electric Industrial Co., Ltd.
(currently Panasonic Corporation)
Oct. 2000 :	Manager of IR Office of Corporate Finance & IR Groupof Matsushita Electric Industrial Co., Ltd.
Apr. 2007 :	General Manager of Corporate International Affairs
Group of Matsushita Electric Industrial Co., Ltd.
Nov. 2014 :	Corporate Advisor of Panasonic Corporation
May 2015 :	Outside Audit & Supervisory Board Member of ZUIKOCORPORATION
Apr. 2018 :	Outside Audit and Supervisory Board Member of theCompany (current position)
Apr. 2018 :	Representative of CG Consulting (current position)
Jan. 2019 :	Special Instructor of The Graduate School of Project
Design (current position)
Apr. 2022 :	Standing Audit and Supervisory Board Member of theCompany (current position)

Independent officer based on the
Independent rules of Tokyo Stock Exchange, Inc.

Apr. 1976 : Appointed as a public prosecutor
Jan. 2004 :	Chief Public Prosecutor of the Nara District Public
Prosecutor’s Office
Dec. 2004 :	Public Prosecutor of the Supreme Public Prosecutor’s Office
Sep. 2005 :	Chief Public Prosecutor of the Maebashi District Public
Prosecutor’s OfficeJun. 2007 :	Deputy Chief Public Prosecutor of the Osaka High Public
Prosecutor’s Office
Jul. 2008 :	Public Safety Director of the Supreme Public
Prosecutor’s OfficeJan. 2010 :	Chief Public Prosecutor of the Osaka District Public
Prosecutor’s OfficeFeb. 2011 :	Registered as lawyer (current position)
Apr. 2017 :	Outside Audit and Supervisory Board Member of theCompany (current position)
Jun. 2017 :	Outside Director of Sanyo Special Steel Co., Ltd.

Apr. 1978 :	Joined Tohmatsu Awoki & Co.
(currently Deloitte Touche Tohmatsu LLC)
Jun. 1996 :	Partner of Tohmatsu & Co.
(currently Deloitte Touche Tohmatsu LLC)
Jun. 2019 :	External Statutory Corporate Auditor of NIPPONSHOKUBAI CO., LTD. (current position)
Apr. 2020 :	Outside Audit and Supervisory Board Member of theCompany (current position)
Mar. 2023 :	Outside Audit and Supervisory Board Member of
TRUSCO NAKAYAMA Corporation (current position)132

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

E
Environment

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

133

Environmental Management

134

Contributing to a Decarbonized Society

136

Disclosure in Line with Task Force on
Climate-related Financial Disclosures(TCFD) Recommendations

142

Biodiversity Conservation

146

Disclosure in Line with the Taskforce on
Nature-related Financial Disclosures(TNFD) Draft Recommended Disclosures

152

Initiatives to Realize a Circular Economy

154

Water Security

162

Environmental Data

166

Factory Site Report175

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

E Environmental Management
1. Governance
Processes, controls and procedures for addressing
environmental issues, and commitment to reducing
environmental impact
The Sekisui House Group has established the ESG Promotion Committee
as a consultative body to the Board of Directors to determine and implement action policies while confirming that all ESG management initiatives
are reasonable and in line with societal expectations. The committee meetsonce every three months. Addressing environmental issues—including contributing to a decarbonized society, biodiversity conservation, realizing a circular economy and water security—is one of the key issues discussed by
the committee. The committee evaluates the appropriateness of action policies and progress, and reports important matters to the Board of Directors.
The Company-wide, cross-departmental Environmental Subcommittee
reports to the ESG Promotion Committee. Mainly composed of head office
department heads involved in environmental management and individuals
in charge of environmental management in business divisions Group-wide,
this subcommittee meets as needed to conduct more specific anddetailed discussions. In addition, the Environmental Subcommittee broadly
disseminates the decisions of the ESG Promotion Committee for adoption
throughout the Group.
The ESG Promotion Committee ensures effective, timely management
oversight by providing the director of the Board responsible for each business and other managers with routine reports and instructions on theimplementation of ESG initiatives.
In addition, the committee sets goals for reducing environmental impact
in response to new issues and works to achieve them.

Acquiring ISO 14001 certification
As part of their production process management, five domestic factories
that manufacture and ship industrialized housing materials have acquired
ISO 14001 certification: the Tohoku, Kanto, Shizuoka, Hyogo andYamaguchi Factories. One overseas factory, the Ingleburn Manufacturing
and Quality Control Centre in Australia, has acquired the certification as
well. ISO 14001 is the international standard for environmental management systems. We are continuing the operation of these systems, and100% of our production facilities are certified.

2. Strategy
Working to realize its global vision to make home the happiest place in theworld, the Sekisui House Group aims to be a leader in ESG managementthat solves social issues and builds a sustainable society by promoting
environmental strategies that are both advanced and have significant
knock-on effects. To this end, under Sustainability Vision 2050, our longterm vision for 2050, we have set out the goals of Leading the Way to a
Decarbonized Society, Leading the Way to a Society in Which Humans
and Nature Coexist and Leading the Way to a Resource-Recycling Society.
Under each of these, we have established targets and are advancing concrete initiatives toward their achievement. The Sekisui House Group’s environmental strategy is characterized by its integration with the Group’sbusiness. Since the announcement of its Environmental Future Plan in
1999, Sekisui House has made the position of environmental measures
within its business activities clear. We have advanced a variety of environmental initiatives, driving such efforts within the housing industry while
gaining the support of all stakeholders, including customers and the supply chain, as we expand the range and scale of our business. In this way,
we seek to exert a substantial positive effect on a variety of environmental
issues—such as global warming prevention, biodiversity conservation andrealizing a circular economy—while achieving business growth.

Sustainability Vision 2050
Sekisui House established the Sustainability Vision 2050 in 2016 andupdated it in 2017, laying out a unified vision that encompasses the NEXT
SEKISUI HOUSE 30-year Vision, which is our management policy, and​initiatives to address the five material issues, which comprise our ESG​

management policy.
Sustainability Vision 2050 comprises five specific visions: Leading theway to a decarbonized society; leading the way to a society in whichhumans and nature coexist; leading the way to a resource-recycling society; leading the way to an advanced, healthy and long-lived society; andleading the way to a diverse society. For each of these, we have set targets as challenges for 2050 as well as targets for 2030, showing how theyalign with the Sustainable Development Goals (SDGs).
Sustainability Vision 2050

Eco-First Promise
Sekisui House was certified as an Eco-First Company by the Japanese
Minister of the Environment in June 2008 for making three promises (theEco-First Promise) related to global warming prevention, ecosystem preservation and resource recycling. We have been conducting environmental
activities with a view to fulfilling these promises. In FY2012 and FY2016,
we updated our Eco-First Promise within the broad frameworks of thethree promises while incorporating changes in the social environment andthe progress of our initiatives. In 2020, we further updated our commitments, and we continue to expand our efforts.
Eco-First Promise

Urban Development Charter
In 2005, we established the Urban Development Charter to fulfill our
responsibility to the future as a housing manufacturer. This charter summarizes the range of expertise we have cultivated as part of our urban development initiatives through the lens of sustainability. Based on our four typesof value (environmental value, economic value, social value and homeownervalue), we have adopted four perspectives: environmental management,
economic management, town management and lifestyle management. We
promote urban development by applying these perspectives while considering our Basic Urban Development Policy and 24 specific guidelines.
Urban Development Charter134

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

Environmental management

3. Risk Management
Environment-related risks are discussed as needed by the ESG Promotion
Committee and Risk Management Committee before being reported to
the Board of Directors, which considers and makes decisions regarding
risk mitigation, transfer, acceptance and control. Any violations of environmental laws and regulations (including potential soil, groundwater or air
pollution) are reported to the head office.

4. Metrics and Targets
Sekisui House has set the following key performance indicators (KPIs) for
environmental initiatives: Ratio of detached house ZEH, number and ratioof ZEH units for rent, number and ratio of ZEH condominiums for sale,number of insulation upgrades, rate of CO2 emissions reduction from new
housing, rate of CO 2 emissions reduction from business operations,
RE100 achievement rate, supplier science-based target-setting rate, sustainable wood procurement rate, biodiversity-friendly tree planting, waste
rate (new construction), waste recycling rate (maintenance and remodeling), rate of electrified Company vehicles and rate of zero-deforestation
timber procurement. Details about initiatives related to these KPIs are provided in the relevant sections of this report.

P.146 Commitment to biodiversity and zero deforestation
P.146 The Gohon no Ki Project, an eco-friendly landscaping and greening project
P.148 Wood Procurement Risk Survey

Environmental charter

P.156 Zero emissions in production and construction divisions

Compliance with environmental laws and regulations
As shown below, there were no significant violations environmental laws
and regulations, including those related to soil, groundwater or air pollution,
in FY2022.
(FY)

2019
No reports of significant violations (subject
to punishments, administrative penalties oradministrative guidance) of greenhouse gas
laws and regulations or of serious leaks offluorocarbons.

2020

2021

5. Activities and Other Related Information

2022

In 1999, Sekisui House announced its Environmental Future Plan, which
includes the environmental charter, basic environmental guidelines andenvironmental action guidelines.

Environmental Charter
To continue to protect our one and only global environment;
To pass down a healthier, more sustainable world to our children;
And by doing so, to contribute to continued health and prosperity—

Same

Same

Same

This is our wish.
Through the creation of environmentally friendly communities and living
environments that can be comfortably passed down to future residents,
Sekisui House is working as a responsible member of society to create a futurein which individuals, communities and the planet exist in harmony.

Individuals

FutureP.136 Promoting ZEH through Green First ZERO detached houses
P.137 Promoting ZEH in Sha Maison rental housing

Earth

Communities

P.138 Promoting ZEH in GRANDE MAISON condominiums
P.139 Energy efficient remodeling of existing houses
P.139 Promoting RE100 through Sekisui House Owner Denki
P.140 Initiatives aimed at 100% electrification of Company vehicles
P.141 Reduction of CO2 emissions at procurement stages for components andraw materials

What can we do for the future?

135

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

E Contributing to a Decarbonized Society
1

Achieving Comfortable Living alongside
Decarbonization While Strengthening
Disaster Resilience

Promoting ZEH1 through Green First ZERO detached houses
Sekisui House’s Green First ZERO (ZEH) detached houses contribute to
the reduction of CO2 emissions and decarbonization through excellent
energy-saving and energy-generating performance without sacrificing­living comfort.
The foundation of this comfort is excellent thermal insulation that clears
ZEH standards. A home designed with a living room atrium or large windows offers a bright, open space, but these features can be disadvantageous in terms of energy efficiency. By using windows with excellent
thermal insulation, we achieve both an open indoor environment and energy efficiency. Since 2022, the standard specifications for Green First ZERO
houses meet the newly established upper grades of thermal insulation—
grade 5—and primary energy consumption—grade 6—under Japan’s
housing performance indication system.
In terms of exterior appearance, to harmonize with the townscape, creating a beautiful home while also achieving ZEH standards is crucial.
Photovoltaic panels, including tile-shaped photovoltaic panels that blend inbeautifully with ordinary roof tiles, are an essential part of ZEH and are astandard feature on our sloped-roof buildings. In addition to their appearance, these tile-shaped panels make it possible to install a large area ofpanels even on complexly shaped roofs.
ZEH also helps promote everyday comfort and economy. Comfortableliving requires energy for use in air conditioning and electronics. In addition, the spread of telecommuting is leading to an increase in time spent athome and, in turn, home energy consumption. Combined with recent rises
in electricity and gas prices, this could cause an even greater burden on
households. The energy saving and generation of ZEH help significantly
reduce these utility costs so that residents do not have to worry aboutmajor cost increases due to spending more time at home. The combined
effect of this with the Family Suite bright and spacious interior designs werecommend, this makes it possible to live comfortably and free of newstresses arising from new modes of living that incorporate telecommuting.
Thanks to these advantages, Sekisui House’s Green First ZERO (ZEH)
detached houses have been embraced by customers, and in FY2022, 93%2
of Sekisui House’s new detached houses were ZEH buildings, far exceeding
the rate for Japan as a whole of 18.5%.3 In addition, the cumulative numberof ZEH houses we have constructed since the launch of this productreached 76,509 as of March 31, 2023. The Japanese government’s 6thStrategic Energy Plan, announced in 2021, sets the goals of having all new
houses built from 2030 meet the ZEH standard for energy efficiency andinstalling photovoltaic power generation equipment in 60% of new detachedhouses by 2030. Sekisui House already meets both of these targets.
The largest portion of the Sekisui House Group’s CO2 emissions, at 61% of
the total, is from the use of supplied housing (Scope 3, Category 11). Promoting
the adoption of ZEH is therefore indispensable to reducing CO2 emissions.
1 Net zero energy house, a house that aims for an annual primary energy balance of zero through energy efficiency and energy generation while providing a comfortable indoor environment. Green First ZERO is thebrand name of our detached house ZEH with standard adoption of a solar power generation system.
2 The ratio of ZEH, Nearly ZEH, and ZEH Oriented (in areas with snow accumulation of 100 cm or more) dwellings
constructed between April 2022 and March 2023 in all areas excluding Hokkaido. The ratio for Hokkaido was 72%.
3 Source: Net-Zero Energy House Demonstration Project Survey Results (2022 Edition); Ministry of Economy,
Trade and Industry, Agency for Natural Resources and Energy; Sustainable open Innovation Initiative. Figure
for FY2021.

Growth in the Number of Detached House ZEH
(%)
100
80
60

71%

74%

76%

79%

87%

91%

(Number of buildings)
93% 100,000

92%

76,50962%

80,00060,00049%

40

40,000

20

11%

13%

14%

17%

19%

8%
2016

2017

2018

2019

2020

2021

20,000

0

0
2013

2014

2015

Ratio of detached house ZEH (left axis)
Cumulative Sekisui House ZEH homes (right axis)

2022(Year)

Nationwide ZEH ratio (left axis)

Note: The ZEH ratio includes contracted and built-for-sale housing. Nationwide figures are rounded to thenearest whole number, from figures published in the Net-Zero Energy House Demonstration Project
Survey Presentation 2022 (sponsored by the Agency for Natural Resources and Energy and the Ministryof Economy, Trade and Industry).

The Family Suite, a spacious living area with large open- Sekisui House proprietary tile-shaped photovoltaic
ings overlooking the garden of the Gohon no Ki Project panels

(FY)

KPI

Unit

2020

2021

2022

2023 target

Ratio of detached ZEH
homes4

%

91

92

93

90

Rate of CO2 emissions
reduction from new
housing5

%

51.26

50.06

55.3

55% reduction
by FY2030

4 ZEH ratio of contracted and for-sale housing in areas other than Hokkaido.
5 Scope 3, Category 11 emissions reduction relative to FY2013 levels. FY2020 and FY2021 figures are calculated based on the boundary of our previous SBT-verified target (excluding Konoike Construction Co., Ltd.).
The scope of emissions was broadened in alignment with the revised SBT-verified target for FY2022 and,for comparison, the scope of emissions in FY2013 was also broadened accordingly. For details on thescope of emissions included, please refer to page 172.
6 Figures have been revised due to more precise calculations of photovoltaic power generated.

Expansion to Group companies
In order to expand its business domain in housing construction, theSekisui House Group is engaged in initiatives for conventional wooden
housing in addition to its mainstay pre-engineered housing. While Group
companies Sekisui House noie and Sekisui House Construction are developing the noie brand and the ki no ie brand, respectively, the commitment
to realizing a decarbonized society through ZEH is common to all Group
companies. In FY2022, 147 of the 472 houses sold under the noie brand,and 13 of the 113 houses sold under the ki no ie brand were ZEH. We areworking to promote ZEH in ways that align with each of these brands,
which propose simple and just-right home building, though such means
as using third-party ownership schemes for photovoltaic power
generation.

136

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Contributing to a Decarbonized Society

Disaster resilience of Green First ZERO Houses
Comfortable living is only possible if residents feel secure about theirhomes when disaster strikes. To prepare for earthquakes, typhoons andother natural disasters, in addition to the robustness of houses themselves, it is crucial to secure living spaces, food, water and energy for use
in the aftermath of a disaster. In 2004, the Sekisui House Group became
the first house builder in Japan to launch an energy-saving, disaster-­resistant house with facilities for storing supplies of food and water as well
as household power storage cells and photovoltaic power generationequipment. Then in 2011, we launched Green First HYBRID houses,
which enable both optimized energy use every day and power use during
power outages through the coordinated control of these systems with fuelcells. As climate change has caused more frequent and severe natural
disasters, we have enhanced the disaster resilience of our housing so that
residents can live their lives with peace of mind.
Today, we propose disaster-resilient zero energy houses that combine
Figure 1. Power Use during a Power Outage

Photovoltaic cells

Photovoltaic cells

Fuel cells

Emergency power
supply board

Fuel cells

Power supply via emergency outlets

Supply though an emergency power supply board

Figure 2. Measures to Prevent Underfloor Flooding

4

1

2
3

5

1 Raised installation height of equipment (toprevent costly equipment repairs due to water
damage)2 Water stop that can be set up at the front
door during emergencies to keep water out
3 Reinforced concrete foundation slab to preventthe entry of water from below the foundations
4 Sewerage pipe air pressure release valve toprevent water spraying from toilets during
sudden heavy rains, etc.
5 R aised building foundation to prevent theentry of water over the foundation

three features: securing living spaces after major earthquakes with highseismic resistance; space and facilities to store a three-day supply of food,drinking water and water for hygiene; and energy self-sufficiency. Suchhouses offer photovoltaic power generation systems to generate electricity
when the sun is shining, fuel cells that can generate electricity in cloudy
weather or at night as long as they have gas and water supply, storage
cells that store excess power generated by photovoltaic and fuel cell systems, a strong structure, and excellent thermal insulation and energy-­saving performance. Through this combination, these houses allow
residents to live in a way that is closer to normal after disasters, making
home an effective disaster shelter.
In April 2022, we further enhanced our resilience offerings with new
emergency power supply boards for use in power outages and reinforced
measures to prevent water from entering underfloor spaces during sudden
heavy rains or flooding. In a home that has only photovoltaic panels andfuel cells, during a power outage, power is only available from specificemergency outlets. With an emergency power supply board, however,appliances that need to stay powered, such as refrigerators, can stayplugged into their normal plugs (Figure 1). In addition, to address increasingly common flooding damage, we raised the installation height of equipment, added water stops that can be set up at front doors during flooding
emergencies, adopted reinforced concrete foundation slabs, added sewerage pipe air pressure release valves, and raised the height of building
foundations. Through the combination of these five measures, we havereinforced measures to prevent underfloor flooding (Figure 2).
In addition to prevention, recovery measures after a disaster are also
important. Sekisui House leverages its Company-wide organizational

Disaster-resilient Zero Energy House
Sekisui House ZEH
Green First ZERO
Stringent specifications for seismic
resistance and independence in disaster

The house itself protects the residents.

strength to quickly assess the safety of the residents and the state ofdamage, make its nationwide factories available as bases to support
regional restoration, and work with partner construction companies nationwide to provide the construction capabilities necessary for recovery.
Through this recovery support framework, we aim to help customers getback to their normal lives as quickly as possible.
In this way, we are continuously working to better protect the lives ofour customers by balancing comfortable living with the realization of adecarbonized society in normal times and providing a recovery support
system that leverages the resilience of buildings themselves and the organizational strength of our nationwide operations in times of disaster. These
efforts encompass both the mitigation and adaptation approaches necessary to address climate change.
Based on its global vision to make home the happiest place in theworld, Sekisui House will continue to evolve Green First ZERO while developing and spreading the value of ZEH, which contributes to the happinessof residents and society at large. By doing so, we will lead the way in the
decarbonization of the housing industry.

Promoting ZEH in Sha Maison rental housing
Approximately 30% of the CO2 emissions attributable to the residential
sector in Japan come from multi-unit housing complexes. Of this, rental
housing accounts for a large fraction, approximately two thirds. Therefore,
the conversion of rental housing to ZEH is essential for decarbonization.
We have designated ZEH under the Sekisui House rental housing brand
Sha Maison as Sha Maison ZEH, and have been promoting its full-scale

Disaster recovery support system
In the eventof a disaster Data management system for individual customer
residences (Disaster Visit app)Self-reliant bases in the event of adisaster (Nationwide factories)
Distribution network

Factories, employees and partner companies protect
the area under their care.

137

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Contributing to a Decarbonized Society

popularization since FY2020.
Two types of ZEH standards, each with different targets, are used for
multi-unit housing complexes. The first is known simply as ZEH andapplies the net zero energy standard to individual housing units in muchthe same way it applies to detached houses.1 The second is known as
ZEH-M and applies the net zero energy standard to entire residential buildings, including common areas. In ZEH-M, the building as a whole isjudged against the ZEH standard, and it may clear the standard even if
individual units within it do not. For this reason, from a resident-first perspective, we offer systems in which photovoltaic panels are connected toeach unit so that residents can sell their own electricity individually, thus
promoting unit-level ZEH that allows residents to enjoy the benefits of
ZEH, including comfort and reduced utility costs. By making as many units
ZEH as possible within each building, we are working to popularize rental
housing that also meets the ZEH-M standard as a result.
In order to promote ZEH in rental housing businesses, which entails
higher costs, it is also crucial to create business benefits for owners. We
believe that as society as a whole progresses toward decarbonization,
demand for ZEH will eventually increase in rental housing, as well. As the
merits of residential units with unit-level ZEH are immediately clear before
move-in, unit-level ZEH can be expected to help prevent occupancy rates
and rents from declining, leading to long-term stable management.
A survey we conducted in FY2021 of young people, who are the mainusers of rental housing, found that respondents were familiar with the effects
of climate change, and we were able to discern an ethical-​mindedness
among them in terms of choosing to live in an environmentally friendly
manner in order to combat such effects. Because this type of thinking is
expected to increase in the near future, the conversion of rental housing to
ZEH can be considered a good investment.
Furthermore, a FY2022 survey of Sha Maison ZEH residents found that88% of respondents were satisfied and, of these, 78% said that theywould choose ZEH for their next home after moving out. Rental housing
residents often move out after a few years, meaning that over time, Sha
Maison ZEH is helping increase the total number of people who prefer
ZEH. In this way, Sha Maison ZEH, with its clear benefits to residents, is
expected to have knock-on effects in popularizing ZEH throughout society.

The Sha Maison ZEH approach has been well received by numerous
owners and residents, leading to orders received for 15,064 ZEH residential units in FY2022, up significantly year on year.
In recognition of these efforts to popularize ZEH, Sha Maison ZEH
received the Energy Conservation Center Chairman’s Award in the FY2022
Energy Conservation Grand Prize.
1 For a multi-unit housing complex, four types of ZEH standards are defined, depending on the difference inenergy efficiency. “ZEH” is capable of reducing net primary energy consumption by 100% or more; “Nearly
ZEH” represents a reduction of more than 75%; “ZEH Ready” represents a reduction of more than 50%, and“ZEH Oriented” represents a reduction of more than 20%. In addition, ZEH-M and ZEH differ in their definitions of evaluation targets, which are “residential building” for the former and “residential units” for the latter.

 ews release: Conducted a Survey on Residential Awareness of Global Warming
N
Prevention Among People in their 20s and 30s (Japanese only)

In its condominiums, Sekisui House designs ZEH with an emphasis onlivability, which is a benefit for the tenants. For example, sweeping vistas
are part of the appeal of high-rise condominiums. The large windows typically used to maximize this appeal are disadvantageous in terms of energy
conservation, but we have achieved both ZEH and comfort through innovations such as the use of vacuum double-glazed windows with extremely
high thermal insulation performance.
In FY2022, 88.8% of condominiums sold were ZEH. We plan toincrease this to 100% from FY2023 onward.
4 Residential units that meet the ZEH Oriented standard or higher grade ews release: All GRANDE MAISON Condominiums to Adopt ZEH-Specifications
N
by FY2023 (Japanese only)

(FY)

KPI
Number and ratio of
ZEH units for rent2
Number and ratio of
ZEH condominiums
for sale3

Unit

2020

2021

2022

2023 target

%

—

—

65

70

Housing
units

2,976

8,501

15,064

—

%

—

39.4

88.8

100

Housing
units

32

192

585

Uemachi 1-chome Tower: Residential units feature high-performance vacuum double-glazed windows for beautiful views.

2 Ratio of orders received for ZEH Ready or higher grade units (includes only units in which individual residents can sell electricity to the grid; number of units was used as a KPI through FY2021)
3 Cumulative number of completed units ranked ZEH Oriented or higher grade. The percentage is that of ZEH
Oriented or higher grade units among all units sold in the fiscal year.

Promoting ZEH in GRANDE MAISON condominiums
As with rental housing, we are promoting the transition to ZEH at the unit
level in condominiums for sale.
In February 2019, Sekisui House built GRANDE MAISON Kakuouzan
Kikuzakacho (Nagoya City, Aichi Prefecture), the first condominium buildingin Japan with all ZEH units connected to photovoltaic power generation
systems. In FY2022, we completed construction of four buildings with 393
ZEH condominiums, bringing the cumulative total of ZEH condominiums to
11 buildings and 585 units,4 exceeding the target of 540 set under the Fifth
Mid-Term Management Plan. In FY2023, we plan to complete constructionof 16 GRANDE MAISON buildings with 880 units, all of which will be ZEH.

Uemachi 1-chome Tower: 43% of the property’s surface area is green space, designed
to be environment-friendly with expansive
green walls.

The Sumiyoshi Honmachi: Common lounge featuring materials and motifs that harmonize with the granite masonry of theneighborhood known for its old estates.

Promotion of ZEB for non-residential construction
In addition to detached houses and multi-unit residential buildings, we arealso promoting ZEB5 in non-residential construction. In FY2022, we actively
promoted a style of proposal for office buildings called Green First Office.
5 Net zero energy building, a building that aims for an annual primary energy balance of zero through energy
efficiency and energy generation while providing a comfortable indoor environment.

138

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

Contributing to a Decarbonized Society

These proposals meet ZEB standards based on excellent thermal insulation performance that leverages ZEH design expertise and technologies
developed in the housing business. These office buildings include proposals for spaces that improve worker productivity and help reinforce BCPs1
with highly seismically resistant structures, thereby undergirding the sustained growth of companies. Reflecting customer needs related to reducing utility costs, promoting carbon neutrality and increasing employee
satisfaction, FY2022 orders were up year on year. Outside of office buildings, we are also rolling out proposals suited to other building uses, suchas clinics and nursing care facilities.
In FY2022, we completed 89 ZEB buildings, bringing our cumulative
total to 173.
Under the ZEB planner registration system, our target is for a majority oforders received in FY2025 to be for ZEB. We are reinforcing efforts toreach this target.
Furthermore, to reduce CO2 emissions from our business activities (Scope
1 and 2), since FY2021 we have ensured that all new offices and facilities
built for the Group’s use are ZEB. For example, at Tomorrow’s Life Museum
Kansai, a facility where visitors can experience the kinds of living that theCompany proposes, the Welcome Hall opened in February 2023 meets the
Nearly ZEB standard. Including buildings designed, built and occupied by
the Sekisui House Group, we now have a total of 14 ZEB buildings.

Tomorrow’s Life Museum Kansai Welcome Hall
1 Business continuity plan, an emergency plan for corporate survival or for business continuity that makes
strategic preparations to avoid an interruption of critical operations in the event that a disaster or other risk
transpires. Since the Great East Japan Earthquake in 2011, such plans have been attracting attention and,as major earthquakes and large typhoons have caused substantial damage in recent years, an increasing
number of companies and local governments have been strengthening related efforts.

Energy efficient remodeling of existing houses

the government to promote the decarbonization of existing housing.
P.209 SumStock quality housing stock system

We make energy efficient remodeling proposals to owners through Group
company Sekisui House Remodeling, Ltd. Energy efficient remodeling is
general term for remodeling that entails the installation of photovoltaic panels or storage cells to increase energy self-sufficiency, improving thermal
insulation performance, or replacing existing air conditioning and water
heating equipment with high-efficiency models. In particular, we focus on
housing that is more than 20 years old, which is typically much less thermally insulated than ZEH. In this area, we propose Idocoro Dan-netsu insulation remodeling, which emphasizes the living room, dining room andkitchen area, where people spend most of their time, and promote replacement of equipment with highly energy efficient models. For owners ofhomes equipped with solar power generation systems that have reached
the post-FIT period (past the end of the feed-in tariff system’s purchaseperiod), we emphasize the merits of adding storage cells to their systems.
Specifically, in addition to increasing the rate of self-consumption of surplus
power, thereby helping reduce utility costs, we highlight the enhanced resilience that such an addition provides by enabling the use of electricity during
power outages caused by natural disasters, which are increasing due to climate change. In FY2022, we received 1,601 orders for Idocoro Dan-netsu
as we worked to promote both comfort for owners and decarbonization.
As part of our efforts to decarbonize existing housing, we are also
focusing on SumStock, an initiative to promote the proper recognition of
the value of existing houses and create an active market for them. We
believe that the proper assessment of the value of existing housing canhelp create more opportunities for investment in energy-saving remodelingand thus contribute to the decarbonization of hosing stock.
The Japanese government’s goal of reducing greenhouse gas emissions
attributable to the residential sector 66% compared with the FY2013 baseline by 2030 depends on decarbonizing existing housing. As such, initiatives in this area are expected to receive a range of policy support going
forward. Sekisui House has supplied more than 2.5 million housing units todate. For our approximately 800,000 detached houses and 230,000 rental
housing Sha Maison buildings that are more than 10 years old, we will
make remodeling proposals and promote market circulation based on
proper valuation while taking advantage of various forms of support from

(FY)

KPI

Unit

2020

2021

2022

2023 targets

Idocoro Dan-netsu
houses (location-based
insulation upgrades)2

Housing
units

1,005

1,338

1,601

1,800

2 Number of units remodeled using Idocoro Dan-netsu with partial thermal insulation and heating systems

2

Decarbonization of Business Activities andResponse to Climate Change

Promoting RE100 through Sekisui House Owner Denki
In an effort to decarbonize its business activities, in 2017, the Sekisui
House Group became the second Japanese company and the first company in the housing industry to join the international initiative RE100. The
Group is working to switch to power derived from renewable energy
sources for use in its business operations. Most companies procure
renewable energy through the purchase of green power certificates andthe installation of photovoltaic power generation systems. In contrast, we
procure surplus solar power from our customers under the post-FIT mechanism through Sekisui House Owner Denki.
Because we were an early adopter of solar power generation systems in
our houses, the annual amount of power generated by all of the solar
power generation systems we had installed was estimated to be over 700
GWh when we joined RE100, more than five times the 120 GWh annual
power consumption of the entire Group at that time. Based on this, weestimated that we would be able to achieve RE100 by around 2040 if we
could procure surplus power from 20%–30% of our customers under the
post-FIT mechanism, and established this as a target. In actuality, we havebeen able to procure such power from roughly 50% of our customers, andexpect to achieve RE100 earlier than originally anticipated. The amount of
renewable energy purchased in FY2022 through Sekisui House Owner
Denki was approximately 60.7 GWh, accounting for roughly 55.1% of theGroup’s total power consumption.

139

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Contributing to a Decarbonized Society

In addition, Sekisui House Owner Denki also creates benefits for cooperating electric power companies by making large contracts for theGroup’s business use power. This makes it possible to set the unit pricefor purchasing surplus power higher than the market price, leading tohigher customer satisfaction. In addition, we expect to be able to achieve
RE100 while controlling the cost of adopting renewable energy.
Overview of Sekisui House Owner Denki
Dispelling the anxiety of
homeowners with solar
power generation systems

Aiming for RE100

Purchase of post-FIT
electricity for 11 yen/kWh
Application
submitted
Payment forpurchased electricity

Homeowner

Sekisui HouseGroup

Proxy contract

Post-FIT power

Cooperating
electric powercompany

Application submitted to Sekisui House

Used to powerbusiness operations

Initiatives aimed at 100% electrification of Company vehicles
Company vehicles account for roughly 30% of the Sekisui House Group’s
CO2 emissions. We thus regard reducing these emissions as an important
aspect of realizing a decarbonized society.
We are promoting the switch to and adoption of electric vehicles, suchas hybrid electric vehicles (HEVs) and battery electric vehicles (BEVs), andhave set the target of 100% electrification of Company vehicles by 2030
and begun initiatives to achieve this goal. This rate stood at approximately
7% in 2022. As a start, the pilot introduction of BEVs was launched in
February 2022. In addition to HEVs, which are being introduced at a rapid
pace, we are actively working to introduce BEVs. By utilizing electricity
derived from renewable energy through Sekisui House Owner Denki, we
aim to further significantly reduce CO2 emissions from Company vehicles(25,277 t-CO2 in FY2022) and contribute to the realization of a decarbonized society.

Post-FIT power Factories/offices/model houses

Used by Sekisui House

(FY)Roadmap for Electrification of Company Vehicles
(%)
100

KPI

Unit

2020

2021

2022

2023 targets

80

RE100 achievement rate1

%

16.4

33.5

55.1

100% by FY2040

60

Rate of CO2 emissions
reduction from business
operations2

%

39.2

46.6

50.9

75% by FY2030

1 Ratio of the post-FIT photovoltaic power purchased by Sekisui House Owner Denki and other renewable
power to the total electricity consumed in business operations
2 Scope 1 and 2 emissions reduction rate relative to FY2013. Konoike Construction Co., Ltd. became a wholly
owned subsidiary in FY2019. To enable time series comparability for emissions, we have retroactively added
Konoike’s annual CO2 emissions to those of the Sekisui House Group for FY2013 (the baseline year for theGroup’s planned CO2 emissions target).

100%

Gasoline-fueledvehicles

40
20

n
atio
trificElec e target
rat

65%

32%

HEV

7%

BEV

0

FY2022–2024

FY2025–2027

FY2028–2030

Company vehicle electrification targets (% of stock)

3. Other Initiatives
Public policy collaboration on climate change in Japan
Through the Japan Federation of Housing Organizations, which supervises
the housing industry, and the Japan Prefabricated Construction Suppliersand Manufacturers Association, we endorse practical policies such as tax
incentives and the expansion of various subsidy programs to promote climate change mitigation in all aspects of buildings, including housing, formulated by the government, particularly the Ministry of Land,
Infrastructure, Transport and Tourism; the Ministry of Economy, Trade andIndustry; and the Ministry of the Environment. We actively cooperate withand make recommendations to these entities.

Collaboration with international public organizations
In 2008, Sekisui House declared that it would aim to be carbon-free in its
operations and value chain by 2050. Since then, we have been focusedon promoting the adoption of net-zero energy houses. The United Nations
Framework Convention on Climate Change (UNFCCC) has proposed thaturgent action is needed to reduce carbon emissions from the building andconstruction sector, which accounts for about one-third of global energy
consumption. An urgent need exists to achieve this objective with innovative buildings and construction methods.
Against this background, we joined the Global Alliance for Buildings andConstruction (GlobalABC), which was established at the UN’s COP21 conference in Paris. We later participated in and submitted reports to the UN’s
COP22 conference in Marrakech, Morocco. At COP23 in Bonn, Germany,
we made a presentation advocating the development of sustainable cities at
SDG 11 Day, a ministerial meeting on SDG 11, highlighting the rationale andbackground for the mass adoption of ZEH. Since FY2022, we have participated in the Building Materials Working Group. In conjunction with COP26,
we participated in the international Race to Zero campaign for decarbonization organized by the UNFCCC through our membership in the Business
Ambition for 1.5°C campaign organized by Science Based Targets (SBT).

140

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

Contributing to a Decarbonized Society

We will continue to work with experts from around the world to decarbonize the building and construction sector.

Reduction of CO2 emissions at procurement stages forcomponents and raw materials

Global share of buildings and construction operational and process
CO2 emissions, 2021

To reduce lifecycle CO2 emissions from homes, Sekisui House has beenpromoting the uptake of ZEH and other energy-efficient housing with theaim of reducing CO 2 emissions at the residential stage (Scope 3,
Category 11). These efforts have led to significant reductions. However,CO2 emissions from the procurement of components and raw materials inthe supply chain (Scope 3, Category 1) account for 30% of the Group’s
total emissions (FY2022 figure). We cannot address this significant portionof emissions alone, so we have begun collaborative efforts with suppliers.
First, in October 2020 we surveyed our suppliers to determine the state of
their initiatives to reduce CO2 emissions. Based on the results, we held aseminar in February 2021, which 135 suppliers attended. We positioned
this event as the kickoff of initiatives to reduce CO2 emissions in our supply
chain, subsequently holding additional seminars with 61 participating companies in April 2021; 242 in October 2021; 260 in September 2022; and157 in February 2023. We use these events to promote awareness of theneed to acquire SBT validation1 and to provide training for procurement
staff. The seminars also feature keynote speeches by speakers from the
SBT organization, and major suppliers as well as small- and medium-sized
suppliers present about how they acquired SBT validation. Sharing positive examples of how even small companies can obtain SBT validation
helps more suppliers get validated. We have also set up a consultation
service within the Company for small- and medium-sized suppliers to provide specific advice and answers to individual questions.
We have set the medium-term target of raising the SBT‑​setting rate ofour major suppliers to 80% by 2030 and are steadily raising the current
rate. Around 20% of the Sekisui House Group’s Scope 3, Category 1 CO2emissions attributable to procurement come from small- and medium-sized suppliers and, in 2022, a total of 19 such companies acquired

Residential (direct)

6%
Residential (indirect)

11%

Other

Non-residential (direct)

8%
Transport

22%

3%

37%

Non-residential (indirect)

8%
Buildings constructionindustry - concrete,
aluminium and steel

Other industry

30%

6%

Other building andconstruction industry

Estimated emissions forbricks and glass

6%

~3%

Global share of buildings and construction final energy demand, 2021

Other

Residential

6%

21%

Transport

26%

Other industry

31%

34%

Non-residential

9%
Buildings constructionindustry - concrete,
aluminium and steel

Other building andconstruction industry

3%F rom the UNEP 2022 Global Status Report for Buildings and Construction

4%
Materials such as
bricks and glass~1%

SBT validation. In addition, as our suppliers set decarbonization targets
and begin initiatives, these efforts contribute to the decarbonization of theconstruction industry as a whole. By promoting effective CO2 reduction
across the supply chain in cooperation with our suppliers, we will ​contribute to the realization of a carbon-free future.
1 Validation by the Science Based Targets Initiative (SBTi) of corporate greenhouse gas reduction targets as
being aligned with the requirements of the Paris Agreement

(FY)

KPI

Unit

2020

2021

2022

2030 targets

Supplier SBT-setting rate1

%

18.6

22.2

31.9

80

1 Percentage of our major suppliers (by portion of CO2 emissions) who have adopted science-based targets

Environmental certifications acquired by suppliers
We confirmed our suppliers’ acquisition status of environmental certifications, including ISO 14001 (environmental management).
(FY)Status of acquisition

Unit

2020

2021

2022

%

—

70

79

Note: Percentage based on annual CO2 emissions

141

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Disclosure in Line with Task Force on Climate-related Financial Disclosures (TCFD) Recommendations
1. Governance
The Sekisui House Group has established the ESG Promotion Committee
as a consultative body to the Board of Directors to determine and implement action policies while confirming that all ESG management initiatives
are reasonable and in line with societal expectations. The committee
meets once every three months. Climate change response is positioned as
one of the important agenda items of this committee, which evaluates theappropriateness of action policies and progress, and reports importantmatters to the Board of Directors.
The Company-wide, cross-departmental Environmental Subcommittee
reports to the ESG Promotion Committee. Mainly composed of head office
department heads involved in environmental management and individuals
in charge of environmental management in each business division, thissubcommittee meets as needed to conduct more specific and detailed
discussions. In addition, the Environmental Subcommittee broadly disseminates the decisions of the ESG Promotion Committee for adoption
throughout the Group, including affiliated companies.
The ESG Promotion Committee ensures effective, timely management
oversight by providing the director of the Board responsible for each business and other managers with routine reports and instructions on theimplementation of ESG initiatives.

duration and the useful life of assets. We also evaluate transition risks basedon potential scenarios for legislation, technology development and market
conditions, and identify and address climate-related risks (physical and transition risks) and opportunities for our business activities.
We have already completed risk assessments and adaptation plans formost of our businesses. However, since we have expanded our business
into new areas, including M&A over the past few years, we are planning tocreate transition plans for all existing businesses based on their specificcircumstances by roughly 2025 in order to adapt to physical risks. In addition, we intend to establish a system for early risk assessment andresponse for 100% of our new businesses in the future, and disclose thenecessary related information.
The scenario we refer to is the 1.5°C scenario shown in Table 1. However,even if regulations are strengthened to achieve the 1.5°C scenario, it is possible that individual countries will not be aligned in their actions, resulting in
Table 1. Scenario Analysis Assumptions
Item

Reference scenarios

P.103 Corporate Governance System

2. Strategy
The Sekisui House Group aims for steady progress toward the overall
decarbonization of its businesses. Accordingly, to clarify the appropriateness of the Group’s strategy and issues, we anticipate various situations
that may occur in the future, then conduct a scenario analysis while taking
into consideration the specific circumstances of business activities andresources, as well as physical risks, including assumed business activities,

a world as projected in the 4°C scenario, where climate change is evengreater. For this reason, we must prepare for both scenarios simultaneously.
In FY2021, Japan set a new greenhouse gas emission reduction targetof 46%, compared to the 2013 levels, by 2030 with a view to achievingcarbon neutrality. Based on this target, various medium- to long-term policies related to the housing industry were also set. For this reason, we haveconducted a large-scale scenario analysis for all of our businesses and arereviewing our strategies. The potential financial impact of the major risks
and opportunities identified through the scenario analysis, as well as our
responses, are shown on the next page.
The financial impact and assumed time period are defined as follows.
Financial impact—Large: ¥20 billion yen or more; medium: ¥10 billion or
more; small: less than ¥10 billion yen
Assumed time period—Short term: up to 3 years from the present; medium term: up to 2030; long term: up to 2050

Assumptions
Scenarios published by various international organizations, including IPCC SSP1 1-1.9 (countries adopt ambitious climate policies to achieve 1.5°C or lower and net
zero CO2 emissions by 2050), IPCC SSP 3-7.0 (CO2 emissions will not begin to decline even in 2050, resulting in high temperatures, heavy rainfall, storms and otherimpacts), IEA SDS (the Paris Agreement and other targets will be achieved through the development of energy policies and investments; many countries and companies will achieve 2050 net zero), and NGFS (Delayed Transition: due to the slow introduction of new climate policies and different levels of action in each country,
emissions will not begin to decline until 2030, and then move toward net zero), as well as announcements by the Japanese government (NDC) and related councils,etc., such as “Reduce Japan’s greenhouse gas emissions by 46% from the 2013 levels by 2030, with net zero emissions by 2050,” “Reduce greenhouse gas emissions in the residential sector by 66% from the 2013 levels by 2030,” “Ensure energy-efficiency at the level of the ZEH standard for new houses built in FY2030 andbeyond,” and “By 2050, popularize houses throughout the entire housing stock that can contribute to carbon neutrality.”
Our model for transition risk assumes that the IPCC SSP 1-1.9 and IEA SDS scenarios of a 50% reduction in global CO2 emissions by 2030 and a reduction tozero by around 2050 will require government policies including a high carbon tax and a market transition to decarbonization.
In addition, as stated in the NGFS Delayed Transition scenario, continuing public and corporate initiatives to reduce CO2 emissions under existing governmental
measures until 2030 is inconsistent with the 1.5°C scenario. Moreover, the best temperature increase estimate, stated in the IPCC SSP 3-7.0, is 2.1°C rise over the
medium term (from 2041 to 2060). Along with other parameters, these figures have been used as assumptions for physical risk.

Subject companies andAll existing businesses of the Sekisui House Group companies2 (including the entire upstream and downstream value chain).
businesses
Quantitative/qualitative

Mainly a qualitative analysis of all existing businesses of the Sekisui House Group. Quantitative estimates of financial impact amounts for particularly important
opportunities and risks.

Impact of Japanesemarket size

The Sekisui House Group generates most of its sales in the Japanese market (about 82% of sales from February 1, 2022 to January 31, 2023). The Japanesehousing market is expected to contract gradually due to the shrinking population, declining birthrate and aging population. While this trend is by no means insignificant, it has not been considered in this analysis, as the focus is climate change-related impacts.

1 IPCC: Intergovernmental Panel on Climate Change; SSP: Shared Socioeconomic Pathways
2 Sekisui House and 345 consolidated subsidiaries. (as of January 31, 2023)

142

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Transition risk: Introduction of carbon pricing
ImpactAssumed time

Transition risk: Rising housing prices and a shrinking market

Response

In the long term, the new construction market itself may shrink as housing prices Financial impact
soar due to the need to comply with stricter regulations required for carbon neutrality,
and as the number of houses with poor energy efficiency and seismic resistanceHighdecreases, and more high-quality housing stock is being circulated in the market.

Assumed timeLong-term

Because our efforts are ahead of the curve, the impact on regulatory tightening in the short to medium term is expected tobe small. However, in response to further regulatory tightening in the long term, we will need to work systematically on thedevelopment of cost-competitive decarbonized housing. In addition, we intend to strengthen our supplied housing business,in preparation for the contraction of the new construction market.

Physical risk: Damage to Company-owned assets due to weather-related disasters

ImpactNationwide weather disasters could damage assets owned by the Group (factories, Financial impact
office buildings and other business locations, production facilities, vehicles, etc.),
making it impossible to continue operations and incurring significant repair orHighreplacement costs.

ImpactResponse

Long-term

We will strive to increase the ratio of ZEH units in managed properties and promote decarbonization remodeling of non-ZEH
units in order to maintain and increase the value of rental housing that appeals to renters.

In the event of a significant rise in temperature, an increase in river flooding and Financial impact
storm surges is expected in Japan.
MediumLong-term

Transition risk: Costs required to decarbonize business activities
ImpactResponse

Impact

The frequency of supply chain damage and difficulties in obtaining construction Financial impact
materials will increase due to the intensification of disasters associated with climatechange, as well as the increase in extremely hot days and heavy snowfalls. In addition, construction sites may be affected for the same reasons, and administrative Not calculated
costs may increase due to longer construction periods.

Assumed time
Medium-term

Although the Company already has measures in place to decentralize the supply chain in anticipation of damage to suppliResponse ers’ factories and transportation routes, and to prevent heat stroke at construction sites, continued consideration is neededin anticipation of an increase in the scale and frequency of natural disasters.

Assumed time

We recognize this as an issue, and are continuing to study this issue by checking government hazard maps and understandResponse
ing the hazards in areas where construction is planned.

In order to decarbonize our business activities, various costs will be incurred, such Financial impact
as converting business locations to ZEB, electrifying Company vehicles, and making
Low
production facilities energy-efficient.

Medium-term

Physical risk: Extension of construction periods due to climate change
Assumed time

Transition risk: Decline in rental business revenues from managed properties at a high risk of disasters
ImpactAssumed time

The Sekisui House Group operates throughout Japan, with the exception of Okinawa Prefecture, and has already established a system that allows its business to continue through support from undamaged areas in the event of a disaster insome areas, including the head office functions. Such business continuity planning (BCP) measures are properly managed
by the Risk Management Committee and updated as necessary.
The amount of damage to the five factories in Japan was calculated based on the assumed inundation depths using riverflooding hazard maps or internal flooding simulations, and it was found that for the four of these factories other than the
Response
Hyogo Factory, there is the potential to suffer inundation damage. A more detailed analysis based on the IPCC RCP 8.5 scenario was conducted for the Kanto Factory, which is expected to suffer the most damage, and the expected damage has
been confirmed to be within the coverage of the insurance policy that is already in place.
Assuming, however, an increase in the severity of natural disasters in the future and the simultaneous occurrence of largescale disasters throughout Japan, our business is expected to suffer extensive damage, and we will continue to examine
ways to strengthen our disaster resilience.

Transition risk: Decline in rental business revenues due to market changes
Managed properties that do not have sufficient decarbonization performance will lose Financial impact
competitiveness, leading to lower occupancy rates and rents.
High

Financial Data, Company
Information and Share Information

The Sekisui House Group conducts risk management based on the following assumptions about rain or windstorms of a severity it has never yet experienced.

Medium-term

The Group as a whole and its suppliers have a long way to go in order to decarbonize their business activities in the medium
term, and if a carbon tax or emissions trading unit price of around 10,000 yen/t-CO2 is imposed, the impact will be signifiResponse cant. We have already started a variety of initiatives throughout the value chain, including promotion of RE100, energy conservation in offices and production facilities, and reduction of CO2 emissions in the building materials manufacturing stage
through collaboration with suppliers, and we intend to reduce this impact as quickly as possible.

Impact

ESG Management
G: Governance E: Environment S: Social

Damage to Company-owned Assets Due to Weather-related Disasters

Table 2. Major Risks, Potential Financial Impacts, and Responses

Carbon pricing has been widely adopted around the world. In Japan, the govern- Financial impact
ment is considering the introduction of a carbon tax, and it may be introduced relaHigh
tively soon.

Mid-Term Management Plan for
Sustainable Growth

Assumed time
Medium-term

The Company is systematically promoting decarbonization in all of its business activities, and the risk of incurring major costs
that would affect its business is low at this point.

Other risks
Before purchasing land for resale, we require the use of hazard maps to conduct an analysis of possible risks.
When constructing large buildings, such as condominiums, we also refer to hazard maps during planning to minimize the risk of damage. However, the impact of climate change is growing year by year, and the scale and frequency of natural disasters may increase, so the Sekisui House Group will continue to study how to deal withrelated risks.

143

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Table 3. Major opportunities, potential financial impacts, and responses

ImpactAssumed time
Medium-term

The ratio of our detached house ZEH exceeds 90%, and ZEH is already a standard specification. Currently, we are also
Response beginning to actively promote ZEH in rental housing and condominiums. We will expand ZEH and ZEB orders for the entire
Group by leveraging our track record of receiving the largest number of ZEH orders in Japan.
Major opportunity: Increase in rental business revenues by converting managed rental properties to ZEH
ImpactThe Japanese government intends to require ZEH-level energy efficiency in all new Financial impact
buildings constructed in and after 2030. In addition, ZEH conversion of rental housing will eventually become more common, so the need for ZEH rental housing couldHigh
increase dramatically as consumers become more ethically conscious.

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Major opportunity: Decarbonization of the production stage

Major opportunity: Increase in ZEH/ZEB orders
The Japanese government has set goals that include reducing greenhouse gas Financial impact
emissions in the residential sector by 66% compared with the FY2013 baseline by2030, positioning ZEH and ZEB as key measures. In addition, demand for ZEH andHigh
ZEB is expected to increase in the future, as consumers become more ethically conscious and businesses further decarbonize.

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Assumed time
Medium-term

Since completing Japan’s first rental housing that meets the ZEH standard for all units in 2018, we have been working to
Response promote ZEH units that can appeal to residents. The Company has already received orders for more than 27,000 units andis preparing for a future expansion of demand for rental ZEH units, especially among ethically conscious consumers.

ImpactIn decarbonizing the entire value chain, efforts by suppliers to reduce emissions at Financial impact
the construction material manufacturing stage are fraught with difficulties.
Low

Assumed time
Medium-term

Since a high percentage of our construction materials, such as exterior walls and frameworks, is produced in-house, it iseasier to reduce greenhouse gas emissions from material production through planned technological development and capiResponse
tal investment than when relying more on external procurement, thus reducing the impact of carbon taxes. The cost reductions are considered as an opportunity, because they can be utilized to secure funding for other purposes.
Major opportunity: Increase in infrastructure construction and waste disposal due to more frequent and severe weather-related disasters

ImpactAs sudden heavy rains are expected to occur more frequently, demand for​ Financial impact
infrastructure-related construction related to stream and flood control, including the
replacement and maintenance of aging existing infrastructure, will increase. In addiLowtion, demand for proper waste disposal following damage caused by greater than

Assumed timeLong-term

expected rainfall will increase.
To meet increased demand for infrastructure development related to disaster countermeasures, we will build up expertise inextending service life through preventive and protective infrastructure renewal and allocate personnel as needed in preparation for receiving orders.
Response
We will invest in technological development and the introduction of new technologies to increase competitiveness and differentiation by such means as offering waste disposal with high recycling rates for buildings, household goods and otherwaste materials arising from wind and water damage.

Major opportunity: Increase in orders for decarbonization remodelingImpact

The government’s goal of reducing greenhouse gas emissions in the residential sec- Financial impact
tor by 66% compared with 2013 by 2030 requires energy-saving renovations tohousing stock, suggesting a range of policy support measures to come. For this reaHighson, orders for decarbonization remodeling are expected to increase.

Assumed time
Medium-term

Orders for insulation retrofitting, power generation and storage cells are on the rise as a result of customer requests andremodeling proposals. In particular, Idocoro Dan-netsu, a partial insulation improvement concept centered on areas where
Response residents spend the most time, has been well received because of the small burden of the cost and construction period forthe customer. These remodeling proposals also highlight enhancing disaster resilience. We will continue to promote remodeling proposals that are realistically feasible for widespread use.
Major opportunity: Reduction of RE100 promotion costs
ImpactAchievement of RE100 is essential to the realization of a decarbonized society. Financial impact
However, procuring renewable energy usually entails significant costs.
Low

Assumed time
Medium-term

Through the Sekisui House Owner Denki initiative, renewable energy power is procured at almost no cost. Considering thepossibility of the electrification of energy used in business in the future, such as a shift to EVs for Company vehicles, the cost
Responseof electricity may increase with conventional procurement methods. The cost reductions achieved through the Sekisui House
Owner Denki initiative can be utilized to secure funding for other purposes, and can therefore be regarded as an opportunity.

Confirmation of the resilience of the Sekisui House Group’s existing strategies
The review found that the Sekisui House Group’s strategy has already begun to address decarbonization andextreme weather events in all of its business activities, and it has been determined that no fatal impacts are currently apparent, either in terms of transition risk to a decarbonized society or physical risk due to climate change.

3. Risk Management
As part of the Group-wide risk management process, the Sekisui House Group conducts assessments to determine climate change-related risks and opportunities based on the TCFD recommendations. Risks and opportunities are identified for the entire Group, led by the principal department of each business, and the results areaggregated by the Environmental Subcommittee, which conducts a financial impact assessment. Major risks andopportunities that are identified based on this process are reviewed by the ESG Promotion Committee, a consultative body to the Board of Directors, before being reported to the Board of Directors, which considers risk mitigation, transfer, acceptance and control, as required. Furthermore, the results are shared by the Risk
Management Committee, and reviewed and managed within the Group's overall risk management system.
P.121 Our risk management system

144

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

145

4. Metrics and Targets
In 2008, the Sekisui House Group declared its Vision 2050, which aims toachieve zero CO2 emissions from housing by 2050. The Group has alreadybegun various initiatives to achieve a zero CO2 emission balance in all
business activities, including the use of renewable energy.
As a milestone toward achieving this goal, by 2030, compared with
FY2013 levels, we aim to reduce our own CO 2 emissions in Scope 11(direct emissions: fuels consumed for factories, offices, vehicles, etc.) and
Scope 21 (indirect emissions: energy consumed by the Company, such as
electricity) by 75%, and those in Scope 3, Category 11¹ (use of sold products) by 55%. These targets have been approved by the Science Based
Targets initiative as in line with a 1.5°C trajectory. We have revised the targets for Scope 1 and Scope 2 reductions upward to a more ambitious
goal for FY2030 after meeting the 50% reduction target in FY2022.
In addition, as an RE100 member company, we will convert to renewablesources of electricity for our business operations, adopting targets of 50%
by 2030 and 100% by 2040. Various concrete measures have been initiatedto achieve these targets, and progress is currently on track, with the 2040

Figure 1. The Sekisui House Group’s Scope 1 and 2 CO2 Emissions Reduction

target expected to be achieved roughly 10 years ahead of schedule.
1 Classification of CO2 emissions according to the categories of the Greenhouse Gas Protocol.

SBT
RE100

Future issues for the Sekisui House GroupAs indicated thus far, the Sekisui House Group has already taken measures to address the anticipated risks from climate change and does notexpect any significant financial burden. However, in order to ensure that the
Sekisui House Group continues to implement decarbonization management as it has in the past, we will continue to monitor the major risk factors
with significant financial impact that have been identified in this analysis
and strengthen the necessary initiatives while further quantifying risks andimproving the accuracy of the analysis. As for challenges going forward,
we believe that the mission of the Sekisui House Group is to contribute to
the transition to a sustainable society by further quantifying and improving
the accuracy of risks related to newly consolidated Group companies.

Figure 2. The Sekisui House Group’s Scope 3 CO2 Emissions Reduction(t-CO2)030,00090,000120,000

150,000

166,619

FY2013

FY202160,000Figure 3. RE100 Achievement Rate0

180,000

2,000

FY2022

4,000

6,000

9,280

4,150

8,000

10,00081,802

Scope 3 (Use of sold products)

0

12,000

1,950

2,620

50%
reduction
FY2022(GWh)(1,000t-CO2)

FY201388,187

In addition, climate change involves many uncertainties, so we need togather a broad range of intelligence from outside the Group. In order for
the Sekisui House Group to demonstrate leadership in the international
community, we will further focus on stakeholder engagement through participation in various domestic and international initiatives, including theUnited Nations Framework Convention on Climate Change (UNFCCC) and
the Global Alliance for Buildings and Construction (GlobalABC), of which
we are the only member in the Japanese private sector.

Scope 3 (other)

Note: Due to an expansion in the scope of data, the figures presented here differ from those disclosed in
Value Report 2022.

FY2021

20

40

37

33%

60

80

100

109

110

FY2022

61

55%

Power consumed in business activities
Photovoltaic power purchased through Sekisui House Owner Denki, etc.

120

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

E Biodiversity Conservation
1. GovernanceCommitment to biodiversity and zero deforestation

Participating in conservation initiatives

In our Sustainability Vision 20506 plan, we have set the goal, as a challenge for 2050, of maximizing ecosystem networks through business
operations. We aim not only to achieve no net loss (to maintain the valueof ecosystems) but also become nature positive (to enhance the value of
ecosystems through our business operations). Based on this commitment,
we remain focused on the Gohon no Ki Project, a landscaping and greening project that fully considers the ecosystem, as well as FairWood sustainable wood procurement.
In particular, the issue of wood procurement is recognized as a pressing
global issue; the goal of zero deforestation by 2030 was adopted in the2014 New York Declaration on Forests. At COP26 in 2021, 140 nations,
including Japan, agreed to this goal. The Sekisui House Group supports
zero deforestation, which aligns with its FairWood procurement approach,and has declared the goal of zero deforestation Group-wide in
Sustainability Vision 2050. In the future, we also aim to achieve zero deforestation throughout our primary and secondary suppliers.

We have been an early participant in the global movement for biodiversity
conservation. At the 9th Conference of the Parties to the Convention on
Biological Diversity (COP9) in 2008, we were one of the nine major
Japanese companies to sign the Leadership Declaration of the Businessand Biodiversity Initiative.1
As a founding member of this initiative, we agreed to the three objectives of the Convention on Biological Diversity (conservation of biodiversity,
sustainable use of biodiversity components, and fair and equitable distribution of the benefits of genetic resources), and we continue to promotebiodiversity conservation2 under this policy in our business operations. We
have also endorsed the goals of the Taskforce on Nature-related Financial
Disclosures (TNFD), which was launched in June 2021. We then joined the
TNFD Forum in February 2022. In addition, we are part of the 30by30
Alliance, which was launched with the aim of achieving the global 30by30
target3 adopted at the 15th Conference of the Parties to the Convention
on Biological Diversity (COP15), and we are proactively cooperating withefforts to register OECM4 sites.
These initiatives are led and promoted by the Environmental
Subcommittee, in cooperation with each department as well as domestic
and overseas Group companies, based on the ESG management promotion system.5 We also ensure that all employees understand and are familiar with these initiatives through progress reports, feedback on issues andproposals for improvement.
1 

Business and Biodiversity Initiative: Leadership Declaration

2 

P.134 2. Strategy

3 30by30 is an international initiative to effectively conserve at least 30% of the Earth’s land and ocean area assound ecosystems by 2030 with the nature-positive goal of halting and reversing biodiversity loss by 2030.
4 Other effective area-based conservation measures, an approach to designating areas that contribute to biodiversity conservation outside of protected areas
5 

P.97 Stance and Initiatives to Promote ESG Management (Sustainability)

6 

Sustainability Vision 2050

CSR procurement
Sekisui House is committed to CSR procurement,7 based on a policy of
ensuring the best quality, robust delivery and reasonable price while also
incorporating ESG. In particular, as we use approximately 250,000 m³ ofwood annually, we have positioned the impact on biodiversity in logging
areas as an important risk to business continuity. Accordingly, we haveestablished our own Wood Procurement Guidelines, which include provisions on biodiversity, and work to promote awareness throughout the supply chain. Every year, we implement a wood procurement risk survey ofmajor suppliers that includes data for secondary suppliers and beyond.
7 

CSR Procurement Guidelines

The Gohon no Ki Project, an eco-friendly landscaping andgreening project 8
Sekisui House is Japan’s largest landscaping company, planting one million trees nationwide annually. To fulfill our responsibility as a large-scale
house builder, since 2001 we have been implementing the Gohon no Ki(“five trees”) Project, an ecosystem-conscious landscaping and greening
project, to conserve biodiversity through our housing business.
The Gohon no Ki Project is based on the approach that “three trees arefor birds, two trees are for butterflies, and all are local native tree species.”
The project proposes the use of native tree species that are beneficial tobirds and butterflies in gardens. In addition to biodiversity conservation, weare making proposals that encompass the benefits to residents of garden
visits by fauna and the other effects of garden trees. We seek to maintainand revive the ecosystem network (nature positive) by increasing theamount of richly green space in urban areas and by leveraging residential
gardens, created under the Gohon no Ki Project, to support the habitat
and activities of the fauna. Ecosystem networks enrich biodiversity at theregional and national levels, creating places where both wildlife and residents can simultaneously enjoy the richness of nature.
8 

Gohon no Ki Project (Japanese only)146

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Biodiversity Conservation

Thanks to the cooperation of the many customers who have endorsed
the philosophy of the Gohon no Ki Project, there were 886,000 plantings(includes those outside the Gohon no Ki Project) in FY2022, with the
cumulative number of plantings since the 2001 start of the project rising to19.0 million.

is to achieve a positive impact through sustainable forestry managementthat goes beyond avoiding illegal logging by continually working on our
supply chain as one of Japan’s leading wood consumers. This also aligns
with our biodiversity conservation challenge goal of “maximizing ecosystem networks through our business.”

Updating the Wood Procurement Guidelines
Since establishing the Wood Procurement Guidelines in 2007, Sekisui
House has promoted FairWood procurement. In light of changes in social
conditions related to wood procurement, we now plan to update theWood Procurement Guidelines to better clarify our stance.

Garden Garden

Town
GardenPark

Satoyama
ForestForestSatoyama

Commitment to biodiversity in wood procurement

Satoyama network

2. Strategy
FairWood procurement and Wood Procurement Guidelines
FairWood is defined as wood that is not only legal, but also contributes tosustainability and local development. We have declared FairWood procurement as a priority in our Wood Procurement Guidelines, and we areworking to improve our level of procurement while striving to engage withFoE Japan and other international environmental NGOs and industry organizations. For example, we are constantly working with environmental
NGOs to obtain the latest information on high-risk areas and update ourrisk assessment methods.
One objective of FairWood procurement is to secure a stable supply ofsustainable and renewable resources for the Company. Another objective

The ten Wood Procurement Guidelines are shown below and shared with
our suppliers and secondary suppliers. Guidelines 2, 3, 4, 8 and 9, in particular, represent our commitment to biodiversity.
10 Wood Procurement Guidelines (2017 edition)
1.	Source wood products from areas with relatively low risk of illegal
logging.
2.	Source wood products from areas without sensitive ecosystems.
3.	Do not source wood products from areas where local ecosystems
are seriously damaged due to large-scale logging of natural forests.
4.	Do not use endangered species for wood products.
5.	Minimize CO2 emissions when producing, processing, and transporting wood products.
6.	When logging wood products, avoid conflict with local communities and refrain from unfair labor practices.
7.	Source wood products from areas of controlled logging, so as not
to exceed the rate of forest regeneration.
8.	Source wood products from domestic forests where well-planned
forest management is in place to conserve ecosystems.
9.	Source wood products from plantation forests that are managed
so as to promote conservation and ecosystem development.
10.	Use recyclable wood building materials.

3. Risk Management
Practicing due diligence in procurement
To us, due diligence1 is the process of securing sustainable timber that
supports the future of our business, and we implement sustainable woodprocurement through strict due diligence practices.
Many companies conduct due diligence only for low-risk timber fromprimary suppliers. In contrast, we also target suppliers at the secondary
level and further upstream and visit logging areas to investigate and confirm the status of any timber deemed high risk.
This is because we believe it is important to share the tracking processwith suppliers and strive for ongoing improvement in order meet growinginternational calls for zero deforestation.
1 Due diligence is the duty of care and effort that companies and others must apply as a matter of course. In
Japan, the Act on Promotion of Use and Distribution of Legally-harvested Wood and Wood Products (commonly known as the Clean Wood Act) refers to due diligence, and was enacted in response to the tightening of regulations on the handling of illegally harvested timber in Western countries. This is represented by aprocess of identifying risks of illegality by 1. collecting information, 2. assessing risk, and 3. practicing risk
mitigation. A growing number of companies are currently practicing due diligence in wood procurement
while also addressing ESG-related risks.

147

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

148

Biodiversity Conservation

Due Diligence Practices
Information
gathering

1. Initial risk assessment
Tree species at risk

Risk assessment

Logging country/
region risk

• Washington Convention• IUCN Red List, etc.
• Extent of illegal logging• Corruption index, etc.

2. Detailed risk assessment

Risk mitigation
measuresIf the probability of risk in the initial evaluation ishigh, we contact upstream suppliers and collectinformation on local forest management and logging
to determine the risk of operational illegality.
• NGO information, document confirmation, site visits, etc.

Wood Procurement Risk Survey
Sekisui House implements a wood procurement survey of its major wood
suppliers (63 companies in FY2022) according to the following process.
Annual Wood Procurement Risk Survey Process
1. Collect detailed data from suppliers on the sources of wood,
including species and producing areas
2. Quantitatively assess the data collected using the Wood
Procurement Guidelines and assign ranks(four-grade scale: S, A, B or C)

3. Provide feedback to suppliers

The ratio of Rank S and Rank A wood has been gradually increasing from
47% before the guidelines were implemented in FY2006, reaching 97.1%
in FY2022.
In order to achieve zero deforestation, a goal adopted by international
consensus, we have decided to manage the rate of zero-deforestation
lumber procurement as a new KPI. To use this KPI in next year’s reporting,
we have begun efforts to confirm detailed data through individual engagement with high-risk suppliers.

Risk assessment of environmental issues

Wood productprocurement ranking1

34 and aboveS

26 or moreA

17 or more

B

Below 17C

1 Wood product procurement ranking
Depending on their total score, purchased wood products are classified into four levels, from high to low: S,
A, B, and C. Minimal acceptable score thresholds are set for Wood Procurement Guidelines 1. and 4.,
which are especially high priority (see page 147). We aggregate and disclose these scores as part of efforts
to achieve net positive impact and no net loss.

Percentage of Wood Products by Region(FY)

For existing suppliers whose CSR evaluation results reveal environmental
risks, we conduct due diligence by monitoring them using onsite interviews, providing advice on evaluation standards and how to meet thosestandards, and confirming the current state of compliance.
In the unlikely event that a serious risk is discovered, we work with therelated divisions to determine the proper remedial action and take measures that could include cutting back on transactions with the supplier,depending on the score in the supplier assessment.

Domestic wood

2020

2021

2022

18.80%

24.72%

25.52%

East Asia2

7.20%

5.08%

8.79%

Europe33.20%

37.48%

31.95%South Pacific3

12.70%

11.78%

11.81%

North America

16.50%

10.41%

12.94%

Recycled wood4

7.90%

7.52%

7.84%

Other5

3.70%

3.01%

1.15%

2 Excluding Japan
3 Indonesia, Malaysia, etc.
4 Particle board and other building materials recycled from construction waste, etc.
5 Africa, etc.

4. Metrics and Targets
Volume of Wood Procured

Volume ofwood procured(KPI: % that is
ranked S or A)

Total score(maximum 43 points)

(FY)

2020

2021

2022

2023 Targets

250,529 m³(97.0%S or A rank)

285,722 m³(97.2%S or A rank)

247,895 m³(97.1%S or A rank)(97.4%S or A rank)

Biodiversity Conservation

(FY)

KPI

Unit

2020

2021

2022

2023
Targets

Biodiversity-friendly tree
planting6

Thousandtrees

17,10618,11619,00320,000

6 Cumulative number of trees planted under the Gohon no Ki Project

4. Encourage improvement for wood ranked B or C

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

149

Biodiversity Conservation

Big data on biodiversity has revealed the effectiveness of the Gohon no Ki
Project, and urban greening will be increasingly important going forward aspart of nature positive initiatives. In urban areas, where green space is limited, it is important to create richly green spaces. We have been providing
quality green spaces that are highly effective at conserving biodiversity
through the Gohon no Ki Project, which focuses on local native tree species.
We will propose better quality green spaces by quantitatively assessing
biodiversity using big data and through quantitative assessments for cohesive green spaces in urban areas.

Evaluating effectiveness quantitatively using big data on
biodiversity
In 2019, to comprehensively evaluate small green spaces scattered acrossJapan that could not previously be assessed, we worked with the Kubota
Laboratory in the Faculty of Science of the University of the Ryukyus tostart a joint verification analyzing the effectiveness of quantitative assessments of biodiversity conservation from a macro perspective. Using thebig data on biodiversity from the University of the Ryukyus in addition to
cumulative data on the number, species and location of trees planted by
the Company, in 2021, this analysis made it possible to quantitatively
express the effect of the Gohon no Ki Project on biodiversity in terms ofthe number of bird and butterfly species being attracted to residential
areas. We also quantitatively evaluated the effectiveness of restoring biodiversity in Japan’s three largest metropolitan areas (Tokyo, Osaka andNagoya) using an integrated diversity index and conducted simulations toassess the effect of continuing the Gohon no Ki Project through 2070.1
The results showed that the Gohon no Ki Project contributes to the restoration of biodiversity, and that the potential benefits can be amplified byexpanding the project in the future. We will widely disclose not only the
results of these assessments, but also the expertise we have accumulated
through our activities over the past 20 years, and will continue to workwith many companies and individuals to promote nature positive initiatives.

1

Results of big data analysis: Effect on birds
Gohon no Ki has the effect of attracting about
Twice as many bird species to residential areas

Birds

Average of

Nature Positive Methodology (Japanese only)3

 ews release: Reinforcing the Perspective of Urban Corporate Green SpaceN
Biodiversity Assessment (Japanese only)

4

30th Global Environment Awards (Japanese only)

55th EcoPro Awards (Japanese only)

9 species

Average of18 species

DoubleResults of big data analysis: Effect on butterflies
Gohon no Ki has the effect of attracting nearly
Five times as many butterfly species to residential areas
Without the Gohon no Ki Project
Butterflies

Average of ews release: 20 Years of Urban Biodiversity Conservation with CustomersNthrough the Gohon no Ki Project (Japanese only)2

Effects of the Gohon no Ki Project

Without the Gohon no Ki Project

Effects of the Gohon no Ki Project

1.3 species

Average of

6.9 species

5
times

Quantitative Evaluation of Nature Positive Effects
Effects of the Gohon no Ki Project
Gohon no Ki Project has achieved atenfold increase in tree species that are the foundation of biodiversity
Effects of the Gohon no Ki Project

Without the Gohon no Ki Project
Native trees

Average of

5 species

Average of(5.42 million cumulative trees)

50 species(17.09 million cumulative trees)

10
times

Simulation of changes through 2070 in three metropolitan areas(Tokyo, Nagoya and Osaka) where green space degradation is significant
Measured value Estimated value(for trees, birds and butterflies)

Urban greening

One initiative in expanding these efforts outside the Company throughwide disclosure is an assessment by the Organization for Landscape and
Urban Green Infrastructure undertaken in November 2022. The organization used Sekisui House’s Nature Positive Methodology,2 developed in collaboration with the Kubota Laboratory in the Faculty of Science of the
University of the Ryukyus, to evaluate 87 green spaces across Japan thatwere certified by the Social and Environmental Green Evaluation System(SEGES) in an effort to better understand the degree of contribution to biodiversity and the potential for biodiversity conservation at each site.3
SEGES is operated by the Organization for Landscape and Urban GreenInfrastructure with the aim of promoting biodiversity conservation and restoration in urban green spaces.
In 2022, the quantitative assessments of biodiversity based on longterm biodiversity conservation initiatives through the Gohon no Ki Project
and big data were recognized with the Grand Prize in the 30th Global
Environment Awards4 in March and the Minister of the Environment Awardin the fifth EcoPro Awards5 in September.

Integrated diversity index

5. Initiatives and Other Related Information

1970

1980

1990

2000

2010

2020

100
75.4%

59.0%
37.4%

40.9%

-12.1%-18.2%

2030

2040

2050

84.6%
41.9%
0
-23.8%
2060

2070(year)

Note: With values for 2000, just before the Gohon no Ki Project, set as the zero level, and with 1977,
the first year for which national land use data is available, set as 100
When the Company and other companies implement initiatives similar to the Gohon no Ki Project
When the Company implements the Gohon no Ki Project
When the Gohon no Ki Project is not implemented

Urban biodiversity: New developments in 2022 (Japanese only)Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

Biodiversity Conservation

The promise of corporate green space and OECM that cancontribute to biodiversity
On the north side of the Umeda Sky Building in Kita-ku, Osaka, where theCompany is headquartered, we created the Shin-Satoyama Garden covering 8,000 m2. This garden was renovated in 2006 with more than 500
trees based on the principles of the Gohon no Ki Project. We planted
native Japanese tree species and more than 200 species of shrubs andflowers to create thickets. In the belief that a variety of types of spaces
supports the richness of an ecosystem, we provided terraced rice paddies
and fields to reproduce a satoyama, the disappearing native landscape ofJapan, in the city center.
The growth of a wide variety of plants has increased the amount ofgreenery, and many creatures—including more than 40 species o­ f wild
birds and more than 20 species of butterflies—­visit, live and grow in thegarden. The arrival of birds of prey, which are rarely seen in the city, hasalso been confirmed. Instead of employing the conventional consumption‑­oriented management approach of removing weeds and fallen leaves
immediately, natural low-load circulatory management has been adopted
for the satoyama to enrich the soil organisms and broaden the food chain.
In this way, we have created a green space where many creatures can
now thrive.
In 2013, we completed the “Wall of Hope,” a huge greening monumenton the east side of Shin-Satoyama measuring 9 meters high and 78
meters long that was installed at the initiative of the renowned architect
Tadao Ando. In order to function as a model for the kind of vertical spatial
greening that is expanding in cities, we covered the green wall with morethan 20,000 plants ofabout 100 diverse species, focusing mainly on
the tree species selected
for the Gohon no Ki
Project. The strategic
arrangement of plants thatflower or change colors at
different time allows visitors to enjoy the varied
Shin-Satoyama and the Wall of Hope viewed from the west side

appearance of the garden as it changes with the seasons. The ShinSatoyama project has become familiar to nearby residents and office
workers as a place where one can experience the true value of theecosystem.
30by30 was adopted by the 15th Conference of the Parties to theConvention on Biological Diversity (COP15) as a major objective of the post2020 global biodiversity framework. In the area of other effective area-based
conservation measures (OECM), a key measure to achieve this objective,
Shin-Satoyama—based on the Gohon no Ki Project—is a good model for
corporate green spaces with a high impact on biodiversity conservation.

Promoting greening and environmental conservation in
condominiums for sale and urban development projects
In the condominium for sale segment, we are utilizing the principles of theGohon no Ki Project for property exteriors. In our GRANDE MAISON1 condominium brand, we maintain a constant awareness of greening, with atarget green coverage ratio (the percentage of the property’s site area thatis planted) of around 20% or more. The average green coverage of the 13
condominiums completed in FY2022 was 24.7%, representing green coverage of 7,114 m².
The outdoor areas surrounding multi-unit buildings such as condominiums also function as a place for re-establishing community among residents, which has increasingly been lost as condominium security has
tightened in recent years. The abundance of greenery soothes the spiritsof residents and enhances the value of the condominium.
1

GRANDE MAISON (Japanese only)

Urban development under the concept of keinen bika—­creating a landscape that grows more beautiful over time
Since 1977, we have been working on community developments under
the names “Common Life” and “Common City.” Designed with an awareness of the connections between neighbors and communities, the sharedspaces boast lushly green plazas and streets as symbols offering a richer
life, with a townscape that will grow more attractive over the years under
the concept of keinen bika. This approach leads to beautification and ishighly appreciated by the local residents.
Since launching the Gohon no Ki Project in 2001, we have been promoting urban development that emphasizes the quality of greenery,
keeping in mind the planting of native species in consideration of ahealthy ecosystem. In 2005, we established the Urban Development
Charter,2 which outlines our diverse expertise cultivated through urban
development, such as that acquired through the Gohon no Ki Project, withadherence to the concept of sustainability.
Skyrail Town Midorizaka (Hiroshima City)
BeforePhoto from 1997
2

Urban Development Charter

After

Photo from 2009150

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

Biodiversity Conservation

Domestic wood initiatives at Sekisui House

Acquiring forest certification (CoC certification)

Looking at the forest industry in Japan, while many forests are entering aperiod of full-scale use, they are not being replanted for the next generation for a number of reasons, and are not being fully utilized.
To revitalize the domestic forest industry, we believe it is necessary toachieve the seemingly contradictory goals of increasing demand to promote
the renewal of forests for the next generation and advancing branding tocreate added value. Therefore, we are shifting to the use of domestic timber,mainly for the structural materials in our SHAWOOD wooden-frame houses.
We do not simply use domestic timber, but also develop it as regional
brands. By adopting materials from the regions where our customers live,
we are contributing to local production for local consumption and the revitalization of regional economies.
Currently, we are developing cedar, cypress
and larch products under 18 brands in 17
regions nationwide. Over 7,000 buildings havenow been built with these materials. These products have grown to the point where they are an
essential element of SHAWOOD.
In response to the “wood shock” that hit theworld in 2021, we took full advantage of thedomestic timber supply network that we havecultivated to mass produce laminated beams
made of cypress. The results of these efforts
include using multiple procurement routes for key
materials to fulfill our supply responsibilities and to
put a system in place that prevents delays when
executing our business operations. As an added
benefit, by viewing the wood shock not only as asupply problem for the Company, but as anopportunity to create demand for domestic timber, we were able to demonstrate our approach
SHAWOOD posts bearing thebrand of the producing area
to providing solutions to social problems.

Currently, 58% of the Sekisui House’s wooden building materials, includinginterior fixtures, and 94% of its structural materials alone are certified
under such schemes as FSC/PEFC (including materials sourced from certified forests). For the purposes of evaluating procurement risks, we continue to calculate these figures, but we do not see them as absolute. We
believe it is necessary to consider the small-scale, thin-margin producers
who cannot obtain certification for economic reasons.
At the same time, in such areas as zero deforestation and zero land
conversion, society now demands more from companies on wood procurement. To meet these expectations, Sekisui House positions forest certification systems as a form of third-party due diligence. Accordingly, we
acquired SGEC/PEFC-CoC certification in May 2022 to promote theadoption of the FairWood procurement policy throughout the supply­
chain. Certification serves as an effective tool for supplying certified woodto the market.
In the process of acquiring forest certification, we supported the certification of several primary suppliers, working to spread the use of certified
products by acquiring certification simultaneously.

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

151

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Disclosure in Line with the Taskforce on Nature-related Financial Disclosures (TNFD)
Draft Recommended Disclosures
Governance
The Sekisui House Group has established the ESG Promotion Committee
as a consultative body to the Board of Directors to determine and implement action policies while confirming that all ESG management initiatives
are reasonable and in line with societal expectations. The committee meetsonce every three months. Along with climate change, addressing biodiversity and natural capital is one of the key issues discussed by the committee. The committee evaluates the appropriateness of action policies andprogress, and reports important matters to the Board of Directors.
P.142 Disclosure in Line with TCFD Recommendations

Strategy
Evaluating potential impacts and dependencies on nature
As with climate change, regarding biodiversity, the Sekisui House Group
works to clarify the appropriateness of its strategy and issues therein by
anticipating various situations that may occur in order to make steadyprogress toward a world where people live in harmony with nature. In
FY2022, we worked with outside experts to use ENCORE1 and other tools
for analyzing the nature-related risks of the housing business (detachedhouses and rental housing). Specifically, we conducted an analysis aimed
at providing an overall picture of our impacts and dependencies on nature.
This analysis divided housing business processes into the four phases ofmaterial procurement, manufacturing and processing, construction, anddemolition. For each phase, we analyzed impacts on nature, including theconversion of land, freshwater and ocean areas as well as atmospheric,water, soil and waste pollution. We also analyzed dependencies on ecosystem services, such as water supply, natural capital, soil quality regulation,
flood mitigation and global climate regulation. In particular, for material procurement, by including producing country-level data in assessments, wewere able to understand the potential risks presented by the types of impact
and dependency that our business activities may have on nature. Going forward, we plan to implement assessments that factor in the Company’s concrete risk reduction measures and nature-positive initiatives to identify anddisclose the Company’s specific nature-related risks and opportunities.

­stakeholders of our business activities.
P.182 Commitment to human rights

1 


ENCORE is an analytical tool recommended by TNFD. By helping users better visualize and understand theimpact of environmental change on the economy, ENCORE can be used to understand how common business processes impact and depend on nature.

Risk Impact Management
As part of its Group-wide risk management processes, the Sekisui HouseGroup assesses nature-related risks and opportunities, as well as impacts
and dependencies, based on the TNFD framework (the TNFD’s final recommendations are scheduled to be released in September 2023; theGroup’s assessments to date are based on beta versions).
Furthermore, we will continue to strengthen engagement with theL

Locate the interface
with nature

priority depenE Evaluatedencies and impacts

Metrics and Targets
In its Sustainability Vision 2050 plan, the Sekisui House Group has set thegoal, as a challenge for 2050, of maximizing ecosystem networks throughbusiness operations. We aim not only to achieve no net loss (to maintainthe value of the ecosystem), but also to become nature positive (toenhance the value of the ecosystem through our business operations).
With this commitment, we remain focused on the Gohon no Ki Project, alandscaping and greening project that fully considers the ecosystem, as
well as FairWood sustainable wood procurement.
Going forward, in step with updates to the TNFD Framework, we will work
to expand the scope of businesses covered by assessments and enhanceA

Assess material risks
and opportunities

P

Prepare to respondand report

Engagement with impacted stakeholders
Understanding the value chain

Assessing impacts and dependencies

We located business operations in thevalue chain of the Sekisui House Group’s
housing business (identified processes tobe assessed, key raw materials and theircountries of origin).

We identified the impacts and dependencies on nature in the Group’s housing business value chain from the perspectives of
key impact drivers and ecosystem services.
We analyzed these using the nature­
related risk analysis tool ENCORE and,based on the results, determined theimportance of specific impacts and dependencies, factoring in such data as the ecological importance to countries where we
procure products and operate.

Identifying key raw materials andanalyzing countries of origin
We assessed four phases of the value
chain (material procurement, manufacturing
and processing, construction, and demolition). In material procurement, specifically,
we performed country-level assessments
for 10 key raw materials.
For wood, which we regard as an especially important raw material, we identified
key countries of origin and their wood procurement ranks based on actual procurement data.

Quantitative impact assessment(wood procurement)
For wood, which we regard as an especially
important raw material, we assessed
impacts on biodiversity on a forest landarea basis by country of origin.

Identifying nature-related risks
and opportunities
We organized the nature-related risks to theCompany, based on impacts and dependencies on nature throughout the value
chain, into the categories of physical risks
and transition risks.
In terms of opportunities, we examined
opportunities that contribute to risk avoidance and mitigation as well as opportunities
based on future market information.2
Analysis of current conditions
We also mapped the identified nature-relatedrisks and opportunities onto the Company’s
current initiatives.
Going forward, we will consider deeper
analyses of risks and opportunities and how
to respond as we prepare to makedisclosures.

Chart depicts the process of assessment and preparation for disclosure in line with the LEAP Approach (v.04 of TNFD beta framework)
2 Information on business areas highly relevant to the Sekisui House Group in “The Future Of Nature And Business” report issued by the World Economic Forum

Preparing for disclosure
Going forward, based on the results of theassessment in accordance with the LEAP
approach, we plan to conduct a deeper
analysis of risks and opportunities for the
housing business, incorporate them into
specific policies and strategies, implement
disclosures in accordance with TNFD v1.0,
and conduct natural capital assessments
for a broader scope of our business.

152

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

the precision of analyses. While advancing sustainable procurement initiatives to decarbonize the supply chain and use resources more efficiently, we
will evaluate impacts and dependencies on nature, assess risks and opportunities, and consider metrics and targets for managing related efforts.

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

Going Forward
In FY2022, we conducted assessments aimed at understanding the overall picture, mainly in the housing business. Going forward, however, we willfurther refine the initial assessments made based on the LEAP approach,conduct analyses accordingly, and improve data collection and analysis
systems to provide a better understanding of actual conditions. At thesame time, we will expand the scope of assessments to other businesses,
striving to grasp the impacts and dependencies on nature as well as risks
and opportunities for all our businesses.
With regard to nature-related risks and opportunities, in preparation fordisclosure in line with the forthcoming final recommendations of the TNFD
Framework, we will analyze and discuss the direction of our response to
said risks and opportunities, taking into account the identification of priority
risks and opportunities reflecting nature-related scenarios and their financial impact.
In addition to existing initiatives, such as quantitative assessments of theeffects of the Gohon no Ki Project and efforts toward sustainable woodprocurement, going forward, we will proactively advance initiatives in new
areas. For example, we plan to assess the social effects of our nature-­
related initiatives, including the effects of the Gohon no Ki Project on theattitudes toward nature, behavior and health of residents.

Assessment of Potential Impacts and Dependencies
on Nature
The Sekisui House Group used FY2021 procurement data1 to assess
potential impacts and dependencies on nature in the housing businessbased on ENCORE, creating a heat map (Figure 1). The analysis foundpossible dependencies on numerous ecosystem services (water supply,
natural capital, soil quality regulation, flood mitigation, global climate regulation, etc.) in raw material procurement processes. We also found potential impacts on nature from lumber harvested and mineral resource mining,
including the conversion of land, fresh water and ocean areas as well as
atmospheric, water, soil and waste pollution.
For wood, which we have long regarded as an especially important raw
material, we worked with suppliers to assess impacts on biodiversity on a forest land area basis by country of origin using score data based on the Wood
Procurement Guidelines and other procurement data.² As a result, we reconfirmed that, while our procurement volume of hardwoods from Southeast
Asia, including Malaysia and Indonesia, is much smaller than our large procurement volumes from Japan or Northern Europe, the impact in Southeast
Asia is relatively great. In addition to further reinforcing the due diligence weare already implementing for wood,³ we will further refine our impact assessments to strengthen sustainable wood procurement going forward.

1 Key countries of origin are determined using procurement volume data for wood suppliers (primary, secondary and beyond), and using procurement volume and procurement spending data with general statistical
data for non-wood materials.
2

P.148 4. Metrics and Targets

3

P.147 3. Risk Management

Impacts
Land conversion
Business

Phase
Land

Housingbusiness

Fresh
water

Direct intakes
Ocean

Water

Non-water

Dependencies

Climatechange
GHG

Pollution
Air

Water

Soil

Waste

Foreign
species,otherSupply services

Other

Water
supplyOthernaturalresources

ESG Management

Nature-Related Measures that Mitigate Risk andCreate Opportunities
Opportunity creation: Verifying the biodiversity effects of theGohon no Ki ProjectIn 2019, working with the Kubota Laboratory in the Faculty of Science ofUniversity of the Ryukyus, we started joint verification to analyze the effectiveness of quantitative assessments of biodiversity conservation from amacro perspective. The results showed that the Gohon no Ki Project cancontribute to the restoration of biodiversity in urban environments facing
severe ecosystem degradation, and that the effect can be further amplified
by expanding the project in the future. The project contributes to both
local ecosystems and comfortable living. As such, we believe it can exert
positive effects not just on urban ecosystems, but also in terms of creating
brand value.
 .149 5. Initiatives and Other Related
P
Information

Risk mitigation: Sustainable wood procurement
Our FairWood procurement of wood and wood products gives due consideration to the forest environment and local communities in producing
regions. Sekisui House has also established the 10 Wood Procurement
Guidelines, which encompass not only legality, but also ecosystems in producing regions. We believe that sustainable procurement helps enhance
the Company’s resilience by promoting the efficient use of resources.
P.147 2. Strategy; P.148 4. Metrics and Targets

Procurement volume by country of origin

Procurement services
Pollination/
Water
Soil
Flood
Climatediseaseregulation conditioning suppression
mitigation regulation

Material
procurement
Manufacturing
and processing
Construction
Demolition

Figure 1. Potential impacts and dependencies on natural capital in the housing business (prepared based on results of analyses using ENCORE and other tools; darker orange indicates a greater degree of potential impact/dependency).
Since material procurement in each phase involves multiple raw materials and procurement processes, care was taken to avoid underestimating impact and dependency by skewing toward more positively evaluated data.

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

SwedenCanadaFinland
China

Japan

Austria
Malaysia
Indonesia
New Zealand

Procurement volume andratio of wood type in nine key
wood supplying countries
Softwood
Hardwood
Pie charts: R atio of wood types by
procurement spending153

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

E Initiatives to Realize a Circular Economy
1. Governance
Under the ESG Promotion Committee, the Sekisui House Group has set
up a Resource Recycling Task Force within the ESG Management
Promotion Headquarters to build and administer a system for resource
recycling for the entire Group. To maintain advanced resource recycling
procedures, we created the Sekisui House Zero Emissions system basedon the Wide Area Certification System. We also set up our own facilities,
called Resource Recycling Centers, to consolidate waste generated atconstruction sites and ensure reliable recycling. To support this system,
we created a waste sorting guide for resource recycling as well as guidelines that set out the criteria for selecting recycling companies. We are distributing information on these measures to our employees and partner
building contractors, and we have developed and operate our own waste
collection and waste measurement systems. In this way, we centrally
manage all processes from waste generation to recycling. In addition tousing recycling methods, we also coordinate related resource recycling
activities that help develop a circular economy, including through our product development and manufacturing departments.
At the same time, to prevent contamination, the Environmental
Subcommittee checks the usefulness and risks of chemical substancesused throughout the Company and provides instructions for improvement
as necessary, thereby providing appropriate monitoring and oversight ofchemical substance usage.

2. Strategy
Resource recycling guidelines
Our basic guideline is to sustain an advanced resource recycling system
based on the Sekisui House Zero Emissions system.

Basic Policy for Zero Emissions

Measures and commitments to reduce resource use

1. This system is designed to control waste generation throughout theentire supply of pre-engineered housing by analyzing the state andnature of waste generation and continually providing information usefulfor reducing waste during design, production and construction.
2. This system not only establishes standards for treatment consigned toothers and ensures effective treatment contracting based on thosestandards, but must also be able to withstand future improvements insocial standards.
Priority items• Ensure effective recycling processes• Ensure traceability• Implement complete sorting of waste within the Company
3. Operations follow the Wide Area Certification System, in principle, as abasis for fulfilling the above norms.

Resource Recycling

The Sekisui House Group works to reduce resource use based on three
approaches.
1. Through zero emission initiatives, we working to recycle and makeeffective use of waste from construction sites, with a focus on material
recycling.
2. We strive to improve durability and provide after-sales services andremodeling in step with the lifecycle stages of housing. These efforts
help to extend the service life of housing and reduce resource use.
3. We aim to realize a circular economy through research and development of new building materials using recycled resources.

Extended service life of housing

Building lifecycle

Building materials

Waste	Raw materials, etc.,
other than building materials

MaintenanceNew construction

Remodeling
Renovation

Quality stock
housing circulation

DesignRecyclable design
information

Factories

Raw materials andparts manufacturers

Resource Recycling
Centers
Intermediate processing(recycled raw materials)

Materials manufacturers
Recyclable design
information

Demolition

Zero emissions

Recyclein themarketplace154

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Initiatives to Realize a Circular Economy

Measures and commitments for resource use at factories
To effectively utilize byproducts resulting from the production of factory-­
manufactured components, we recycle such byproducts by processing
and converting them into raw materials.
For example, we have adopted equipment for recycling scraps generated
during exterior wall panel manufacturing and the cutting of holes for pipes
to pass through, turning them back into raw materials for exterior walls.

considerations. Through such efforts as working with suppliers to develop
and procure products that are easy to separate and sort for recycling,
Sekisui House strives to procure environmentally friendly products that
contribute to sustainability.
For example, to facilitate the sorting of hot water pipe scraps, we do not
use adhesives to bond double-layered hot water pipes when the layers are
made from different types of plastic.

Prevention of contamination by hazardous chemicals
Measures and commitments for handling waste
Controlling waste generation
We have focused efforts on the development of systems intended to control waste generation. We analyze the amount of resource inputs that go
into product supply as well as the status and nature of waste generated
during the manufacturing and construction processes. We also continuously improve systems for providing information useful in reducing waste
in the processes of design, production and construction.

Utilizing waste
We establish recycling standards for the waste we generate and ensure
proper recycling in accordance with these standards. Moreover, we willcontinue to pursue recycling technologies that are economically feasible
while further contributing to the emergence of a society committed toresource recycling. We will pursue these goals in collaboration with ourpartner companies, including material manufacturers, factory production
companies, partner building constructors, intermediate processing companies and demolition companies.

Product Requirements in Green Procurement Policy
We are committed to green procurement, seeking to fulfill our social
responsibility under our basic purchasing policy of providing the best quality,
robust delivery and reasonable prices while also incorporating ESG

Sekisui House aims to implement prevention that exceeds legal and regulatory requirements and minimize the risk of using hazardous chemicals
through economically viable application of the best available technology(EVABAT) throughout the lifecycle of housing. In 2007, we created our own
Chemical Substance Guidelines, which employ a risk management perspective. We review and revise the guidelines in accordance with laws andregulations and new information regarding the use of chemical substances.
At the same time, we comply with laws and regulations and promote
appropriate responses to chemical substances based on guidelines established by the national government, local governments, industry associations and other organizations.
Chemical Substance Guidelines (Amended Second Edition)

Hazardous waste policy
We comply with all laws and regulations on hazardous waste and handle
hazardous waste appropriately based on guidelines from by the national
government, local governments, industry associations and other organizations. We will also indefinitely maintain zero discharge of hazardous waste
into the natural environment.

3. Risk Management
Addressing resource recycling risks
When formulating the Sekisui House Zero Emissions system, the Groupfocused on building a system that takes into account certain risks inresource recycling, such as fraudulently passing off non-recyclable waste
as recyclables and illegal dumping. In addition to selecting recycling companies based on the guidelines from our selection criteria, we periodicallyinspect treatment centers, perform operational audits and, on an ongoingbasis, manage consignment contracts and waste management manifests
through a centralized in-house management system. Through these
efforts, we work to minimize (avoid) potential risks. A dedicated department at the head office is ready to take immediate action in the unlikely
event that a potential violation of laws and regulations is detected.

Addressing risks of contamination by hazardous chemicals
In addressing risks of contamination by hazardous chemicals, it is essential
to always strive to balance corporate activities with preventive measures bysuch means as setting management levels according to the risks of using
the chemical substances used in products. We set a variety of standards
and procedures for handling our products at each phase in their lifecycles.

155

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Initiatives to Realize a Circular Economy

Responsible Divisions, Preventive Procedures and Risks Addressed at Each Lifecycle Phase
Division

Design andDevelopment
Divisions

Production
Divisions

Construction
Divisions

Design and Development Divisions

Environmental
designISO-based
standards/
procedures forenvironmental
management, etc.

Construction
management
standards/
procedures

Environmental
design that has
minimal impact
on residents

Lifecycle phase
Preventive procedures
Risks addressed

1

Product designand development

Impact across product lifecycles

2

Production at
suppliers

Risk of supplier employees being exposed to
substances during production
Risk of environmental contamination during production

3

Production at
Company factories

Risk of supplier employees being exposed to
substances during production
Risk of environmental contamination during production1

Construction

Risk of employees being exposed to substances whenhandling components
Risk of environmental contamination due to improper
disposal of construction waste

4

5

Residence

Risks to residents from insufficient environmental design

6

Product disposal

Risk of employees being exposed to substances
during demolition
Risk of environmental contamination due to improper
disposal of waste

Providinginformation on theuse of hazardous
substances in
products

4. Metrics and Targets
Zero emissions in production and construction divisions
Expanding measures under the Wide Area Certification System

1 Risk of environmental contamination during production
To address the risk of contamination by hazardous waste, during normal operations we thoroughly enforce proper disposal as part of factory zero emissions schemes. We also strive to ensure appropriate response in the event ofan emergency, such as an accident or earthquake, by determining emergency contamination prevention and mitigation procedures ahead of time and testing such procedures on an ongoing basis.

Addressing risks related to soil and groundwater pollution
We work to minimize risks, including the prevention of secondary pollution,by conducting surveys and implementing countermeasures not only forthe land of Company facilities, but also for land for which we are engaged
in transactions.
Prior to engaging in land purchase or sales contracts, we identify risks
related to soil and groundwater contamination by means of a pre-screening
system using our own soil contamination checklist (including a survey on
history of land use; surveys of topography, geology and groundwater; adata survey on surrounding environmental measurements by local governments; a site inspection survey; and legal compliance check).

of contamination (land contaminated mainly with heavy metals where complete remediation can be guaranteed) undergoes remediation by soil
replacement before the sale. In such cases, we explain the measures thathave been taken as a material matter. Land with more serious contamination is not purchased.
At domestic factories on our own sites where contamination could be arisk if no action is taken, we have set up measures and procedures forinvestigation, prevention, ongoing management and emergency response(prevention and mitigation of contamination), and are implementing contamination risk management.

In the case of land that may contain contaminated soil, such as former factory sites, sellers are increasingly conducting their own voluntary
surveys. When purchasing land, a specialized department of theCompany scrutinizes all such survey reports. If a problem is identified
regarding the completeness of the information, we ask the seller to conduct additional surveys.
Properties that are determined to be at risk of contamination are analyzed by designated research institutions to evaluate the appropriatenessof the transaction. Where soil contamination has been discovered as aresult of the investigation, land with minor concentrations and distributions

Housing construction requires a significant input of resources. We are
involved in the entire lifecycle of housing from producing materials in ourfactories to demolition work, and we succeeded in reaching zero emissions1 in four of our divisions (material production, new construction sites,
after-sales maintenance, and construction sites for remodeling our own
properties) between 2002 and 2007. Since then, we have maintained thisachievement as we continue to operate with consideration for the qualityof our recycling efforts. One reason we were able to lead the industry byachieving zero emissions in so many areas of our business was our use of
the Wide Area Certification System, which is a special feature of Japan’s
Wastes Disposal and Public Cleansing Act. In 2004, we were the first in
the Japanese construction industry to gain this certification, and we havesince managed to expand our zero emissions efforts through this system.
In 2019, a joint application including all 17 Sekiwa Construction companies
at the time was approved, and we are currently preparing a joint application
with Sekisui House noie. Through these efforts, we intend to further
expand and strengthen the resource recycling system of the entire Group.
As one part of zero emissions efforts centered on the lifecycles of our
products, we are also working toward zero emissions in the real estateleasing business, with Sekisui House Real Estate Holdings, Ltd. playing a
1 Zero simple incineration of industrial waste and zero landfill disposal

156

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Initiatives to Realize a Circular Economy

central role. Specifically, we are implementing initiatives aimed at achieving
zero emissions of waste (interior materials such as wallpaper and cushion
flooring) generated during repair work when residents vacate Sha Maison
rental housing delivered by the Company and managed by Sekisui House
Real Estate companies.
Looking ahead, a large amount of aging photovoltaic panels are expected
to be scrapped in coming years. We are considering installing recycling
facilities for these panels within our in-house waste processing system run
primarily though the Resource Recycling Centers.

 esource Recycling Centers: The heart of our zero emissions
R
initiative at new construction sites
One unique characteristic of the Sekisui House Zero Emissions System’s
waste collection system, under the Wide Area Certification System, is ouruse of in-house Resource Recycling Centers. These facilities, which havebeen in operation at our production facilities across Japan since 2003,
serve as the heart of our zero emissions efforts at new construction sites.
The centers manage processes from allocating waste collection vehicles
to supervising outsourced recycling companies.
All our waste generated during new construction is first sorted into 27
categories on site, then re-sorted into 60 to 80 categories at our 23
Resource Recycling Centers nationwide. All this waste is eventually recycled under the Group’s management. By disassembling items into components of a single material and reducing their volume through compression
and heating, we prepare these materials to enter recycling streams handled partly by external contractors.
Plastic, which has become a particular problem in recent years, hasbeen collected and recycled at a 100% rate since the introduction of zero
emissions at our new construction sites in 2005. In addition to sorting
plastics by type, we subdivide sorting categories, such as the degree of
soiling, according to the requirements of recycling facilities in an effort tomaintain a high standard of recycling.
Sekisui House New Construction Waste Recycling Rate

(FY)

2020

2021

2022

100%

Same as left

Same as left

Our waste measurement system

Basic program for increasing the resource usage rate

Securing traceability in the proper disposal of construction waste is of theutmost importance not only to ensure proper treatment and recycling ofwaste, but also for promoting recycling business models such as streamlined construction. We have been proactive in introducing information andcommunications technology, starting with the trial of a waste measurement system using IC tags in 2007.
In 2017, we updated our proprietary Electronic Processing System for
waste collection into a cloud-based system in order to respond flexibly torequests for enhancement of electronic system functions for waste management. We now operate a waste measurement system that utilizes 2D
barcodes. This innovative system accurately monitors conditions at thetime of disposal, aggregates and analyzes data from each building, andmonitors the total disposal amount and the disposal amount by type ofwaste in real time.
The detailed data analyzed in this way is then fed back to inform product development, material design, production processes and construction
processes, enabling the more effective use of resources.
Waste Measurement System Utilization Rate at Sekisui House Business Sites
(FY)

2020

2021

2022

100%

Same as left

Same as left

Raw Material Use Avoidance and Reduction Targets
KPI

Unit

2020

(FY)

2021

2022

2023
targetWaste rate (new construction)1

%

5.8

5.4

5.6

5.0

Raw material and resource input

1,000 t

843

942

887

—

Waste from new construction(factory production/construction)

1,000 t

49.3

49.8

50.0

—

Waste recycling rate (new construction)2

%

100

100

100

100

Waste recycling rate
(maintenance and remodeling)3

%

92.8

95.6

94.6

—

1 Ratio of waste (from factories and construction) to raw material production and resource inputs for new
pre-engineered housing
2 Waste recycling rate for new pre-engineered housing
3 Waste recycling rate for maintenance and remodeling work

We are working to maintain resource efficiency-conscious product designthat minimizes the generation of unused materials (waste), regardless ofchanges in material inputs required to enhance housing functionality (suchas improving durability, thermal insulation and the flexibility of living spaces).
Notable initiatives
Recycling packaging and paper at construction sites
Sekisui House has launched a project to replace the plastic bags it provides with recyclable paper bags. We considered a variety of materials forthe new bags, ultimately selecting sanitary packaging paper used to package sanitary equipment, such as hot water heaters. This paper can bemixed with general recycled paper, without the use of virgin pulp, to berecycled into environmentally friendly paper bags.
We expect this project to help alleviate environmental burden, reducing
plastic use by 10,723 kg
per year through the phasing out of plastic bags, andreducing virgin pulp use by
13,232 kg per year throughthe use of waste materials
and recycled paper.
Materials samples
Sample bag
Dyne Concrete recycling
The Kanto Factory and Hyogo Factory recycle concrete waste that arisesin the Dyne Concrete manufacturing process as raw materials. Scrap
material bored out of exterior wall panels and concrete residue thatadheres to equipment were previously disposed of as waste. Some of thismaterial is now recycled by pulverizing it to specific grain sizes for reuse as
raw materials, reducing resource costs.
Bellburn recycling
Bellburn scraps are pulverized and used as filler in Sekisui House’s
Shellshut Slab sound- and vibration-absorbent floor system. By replacing
the inorganic sands previously used for this filler with Bellburn pulverized to
specific grain sizes, we are able to reduce material input.

157

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

158

Initiatives to Realize a Circular Economy

Reducing the volume of waste and improving the qualityof recycling
We continue working to reduce the amount of waste generated at our production and construction sites. In FY2022, we reduced the total amount of waste
generated from factory production by 2.2% from the previous fiscal year.
Although the amount of waste generated per newly built house has
decreased by nearly 60% compared with FY1999 levels as a result of ourzero emissions initiative, in recent years this amount has been increasingslightly as the proportion of houses with high environmental performanceand high input of materials increases.
However, with the recent global emphasis on achieving a circular economy, greater importance is being placed not only on reducing the amountsof waste generated, but also on improving the quality of recycling throughthe redesign of entire businesses. In light of this trend, we have been
improving our construction methods by revising our structural building andconstruction techniques, utilizing the strengths of our in-house production
and direct construction, handled exclusively by Group companies andpartner building constructors.
Moreover, by thoroughly sorting, categorizing and processing waste to meetthe exact needs of recyclers, we are contributing to a higher quality of recycling.
At the same time, while maintaining zero emissions during the production, construction and maintenance phases, we are conducting research
aimed at increasing our material recycling rate, which stood at 80.5% in
FY2022, to 90%.

Recycling initiatives
We reuse waste generated in-house as a raw materials in buildings weconstruct. For example, we manufacture house construction materials
from plastics recovered from packaging materials and an acoustic insulation material for floors from crushed scrap roof tiles.

Reusing Solid Waste

Green procurement

At manufacturing and processing facilities located at two of our Resource
Recycling Centers, scrap plasterboard collected from new housing construction sites and eggshells from third-party food processing factories are
mixed together and crushed. This produces Platama Powder, an athletic
field marking chalk, which we have manufactured and sold since 2010.
This initiative has enabled us to establish a new commercial distribution
channel and a system for continual recycling by regularly purchasing eggshells, which were previously thrown away as food waste.
We also reuse sorted solid waste by selling it in such forms as resinmaterials, woodchips, power line materials and Styrofoam materials (ingots).

Platama Powder, an athletic
field marking chalk that posesno risk to human health

Eco Mark(FY)Platama Powder
production

Unit

2019

2020

2021

2022

2025 target

t

1,795

1,932

1,979

1,668

Up 5%
from 2019

We proactively engage in green procurement, which prioritizes the purchase of environment-friendly products, and we purchase stationery andother office products used by our business offices across Japan in accordance with our Green Procurement Guidelines. In FY2022, our green procurement rate was 92.5%, and our recycled copy paper rate was 99.9%.
By gathering, compiling and visualizing data on the amount of paper
used in offices, we are raising awareness of the need to reduce theamount of paper we consume. In collaboration with Sekisui House Umeda
Operation Co., Ltd., we supply domestically produced, bright white 100%
recycled paper that is high quality and environmentally friendly (the standard under the Green Purchasing Law is 70% recycled paper content).
This recycled paper, produced by the Group, is supplied to offices, including Group companies, throughout Japan.
In FY2022, the Company’s total paper consumption was 617 tonnes,
down 7.6% year on year, and annual paper consumption per employee
totaled 41.3 kilograms, down 7.1%, reflecting the continued progress of
paperless initiatives.
Green Procurement Rate, etc.

(FY)

Unit
Green procurement rate
Recycled copy paper usage rate

%

2020

2021

2022

89.5

91.2

92.5

99.7

99.9

99.9

Note: Non-consolidated basis

Annual Paper Consumption Per Employee

(FY)

Unit

2020

2021

2022

Total paper usage

t

692

668

617

Annual paper consumption
per employee

kg

46.1

44.5

41.3

Note: Non-consolidated basis

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

159

Initiatives to Realize a Circular Economy

Atmospheric and other external emissions of chemical
substances from factory production
Substances Subject to the PRTR Law1

(FY)

Targets

2020

2021

2022

• Continue appropriate
protective measures• Maintain zero accidents
caused by chemical
substances

No accidents caused bychemicals used in factory
production occurred.

Same as left

Same as left

Atmospheric Emissions of Volatile Organic Compounds (VOCs)2(FY)

Targets

2019

2020

20213

60% decrease from FY2010 levels

75% decrease

71% decrease

78% decrease

Emissions of Volatile Organic Compounds (VOCs)2(FY)
Unit
VOCs subject to PRTR
VOCs not subject to PRTRt

For specially controlled industrial waste generated at domestic factories,
we comply with the Wastes Disposal and Public Cleansing Act, as well as
all related laws and regulations (such as the Ordinance on Prevention ofHazards due to Specified Chemical Substances) and industry guidelines.
Procedures are also in place to identify potential accidents and emergencies that could lead to significant environmental impact, to prevent any
adverse environmental impact, and to conduct mitigation to minimize theescalation of impact. At the same time, the effectiveness of emergency
preparedness and response procedures is maintained through annual
testing and internal audits.

2019

2020

20213

30.5

24.4

68.5

110.5

82.2

39.5

1 Pollutant Release and Transfer Register Law: Law requiring the monitoring of environmental emissions ofspecified chemical substances and promotion of improved management. Businesses meeting certain conditions specified by Cabinet Order are required to report the amount of specified chemical substances
released and disposed of annually.
2 The Sekisui House Group confirms and monitors emissions of the 80 VOCs for which atmospheric emissions require monitoring designated under the Japan Prefabricated Construction Suppliers andManufacturers Association’s Eco Action 2020 management survey.
3 Because they are taken from a government report, the figures here are for the period from April 2021 toMarch 2022, which differs from the period covered by this report.

Initiatives for proper processing of hazardous waste

Natural Environment (Soil) 
2020

2021

2022

Maintain zero serious risk
when purchasing land4

No purchases (sales)
occurred involving
contaminated land
exceeding legal standards
or unremediated land.

Same as left

Same as left

4 Serious risk includes redevelopment of brownfield sites (land that is idle due to real or potential contamination caused by industrial activities, etc.).

During residential use
Adoption Rate of Next-generation Indoor Environment Control System
SMART-ECS5

Initiatives to reduce hazardous waste

Targets
Minimum 70% adoption rate

We are constantly considering how to use the best economically feasible
technologies. One example of reducing hazardous waste is electrodeposition
coating materials used for antirust treatment on steel frames. In the past,these contained a very small amount of lead, which could become hazardous waste, but since January 2003, we have switched to lead-free coatings.

Initiatives for processing hazardous waste and preventing
contamination by chemical substances

5

Unit

2021

2022

%

79

80

Construction waste

In 2004, we acquired the first Wide Area Certification in the constructionindustry. We have achieved and maintained zero emissions by collecting 27
categories of waste sorted at our construction sites, re-sorting them into up
to 80 categories at our Recycling Centers, and recycling 100% of waste.
(FY)

Targets

2020

2021

2022

Maintain zero release ofhazardous waste into thenatural environment

No improper processingor scattering accidents.

Same as left

Same as left

(FY)

Maintain zero release ofhazardous waste into theenvironment during new
construction

2020
No release accidents
occurred.

2021

2022

Same as left

Same as left

During Demolition and Disposal

Approximately 95% of the hazardous waste that we handle is asbestos(Levels 1 and 2) from existing structures, which is strictly treated as specially controlled industrial waste. The remainder is mainly residual substances left over from the use of chemical raw materials handled indomestic production facilities.

During Construction 
Targets• Continue appropriate
protective measures• Maintain zero accidents
caused by chemical
substances

(FY)

2020
No accidents causedby use of chemical
substances occurred.

2021

Same as left

2022

Same as left

(FY)

SMART-ECS (Japanese only)

Targets

During Factory Production

(FY)

Targets(FY)

Targets

2020

2021

2022

Maintain zero emissions ofhazardous waste into theenvironment during
demolition work

No environmental release
accidents occurred.

Same as left

Same as left

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

160

Initiatives to Realize a Circular Economy

Emissions and Transfer of PRTR-Listed Substances (FY2021)

5. Activities and Other Related Information
Pollution, Waste and Resource Use Costs and Investment in
R&D on Reducing or Avoiding Their Impacts
The Resource Recycling Centers at our factories handle waste from construction sites, sorting plastic products for recycling and collecting metals
and other valuables. In FY2022, the operating expenses associated withthe facilities, from the operation of collection points to disposal (costs
imposed by waste issues), totaled ¥517 million. In addition, Group company
Konoike Construction invested ¥1,980,000 for experimental research
aimed at developing technologies for processing soil containing radioactive substances.

Factory

TohokuFactory

Kanto
Factory

Emissions and Transfer of PRTR-Listed Substances(FY)
Emission and transfer

Unit

2019

2020

20211

t

63.9

54.8

63.9

1 Because they are taken from a government report, the figures here are for the period from April 2021 toMarch 2022, which differs from the period covered by this report.

Materials Used in Production(FY)
Unit

2020

2021

2022

Metal

239

264

261

Concrete

213

235

230

198

215

202

124

135

121

Other

69

76

73

Total

843

924

887

Glass and ceramics
Lumber1,000 tShizuoka
Factory

PRTR
legislative
decreenumber

CAS No.

349

108-95-2

405

—

411

50-00-0412—

Substance

Discharged into
the atmosphere

Transfer

Discharged into
bodies of water

Discharged into
the soilLandfill
disposal at thebusiness site

Transfer to thesewer system

Transfer outsideof the relevantbusiness site(waste disposal)

AmounthandledPhenol

0

0

0

0

0

0

4,858

Boron and its compounds

0

7,169

0

0

0

8,624

17,572Formaldehyde

0

0

0

0

0

0

1,214

Manganese and its compounds

17

0

0

0

0

141

1,338

(Total amount of substances not
subject to administrative reporting)

35

612

0

0

0

36

683

Subtotal

52

7,781

0

0

0

8,801

25,665232

68-12-2

N,N-dimethylformamide

3,260

0

0

0

0

0

3,260

240

100-42-5

Styrene

0

0

0

0

0

0

2,203

300

108-88-3

Toluene

4,761

0

0

0

0

0

4,761

412

—

Manganese and its compounds

168

0

0

0

0

1,105

5,203

(Total amount of substances not
subject to administrative reporting)

2,986

0

0

0

0

121

3,077

Subtotal

11,174

0

0

0

0

1,226

18,503

1

—

0

0

0

0

0

82

2,074

53

100-41-4Ethylbenzene

10,276

0

0

0

0

537

10,813

Water-soluble zinc compounds

801330-20-7

Xylene14,761

0

0

0

0

786

15,547296

95-63-6

1,2,4-Trimethylbenzene

3,541

0

0

0

0

174

3,715

297

108-67-8

1,3,5-Trimethylbenzene

967

0

0

0

0

47

1,014

300

108-88-3

Toluene24,913

0

0

0

0

939

25,863349

108-95-2

Phenol

0

0

0

0

0

0

5,828

405

—

Boron and its compounds

0

1,509

0

0

0

2,768

19,670412—

Manganese and its compounds

117

0

0

0

0

875

5,146

(Total amount of substances not
subject to administrative reporting)

234

96

0

0

0

85

1,426

Subtotal

54,808

1,605

0

0

0

6,293

91,095(Total amount of substances not
subject to administrative reporting)

1,018

0

0

0

0

0

1,018

Subtotal

1,018

0

0

0

0

0

1,018

0

31

0

0

0

404

1,285

Hyogo
Factory

Yamaguchi
Factory(kg)
Emissions

1—

Water-soluble zinc compounds

53

100-41-4Ethylbenzene

1,482

0

0

0

0

0

1,482

80

1330-20-7

Xylene

4,137

0

0

0

0

0

4,137

296

95-63-6

1,2,4-Trimethylbenzene

2,673

0

0

0

0

0

2,673

300

108-88-3

Toluene

1,550

0

0

0

0

0

1,550

412

—

Manganese and its compounds

74

59

0

0

0

561

2,389

(Total amount of substances not
subject to administrative reporting)

1,631

31

0

0

0

0

1,394

Subtotal

10,065

90

0

0

0

965

14,910

Total

77,116

9,476

0

0

0

17,285

151,190

Note: Because they are taken from a government report, the figures here are for the period from April 2021 to March 2022, which differs from the period covered by this report.

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Initiatives to Realize a Circular Economy

Waste Generated (Sekisui House Group, Including Konoike Construction)(FY)
Unit
Waste generated1
Non-recyclable waste2
Breakdown

1,000 tRecyclable waste3

2020

2021

2022

1,107.4

1,021.4

1,069.7

33.4

24.24

21.2

1,074.0

997.2

1,048.5

97%

98%

98%

1 Total waste from offices, factories and construction/demolition sites
2 Waste generated that is disposed of in landfills or by incineration and not recycled
3 Waste generated that is recycled (material recycling or thermal recycling)
4 FY2021 figures for non-recyclable waste and recyclable waste have been retroactively revised to improveaccuracy.

Hazardous Waste Generated(Sekisui House Group, Including Konoike Construction)(FY)
Hazardous waste generated

Unit

2020

2021

2022

1,000 t

0.962

0.612

0.904

Note: The Sekisui House Group defines hazardous waste as specially controlled industrial waste stipulated in
the Wastes Disposal and Public Cleansing Act (flammable waste oil, scatterable asbestos, etc.), including waste regulated by the Basel Convention, such as waste PCBs.

SOx and NOx emissions (factories in Japan)(FY)
Unit
Sulfur oxides (SOx)
Nitrogen oxides (NOx)

t

2020

2021

2022

0.055

0.057

0.052

3.44

5.67

3.37

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

161

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

E Water Security
1. GovernanceSekisui House implements initiatives to address issues related to climatechange, including water-issues, through the ESG Promotion Committee.
Furthermore, at our factories, we have established a management system
under ISO 14001, the international standard for environmental management systems, through which we are promoting water-related initiatives.

2. Strategy
Sekisui House’s business activities, in such areas as housing, construction
and remodeling, use only small amounts of water. However, as theimpacts of climate change on human society and ecosystems intensify
year by year, water resources are becoming a significant global concern. In
particular, over the long term, water shortages are seen as a global water
risk, and the conservation of water resources, using water stress as a metric, is a challenge going forward. To secure the sustainability of water
resources, we not only avoid water risk in our own businesses, but work
to promote efficient water use and prevent water pollution based on theunderstanding that these issues have a tremendous impact on our supply
chains. To this end, we assess water risks, set water use reduction targets, and implement measures to promote the effective use of water
resources and manage wastewater quality.

3. Risk Management
Initiatives at factories in Japan
Our five domestic production factories (the Tohoku Factory, Kanto Factory,
Shizuoka Factory, Hyogo Factory and Yamaguchi Factory) use groundwater in addition to the municipal water supply and industrial-use water in thecoating of steel frame members and the manufacturing and painting of
exterior walls used in residential construction. All five factories have formulated water management plans. We are making ongoing efforts to ensure

appropriate wastewater quality management and the efficient use of water
resources in these processes. Specifically, we implement wastewater
quality analyses at least once a month and work to reduce water consumption through such efforts as reusing treated water for cleaning.
Wastewater from all five factories in Japan is discharged into public sewers and rivers after being purified in the factory’s effluent treatment plant.
We manage wastewater quality according to voluntary standards set as
annual targets that are stricter than the Water Pollution Control Law andordinances. In 2022, the measured water quality of discharge was better
than these voluntary standards. In this way, we strive to prevent water pollution and protect the water quality environment in the areas surrounding
our factories. We share the results of wastewater quality assessments at
all five factories in Japan. In the unlikely event that our voluntary standards
are exceeded, we share the information on the actualized water pollution
risk at a managers’ meeting to prevent recurrences.

Evaluating Water Stress Levels at Production Sites
We have confirmed that none of the Company’s production sites are locatedin regions designated as having high or extremely high (>40%) water
stress levels as identified using the WRI Aqueduct tools developed by theWorld Resources Institute (WRI).
However, the Shizuoka Factory is located in a region predicted to havean extremely high (>80%) level of water stress in 2030.1 Taking a mediumto long-term perspective, the Company considers the Shizuoka Factory as
equivalent to a production site in a water-stressed region. Accordingly, we
have confirmed the need to strive for the efficient use of water resources
and usage reduction and are promoting better use.
1 The Ingleburn Manufacturing and Quality Control Centre in Australia is located in a region predicted to havean extremely high (>80%) level of water stress in 2030, but the facility is not included as it does not carry out
manufacturing processes that use water.

Cooperation with diverse stakeholders
Cooperation with customers
In our newly built houses, we have installed the latest water-saving fixtures(faucets, showers, flush toilets, etc.) supplied by housing equipment manufacturers as standard equipment in the majority of houses since before
2020. In this way, we are helping to reduce water consumption in houses.
Furthermore, for existing homes, we are promoting the use of water-saving
fixtures, including by replacing existing fixtures, through the remodelingbusiness.
Cooperation at business sites in water-stressed areas
The Shizuoka Factory uses municipal water drawn from the Oi River system. Based on requests from the Toen Industrial Water Business
Association, the Shizuoka Factory proactively uses industrial-use water,
helping to reduce municipal water consumption.
Cooperation with public entities
Sekisui House participates in the Ministry of the Environment’s Water
Project. This project carries out activities related to offering initiatives, products, technologies and services that promote the effective use of water
resources and water-saving sewerage in business activities in Japan.
Ministry of the Environment’s Water Project (Japanese only)Group company Konoike Construction is actively involved in renewableenergy projects aimed at contributing to decarbonization. One such project it has started is a small-scale hydroelectric power generation project atthe Higashinada No. 1 low-rise water distribution plant of the Kobe City
Waterworks Bureau. The project, installed on a site leased from Kobe City,
commenced power generation in June 2020. It comprises a small-scalehydroelectric power generation system through which passes a stablewater flow from the distribution plant’s water purification tanks to a distribution reservoir.
Cooperation with other regional companies
When shipping and transporting products to construction sites—whether
from our own factories or those of our partner manufacturers—we use theCompany’s transport cases. After use, these cases are collected from162

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

163

Water Security

construction sites, returned to factories, washed and reused. The waterused in this washing is recirculated within the cleaning facilities, helping
reduce water consumption. In addition, the employee cafeterias at somefactories are operated by external food service contractors. As one part ofwater conservation efforts in these operations, we proactively use no-wash
rice, which can be cooked without additional washing.
Cooperation with investors
The management of office buildings owned by the Company and its overall real estate portfolio is entrusted to Sekisui House Asset Management,
Ltd., which implements appropriate water management, including monitoring and setting numerical targets for the volume of water use.

The Sekisui House Group’s Water Use

(FY)

Unit
Municipal water

Groundwater

At production facilities

At production facilities

Industrial-use
water(reclaimed water) At production facilities
Total

Initiatives in Overseas Businesses
Sekisui House’s West Village Project has been certified as a leader in environmental friendliness and social sustainability within the Australian market. It gained World Leadership status from the Green Building Council ofAustralia (GBCA) in November 2017 when the project received 6 Star
Green Star Communities Certification. This is the highest sustainability
ranking for master-planned communities in Australia.
West Village comprises eight condominium buildings and nearly one
hectare of green, open space, including four leafy laneways and twoparks. In particular, Morrison Park incorporates sustainability and heritage
management initiatives. Gray water from laundries and showers in two of
the neighboring residential buildings is treated onsite and stored in a
250 kL tank. This, together with a 50 kL rainwater tank, is used to water
the gardens in the park.

Water Withdrawal/Consumption in Water-stressed Regions

4. Metrics and Targets

1,000 m³

At production facilities

2020

2021

2022

597

598

566

SewersRiversTotal

At production facilities

At production facilities

1,000 m³

At production facilities

(FY)

Unit

130

134

134

Water withdrawal

462

457

471

Water consumption

462

457

471

24

22

21

24

22

21

1,083

1,076

1,058

616

612

626

2020

2021

2022

443

472

441

8

8

9

345

302

345

345

302

345

788

774

786

353

310

354

Wastewater Volume by Discharge Destination
Unit

(FY)

1,000 m³

2020

2021

2022

58.6

57.5

55.4

9.7

7.8

4.4

Targets for Reducing Water Consumption and Withdrawal in
Water-stressed Areas
Looking ahead at future water stress risk, the Shizuoka Factory is actively
working to utilize industrial-use water in processes that previously usedmunicipal water to demonstrate its proactive stance on conserving thewater environment. Furthermore, the factory has set the target of reducing
the consumption of industrial-use water by 80% in its internal wastewater
treatment facilities from FY2021 levels by 2030. As part of these reduction
efforts, we will promote the internal circulation of water by reusing some
effluent and by expanding the use of rainwater. We view water consumption at the Shizuoka Factory as one of our most important indicators forwater conservation, and are working to reduce water withdrawal andconsumption.
Industrial-use Water Reduction Rate at Wastewater Treatment Facilities
in the Shizuoka PlantCompany Facilities in Water-stressed Regions
Shizuoka Factory: 1 location
Number and Proportion of Assets, Production, and Revenue in Water-stressed
Regions
Maximum production
capacity

Shizuoka Factory

Shizuoka Factory

All factories

Percent of total

800
houses/month

2,420
houses/month

33%

Unit

2021

2022

2030 target%

0 (baseline year)

25

80

(FY)

Targets and Progress toward Reducing the Use of Water as a
Raw Material
The Company does not use water as a raw material.

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Water Security

Water Use Per Unit of Net Sales (FY)
Unit

2020

2021

2022

(m³/million yen)

0.443

0.416

0.361

The Sekisui House Group’s Costs Associated with Water-related Risks(FY)
Unit
Municipal water andsewerage costs
Other operating costs

Water Pollutant Discharge

Million yen

Total

2020

2021

2022

104

108

114

107

109

124

212

217

238

Biochemical Oxygen Demand (BOD)(FY)
2020

2021

2022

Tohoku Factory

Unit

0.053

0.061

0.051

Kanto Factory

0.755

0.771

0.734

Shizuoka Factory

0.088

0.094

0.106

Hyogo Factory

t

0.043

0.056

0.054

Yamaguchi Factory

0.238

0.279

0.378

Total

1.178

1.261

1.323

Chemical Oxygen Demand (COD), Phosphorus, Nitrogen

COD
Phosphorust

Nitrogen

2020

2021

2022

0.753

0.835

1.079

0.024

0.071

0.097

0.401

0.378

0.482

Calculation standards
Wastewater measurements taken throughout the fiscal year are used to calculate average COD and average
concentrations of phosphorous and nitrogen. Average daily COD and concentrations of phosphorous andnitrogen are multiplied by average daily wastewater volume (m³/day), which is then multiplied by the number ofdays the factory operated to calculate annual emissions volume.
Note: Data is disclosed for sites subject to Japan’s Water Quality Standards.

Number of Violations of Permits, Standards and Regulations Related
to Water Quality and Quantity(FY)
2020
0
Note: There were no violations ofpermits, standards or regulations related to water quality or
quantity

2021

Group company Konoike Construction boasts a long track record andadvanced technologies in the cleanup of soil contaminated by a variety ofpollutants and, in addition to soil, is working in a wide range of areas
including water pollution countermeasures and disaster-related waste disposal. In FY2022, the company implemented research and development
as follows.


Sites covered: Yamaguchi Factory(FY)
Unit

Investment in R&D to Mitigate Water-related Risks

2022

0

0

Same as left

Same as left

Topic

Unit

Developing water purification technologies that use
ultrafine bubbles
Developing treatment technologies for organic fluorides(PFAS)
Enhancing existing environmental technologies(solidification and insolubilization, bio-treatment, etc.)

Cost
6Million yen

25
17

Financial Data, Company
Information and Share Information

164

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

165

Water Security

Domestic Factory Water Quality Analysis Results
Tohoku Factory

Emissions

Unit

Regulatory Regulatory
value under value underWater
ordinances
Pollution
andControl Law agreements

Voluntarystandard
value

Kanto Factory: Factory 1
Regulatory Regulatory
value under value under
MeasuredWater
ordinances
value
Pollution
andControl Law agreements

Voluntarystandard
value

Kanto Factory: DYNE Panel Factory
Regulatory Regulatory
value under value under
MeasuredWater
ordinances
value
Pollution
andControl Law agreements

Voluntarystandard
value

Shizuoka Factory

Regulatory Regulatory
value under value under
MeasuredWater
ordinances
value
Pollution
andControl Law agreements

Voluntarystandard
value

Hyogo Factory
Regulatory Regulatory
value under value under
MeasuredWater
ordinances
value
Pollution
andControl Law agreements

Voluntarystandard
value

Yamaguchi Factory
Regulatory Regulatory
value under value under
MeasuredWater
ordinances
value
Pollution
andControl Law agreements

Voluntarystandardvalue

Measuredvalue

Hydrogen ion
concentration(hydrogen index;pH)—

5.8 orhigher
8.6 orlower

5.8 orhigher
8.6 orlower

5.9 orhigher
8.5 orlower

7.5

5.8 orhigher
8.6 orlower

5.8 orhigher
8.6 orlower

6.0 orhigher
8.4 orlower

8.1

5.8 orhigher
8.6 orlower

5.8 orhigher
8.6 orlower

6.0 orhigher
8.4 orlower

7.7

5.8 orhigher
8.6 orlower

5.8 orhigher
8.6 orlower

6.0 orhigher
8.0 or
lower

7.7

—

—

6.2 orhigher
8.2 orlower

7.6

5.8 orhigher
8.6 orlower—

6.0 orhigher
8.0 orlower

7.0

Chromium

mg/L

2

—

1

Below 0.1

2

1

0.5

0.1

2

1

0.5

0.01

2

2

—

0.1

—

—

—

—

2

—

0¹

0

Copper

mg/L

3

—

1.5

Below 0.1

3

—

1.5

0.1

3

—

1.5

0.01

3

1

—

0.05

—

—

—

—

3

—

0.1

0

Phenol

mg/L

5

—

2.5

Below 0.1

5

1

0.5

0.1

5

1

0.5

0.05

5

5

—

0.05

—

—

—

—

5

—

2.5

0

Normal-hexane
extracts (mineral oil)

mg/L

5

5

3

Below 0.5

5

—

2.5

0.5

5

—

2.5

1.0

5

3

2

0.5

—

—

2

1 or lower

5

—

2.5

0

Soluble manganese

mg/L

10

—

5

Below 0.1

10

1

—

0.1

10

1

—

0.1

10

10

—

0.1

—

—

—

—

10

—

5

1.5

Soluble iron

mg/L

10

—

5

Below 0.1

10

—

5

0.1

10

—

5

0.26

10

10

3

0.1

—

—

—

—

10

—

5

0

Phosphorus

mg/L

—

—

—

—

—

—

8

0.3

—

—

8

0.3

—

—

—

—

—

—

—

—

1.56
(kg/day)—

1.50(kg/day)

0.4(kg/day)

Nitrogen

mg/L

—

—

—

—

—

—

90

5.9

—

—

90

1.2

—

—

—

—

—

—

—

—

11.88
(kg/day)—6(kg/day)

2.0(kg/day)

Chemical oxygen
demand (COD)

mg/L

—

—

—

—

—

25

—

4.7

—

25

—

8.2

—

—

—

—

—

—

70

13.5

10.4
(kg/day)—

10(kg/day)

4.5(kg/day)

Biochemical oxygen
demand (BOD)

mg/L

160

20

—

3.1

160

25

15

1.9

160

25

15

4.3

160

20

10

2.2

—

—

70

7.25

160

—

60

8.4

Suspended solids
(SS)

mg/L

200

150

60

7.2

200

40

20

1.1

200

40

20

3.8

200

30

10

3.1

—

—

25

5.15

200

—

75

3.9

Coliform bacteria
countBacteria/
cm³

3,000
(dailyaverage)

3,000(dailyaverage)

1,500

159

3,000
(dailyaverage)

—

1,000

0

3,000
(dailyaverage)

—

1,000

7.2

3,000
(dailyaverage)

3,000(dailyaverage)

100

0

—

—

1,500

19.25

3,000
(dailyaverage)

—

1,500

7.7

mg/L

2

—

1

0.2

2

—

1.5

0.1

2

—

—

0.01

2

1

0.5

0.06

—

—

2

0.02

2

—

1.8

1

Zinc

1 Not detected (below the detection limit)Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

E Environmental Data
Commitment in the Event of Inconsistencies between Trade
Association Positions and Company Policy on Climate Change
As an industry leader, Sekisui House is positioned to play a leading role indecarbonization efforts. Industry trade associations have developed agood understanding of the Paris Agreement and the Japanese government’s policy on climate change, and there is no inconsistency amongindustry activities in this area. In the event of inconsistencies between
Sekisui House’s policies and the climate change position of trade associations due to future changes in social conditions or other factors, or the
event that the Company deems trade associations’ stance on climatechange insufficient, the Company we will take the lead in engaging withindustry actors to promote consistency with national policy.

Greenhouse Gas Emissions from Specific Activities
(FY)

2020

2021

Flaring emissions

Unit

0

0

0

Methane (CH4) emissions

0

0

0

0

0

0

t

Cement production
GHG emissions

2022

Carbon Intensity
Scope 1 and Scope 2 Emissions per Unit of Net Sales(FY)
Unit

2019

2020

2021

Yen

t/billion yen

50.10

55.17

33.98

USD

t/million USD

5.46

5.76

3.92

Power Generation by Energy Type

Harmony with the Environment

Sekisui House’s factories and other facilities have installed photovoltaic
and other alternative systems to generate power for use in-house.

Environmentally Symbiotic Housing is an initiative aimed at creating better
housing through compliance with certification standards based on
CASBEE for New Detached Houses, part of the Comprehensive
Assessment System for Built Environment Efficiency (CASBEE) promotedby the Ministry of Land, Infrastructure, Transport and Tourism. Housingthat combines global environmental conservation (low impact); affinity withthe surrounding environment (high contact); and amenities and a healthyliving environment can be certified as “in harmony with the environment”
by the Institute for Built Environment and Carbon Neutral for SDGs.
In addition to adopting the concept of Environmentally Symbiotic Housing
in product development, Sekisui House reflects this concept in its development of custom detached houses, condominiums and gardens, striving toprovide good housing and attractive cityscapes through the “Common’s”
cityscape evaluation system. In particular, we strive to reduce environmental
impact through ZEH and promote harmony with the environment throughthe biodiversity-friendly Gohon no ki project while creating comfortable living
spaces. Through such tangible efforts to realize harmony with the environment, we aim to contribute to the emergence of a society committed tosustainability in housing and community development.
CASBEE has been adopted by numerous cities in Japan, particularly
ordinance-designated large cities. Our CASBEE Accredited Professionals
play a central role in promoting this initiative.

(FY)Photovoltaic power generation

Unit

2020

2021

2022

MWh

30

30

79

Short Term (up to 5 Years) GHG Emissions Reduction Targets
Sekisui House is working to decarbonize its businesses in line with thelong-term target for 2030 of reducing the Scope 1 and 2 emissions fromits business operations by 75% compared with the FY2013 levels. To
achieve this target, we aim to reduce emissions by 4.4% each year, to thisend advancing such initiatives as switching to renewable energy, moving
to office buildings that meet ZEB specifications and replacing our fleet ofCompany vehicles with electric vehicles.

166

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

Environmental Data

Percentage of energy-efficient homes

Use of lifecycle analysis during product and system design

Sekisui House has been a leader in energy conservation in the housing
industry by adopting insulated aluminum sashes and double-glazed windows in 2000, adopting next-generation energy-efficiency standards asstandard specification in all detached houses in 2003 followed by high-­
efficiency water heaters in 2005, and by launching ZEH products in 2013.
We are now taking the same approach in our rental housing, too. As aresult, 98% of our detached houses and 99% of our rental housing meet the
government’s certification standards for low-carbon buildings (standards
related to the external skin and primary energy consumption) as of FY2022.
Sales of this energy-efficient housing account for 99% of the Group's total
sales in the custom detached houses and rental housing businesses.

For some time, we have calculated CO2 emissions at every product lifecycle stage, from production to demolition, using the Life Cycle Assessment(LCA)1 method. These calculations have shown that the residential stage is
responsible for the largest portion of CO2 emissions. For this reason, we
have worked hard to promote eco-friendly homes that reduce emissions.
To contribute to the realization of a decarbonized society, we recognizethat the most important factor is reducing environmental impact at the residential stage and therefore continue striving to evolve our products.
In addition, Group companies specializing in remodeling existing products are working to reduce CO2 emissions from the existing housing stock,
making steady progress toward a decarbonized society by 2050.
Furthermore, by calculating CO2 emissions for Scope 1, 2 and 3, we aremonitoring CO2 emissions not only during product manufacturing, but also
at upstream, including material procurement, and downstream, including
during occupancy. We use this information to devise ways to reduce CO2
emissions over the entire product lifecycle.

Office LED initiatives
The Sekisui House Group has been working to convert office lighting toLEDs since FY2018. In FY2022, at least 419 fluorescent lamps were
replaced with LEDs, bringing the cumulative total to approximately 22,500.
As a result of this year’s change, annual CO2 emissions were reduced
approximately 15 tonnes. The amount invested was ¥2.41 million, whilecosts were reduced by ¥970,000, for an expected recovery of costs in
2.5 years.

1 An approach for quantitatively determining the environmental impact of all processes from the extraction of
raw materials required for a product or service through to use and disposal.

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

167

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Environmental Data

Annual GHG data, energy use data and water use data
Totals for the real estate portfolio
Sekisui House is working to decarbonize its real estate portfolio. The figures below are for the portion of real estate that the Company owns, or forwhich it owns the real estate trust beneficiary rights, that is office andcommercial buildings in the leasing business for which energy use andother such data is available.

Building management systems that measure energy efficiency

Commitment regarding greenfield development

Umeda Sky Building, which Sekisui House jointly owns, uses a building
energy management system (BEMS). Managing the indoor temperatureand humidity as well as the operation of heat source facilities, the system
is used to, for example, optimize the operating hours of building equipment. The system is also able to measure electricity consumed by lighting
separately from the rest of the building’s power.

In the Company’s approval screening standards for purchasing real estate,
the standards for purchasing greenfield properties specify that, for any
farmland being considered for purchase, the appropriate farmland conversion procedures must be observed. We purchase only land that hasreceived government permission for conversion from farmland to land forother purposes.
The Tama New Town Higashiyama subdivision is an example of greenfield development. For this project, we are advancing development withdue consideration to the local ecosystem in line with the commitments of
the Company’s Urban Development Charter, which states that “We will
preserve existing woodlands and transplant trees that cannot be kept inplace. Even small saplings will be saved and planted in various locations
around town.”

(FY)

Unit

2020

2021

2022

MWh

30,39928,69836,491

Gas consumption

1,000 m³

3,648

3,339

3,608

Water consumption

1,000 m³

197

172

261

Electricity consumption

GHG emissions

t-CO2

18,727

13,84019,599Floor area

m2

244,616

231,402

293,133

Evidence and ratio of buildings with green certification in
the real estate portfolio
Grand Front Osaka, in which Sekisui House owns a partial stake, hasearned a five-star certification under the CASBEE for Real Estate system.
The green certification ratio of Sekisui House’s real estate portfolio stands
at 7%.
Evaluation of Grand Front Osaka under CASBEE for Real Estate (Japanese only)

Green leases with tenants
Sekisui House has entered into green lease agreements with certain tenants of properties it owns, including those at Grand Front Osaka. From theperspectives of energy saving and environmental consideration, and sharing the principles of maintaining and improving property comfort and productivity, we and our tenants mutually cooperate in one another’senvironmental initiatives.

Evidence of urban brownfield redevelopment
Sekisui House is developing Miramachi, a 27-hectare former factory site in
Toyohashi City, Aichi Prefecture. This complex was developed with the aimof solving local issues and realizing a compact city.
In the Company’s approval screening standards for purchasing realestate, the standards for purchasing brownfield properties specify that thecause, responsibility, burden, cost, schedule and procedures (includingsite de-designation) for the remediation of any soil contamination or suspected soil contamination must be made clear before purchasing.
In addition, for the redevelopment of former factory sites and similarsites, Group company Konoike Construction draws on its wealth of experience and technologies to plan and implement optimal measures, basedon surveying results, for dealing with soil contamination, including thatcaused by leaks of hazardous substances, heavy metals and volatileorganic compounds.

Urban renewal evidence
At the West Village redevelopment project in Brisbane, Australia, we haveleft intact the Peters Ice Cream Factory, established in 1928, at a central
location within the site to preserve the historic view while creating an officespace with a sense of history for lease by small and medium-sizedenterprises.
The Ice Cream Factory

168

Value Report 2023
SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Contents

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Environmental Data

Material balance (monitoring of environmental impact of business activities in FY2022)1
To make its environmental conservation activities as effective as possible, the Sekisui House Group monitors and reports on environmental impacts2 at all business sites, including offices, factories, and construction and demolition sites bothin Japan and overseas.

175,064 MWh

Energy134,379 MWh

Energy56,888 MWh

Electricity
Gasoline
Light oil
Natural gas
Propane gas
Kerosene
Cold water / hot water / steam

48,563 MWh
11,351 kL
301 kL
571,000 m³
48,000 m³
21 kL
19,531 GJ

Electricity
Natural gas
LPG
LNG
Kerosene
Light oil
Gasoline

42,308 MWh
3,659,000 m³
1,671 t1,338 t172 kL
53 kL
17 kL

Electricity
Light oil
Gasoline
Kerosene

19,343 MWh
3,329 kL
215 kL
60 kL

Water

205,000 m³

Water

626,000 m³

Water

227,000 m³

Municipal water

205,000 m³

Municipal waterIndustrial-use water
Groundwater

134,000 m³
21,000 m³
471,000 m³

Municipal water

227,000 m³

Business
sites

INPUT

Energy

Offices

OUTPUT

CO2 emissions
Waste4
Paper
Other

Factories

43,160 t-CO2
85 t (Recycling rate: 73.6%)
56 t
30 t

CO2 emissions
Waste
Glass/ceramics
Metal
SludgeWood
OtherConstruction and demolition sites3

21,637 t-CO2
12,432 t (Recycling rate: 100%)
4,040 t4,874 t1,851 t
946 t
722 t

CO2 emissions
Waste
Concrete
SludgeDebris, etc.
Asphalt concrete
Other16,997 t-CO2
1,057,199 t (Recycling rate: 98.0%)
447,668 t
232,255 t
70,366 t
55,211 t
251,699 t

1 Scope: Sekisui House (non-consolidated basis) and its major consolidated subsidiaries in Japan and overseas (51 companies)
Period: FY2022 (February 2022 to January 2023), in principle. The figures include estimates in cases where final data was unavailable at the time of calculation. From FY2022, data categorization by business activity was changed to categorization by business site. As such, figures for energy use and CO2 emissions that were previously recorded forthe categories of development and design, factory production, construction and demolition are now recorded for the categories of offices, factories, and construction and demolition sites.
2 All figures for waste from business activities include valuables.
3 Because demolition orders received by Sekisui House are carried out by partner companies with which the Company has no capital relationships, the CO2 emissions related to the energy use in such demolition have been reclassified as Scope 3 Category 1.
4 Emissions from the head office building169Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Environmental Data

Data calculation standards
Sites

Environmental metrics

Calculation method

Energy and CO2• Energy consumption and CO2 emissions at Sekisui House (non-consolidated basis), 51 major domestic and overseas consolidated subsidiaries• Energy consumption (GJ) = [ (Purchased electricity) + ∑ [(Fuel consumption) × (Calorific value per unit of fuel) ] ÷ 3.6 (GJ/MWh)] + ∑ (Heat consumption ÷ 3.6 (GJ/MWh) (including the calculated performance of U.S. offices, which is​partially estimated).
Calorific values per unit of fuel refer to those specified in the Act on Promotion of Global Warming Countermeasures.1• CO2 emissions (t-CO2) = [ (Purchased electricity) × (CO2 emission factor) + ∑ [(Fuel consumption) × (Fuel CO2 emission factor)] + ∑ [(Heat consumption) × (Heat CO2 emission factor)] ]. Domestic CO2 emission factors refer to thosespecified in the Act on Promotion of Global Warming Countermeasures1 while overseas electricity CO2 emission factors are based on the “Emissions Factors 2022” (IEA).
• Due to data input limitations, energy consumption and CO2 emissions from light oil for construction vehicles used at construction and demolition sites by the former Sekiwa Construction2 are included in the “Offices” category.

Waste• Amount of waste generated from the Sekisui House (non-consolidated basis) head office, including consolidated subsidiary offices in the same building

Energy and CO2• Energy consumption and CO2 emissions at Sekisui House’s (non-consolidated basis) five domestic factories and the Ingleburn Manufacturing and Quality Control Centre (Australia)• Energy consumption (GJ) = [ (Purchased electricity) + ∑ [(Fuel consumption) × (Calorific value per unit of fuel)] ÷ 3.6 (GJ/MWh) ].
Calorific values per unit of fuel refer to those specified in the Act on Promotion of Global Warming Countermeasures.1• CO2 emissions (t-CO2) = [ (Purchased electricity) × (CO2 emission factor) + ∑ [(Fuel consumption) × (Fuel CO2 emission factor)] ].
CO2 emission factors for electricity and fuel at sites in Japan refer to those specified in the Act on Promotion of Global Warming Countermeasures,1 while electricity CO2 emission factors at the Ingleburn Manufacturing and
Quality Control Centre (Australia) refer to those specified in the “Emissions Factors 2022” (IEA).

Waste• Amount of waste generated from Sekisui House’s (non-consolidated basis) five domestic factories

Energy and CO2• Electricity, fuel and other energy consumption and CO2 emissions from the domestic construction and civil engineering work of Sekisui House (non-consolidated basis), the former Sekiwa Construction2 and Konoike Construction.
Data for Konoike Construction includes demolition work associated with construction and civil engineering work and discrete demolition projects.
• Energy consumption (GJ) = [ (Purchased electricity) + ∑ [(Fuel consumption) × (Calorific value per unit of fuel) ] ÷ 3.6 (GJ/MWh) ].
Calorific values per unit of fuel refer to those specified in the Act on Promotion of Global Warming Countermeasures.1• Energy consumption and CO2 emissions resulting from construction by Konoike Construction refer to those resulting from domestic construction and civil engineering work it supervises (excluding discrete demolition work)
The fuel consumption by construction machinery is calculated from the number of operating days of construction machinery using the Japan Construction Machinery and Construction Association’s loss table for construction
machinery. Energy consumption and CO2 emissions estimated for small-scale construction work at contracted amounts of less than ¥100 million are estimated.
• CO2 emissions (t-CO2) = [ (Purchased electricity) × (CO2 emission factor) + ∑ [(Fuel consumption) × (Fuel CO2 emission factor)] ].
CO2 emission factors for electricity and fuel refer to those specified in the Act on Promotion of Global Warming Countermeasures.1• From FY2022, the calculation method of CO2 emissions from electricity used by Konoike Construction at construction and demolition sites has been changed from location-based to market-based.

Waste• Amount of waste generated from new construction, maintenance and remodeling sites as well as housing and building demolition sites by Sekisui House (non-consolidated basis), the former Sekiwa Construction2 and Sekisui House
Remodeling.
• Amount of waste generated from Konoike Construction’s domestic construction and civil engineering work. Data for Konoike Construction include demolition work associated with construction and civil engineering work and discrete
demolition projects.

Offices

Factories

Construction anddemolition sites

1 Calorific value per unit of energy and CO2 emission factors are based on the Act on Promotion of Global Warming Countermeasures. Electricity emission factors are based on the factors by electric utility in “Emission Factors by Electric Utility (for Calculation of Greenhouse Gas Emissions by Specific Emitters) FY2021 Results” (Ministry of theEnvironment and Ministry of Economy, Trade and Industry; January 24, 2023).
2 The names of the Sekiwa Constriction companies changed to the Sekisui House Construction companies as of February 1, 2023.

170

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

171

Environmental Data

Value chain greenhouse gas (GHG) emissions (FY2022)
Scope 1 and 2 GHG Emissions(t-CO2e)

Scope

Description

CO2

HFC1

Other2

Total emissions

Targets

Scope 1CO2 emissions from use of primary fuels

55,4758

055,483

Sekisui House (non-consolidated basis) and major consolidated
subsidiaries in Japan and overseas (51 companies)

Scope 23

CO2 emissions associated with purchased electricity and heat

26,319—026,319Sekisui House (non-consolidated basis) and major consolidated
subsidiaries in Japan and overseas (51 companies)

Total of Scope 1, 2

81,7948

081,802

1 Hydrofluorocarbon released by Sekisui House (non-consolidated basis)
2 CH4 (methane), N2O (nitrous oxide), PFC (perfluorocarbon), SF6 (sulfur hexafluoride), etc.
3 Market-based calculation

Scope 1 and 2 GHG emissions by country

(t-CO2e)Japan

United States

Australia

China

Total

79,512

1,382

370

538

81,802

Scope 3 GHG emissions(t-CO2)

Scope

Upstream

Downstream

Category

EmissionsTargets

Category 1

Purchased goods and services

2,072,896

Category 2

Capital goods

190,694

Sekisui House (non-consolidated basis)

Category 3

Fuel- and energy-related activities not included in Scope 1 or Scope 2

19,855

Sekisui House (non-consolidated basis), 51 major consolidated subsidiaries

Category 4

Upstream transportation and distribution

28,663

Sekisui House (non-consolidated basis)4

130,226

Sekisui House (non-consolidated basis), Konoike Construction,
the former Sekiwa Construction, Sekisui House Remodeling

Sekisui House (non-consolidated basis), Konoike Construction

Category 5

Waste generated in operations

Category 6

Business travel

6,913

Sekisui House (non-consolidated basis)

Category 7

Employee commuting

19,672

Sekisui House (non-consolidated basis)

Category 8

Upstream leased assets—(CO2 emissions from leased Company vehicles are included in Scope 1)

Category 9

Downstream transportation and distribution—(Not applicable)

Category 10

Processing of sold products

Category 11

Use of sold products5

4,149,2256

Category 12

End-of-life treatment of sold products

127,381Sekisui House (non-consolidated basis), Konoike Construction

Category 13

Downstream leased assets

23,906

Sekisui House (non-consolidated basis)

Category 14

Franchises—(Not applicable)

Category 15

Investments

312

1 major equity-method affiliate—(Not applicable)
Sekisui House (non-consolidated basis), Konoike Construction,
Sekisui House noie, the former Sekiwa Construction, Sekisui House Real Estate

4 From FY2022, the targets have been changed to specified consigners as stipulated in the Act on the Rational Use of Energy. Accordingly, Konoike Construction, which was included in the scope of the data until FY2021, has been excluded.
5 The scope of calculation was changed from FY2022.
6 Scope 3 Category 11 emissions under the previous scope of calculation (detached houses and low-rise rental housing) were 2,638,031 t-CO2

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Environmental Data

Scope 3 greenhouse gas emissions calculation standards
Category

Calculation method

Category 1

Purchased goods andservices

Scope of calculation includes goods and services purchased by Sekisui House (non-consolidated basis) and Konoike Construction (electricity, fuel and other types of energy used at construction sites by partner companies that have no capital
relationship with the Group). Raw materials used by Sekisui House’s (non-consolidated basis) factories and major materials purchased by Konoike Construction = [(Purchase price by raw material type (million yen), or quantity purchased by raw
material type for major materials purchased) × (CO2 emission factor by raw material type (t-CO2/million yen)), or quantity-based emission intensity]. CO2 emission factor by raw material type refers to that specified in the Basic Guidelines on
Accounting for Greenhouse Gas Emissions throughout the Supply Chain (Ver. 2.4, March 2022; Ministry of the Environment and Ministry of Economy, Trade and Industry) and the accompanying Emission Intensity Database for Corporate Value
Chain Accounting of Greenhouse Gas Emissions (Ver. 3.2, March 2022). Electricity used at new construction sites, excluding those of Konoike Construction = [ (Electricity consumption resulting from onsite temporary construction, estimatedbased on Sekisui House’s past performance (kWh/day) × (Average construction period of a detached house (days/house) × (Number of houses built per year (shipment basis; houses) ] − [ (Electricity used by Sekisui house (non-consolidated
basis) and the former Sekiwa Construction (15 companies) in domestic construction and civil engineering work excluding discrete demolition projects) ]. Light oil consumption = [ Heavy machinery light oil consumption (L/house) per detachedhouse (based on Sekisui House’s past performance) ] × [ Number of houses built per year (shipment basis; houses) ]. Data for new construction by Konoike Construction are calculated based on the amount of electricity, fuel and other types ofenergy used by construction partner companies. CO2 emissions are calculated by multiplying the above energy consumption by the CO2 emission factor for each energy type. However, for calorific value per unit and CO2 emission factor foreach energy type, the values of the Act on Promotion of Global Warming Countermeasures are adopted.1

Category 2

Capital goods

Calculated based on Emission Intensity Database for Corporate Value Chain Accounting of Greenhouse Gas Emissions (Ver. 3.2; Ministry of the Environment and Ministry of Economy, Trade and Industry) for buildings and accompanying facilities, structures, mechanical equipment, tools, furniture and fixtures, vehicles and transport equipment.

Category 3

Fuel- and energy-related
activities not included in
Scope 1 or Scope 2

Calculated based on Emission Intensity Database for Corporate Value Chain Accounting of Greenhouse Gas Emissions (Ver. 3.2; Ministry of the Environment and Ministry of Economy, Trade and Industry) and the IDEA LCI Database (Ver. 2.3)
for Scope 1, 2 (excluding cold water, hot water and groundwater).

Category 4

Upstream transportation anddistribution

Calculated according to the Act on the Rational Use of Energy and the Act on Promotion of Global Warming Countermeasures for Sekisui House (non-consolidated basis). For other parts of the Group, calculated according to the Act on
Promotion of Global Warming Countermeasures and according to the fuel economy method (with adoption of prescribed fuel economy when measured values are not available) based on the Act on the Rational Use of Energy. Calorific value
per unit of fuel and fuel CO2 emission factors refer to those specified in the Act on the Rational Use of Energy and the GHG Emissions Accounting and Reporting Manual (Ver.4.8, January 2022; Ministry of the Environment and Ministry of
Economy, Trade and Industry).

Category 5

Waste generated inoperations

Calculated as [Waste (t) from offices, factories, and construction and demolition sites] × [Waste CO2 emission factor (t-CO2/t) by waste type]. Waste CO2 emission factor (t-CO2/t) by waste type refers to those specified in Basic Guidelines on
Accounting for Greenhouse Gas Emissions throughout the Supply Chain (Ver. 2.4, March 2022; Ministry of the Environment and Ministry of Economy, Trade and Industry) and the accompanying Emission Intensity Database for Corporate Value
Chain Accounting of Greenhouse Gas Emissions (Ver. 3.2, March 2022).

Category 6

Business travel

Calculated based on Emission Intensity Database for Corporate Value Chain Accounting of Greenhouse Gas Emissions (Ver. 3.2; Ministry of the Environment and Ministry of Economy, Trade and Industry) for employee business trip expenses(travel expenses).

Category 7

Employee commuting

Calculated based on Emission Intensity Database for Corporate Value Chain Accounting of Greenhouse Gas Emissions (Ver. 3.2; Ministry of the Environment and Ministry of Economy, Trade and Industry) for employee commuting expenses.

Category 8

Upstream leased assets

CO2 emissions from use of upstream leased resources (vehicles, heavy machinery, equipment, etc.) are included in Scope 1 and 2.

Category 11

Use of sold products

CO2 emissions are calculated based on energy consumed during the use of all housing and non-housing buildings supplied annually by Sekisui House (non-consolidated basis) and Konoike Construction (only housing handled from design toconstruction) as well as Sekisui House Noie, the former Sekiwa Construction and Sekisui House Real Estate. For housing, primary energy consumption is calculated using an energy consumption performance calculation program used for
ZEH² calculations that complies with the Act on the Improvement of Energy Consumption Performance of Buildings, and then converted into CO2 (power generated by photovoltaic cells installed on housing is deducted in full from primaryenergy consumption and CO2 emissions). CO2 emission factors refer to those specified in the Act on Promotion of Global Warming Countermeasures.3 For non-housing buildings, primary energy consumption is calculated by multiplying floorarea by energy consumption per unit floor area for each building use, or by a process analogous to that for housing using the abovementioned program, and then converted to CO2. Energy consumption per unit floor area by building type andCO2 emission factors refer to those specified in the Building Energy Consumption Survey Report (Building-Energy Manager’s Association of Japan). Service life is assumed to be 45 years for low-rise rental housing and non-housing buildings
and 60 years for detached houses, condominiums and high-rise rental housing.

Category 12

End-of-life treatment of soldproducts

Waste originating from materials shipped from Sekisui House’s factories (non-consolidated basis) (weight-based), materials procured on site (weight-based) and the demolition of domestic structures built by Konoike Construction is sorted bywaste type. CO2 emissions are then calculated as [Waste by type of waste (weight-based)] × [CO2 emission factor by type of waste (t-CO2/t)]. Waste CO2 emission factor (t-CO2/t) by waste type refers to those specified in Basic Guidelines on
Accounting for Greenhouse Gas Emissions throughout the Supply Chain (Ver. 2.4, March 2022; Ministry of the Environment and Ministry of Economy, Trade and Industry) and the accompanying Emission Intensity Database for Corporate Value
Chain Accounting of Greenhouse Gas Emissions (Ver. 3.2, March 2022).

Category 13

Downstream leased assets

For tenants, etc., of buildings owned by Sekisui House (non-consolidated basis), including residential buildings, emissions are calculated by multiplying floor area by occupancy rate and either actual usage of electricity, etc., or by the figures
specified in [16] Buildings by use and emissions per unit of area (Secretariat) of the Emission Intensity Database for Corporate Value Chain Accounting of Greenhouse Gas Emissions (Ver. 3.2, March 2022).

Category 15

Investments

Calculated as [Greenhouse gas emissions for major Sekisui House Group equity-method affiliates (1 company) in the previous fiscal year] × [The ratio of voting rights in said affiliates held by Sekisui House (%)].

1 Calorific value per unit of energy and CO2 emission factors are based on the Act on Promotion of Global Warming Countermeasures. Electricity emission factors are based on the factors by electric utility in “Emission Factors by Electric Utility (for Calculation of Greenhouse Gas Emissions by Specific Emitters) FY2021 Results” (Ministry of theEnvironment and Ministry of Economy, Trade and Industry; January 24, 2023).
2 Housing designed with the aim of achieving net zero annual primary energy consumption by significantly improving the insulation performance of the external skin and using high-efficiency systems to greatly reduce energy use while maintaining the quality of the indoor environment, as well as utilizing renewable energy, etc.
3 Calorific value per unit of energy and CO2 emission factors are based on the Act on Promotion of Global Warming Countermeasures. Electricity emission factors are based on the national averages of the factors by electric utility in “Emission Factors by Electric Utility (for Calculation of Greenhouse Gas Emissions by Specific Emitters) FY2021 Results” (Ministryof the Environment and Ministry of Economy, Trade and Industry; January 24, 2023).

172

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Environmental Data

Energy consumption in the Sekisui House Group2
Unit
Offices
Factories

MWhConstruction and demolition sites
Total

MWh

(FY)

2020

2021

2022

185,884

176,401

175,064

128,198

138,269

134,379

178,596

40,2471

56,888492,678

354,917366,331

1 The method for recognizing CO2 emissions from energy used during construction by partner companies that have no capital relationship with the Group was changed to Scope 3 Category 1 from FY2021. Therefore, energy used by partner companies during construction is not included in the energy data above. When calculated using the previous method, energy consumption for FY2021 was 160,399 MWh.
2 From FY2022, data categorization by business activity was changed to categorization by business site. As such, figures for energy use and CO2 emissions that were previously recorded for the categories of development and design, factory production, construction and demolition are now recorded for the categories of offices, factories, and construction and demolition sites.

Purchased renewable energy (electricity) (MWh)

Purchased electricity (total)1
Of which, renewable energy

(FY)

Unit

2020

2021

2022

MWh

115,039

109,068

110,134

MWh

6,609

29,946

37,847

2020

2021

2022

51

46

43

34

29

22

50

131

17

135

88

82

1 For FY2022, Scope 2 emissions divided by purchased electricity come to 0.239 tonne-CO2/MWh.

GHG emissions (Scope 1, 2)2

(FY)

Unit
Offices
Factories

1,000t-CO2

Construction and demolition sites
Total

1,000t-CO2

1 The method for recognizing CO2 emissions from energy used during construction by partner companies that have no capital relationship with the Group was changed to Scope 3 Category 1 from FY2021. When calculated using the previous method, Scope 1
and 2 emissions from construction and demolition sites were 45,000 t-CO2, and total Scope 1 and 2 emissions were 120,000 t-CO2.
2 From FY2022, data categorization by business activity was changed to categorization by business site. As such, figures for energy use and CO2 emissions that were previously recorded for the categories of development and design, factory production, construction and demolition are now recorded for the categories of offices, factories, and construction and demolition sites.

Financial Data, Company
Information and Share Information

173

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Environmental Data

GHG emissions (Scope 1, 2, 3)
Scope
Scope 1, 2

Scope 1CO2 emissions from use of primary fuels

Scope 2CO2 emissions associated with purchased electricity and heat

Unit
1,000 t-CO2

Total of Scope 1, 2

Scope 31,000 t-CO2

20204

20211

2022

86

53

55

49

35

26

135

88

82

Category 1

Purchased goods and services

2,040

1,834

2,073

Category 2

Capital goods

75

135

191

Category 3

Fuel- and energy-related activities not included in Scope 1 or Scope 2

18

16

20

Category 4

Upstream transportation and distribution

30

31

29
130

Category 5

Waste generated in operations

131

128

Category 6

Business travel

6

6

7

Category 7

Employee commuting

19

22

20

Category 8

Upstream leased assets2

Category 9

Downstream transportation and distribution

Category 10

Processing of sold products

Category 11

Use of sold products

1,000 t-CO2

—

—

—

—

—

—

—

—

—

3,0103

3,0853

4,1495

Category 12

End-of-life treatment of sold products

155

157

127

Category 13

Downstream leased assets

6

5

246

Category 14

Franchises

—

—

—

Category 15

Investments

0

0

0

Total of Scope 3

1,000 t-CO2

5,490

5,419

6,770

Total of Scope 1, 2, 3

1,000 t-CO2

5,625

5,507

6,851

1 The method for recognizing CO2 emissions from energy used during construction by partner companies that have no capital relationship with the Group was changed to Scope 3 Category 1 from FY2021. 
When calculated using the previous method, Scope 1 emissions for FY2021 were 80,000 t-CO2, Scope 2 emissions were 40,000 t-CO2, total Scope 1 and 2 emissions were 120,000 t-CO2, Scope 3 Category 1 emissions were 1,802,000 t-CO2, and Scope 3 Category 3 emissions were 18,000 t-CO2.
2 CO2 emissions from leased vehicles (Company vehicles) are included in Scope 1.
3 Figures have been revised due to more accurate calculations of photovoltaic power generated.
4 Greenhouse gas emissions figures for 1 major equity-method affiliate have been retroactively recorded for FY2020 onward.
5 From FY2022, the scope of Category 11 emissions calculation has been expanded to Sekisui House (non-consolidated basis), Konoike Construction, Sekisui House Noie, the former Sekiwa Construction and Sekisui House Real Estate.
6 The scope of calculation has been expanded from FY2022 to improve accuracy.

174

Value Report 2023
SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Contents

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

E Factory Site Report
The Sekisui House Group’s five domestic factories (Tohoku, Kanto,
Shizuoka, Hyogo and Yamaguchi) have compiled data and reported on
their environmental activities at the production stage, including energy
consumption and emissions, for FY2022.
All factories have in place exacting production quality management systems and operate with consideration for their impact on the local

Tohoku Factory mega solar

Kanto Factory mega solar

To reduce energy use in production, we are systematically replacing existing machinery with high-efficiency models. Approximately 70% of factory
lighting is now LED, and we plan to increase this to 100% by the end of
FY2025. Furthermore, we have set the target of 100% electrified forklifts
by the end of FY2025. We are also systematically replacing Company
vehicles with hybrid electric and battery electric vehicles.
As for production facilities, we are working to improve productivity by
reducing production issues and updating production methods while saving

environment. In 2000, we built a unified environmental management system for all production factories and received JIS-Q-14001 certification.
Under this system, we set voluntary standards for air and water emissions
that are stricter than legal or regulatory standards and periodically measureemissions as part of management efforts. No serious accidental releasesof chemical substances, oil or fuels were reported in FY2022.

Shizuoka Factory mega solar

Working toward the realization of a decarbonized society, in FY2013 we
installed photovoltaic (mega solar) power generation systems at all factories as part of efforts to spread the use of renewable energy. Furthermore,
we are switching over power used at factories to power purchased
through Sekisui House Owner Denki. As a result of such efforts, in
FY2022, 78.7% of electricity used at factories was renewable energy.

Hyogo Factory mega solar

energy through such initiatives as optimizing production conditions. For
drying equipment and other facilities that use heat, we are improving insulation performance to cut energy use and switching fuels to LNG, whichemits less CO2, while examining ways to eliminate the use of fossil fuels in
the future.
Through efficient selection and use of resources at every step from raw
materials to final products, we are optimizing material yields to saveresources and reduce waste. At the same time, we are advancing circular

Yamaguchi Factory mega solar

economy activities, such as recycling waste into raw materials and reusing
it in products for other purposes.
The Factory Site Report compiles data from the production stage at thedomestic factories. The Recycling Centers, which handle waste from construction sites, are excluded from the scope of reporting.

175

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Factory Site Report

Tohoku Factory

Glass/ceramics

1,242.7

100%

100%

Metal

269.7

100%

100%

Sludge

102.7

100%

100%

Wood

11.3

100%

37.2%

Other

57.4

100%

50.2%

Total

1,683.8

100%

97.9%

The Tohoku Factory manufactures Bellburn earthenware exterior wall panels exclusively for SHAWOOD homes. The firing furnace in this processuses a great deal of energy. To reduce energy use, exhaust heat from thefiring furnace is captured and used in the drying furnace, thereby increasing energy efficiency. In the Bellburn forming process, after extrusion
molding, the product’s appearance is checked by AI. Panels that do notmeet the required standards are sent back for reuse as raw materials via areturn conveyor, helping use raw materials efficiently and reduce waste.
After the Great East Japan Earthquake, Sekisui House formed a disasterprevention agreement with Shikama-Cho, Miyagi (where the Tohoku
Factory is located), to set up emergency shelters and provide supplies inthe event of a disaster. Environmentally friendly in ordinary times and providing safety and peace of mind to customers and the local community intimes of disaster, the site serves as a disaster risk reduction factory of the
future. Aiming to speed up initial response and enable energy self-­
sufficiency when disaster strikes, the factory has built a smart energy system comprising the existing photovoltaic power generation system as well
as new large storage cells, gas engine generators, plug-in hybrid vehicles(PHEVs) and a factory energy management system (FEMS). Using thelarge (2 MW-class) storage cells, the factory seeks to lower its peak electricity draw. The use of FEMS improves the visibility of energy use by thefactory’s main facilities, raising employee awareness of energy saving andthereby helping reduce energy use.
The main environmental initiatives at the Tohoku Factory in FY2022 wereas follows.

1. Initiatives to reduce CO2 emissions from production(production at factories plus shipping and transportation)

Location:

8 Ohara, Shikama-cho,Kami-gun, Miyagi

Establishment:

August 1997

Total factory area: 121,458 m²
Factory floor area: 60,420 m²
Max. production

300 houses/month

Main products

Steel frame members,
processed wood parts,
Bellburn earthenware
exterior wall panels

Major energy and resource consumption
Energy/Resource

Unit

Consumption

Electricity

MWh

4,698

KerosenekL

0.1

Light oil

kL

5.2

LPG

t

896

1,000 m³

15.9

Municipal water

Amount of waste generated and recycling rates
Type

Amount (t)Recycling rate

Material
recycling rate

Air analysis results
Unit

Measured value

Statutory
standard

Voluntarystandard

ppm

Less than 36

180

60

SOx

Nm³/h

Less than 0.024

17.5

0.175

Soot and dust

g/Nm³

0.005

0.25

0.025

EmissionsNOx

To reduce CO2 emissions from production, we worked to improve production efficiency by lowering the product defect rate and to save energy byreplacing air conditioners and other equipment with energy efficient models. Furthermore, we used a thermal camera to identify areas where heat
was escaping from the existing drying furnace. By cladding these areas

with exterior insulation, we improved the furnace’s heat retention, reducing
LPG use. In terms of shipping and transportation, we used trucks withlarger loading capacities in the transport of materials for new detached houses, improving loading
efficiency. For large multi-building housing developments, we transported materials for multiple
buildings together, thereby reducing the number
Exterior-clad insulation on theof trucks required and CO2 emissions.
drying furnace door

2. Resource recycling initiatives
In the Bellburn manufacturing process, we areworking to reduce waste by using 3D scanners tocreate digital 3D models of components that
greatly affect the material yield rate and implement multifaceted analyses to reduce the defectrate and thereby reduce waste. At the Resource
Recycling Center, we survey and analyze waste
sent back from new construction sites in an
ongoing effort to reduce surplus material. The
survey results are shared with the branch andsales offices to develop countermeasures,
improve systems and reduce waste.

3D scanning

Model on screen

3. R ehabilitation of ecosystem networks
and contribution to society
To contribute to the local community, we held asecond annual “clean walk” to tidy up the community while promoting employee health. To preventthe spread of COVID-19 in FY2022, this event was
split into two groups at two Miyagi Prefecture locations: Shikama-cho in Kami-gun and Akaishidai in
Tomiya City. We will continue contributing to local
communities based on social conditions.

Clean walk (Shikama-cho)Clean walk (Akaishidai)

176

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Factory Site Report

Kanto Factory
Location:

2 Kitatone, Koga, Ibaraki

Establishment:

August 1970

Total factory area: 309,547 m²
Factory floor area: 114,243 m²
Max. production

870 houses/month

Main products

Steel frame members,
panel components,
processed wood parts,
Dyne Concrete exteriorwall panels

Major energy and resource consumption
Unit

Consumption

Electricity

Energy/resource

MWh14,897

KerosenekL

11.2

Light oil

kL

21.8

LPG

t

110

Natural gas

1,000 m³

2,680

Municipal water

1,000 m³

15.2

Groundwater

1,000 m³

454

Amount of waste generated and recycling rates
Type

Amount (t)Recycling rate

Material
recycling rate

Glass/ceramics

932.1

100%

100%

Metal

2,071.7

100%

100%

Sludge

939.1

100%

100%

Wood

387.1

100%

42.9%

Other

169.7

100%

76.8%

Total

4,499.7

100%

94.2%

Air analysis results
Emissions

Unit

Measured value

Statutory
standard

Voluntarystandard
150

NOx

ppm

32

230

SOx

Nm³/h

Less than 0.11

14.5

7.0

Soot and dust

g/Nm³

Less than 0.001

0.20

0.10

The Kanto Factory manufactures high-performance Dyne Concrete exterior wall panels. This process uses a great deal of energy. We are implementing a variety of measures to save energy in the manufacturing
process, such as using exhaust heat from steam boiler drains and changing the heat source for drying furnaces from steam to burners.
Furthermore, in the manufacture of steel frame members, panel components and processed wood parts, we are advancing such measures as
replacing existing equipment with high-efficiency models, including updating cubicles and installing amorphous transformers, as well as switching tolocalized air blowers to reduce air compressor power consumption.
In 2022, we rebuilt the factory’s office, creating a net zero energy building (ZEB) of the type that Sekisui House is promoting using the expertise
cultivated in the housing business. Aiming to ensure peace of mind foreveryone working there and create a comfortable space to be in, thebuilding’s basic specifications include disaster resilience, efficient ventilation systems (in light of the COVID-19 pandemic) and thermal insulation. In
addition, we adopted a free address system, did away with land lines anddesigned the layout to facilitate interaction between departments to makethe office environment more pleasant. Rebuilt as a Green First office, thenew building also uses less energy.
The main environmental initiatives at the Kanto Factory in FY2022 wereas follows.

line, we used AI to establish an optimized production method. This greatly
improved productivity and reduced the line’s electricity use.
To minimize CO2 emissions during shipping and transportation, we
improved our truck loading methods to reduce the number of trucks
required. For example, we made adjustments to packing at the production
stage based on the way that materials
are loaded onto trucks, eliminating theneed for a loading trestle and thus
expanding the effective truck bed space.
Through such efforts, we successfully
Improved loading efficiency through adjustimproved loading efficiency.
ments at the production stage

2. Resource recycling initiatives
As in the previous year, waste reduction activities focused mainly on
improving yields and reducing sludge. In the Ironwork Group, cleaning
sludge periodically arises in electrodeposition coating processes. To minimize this, we now utilize temperature controls that allow us to turn off circulation pumps in order to curb the formation of chemical sludge. The Dyne
Wall Panel Group made improvements to vibrators to increase the uniformity of concrete placing, working to increase yields and reduce waste.

3. Rehabilitation of ecosystem networks and contribution to society
1. Initiatives to reduce CO2 emissions from production(production at factories plus shipping and transportation)
In FY2022, we advanced efforts to reduce CO2
emissions mainly in the areas of energy-saving
equipment and controls. We installed inverter
compressors, LED interior lighting and other energy-saving equipment. We also adopted energy-­saving controls for heating and cooling inelectrodeposition coating processes to reduce
electricity use. On the steel frame member welding

Interior LED lightingThis year, new initiatives included donating Bellmark charity points to the
local social welfare council and participating incleanup activities near Koga Station organizedby local soccer club FC Koga. To support
Burano and Mirai no Kodomo Network, both ofwhich are organizations that receive funds
through the Sekisui House Matching Program,
we provided support for field trip events for children and donated school swimming supplies
Cleanup activities near Koga
and food products.
Station177

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Factory Site Report

Shizuoka Factory
Location:

1100 Naka,
Kakegawa, Shizuoka

Establishment:

August 1980

Total factory area: 246,098 m²
Factory floor area: 124,347 m²
Max. production

800 houses/month

Main products

Steel frame members,
panel components,
processed wood parts,
Bellburn earthenware
exterior wall panels

Major energy and resource consumption
Unit

Consumption

Electricity

Energy/resource

MWh13,036

KerosenekL

0.7

Light oil

kL

0.3

LPG

t

108

LNG

1,000 m³

1,338

Municipal water

1,000 m³

34.3

Industrial-use water

1,000 m³

21.2

Amount of waste generated and recycling rates
Type

Amount (t)Recycling rate

Material
recycling rate

Glass/ceramics

1,020.7

100%

100%

Metal

1,708.7

100%

100%

Sludge

584.2

100%

82.9%

Wood

235.8

100%

99.9%

Other

309.0

100%

58.1%

Total

3,858.4

100%

94.0%

Air analysis results
Emissions

Unit

Measured value

Statutory
standard

Voluntarystandard

NOx

ppm

39

230

42

SOx

Nm³/h

0.17

1.77

0.62

Soot and dust

g/Nm³

Less than 0.030

0.2

0.1

The Shizuoka Factory manufactures Bellburn earthenware exterior wall panels exclusively for SHAWOOD homes. This process uses a great deal ofenergy, but to save energy, the factory changed fuels from liquid propane
gas (LPG) to liquid natural gas (LNG) in 2011. We have installed an LNG
storage tank within the factory to provide a stable supply of fuel. LNG isevaporated in an air heat vaporizer, which uses the natural energy of theheat in the atmosphere. We are also implementing ongoing initiatives to saveenergy by improving LNG consumption efficiency, including directing
exhaust heat from firing furnaces to warming and drying facilities.
Furthermore, we have been proactively transitioning to electric forklifts aheadof the other factories, and approximately 90% of forklifts are now electrified.
As the only one of the Group’s five domestic factories located in awater-stressed area, the Shizuoka Factory is actively working to reducewater use. To this end, we store rainwater and use it to clean the dehydrators in the factory’s wastewater treatment facilities.
In terms of resource recycling, we have installed equipment to recycle
defective Bellburn panels. We use AI in quality inspections, and panels
that do not meet our strict quality standards are disposed of. Such tiles
are crushed and recycled as filler in sound-absorbent flooring, thereby
making effective use of materials and reducing waste.
The main environmental initiatives at the Shizuoka Factory in FY2022
were as follows.

1. Initiatives to reduce CO2 emissions from production(production at factories plus shipping and transportation)
In addition to the activities continued from FY2021, we upgraded a compressor at the ironworking plant, installed controls to turn off the panel
coating booth exhaustfans when not needed,
and changed to LED
lighting in Yard 2, Yard 3
and the first floor of the
LED lighting in Yard 2
New compressor in theoffice building, among
ironworking plantother new initiatives. In terms of shipping and transportation, we changed
production bases for metal interior fixtures and fittings to reduce transportdistance and improved loading efficiency to reduce the number of trucks
used in an effort to reduce CO2 emissions.

2. Resource recycling initiatives
To minimize factory waste, we worked to improve the yield of wooden pillars and coatings and reduce the mass of sludge from internal processes
through dehydration. Initiatives started in December 2020 to recycle
rejected Bellburn ceramic exterior wall panels for use in filler for sound-­absorbent flooring once again produced significant results in FY2022.

3. Rehabilitation of ecosystem networks and contribution to society
The Shizuoka Factory focused on maintaining and improving the greeningof the site based on a greening plan. On May 26, 2022, a ceremony togrant a subsidy to certified NPO Tokinosu Forest Club under the Sekisui
House Matching Program was held at the Shizuoka Factory. The factoryhas been involved with Tokinosu Forest Club since 2010 through annual
tree planting volunteer activities, and the subsidies granted through the
Matching Program help provide a sense of fulfillment to employees. In
terms of social contribution, we carried out three volunteer activities: clearing underbrush on September 11 (28 participants, Tokinosu Forest,
Kurami, Kakegawa City);clearing underbrush on
October 22 (14 participants, coastal disasterprevention forest,
Subsidy grant ceremony
Clearing underbrush(group photo)
Obuchi, Kakegawa City);
and maintenance of aforest road on November
13 (34 participants,
Tokinosu Forest, Kurami,
Kakegawa City).
Clearing underbrush
Forest road maintenance178

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Factory Site Report

Hyogo Factory
Location:

786-36 Ishitani,
Yokodani, Kato, Hyogo

Establishment:

July 1985

Total factory area: 59,970 m²
Factory floor area: 20,651 m²
Max. production

380 houses/month

Main products

Dyne Concrete exteriorwall panels

Major energy and resource consumption
Unit

Consumption

Electricity

Energy/resource

MWh

2,405

Light oil

kL

4.6

LPG

t

42.6

Natural gas

1,000 m³

979

Municipal water

1,000 m³

28.4

Groundwater

1,000 m³

3.7

Amount of waste generated and recycling rates
Type

Amount (t)Recycling rate

Material
recycling rate

Glass/ceramics

766.1

100%

100%

Metal

34.0

100%

100%

Sludge

34.0

100%

100%

Wood

2.4

100%

100%

Other

103.8

100%

100%

Total

940.4

100%

100%

Air analysis results
Emissions

Unit

Measured value

Statutory
standard

Voluntarystandard

NOx

ppm

28

150

75

SOx

Nm³/h

0.0042

1.5

0.01

Soot and dust

g/Nm³

0.00170.1

0.01

The Hyogo Factory manufactures high-performance Dyne Concrete exterior wall panels. The production of concrete uses a large amount of steam.
We have installed automatic steam valves in the pipes that supply steam
to each process so that steam supply to processes not in use can be shutoff, saving energy. In 2020, we replaced one of the boilers that supplies
steam with a cutting-edge high-efficiency model. Through system control
that prioritizes the use of the new boiler, we have promoted further energy
saving. In addition, we have applied a thermal barrier coating to the roof ofthe office building, reducing summer air conditioning power consumption.
Responding to calls for energy saving in light of power shortages, we haveinstalled three 35 kW in-house stations to power the factory in the event ofelectrical grid instability.
We are also working to reduce concrete waste in concrete manufacturing. We are implementing a variety of initiatives to this end, including
installing automatic scrapers to prevent material from sticking to the sidesof concrete hoppers and switching to butterfly valves on the intake portsof pumps for pouring liquid concrete into molds to prevent liquid concrete
spatter. By collecting dust from Dyne Concrete panel processing to recycle
as raw material, we are further reducing concrete waste. We have also
installed equipment to automatically inspect panel thickness during concrete placement, improving the precision of product thickness and thereby
helping reduce raw material use.
The main environmental initiatives at the Hyogo Factory in FY2022 wereas follows.

1. Initiatives to reduce CO2 emissions from production(production at factories plus shipping and transportation)
In FY2022, we reduced CO2
emissions from factory production by switching to LEDs
for focal lighting in production
processes, adjusting the pressure of compressors thatLED focal lighting

provide power to production lines and changing the boiler control program. We also worked to curb CO2 emissions in transportation by increasing the operating rates of 25-tonne and 21-tonne trailers, thereby reducing
the number of 10-tonne trucks in use.

2. Resource recycling initiatives
In addition to recycling dust collected from manufacturing and processing
as a raw material in-house, we have installed new crushing equipment toturn concrete waste generated in the factory into raw materials, increasing
the internal recycling rate of concrete waste.

Crushing equipment

Before crushing

After crushing

3. Rehabilitation of ecosystem networks and contribution to society
We clean up the area surrounding the factory every month. In addition, a
total of 180 employees participated in cleaning up the Tojo area of Kato
City in March, June, September and December tobeautify the neighborhood. In local social contribution activities, we participated twice in food drives
sponsored by the Kato City Social Welfare Counciland four times in blood donation drives. We also helda charity drive for Children’s Day and took part ina campaign to support the recovery ofdisaster-affected areas. In addition,
employees volunteered by participating in
the Lao Picture Book Project by pasting
Lao translations into Japanese picture
books, creating and donating Lao versions
Making Lao picture booksof The Gigantic Turnip and The Mitten.

179

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Factory Site Report

Yamaguchi Factory
Location:

5000 Suzenji,
Yamaguchi

Establishment:

August 1973

Total factory area: 228,667 m²
Factory floor area: 88,148 m²
Max. production

450 houses/month

Main products

Steel frame members,
panel components,
processed wood parts

Major energy and resource consumption
Unit

Consumption

Electricity

Energy/resource

MWh

6,259

KerosenekL

154

Light oil

kL

0.2

LPG

t

513

Municipal water

1,000 m³

34.5

Groundwater

1,000 m³

14.0

Amount of waste generated and recycling rates
Type

Amount (t)Recycling rate

Material
recycling rate

Glass/ceramics

11.3

100%

100%

Metal

637.5

100%

100%

Sludge

167.7

100%

100%

Wood

299.0

100%

44.6%

Other

81.8

100%

36.0%

Total

1,197.3

100%

81.8%

Air analysis results
Emissions

Unit

Measured value

Statutory
standard

Voluntarystandard

NOx

ppm

35

250

125

SOx

Nm³/h

Less than 0.001

3.43

1.72

Soot and dust

g/Nm³

0.015

0.3

0.25

The Yamaguchi Factory manufactures steel frame members and panel
components and processes lumber. We are implementing innovative measures to save energy, such as using IoT technology to control compressor
operations and improve efficiency since FY2019. Specifically, a remote control system developed in-house predicts compressed air usage based on
the operational status of manufacturing processes to provide an optimizedenergy supply by controlling electric valves and multiple compressors.
Other energy-saving measures include replacing existing equipment withhigh-efficiency models, improving productivity and efforts to use energy
efficiently.
We have internally developed and launched a smart manufacturing system using IoT, big data and AI for the line that manufactures beams for theFlexible ß System, Sekisui House’s construction method for 3- and 4-story
steel-frame housing. In this system, AI trained on automatically collected
past manufacturing data (big data) makes judgments based on manufacturing conditions. Using this technology, we have automated adjustments
to production volumes and employee allocation, which previously relied on
the expertise of managers. As a result, AI-powered improvements to efficiency in manufacturing line operations and power-saving operations haveincreased material yield, reduced working hours and cut electricity use.
The main environmental initiatives at the Yamaguchi Factory in FY2022
were as follows.

1. Initiatives to reduce CO2 emissions from production(production at factories plus shipping and transportation)
To use energy more efficiently, we are replacing equipment with high-­
efficiency models and working to improve productivity on an ongoing basis.
In FY2022, we replaced the chiller used to cool electrodeposition coating
materials for iron components with a model that can both cool and warm.
This has enabled efficient temperature control of these materials, cutting
CO2 emissions by 12 tonnes annually. In addition, we replaced about 310
ceiling lamps with LEDs, saving approximately 35 MWh per year.
We also replaced office air conditioners and the cafeteria noodle cooker,

improved the power control of factory night-lights
and implemented intermittent operation of conveyors, fans and pumps. Through these and otherenergy-saving initiatives, we have reduced annual
CO2 emissions by approximately 50 tonnes.

The new chiller

2. Resource recycling initiatives
We are working to reduce paint, wood and steel raw material loss andpromoting waste reduction programs. On the beam processing line for
SHAWOOD wooden-frame housing, we have reduced waste by optimizing
product combinations according to the length of the raw materials. We
also optimized the amount of activated charcoal used to treat factory effluent to reduce the volume of sludge disposed of as waste.

3. Rehabilitation of ecosystem networks and contribution to society
We continued our regular cleanups of roads around our factories, with 227
employees participating in FY2022. Contributing to ecosystem preservation, we also launched a variety of new activities in FY2022 in cooperation
with the NPO Yacho Yamaguchi, which manages the Kirarahama Nature
Observation Park (located in Yamaguchi City), where we took part in tree
planting, volunteered to implement controlled burns of park reed grass,and helped jointly maintain a scenic road. We held and participated in 14
events, with a total of 321 participants, including employees, their families
and the employees of partner companies. In addition, we once again provided food products to Food Bank Yamaguchi, a nonprofit organizationthat works to reduce food waste. We also registered as a food loss reduction partner with the Yamaguchi Prefecture Food Loss Promotion Council
and will continue tocollect and donate
food from employees’
households thatwould otherwise have
Scenic road maintenance
Planting trees in Kirarahama
been thrown out.
Nature Observation Park180

Value Report 2023
SEKISUI HOUSES
SocialContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

181

Respect for Human Rights

182

Developing Human Resources

187

Diversity and Inclusion

192

Happiness Health Management

199

Occupational Health and Safety

201

Customer Initiatives

207

Coexisting with Local Communities

210

Supply Chain Management216

Scope of Calculation
Scope

Details

1

Sekisui House

Sekisui House, Ltd.

2

Sekisui House and Major Domestic
Group Companies (excluding Konoike
Construction)

Sekisui House, Ltd.
Sekisui House Real Estate GroupSekisui House Construction GroupSekisui House Remodeling, Ltd.
Sekisui House noie Limited

3

Sekisui House and Major Domestic
Group Companies

Sekisui House, Ltd.
Sekisui House Real Estate GroupSekisui House Construction GroupSekisui House Remodeling, Ltd.
Sekisui House noie Limited
Konoike Construction Co., Ltd. andDomestic Subsidiaries

4

Sekisui House and Domestic Group
Companies

Excludes Overseas Group Companies

5

Sekisui House GroupSekisui House, Ltd. andConsolidated Subsidiaries

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

S Respect for Human Rights
1. Governance
Structure for supervision and responsibility regarding
respect for human rights
At the core of the Sekisui House Group’s corporate philosophy is “love ofhumanity,” and the principle of valuing human beings is the foundation of
the Group’s corporate management.
Based on that principle, we have developed a system to promote
human rights due diligence. As stipulated in the Sekisui House Group
Human Rights Policy, the Board of Directors of the Company has its consultative body, the Risk Management Committee (chaired by Satoshi
Tanaka, Representative Director of the Board, Executive Vice President,
Executive Officer), regularly inspect and supervise compliance with our
Human Rights Policy and related initiatives.
With regard to human rights issues in the Group, the Social
Improvement Subcommittee decides on priority issues and policies in the
ESG management promotion structure. We have established a humanrights due diligence meeting under the Social Improvement Subcommittee
and are promoting information sharing and collaboration among several
related departments.

Human relations promotion framework1
To strengthen our corporate culture that strictly prevents the infringementof human rights, discrimination and harassment, we have organized the
Human Relations Promotion Committee chaired by the President, withcommittees of the same name established in our departments, offices andGroup companies.
Every year, representatives of each promotion committee gather to holda National Human Relations Promotion Committee Meeting. At the meeting, guidelines for human rights measures, Group-wide priority issues,
training policies and training plans are shared.
Each promotion committee is responsible for promoting the initiatives

decided at the National Human Relations Promotion Committee Meeting.
We have established the Human Relations Office in the Legal
Department as a dedicated department for overseeing human rights under
the responsibility of the managing officer responsible for legal affairs.
Under the Social Improvement Subcommittee, this office is also in chargeof promoting human rights due diligence by running the consultation deskfor harassment in the Group, implementing human rights awareness training, planning and operating human rights initiatives through the Human
Relations Promotion Committee, supporting implementation onsite, andhandling human rights issues when they arise.
1 The Group’s human rights promotion structure. In addition to human rights issues that we have long beenworking on, such as Buraku (marginalized communities) issues, we have established a structure to address thehuman rights of individual employees who are greatly impacted by relationships in the workplace, and torespond to a wide range of human rights issues as issues for the organization and workplace. In 2006, weestablished the Human Relations Office as a department that is responsible for the promotion of human rights.

2. Strategy
Commitment to human rights
In April 2020, we formulated and announced the Sekisui House Group
Human Rights Policy. It was formulated with the advice of outside experts
and approved by the Board of Directors of the Company.
The Human Rights Policy respects international norms, such as theInternational Bill of Human Rights, the ILO (International Labour
Organization) Declaration on Fundamental Principles and Rights at Work,and Guiding Principles on Business and Human Rights, and supports theTen Principles of the United Nations Global Compact.
In order to fulfill our social responsibilities, we have stated that we will
respect the human rights of all stakeholders who may be affected in ourbusiness activities including our supply chain.
This Human Rights Policy, based on the Group’s Corporate Philosophy
and Code of Conduct, supplements and clarifies respect of human rights,
one of the principles stated in the Corporate Code of Conduct.
All Sekisui House Group officers and employees (including temporary,part-time and fixed-term employees) must comply with this policy, and we

promote awareness of the policy through training and other measures. We
also publish the policy on our website, and we expect all stakeholders
inside and outside the Group to understand and support the Group’s policies and initiatives for respecting human rights.
In addition, to disclose information as stated in the Human Rights
Policy, we publish a human rights report.
Sekisui House Group Human Rights Policy
Sekisui House Group Corporate Code of Conduct (Japanese only)
Human Rights Report 2023  Policy on discrimination
The Sekisui House Group Corporate Ethics Guidelines define the standards of corporate ethics that the Company, its officers and employees
must comply with in pursuing the corporate activities of each Group company. We have also established the following policy on the respect ofhuman rights and prohibition of discrimination.
5−1 Respect of Human Rights and Prohibition of Discrimination
Consistently strive to maintain a healthy workplace environment,
respect the human rights of each person and do not act in any way
that could lead to discrimination. Do not discriminate in hiring andtreatment of employees. Furthermore, ensure that other persons areprevented from discriminatory behavior.
1. Do not engage in any form of unreasonable discrimination based on
birth, nationality, race, ethnicity, beliefs, religion, gender, sexual orientation, gender identity, age, disabilities, preference, educational
background, family and others.
2. Do not engage in acts which violate human rights through violence,
derision, slander, libel, forced labor through threats, bullying, or
spread of rumors.
Sekisui House Group Corporate Ethics Guidelines

182

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Respect for Human Rights  Policy on prevention of child labor and forced labor
As stipulated in the Sekisui House Group Human Rights Policy, the Sekisui
House Group does not tolerate any form of forced or compulsory labor orchild labor. We do not tolerate any involvement in human trafficking nor
any involvement with companies or production regions where such
involvement has been identified through transactions.
We observe the legal minimum working ages of the countries where we
operate and verify the ages of applicants when hiring. Our CSR
Procurement Guidelines, which are applied primarily to our main suppliers,
prohibit discrimination based on nationality or race, inhumane treatment,
forced or compulsory labor and child labor, and require the appropriate
management of employee health and safety.

  Policy on children’s rights
The Sekisui House Group Human Rights Policy expressly and strictly prohibits any form of child labor. We support the Children’s Rights andBusiness Principles published by UNICEF in 2012. In addition to working
to prevent and eliminate child labor, we implement initiatives to ensure
respect for children’s rights based on an awareness that corporate activities may impact children in diverse ways.
P.213 Education for a sustainable future starting with housebuilding

Approach to suppliers  Establishment and dissemination of CSR Procurement
Guidelines
Following our support and signing of the Ten Principles in the four fields ofhuman rights, labor, environment, and anti-corruption stated in the United
Nations Global Compact in 2018, we joined the supply chain subcommittee of the Global Compact Network Japan (GCNJ), a local network basedin Japan. In addition, we established the CSR Procurement Guidelines as
a procurement initiative in our supply chain, and are distributing them toour business partners.
The CSR Procurement Guidelines are based on the Self-Assessment

Questionnaire (SAQ) for CSR procurement issued by GCNJ. We requestthat our business partners submit a signed agreement confirming that they
understand and have agreed to comply with the purpose and content of
the guidelines, and to cooperate with periodic follow-up reviews andinspections by the Company regarding procurement initiatives. Whencommissioning a company as a new business partner, we require a signed
agreement confirming an understanding of the guidelines before any transactions are conducted.
We conduct CSR evaluations of our business partners through self-​
assessment based on the SAQ issued by GCNJ and use the results as
one of the items for supplier assessments. In order to conduct fair andimpartial transactions, we also disclose the evaluation results to our business partners. Assessment items related to human rights and labor areincorporated into the CSR evaluations. We monitor suppliers who are
identified as requiring attention by the assessment results through onsite
interviews to confirm their current status.
P.216-218 Supply Chain Management

Relationships with employees  Dialogue with employees on freedom of association andrespect for collective bargaining rights
As stated in the Human Rights Policy, all Group companies respect freedom of association and the right to collective bargaining. We shall comply
with labor-related laws and labor-management agreements, and work tobuild constructive relationships through sincere dialogue and negotiations
with 100% of employees, including workers with shorter working hours, ortheir selected representatives.

  Policy for reducing excessive working hours
The Sekisui House Group recognizes workstyle reforms for employees as
an important issue. In particular, we believe that reducing total working
hours is crucial to enabling employees to sustainably do their best work.
Average monthly employee work hours are used as an ESG management

indicator to calculate Performance Share Units (PSU), a form of remuneration for directors of the Board (excluding outside directors). By setting a
KPI based on this metric, we are uniting the entire Company in striving
toward reductions. To this end, in FY2022, in addition to maintaining legal
compliance, individual divisions set their own targets for average total work
hours to achieve the targeted KPI.
Furthermore, aiming to enable employees to work with autonomy, we
are advancing efforts to ensure that employees in all divisions take theirannual paid leave through systematic planning.
P.114 Performance-related stock remuneration (Performance Share Unit)

3. Risk Management
Promoting human rights due diligence
Based on our Human Rights Policy, we have incorporated the process ofhuman rights due diligence into our business activities and employ a
PDCA cycle in initiatives. Relevant departments, offices, Group companies, and other organizations (“related departments, etc.”) are responsiblefor due diligence for human rights issues. In addition, we obtain information through dialogue with stakeholders and from the advice and input
provided by experts and human rights groups. We use this information to
identify risks, educate and implement relevant measures. The related
departments, etc., share and aggregate information with relevant businessdivisions, and human rights due diligence meetings verify its content to
identify Company-wide issues, provide education and make improvements.

183

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Respect for Human Rights

contributed to negative impacts on human rights, we strive to appropriately
remediate such impacts.

Identifying important human rights issues in our business  Process for identifying human rights issues in overseas
operations

The assessment of human rights risks associated with our business isreviewed at the human rights due diligence meeting.
The red points in the following map indicate priority issues.

Because human rights issues in operations overseas vary by country andregion, we created and conducted the Self-Assessment Questionnaire(SAQ) on international human rights issues.
Objective: Understanding, prevention and countermeasures for possible
negative impacts on the human rights of stakeholders in construction and development
Target: S even major overseas Group companies and five overseas offices
Period: D istributed and collected in October 2022
In 2023, based on the assessment and analysis of the SAQ results, weplan to expand dialogue with overseas Group companies and bases, andcontinuously work to identify, prevent and mitigate human rights issues.
Should surveys, consultations or reports reveal that we have caused or

Impact on human rightsHigh

Map of Human Rights Risks Related to Group Businesses
Employment of non-Japanese
workers at construction sites
Human rights issues
associated with timber
procurement

Employment andretention of people
with disabilities

Construction site
health and safety
Workplace
Labor issues in theharassment
supply chain

Overwork andstress of
employees

Leakage of personal
information
Human rights violations on
the Internet

Implementation and measures for impact assessment
regarding human rights in our business activities
The Group values a broad array of perspectives including the opinions ofstakeholders and related parties, as well as direct dialogue should humanrights issues arise.

  Employees
The Human Relations Promotion Committee plays a central role in preventing workplace harassment based on a dual approach: a preventive
approach and a reactive approach. The annual PDCA cycle is shown below.

Advertising expressions

Fair hiring

Safe, secure
products andservices

Discrimination against
rental housing residents

Strength of connection with the Group

1. Workplace harassment
2. Construction site health and safety
3. Labor issues in the supply chain
4. Employment of non-Japanese workers at construction sites

Employee Human Rights Due Diligence (Workplace Harassment Prevention)High

Identification of implicit issues
Analysis of Governance Awareness
Survey score trends
Analysis of explicit issues
Training report analysis
Explore the cause,
Dialogue with each organization
background and solutionof consultation cases.
Solution of consultation cases
Neutral and fair decisions based on facts
The Disciplinary Advisory Board implements
disciplinary actions and personnel
measures depending on the case.
Sexual and Power Harassment Hotline
Full-time personnel provide consultation support
Consultation personnel are assigned at
all organizations
Consultation personnel undergo annual
training to improve their skills
Human relations training
Required for all Group employees, including
temporary employees and part-time employees
Three hours per year for all employees

Risk assessment
The Risk Management Committee
verifies recurrence prevention measuresand disseminates them via General
Affairs senior manager meetings.

C

A

D

P

Integration

Awareness-raising policy formulation
Collaboration with human rights groups
Collating social conditions and theirimpact on corporate activities
Selection of human rights slogans
Production of human relations training
manuals for the next fiscal year

Human Relations Promotion Committee
Committees established in 298 organizations
National Promotion Committee Meeting held
Set out policy measure guidelines
every year
Reactive approach
Preventive approach184

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Respect for Human Rights  Construction site workers  Suppliers

Construction site work environments are hazardous and missteps canreadily lead to life-threatening accidents. Accordingly, occupational healthand safety is the highest priority of the Sekisui House Group, underlying all
business activities. We take a wide range of measures to ensure healthyand safe work environments for all workers.

We hold policy briefings every year to ensure that suppliers obtain a deeper understanding of our procurement activities. Approximately 150 companies participated in the briefings held in February 2022. For briefings, we
invited an outside lecturer to speak on the subject of “Business andHuman Rights in Supply Chains.”
As part of our efforts to respect the human rights of foreign workers
employed by contractors in factories, we review signs to secure safety inthe plant and confirm the status of the work environment, including work
hours, with the cooperation of the factory contractors.
Sekisui House Real Estate Group and its member stores aim to be
LGBTQ-friendly when finding tenants for rental housing properties.
Specifically, we are revising the gender section on tenant application documents, digital application forms and lease agreements, and providing
training to help eliminate the particular stresses LGBTQ individuals facewhen looking for and moving into homes. More than 3,000 employees of
the Sekisui House Group and member stores took part in training on theseissues conducted in May 2022.

P.201 Occupational Health and Safety

Construction sites employ construction technicians of all nationalities andgenders, but we place particular emphasis on the work environment forforeign workers (including technical trainees) with different backgrounds interms of culture, language, etc.
We conducted a survey of technical trainees at Group companies andtheir partner building constructors, and received responses from 153 people, most of whom responded in their native language. With the aim ofassessing work, lifestyle environment, Japanese language and culture, andhopes for the future, the survey questions included prompts such as“What tasks are difficult at work?” and “What difficulties do you face living
in Japan?” In response to being asked how much longer they would like towork in Japan, 76% of the technical trainees responded that they would
like to continue their work even after their three-year training period ended.
In addition, 70% of those surveyed said that they would like to remain in
Japan as specialized skill trainees, exhibiting overall satisfaction with theircurrent work environment. We will continue to provide many opportunities
for dialogue with our technical trainees and utilize their opinions to further
improve the work environment.

  Customers
Continued dialogue with customers contributes to the provision ofhigh-quality housing. Even after housing is provided, we accept opinions
and evaluations regarding our overall service through regular inspections
and questionnaires.

P.217 Enhancing sustainable procurement  Human rights groups
Following our support and signing of the Ten Principles in the four fields ofhuman rights, labor, environment and anti-corruption stated in the United
Nations Global Compact in 2018, we joined the subcommittees (HRDD
and human rights education) of the Global Compact Network Japan(GCNJ), a local network based in Japan.
We also collaborate with related organizations that work on various
human rights issues, including the Buraku (marginalized communities)
issue, and continuously collect information to utilize for in-house educationand training.
Related organizations working on human rights issues• The Buraku Liberation and Human Rights Research Institute• The Corporate Federation for Dowa and Human Rights Issue, Osaka• Association for Fair Employment and Human Rights Education• Osaka City Corporate Human Rights Promotion Council• NPO Multi-Ethnic ’Human Rights’ Education Center for Pro-existence• Normalization Society• Cuore C Cube Co., Ltd.
• NPO Nijiiro Diversity

Proper operation of our human rights reporting system
As stated in the Human Rights Policy, the Group has put in place several
reporting systems, including the Sekisui House Group Compliance Support
System, to understand concerns and potential negative impacts on humanrights resulting from our business activities. By appropriately operatingthese system, we are working to enhance our consultation desk network.
The Human Relations Office has established a Sexual and Power
Harassment Hotline to provide consultation on all human rights issues,
including various types of harassment and consultation to create a comfortable working environment for employees with disabilities. In addition,
we assign one male and one female employee each to serve as consultation personnel (754 people total, as of February 2023) across 100% of ourbusiness sites in Japan, including at domestic Group companies.
We hold training sessions every year for these consultation personnel toimprove their skills and strengthen cooperation with the Human Relations
Office. All employees are made aware of that consultation personnel arestationed at all business sites through the Company intranet, human relations training manuals and posters. We promptly respond to consultations
and reports, conducting investigations and taking corrective and remedial
measures as necessary. We strictly protect confidentiality and ensure thatthe users of these services will suffer no disadvantage due to their consultations and reports.
At our overseas Group companies, we have established consultations
systems for each country and operating company.
We also take inquiries about human rights on our public website.
Sekisui House Group Compliance Helpline (Japanese only)185

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

186

Respect for Human Rights

4. Metrics and Targets

5. Activities and Other Related Information  Sexual and Power Harassment Hotline

Continuous human rights education for employees



(FY)

2020

2021

2022

  Human Relations Training

167

169

213

Of which, harassment cases

92

97

66

Of which, cases involving
corrective action

79

79

87

To raise awareness of human rights issues and foster a work environment
in which employees can work comfortably, human relations training is held
for all Group employees1 every year. This training is designed to improve
employees’ awareness around human rights and provides an opportunity
for them to think about human rights as their own issues in their everyday
work. Work leaders at each business site serve as facilitators.

Cases

Every case we received was addressed. After receiving the report andunderstanding the intentions of the consultee, we determine whether theissue involves the organization. If so, we confirm the facts and then ensure
corrective action is taken once deemed necessary, and fully carried out. In
addition, we may also offer the consultee further advice and support thatis tailored to the situation. Of the total number of cases received, most of
the non-harassment consultations are related to management and humanrelationships in the workplace.

  Public Website Human Rights Cases / Response to Human
Rights Inquiries
(FY)

Inquiries

2020

2021

2022

7

32

21

Established when the Sekisui House Group Human Rights Policy was formulated in April 2020, we accept both internal and external inquiries related
to human rights via our public website. In FY2022, the greatest portion ofthese inquires (seven) were complaints about the manners of rental housing tenants. We have looked into and responded as needed to all inquiries
received, except two cases that were impossible to investigate because
there were no leads, and we did not identify any serious human rights violations inflicted by our business.

1 Participation is voluntary for temporary, part-time and fixed-term employees, but training manuals are distributed to employees. In addition, some Group companies, including those overseas, conduct their own
equivalent training.

  Employees Receiving Human Relations Training(FY)% of employees by organization

In addition, the Human Relations Office conducts internal training by rank
and specialty as necessary to prevent violations of human rights, including
all forms of harassment.

2022 Human Relations Training manual

2020

2021

2022

%

100

100

100

Number of participants and satisfaction of Human Relations Training in FY2022
Type

Training
for all
employees

Participants

25,035

FY2022 Training for promotion leaders (for managers; 2 hours a year)• Majority privilege• Considering the abuse of authority through the news
FY2022 Training for all employees (including managers; 3 hours a year)• Business and human rights: Whose rights to what?
• Companies and the human rights of children• Resilience in the workplace

Unit

Training for
promotion
leaders

7,478

Post-training
questions

Agree

Somewhat Somewhat
Disagreeagree
disagreeGained usefulknowledge for the
future

75.5%

22.8%

1.4%

0.3%

Gained awarenessthrough groupdialogue

70.7%

25.9%

2.6%

0.8%

Awareness aroundhuman rights and thework environment
increased

70.7%

26.5%

2.4%

0.4%

Gained usefulknowledge for the
future

86.7%

12.6%

0.5%

0.2%

Gained awarenessthrough groupdialogue

80.7%

17.5%

1.3%

0.5%

Awareness aroundhuman rights and thework environment
increased

80.4%

18.1%

1.2%

0.3%

  Soliciting Human Rights Slogans
Each year, we solicit human rights slogans from all Group employees andtheir families for Human Rights Week, from December 4th to 10th. In
2022, we held our 39th slogan contest, and a total of 27,073 entries
were submitted, from which we
selected one outstanding work andfive excellent works. We are displaying posters containing these six
works to various organizations andGroup companies.
Sekisui House Group Human Rights Slogan 2022

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

S Developing Human Resources
1. Governance
Personnel system and human resource management structure
Based on our global vision to make home the happiest place in the world,
Sekisui House has created a vision for the future of maximizing the happiness of our customers, employees and communities as its ideal vision for2050. To make Sekisui House the happiest company in the world, we
have been working on diversity and inclusion and workstyle reforms.
Moreover, to support self-directed career development, we have positioned 2021 as the kickoff year for our personnel system reforms andrevised our grading system, the rating system and the compensation system in 2022. In addition, the same approach is being applied to our subsidiaries and affiliates, which are carrying out personnel system reforms.
We have established two types of career courses for managers: managerial positions that contribute to the organization through management,
and specialist positions that contribute to the organization through high-­
level expertise. We support personnel in these positions, so that they canchoose their own future career course and grow in their chosen direction.
Effective communication between supervisors and their team members isessential to understanding one’s own strengths and individuality. To support

this, we have established a system of career interviews, in which supervisors and members discuss careers on a regular basis. These interviews areheld to share employees’ values and ideas about their careers, as well as tosupport their growth by providing appropriate feedback on their individual
strengths and key aspects of their development. We have started careerinterview training for supervisors to systematically learn coaching skills, listening skills and more as we also focus on cultivating leaders who support
self-directed career development. In total, 2,733 employees participated in
the training, and in a 2022 career interview survey, approximately 95% of
respondents indicated that their supervisors listened to and approved theirtrajectories. We will continue to conduct career interviews in the future to
support the self-directed career development of each employee.

Key points of personnel system reform
Self-directed career development• Career course selection

Main features of the revised personnel system

Courses andgrades• Early creation of management opportunities• Career interviews with supervisors

Specialists

Managers

Evaluations
Regular employees

Ample communication between supervisors and members• Promotion decisions based on merit, not on age or years of employment• Early promotion of highly evaluated employees (promotion to manager possible in as few
as five years)

Fundamental revision of personnel evaluations and enhancement of
job interviews

Employee happiness

Workstyle reforms• Introduction of role classes for managerial positions• Managerial (M) positions that contribute to the organization through management• Specialist (SP) positions that contribute to the organization through high-level expertise

Promotion according to merit (regular employees)
Promotions

Diversity andinclusion

Double track course (managers)• Fair and transparent appraisal

Personnel system reform that supports self-directed career development

Self-directed
career development
supportWe have programs tailored to each employee’s specialized abilities foreach job type to help our employees increase their expertise and meet thediverse requirements of our customers. In the three-year training programfor detached home sales, employees learn a customer-centric approachand a broad range of specialized knowledge and skills for housing sales.
Since the program’s launch in FY2018, a total of 1,886 employees haveparticipated in the program.
Designers spend the first two years with Sekisui House in the entry-level
program to acquire the shared specialized knowledge required. Then, in
the intermediate program, which lasts until the fifth year, they take

Outline of Personnel System Reform

Goals of Personnel System Reform

Personnel system
reform

Employee ability development program• Ability/behavior review and performance review are separated.
• Ability/behavior review is reflected in class changes and salary changes, while
performance review is reflected in performance bonuses.
• Process for self-evaluation, approval and evaluation finalized, and evaluation system developed• Interview training

Career emphasis and talent management
Training andtransfer• Self-assessment of career plan and self-emphasis of one’s ability/knowledge/experience• Periodic career interviews five times a year
• Human resource matching utilizing the talent management system• Human resources recruitment system

187

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Developing Human Resources

systematic training courses to improve their expertise in their respectiveroles. Subsequently, employees are able to select and participate in training tailored to their expertise and acquire in-house certifications such as
Chief Architect1 to further enhance the value they provide to our customers. By FY2022, a total of 984 people have participated in the training.
1 For details, please see the section entitled “5. Activities and Other Related Information.”

In addition, we have systematized the specialized knowledge and skills
required on the ground for construction technicians, including those atpartner building constructors, and are providing learning opportunities
centered on the acquisition of specialized qualifications and skills. After
opening the first Educational Training Center and Training School in 1982,
we now hold training at three locations across Japan. A total of 734 trainees have participated in courses at these schools over the past 10 years.
After creating a system welcoming to women, including women-only private rooms in the trainee dorms, ten women construction workers havecompleted the training in the past two years. Trainees continue to improvetheir skills and techniques even after completing training school by participating in training programs at education and training centers according totheir work experience and level.

Evaluation of individual performance

In FY2022, we conducted an e-learning session on goal setting, evaluation and feedback for all evaluators and evaluatees. The session aimed tohelp participants achieve personal growth and improve organizational results.
They learned how to set goals, communicate with supervisors and teammembers, and leverage and apply their evaluation results going forward.
Grading System Overview

We conduct two types of personnel reviews: an ability/behavior review anda performance review.
Flow for creatingstrong results

Ability
Knowledge
Skill

Behavior that demonstrates
reproducibility, with ingenuity
that leads to the creation ofbusiness performance

Motivation
AttitudeAbility/behavior review
Evaluate the expected ability andbehavior level for each grade

Concretebehavior

Various efforts and tasks
that lead to final results

Process

Performance

Performance review
Evaluate the process andachievements, respectively

2. Strategy
Fundamental policy for human resource development

The Company’s grading system consists of evaluations made from two
perspectives: an ability/behavior review and a performance review. In theability/behavior review, we evaluate ability/knowledge/skill, motivation/
attitude, and the resulting concrete behaviors. In the performance review,
we evaluate the process used to achieve final results using management
by objectives (MBO), as well as the resulting performance. We use theevaluation results to reflect the ability/behavior review in promotions, pay
raises, and retirement allowances, and to reflect the performance review
in performance bonuses. In addition, the sales divisions provide monthly
performance allowances based on individual performance.

To achieve the Sekisui House Group’s global vision to make home thehappiest place in the world, its human resources philosophy is to makeSekisui House the world’s happiest company. To realize this, we have
newly formulated the Group’s fundamental policy for human resource
development as, “maximize the value of human capital and drive businessgrowth through diversity & inclusion of knowledge and experience.”
Since its founding, the Group has drawn on its DNA of creativity to takeon challenges. Drawing on this strength, to provide happiness in the era of
the 100-year lifespan, we aim to improve human capital value and social
value and thereby further enhance corporate value.

Securing, training, and managing human resources
according to business strategies
Based on the outlook for future business, we make and execute strategic
recruitment plans while accounting for data related to increases anddecreases in personnel.
With regard to the human resources required for future business promotion (e.g., DX human resources), we aim to create a system that allows us
to compile pipeline information inside and outside the Company and makebusiness proposals. As for transfers and training, we have built a dashboard in the talent management system that allows organization leaders tocheck the status of their organizations at a glance, and established a data
environment that is useful for making decisions about such matters astransfers and educational planning.
In FY2021, we introduced a talent management system that is common
to our Group companies, and we are now able to centrally manage thepersonnel information of over 25,000 people throughout the Group. Using
this system, we will transfer human resources across the Group (investing
human resources in growing businesses) to make maximum use of talent.

Managerial promotion system based on the new
personnel system
As part of the revision of our personnel system in April 2022, the ranks forgeneral employees were reduced from nine levels to five, facilitating theearly promotion of talented employees to manager. Starting in April 2023,
we are further accelerating this process and have revised the rules to allow
employees to be promoted to managerial positions after a minimum of five
years of working for the Company. A merit system determines promotions
and appointments, based on individual ability and behavior, regardless ofage or history in the Company.

188

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

189

Developing Human Resources

Use of people analytics
To support self-directed career development and ensure that the right person is in the right role, we manage human resource information throughour centralized talent management system. In addition to personnel evaluations, career ambitions, multifaceted observations and the results ofexternal assessments, we will gradually expand information managed inthis system to include records on career interviews and skills for use in
succession planning and human resources meetings for the appointment
of directors and officers. We have created an environment in which upperand middle management can make data-based decisions.
When recruiting new graduates, we analyze and extract the humanresource requirements for outstanding employees and hire humanresources who meet those requirements, which helps us to secure excellent human resources with great potential. In selective training after
employees join the Company, we use various types of human resource
data, including aptitude tests, to select employees.

3. Risk Management
Risk management regarding human resources

high degree of expertise and clarified our ideals and expected roles forsuch positions.
(2) W e conducted MBO e-learning for evaluators and evaluatees.
Participants learned how to set goals to achieve growth through theirwork, handle evaluation results and use those results in the future.
Sharing growth challenges through mutual communication will lead tomore understandable and transparent grading, which will lead to higher
motivation and personal growth.

 scertaining and responding to risks in education andA
dissemination
The following PDCA cycle for training programs helps us transfer lessons
learned in training to the workplace.
(1) Overall: Clarify the purpose of the training, determine the quality andretention levels from the participant report, use that as reference for
future training, and continually improve the quality of programs, textbooks and instructors, while imparting external knowledge.
(2) Selection and other forms of training: We help students acquire knowledge and change their behaviors with issue-driven preparation and­follow-up training as well as coaching by outside instructors.



(FY)

KPI

Unit

Scope

Cumulative numberof workers who have
Persons
acquired major
qualifications2 required
for specific duties

1

2020

2021

2022

2023

Results Results Targets Results Targets

22,53422,94022,90023,608For the scope of the data, click here (content from page 181 will open in a new window).
2 Major qualifications: eleven total qualifications (employees are counted for each qualification they hold;excluding retirees): first-class building operation and management engineer; first-class civil engineering
works execution managing engineer; first-class landscape gardening work operation and management
engineer; first-class plumbing work operation and management engineer; first-class electrical construction
management engineer; registered real estate transaction agent; and first-, second-, and third-grade certified
skilled professional of financial planning

Human Capital ROI

(FY)

Scope
Human capital ROI3
Employee-related expenses

5

2020

2021

2022

174%

183%

189%

251,470 million

277,403 million

293,334 million

For the scope of the data, click here (content from page 181 will open in a new window).
3 Formula for human capital ROI: (A-(B-C)) ÷ C(A) Total revenue, (B) Total operating expenses, and (C) Total employee-related expenses

P.226 11-Year Highlights (Consolidated)

Employee Turnover Rate

Risk management regarding engagement
We conduct an annual Governance Awareness Survey to monitor current
conditions within the Group regarding our corporate philosophy, vision andstrategy, employee autonomy, workplace culture and compliance. Basedon the survey results, we encourage department heads to identify andresolve issues in their departments, and to reflect organization-­wide issues in Company policies and training programs, working to retain
human capital by improving employee engagement. Key initiatives in
FY2022 were as follows.
(1) We established certification criteria and competency standards for specialists (SP positions) who contribute to the Company through their

4. Metrics and Targets
Employee turnover rate
(FY)

Scope

2020

2021

2022

1

6.3 hours

7.6 hours

6.7 hours

Human relations training

1

3.0 hours

3.0 hours

3.0 hours

Legal training

1

1.0 hours

1.0 hours

1.0 hours

1

2.3 hours

3.6 hours

2.7 hours

Training time (hours/person)
Key training
programs

Other training programs1

(FY)

Scope

Investment in Training and Ability Development

24,100Voluntary turnover rate of full-time employees

Note 4

2020

2021

2022

3.14%

3.44%

4.07%

2.93%

3.24%

3.98%

For the scope of the data, click here (content from page 181 will open in a new window).
4

1 until FY2021,

2 in FY2022.

Ratio of Non-Regular Employees (Contract and temporary employees)
Scope
Ratio of contract employees

For the scope of the data, click here (content from page 181 will open in a new window).
1 Other training programs include training for managers and other staff to prevent sexual harassment andabuse of authority, as well as career autonomy courses and training for new leaders.

Ratio of temporary employees
Total

Note 5

2021

2022

8.0%

7.9%

5.7%

2.1%

2.3%

2.8%

10.1%

10.2%

8.6%

For the scope of the data, click here (content from page 181 will open in a new window).
5

1 until FY2021,

2 in FY2022.

(FY)

2020

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Developing Human Resources

5. Activities and Other Related Information

Initiatives to strengthen management capabilities

Building our leadership pipeline

Sekisui House conducts an array of training courses for management-level
employees. Training for new managers is divided into sections: risk management, career interview training, evaluation training and problem-solving
reinforcement. This encourages managers to acquire know-how and skills
in each section. In addition, we are aiming to strengthen the management
and human resource development capabilities of every branch and team, as
well as revitalize the organization, by conducting training for newly appointed chief managers and integrity management training for general managers.

Keiei-juku
We have held the Keiei-juku management training program since 2018 asa program for future top management candidates to develop insight, character, management skills and leadership. A total of 119 employees participated in its fourth session in 2022.

SHINE! Challenge Program
The SHINE! Challenge Program (acronym for Sekisui House Innovatorsand Entrepreneurs Challenge Program) trains young leader candidates(under 35 years old). The program is designed to discover, train and foster
talented young individuals early on to systematically produce strong candidates for leading the business into the
future. Since the program began in October
2019, 43 participants have completed thecourse. In FY2022, 18 new participants
completed the fourth term and fostered
their leadership development, issue identifiThe fourth term of thecation and project design skills.
SHINE! Challenge Program

Succession plan
In 2021, we started succession plan meetings, in which executive officers,
operating officers, and the general managers of the head office and technology and production division participate to share information on theirsuccessors and discussing training plans, we aim to enrich the pipeline of
next generation management candidates. In FY2022, the meetings wereexpanded to include chief managers, technical senior managers andsenior managers of the General Affairs Department. By holding thesemeetings twice a year, we will develop talent Group-wide to realize thesustainable growth of the Group.

Support for employee’s self-directed career development
Career interviews
We conduct career interviews in which supervisors and their team members
converse on a regular basis for the purpose of realizing self-directed careerdevelopment by our employees. According to the results of a survey we conducted in FY2022, 70% of participants felt that they took more self-directedaction and that their awareness of self-directed career development changed
as a result of career interviews. In the future, we will raise awareness regarding human resource development and support self-directed career development based on ample communication between supervisors and members.

Self-directed career development course
We provide training that allows each and every employee to formulate theirown career vision and take concrete actions in order to realize that vision.
The self-directed career development course and other rank-specific training courses that have been offered since 2003 were consolidated into the
Self-Directed Career Development Course III, launched in 2022. The content was adjusted to cultivate flexible career awareness that can accommodate societal and environmental changes with a more future-oriented,
strategic mindset. In addition, to effectively connect experiences from one’s
early career days to real growth, we have established the Self-Directed
Career Development Course for new employees, and the Self-Directed
Career Development Course II for second-year employees, to be offered

starting in 2023. A total of 16,987 employees have completed these training courses as of January 31, 2023. We continuously support our employees in their self-directed career development while iterating improvements
to the training content through questionnaires and follow-up surveys.
Since FY2022, to strengthen our human resources who continue to
evolve in response to a changing environment, we are updating our career
education system with more enriched content.

New personnel recruitment system
In September 2022, the personnel recruitment system was reformed, andwe conducted four public recruitment sessions in FY2022. The new system will support self-directed career development by giving employees anopportunity to positively demonstrate their capabilities while responding
flexibly to changes in the management environment, business strategy andorganizational structure.

Career Challenge System
We have introduced the Career Challenge System to provide opportunities
for employees with the spirit of embracing challenges to make further
progress.
Based on job type, job content and expected duties to be assumed in
the future, our employees are categorized into four groups: Sales engineering job group (main career track), production skills job group, general clerical job group and employees working in specified areas (regional
employees). Our personnel systems are operated according to the characteristics of each job group in terms of training and basic compensation. The
program supports the conversion of employees in production and generalclerical work as well as regional employees into sales engineering positions.
Applicants submit a career vision sheet with their application, and thentake a two-day training course. During the training, they reflect on theirpast work experience and contemplate their future career. Upon completion of the training, applicants are evaluated on the breadth and clarity of
their career vision after conversion, re-submit their career vision sheets,and go through the interview process with the chief manager of the affiliated department. 97 employees applied for the program in FY2022.

190

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Developing Human Resources

Number of Applicants and Actual Converts1 under the Career
Challenge System
2020
Number of applicants
Actual converts

Not implemented

(FY)

2021

2022

31

32

27

30

1 The scope of this data includes Sekisui House, Ltd., Sekisui House Real Estate Group and Sekisui House
Remodeling, Ltd.

Qualification reward system
To motivate employees to continue their self-development, improve theirawareness and strengthen their affinity for skill development, we haveestablished a system to give cash rewards to employees who acquire
qualifications through national or certification examinations. We also subsidize course fees and support qualification acquisition for employees who
obtain major qualifications required for their work, such as registered realestate transaction agents and financial planners, first- and second-classarchitects, and first-class building operation and management engineers.
We also subsidize course fees and otherwise support qualification acquisition to help raise employee awareness and motivation.

In-house certification programs(Numbers of people certified as of April 1, 2023, Sekisui House, non-consolidated)

Design: Chief Architect
The Chief Architect program was established to develop designers who
support the creation of quality houses. By granting the role and qualifications of Chief Architect, the program aims to further improve skills ofdesigners. The certification period is two years, and as of FY2023, a totalof 319 Chief Architects are carrying out their vital role across the country.

  On-site supervisor: Chief Constructor
This program assigns the role and qualifications of Chief Constructor to
outstanding onsite supervisors, thereby encouraging them to pursue evenhigher goals. We have trained numerous excellent onsite supervisors who

engaged in routine work aiming to acquire this certification, and this has
improved our brand power and productivity. The certification period is two
years, and there are currently 143 active Chief Constructors.

Structural planning: Structural Planning Specialist
This is a certification program established to foster designers who play aleading role in structural planning at offices. The purpose of the program is
to improve the safety and rationality of structural planning by granting thedesigner the role and qualifications of a certified Structural Planning
Specialist. The certification period is three years, and the current numberof active Structural Planning Specialists is 214.

Design (Platinum business): Platinum Specialist
To promote what we call our platinum business (housing for senior citizens, welfare buildings in general for children, people with disabilities andothers, medical facilities, etc.), the role and qualifications of the PlatinumSpecialist are granted to employees engaged in design who have an
excellent track record in design combined with advanced expertise andthe skills necessary for designing platinum properties. The certification
period is three years, and there are currently 45 active Platinum Specialists.

After-sales service: Customer Support Meister (CS Meister)
To increase the number of customers who choose the Company, the certification recognizes the employees who excel in customer support andtake the initiative in carrying out their duties with a high level of skill andabundant knowledge. The certification period is one year, and there are
currently 63 CS Meisters active across Japan.

Training for employees on environmental initiatives
When introducing our eco-friendly homes to customers, it is important toprovide an explanation based on sufficient knowledge. For this reason, we
implement a wide range of education and training programs for our employees.

  Green First Training
Our Green First2 eco-friendly homes constitute the backbone of our efforts
to combat global warming and are at the core of our product strategy.
Accordingly, it is essential to have a deep understanding of the societal
background and national policies, as well as technical elements, systemcontent, and aspects that must be explained to customers, such as the
economic benefits and details of public subsidy programs. For this reason,
we have been conducting a group training program called the Green First
Training.
Fourteen years have passed since the launch of Green First homes, andour offerings have evolved into ZEH for both detached houses and multiunit housing complexes. Currently, the quality of our training has improved
thanks to the use of tablets and the development of online learning environments. Training is intended not only for sales and technical staff at new
construction contractor offices, but also includes customer service
employees involved in after-sales maintenance, as well as Sekisui House
Remodeling employees in the remodeling division, and Sekisui House Real
Estate employees who handle ZEH rental housing. As of FY2022, we haveheld training courses a total of 680 times, and a total of more than 38,000
employees have taken these courses. In FY2022, 24 courses were held,
and more than 2,750 employees participated, due in part to the fact thatvideos of the courses were made available so that the courses could be
repeated online.
2 The name of our eco-friendly home brand launched in 2009. Each highly insulated and airtight house isequipped with a solar power generation system and fuel cells. Since 2013, we have focused on Green First
ZERO, which conforms to ZEH standards.

Labor practice initiatives
Sekisui House regularly participates in workshops to discuss employee
benefits and labor practices with other companies. We use the insights
into other companies’ initiatives provided through these workshops toimprove our labor practices.

191

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

S Diversity and Inclusion
1. Governance
Our Commitment to Human Resource Sustainability
In 2006, the Group announced its Commitment to Human Resource
Sustainability. The three pillars of our diversity promotion policy are promoting the participation of women; utilizing diverse personnel; and promoting diverse workstyles. We are working to create an environment andstructure where both employees and the Company can achieve sustainable growth. In the same year, we established the Diversity Development
Team, and started engaging in full-scale efforts. Later, this team was reorganized into the Diversity and Inclusion Promotion Office in February 2014,
and again into the Diversity and Inclusion Promotion Department in April
2018. We are working to support the active participation of female
employees as well as diversity in our human resources.
Human Resource Sustainability Declaration (Japanese only)

Results and expansion of activities
In December 2017, we became the first company in the constructionindustry to receive the Minister of State for Special Missions Award(Gender Equality) of the Advanced Companies where Women ShineAwards from the Gender Equality Bureau of the Cabinet Office. This award
was granted as recognition of our efforts in the following areas: enhancing
women’s empowerment in the entire construction industry through humanresource strategies to encourage female employees to pursue theircareers and the development and commercialization of temporary toilets
for women at construction sites; promoting female employees to managerial and executive positions Group-wide; and implementing IT technology-​
based workstyle reforms to support work-life balance.
In October 2020, we were awarded the Grand Prix at the IKUMEN
AWARD 2020 sponsored by the Ministry of Health, Labour and Welfare.
Our male employee childcare leave program, which the Group put into fullscale operation in September 2018, was evaluated favorably. We willcontinue to share the lessons learned and knowledge gained from theoperation of this program with society at large, hoping to contribute tobuilding momentum toward the societal normalization of male employees
taking childcare leave.
In March 2021, we were selected as a Nadeshiko Brand 2021 by the
Ministry of Economy, Trade and Industry and the Tokyo Stock Exchange
for the sixth time, making us the only company in the housing and construction industry to achieve this feat.
In October 2020, we became a member of The Valuable 500, an international initiative promoting the active participation of people with disabilities. The Valuable 500 was launched at the World Economic Forum Annual
Meeting held in Davos in 2019, based on the idea that inclusive businesscreates inclusive societies. 500 major companies around the world havejoined in the initiative with the aim of sparking reforms by business leadersthat enable persons with disabilities to unleash their potential value in business, society and the economy. The Sekisui House Group, which aims tobecome a leading company in ESG management, has endorsed the objectives of The Valuable 500 and established the following commitments.
1. Customer happiness: Create homes and communities to provide lifelong housing.
2. Employee happiness: Provide opportunities and foster an environment
for employees with diverse backgrounds to reach their full potential.
3. Societal happiness: Support social inclusion and normalization for people with disabilities.
Sekisui House Group’s Valuable 500 Commitment

2. Strategy
The concept of diversity and inclusion is important in ensuring the sustainable growth of individuals and companies in an era of change. In everyorganization and workplace, we must respect and recognize differences inage, gender, nationality, values, sexuality, disabilities and other characteristics. We aim to build an environment where goals and roles are madeclear and information is shared, there is mutual respect and trust, employees proactively participate and contribute, and employees are used effectively as members of their organizations, thereby creating psychologicallysafe workplaces. We believe that this will lead to the creation of value
through the strength of diversity. The Group has positioned diversity andinclusion as a material issue and set the goal of becoming a leading company in ESG management.

Policy on overhauling work environments
We work to overhaul various measures with the aim of becoming a company where anyone can work with a sense of fulfillment and happiness.

Action Plan for the Promotion of Active Participation by
Women
In February 2021, we set new targets for Sekisui House’s Action Plan for
the Promotion of Active Participation by Women based on the Act on
Promotion of Women’s Participation and Advancement in the Workplace.
We set two major targets of “310 or more female managers” and “100%1
take-up rate for eligible male employee childcare leave” (both by March 31,2026 on a Group basis), and will continue making efforts to achieve thetargets.
1 100% means that all eligible employees with a child or children under the age of three (the limit under theCompany’s rules and regulations) take childcare leave.

In 2021, Sekisui House became the firstcompany in the industry to be selected
six times as a Nadeshiko Brand.

Grand Prix in the IKUMEN AWARD 2020

 ekisui House’s Action Plan for the Promotion of Active Participation by WomenS(Japanese only)192

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

193

Diversity and Inclusion

3. Risk Management
We aim to be an inclusive organization in which diverse employees play
active roles in order to meet the diverse needs of our customers.
However, in male-centric homogeneous organizations, there is a highrisk that bias will emerge in values, policies, strategies and other aspects,
especially in terms of management. This would likely hinder response tointensifying market competition and the globalization of business.
Prejudice, discrimination, harassment and other issues may also arise fromunconscious bias, ignorance or indifference unless we foster a corporate
culture of mutual recognition and respect for diverse ideas, values andidentities. This raises concerns about loss of psychological safety in theworkplace, as well as the potential for increased mistakes and accidents
resulting from weaker communication.
When it comes to diversification of workstyles, we must promote telework and other styles that are not bound to a single location or time.
Otherwise, we will be unable to satisfactorily support the diverse values
and lifestyles of our employees, customers and businesses, and it will
become difficult to plan and implement BCPs, including measures against
large-scale disasters and infectious diseases. Furthermore, if we areunable to conduct the diversity management needed for this era of diversifying human resources, it will be difficult to promote a balance between
work and childcare, nursing care, and treatment of injuries and illnesses,
which will lead to decreased employee motivation and the loss of talented
human resources.
In our Human Relations Training, which we conduct every year, we holddiscussions to address various changes in workplaces, such as self-​
directed career development and diverse workstyles. In addition, in the
Governance Awareness Survey, we included items related to diversity andinclusion to assess the current state of self-directed career development
and workplace culture and help us continue improving.
P.186 Human Relations Training

4. Metrics and Targets
(FY)
KPI

Scope

Unit

1

Persons

Number of female directors of the Board

2021

2022

2023

Results

Results

Targets

Results

Targets

1

3

3 or more3

3 or more

Number of female managers

2

Persons

236 (3.79%)

273 (4.31%)

260 (—)302 (4.6%)

300

Percentage of full-time female employees

2%

27.3 (6,225 persons)28.1 (6,454 persons)28.0 (—)

28.9 (6,743 persons)

29.2

Percentage of female new graduates hired

Note 1%41.6 (305 persons)41.2 (2,778 persons)42.0 (—)

44.6 (350 persons)40

Employment rate of persons with disabilities

1

%

2.76

2.90

2.61

2.97

2.97

4

%

—

—

—

2.864

2.86

Note 2

%

100

100

100

100

100

Employment rate of persons with disabilities3
Take-up rate for eligible male employee childcare leave (%)

For the scope of the data, click here (content from page 181 will open in a new window).
1
2

2020

3 Of domestic consolidated companies, 33 are subject to statutory requirements to hire persons with disabilities (including
non-consolidated Sekisui House)
4 Against the target of reaching the statutory requirement for employing persons with disabilities on a consolidated basis,
in FY2022, 32 of 33 companies were able to reach the required number of employees (one did not).

2 until FY2022, and 3 in FY2023
1 in FY2020, and 2 from FY2021(FY)
Indicator
Number of female directors/
Total number

Scope
Consolidated

Note 5
Persons

Non-consolidated

1

Consolidated

Note 5

Number of female Audit andSupervisory Board members/
Total number

Non-consolidated

1

Number of female executive officers/
Total number

Consolidated

Note 5

Non-consolidated

1

Number of female managers by
job type

Persons

Retention rate per year after returningfrom childcare leave
Number of employees who havetaken childcare leave

Persons

Sales positions
Technical positions

Note 5

Persons

Administrative positions

Female managers
Returning rate from childcare leave

Unit

Male
FemaleMale
FemaleMale
FemaleNote 5

Persons

Note 6%Note 6%Note 5

Persons

2020

2021

2022

1/119 (0.84%)

4/90 (4.44%)

4/110 (3.64%)

Of which, 1/4 are external

Of which, 3/4 are external

Of which, 3/5 are external

1/12 (8.33%)

3/10 (30.00%)

3/10 (30.00%)

Of which, 1/4 are external

Of which, 3/4 are external

Of which, 3/5 are external

1/8 (12.50%)

2/8 (25.00%)

1/13 (7.69%)

Of which, 1/6 are external

Of which, 1/6 are external

Of which, 0/2 are external

1/6 (16.67%)

2/6 (33.33%)

1/5 (20.00%)

Of which, 1/4 are external

Of which, 1/4 are external

Of which, 0/2 are external

4/28 (14.29%)

3/40 (7.50%)

2/72 (2.78%)

1/18 (5.56%)

2/28 (7.14%)

2/23 (8.70%)

105 (5.49%)

113 (5.86%)

114 (5.42%)

64 (2.41%)

79 (3.00%)

88 (2.06%)

65 (6.05%)

79 (7.10%)

99 (6.53%)

2 (0.34%)

2 (0.36%)

7 (0.79%)

100

99.9

100.0

97.3

97.1

95.8

100

99.9

98.7

98.7

98.9

97.6

642

549

517

334

270

313

For the scope of the data, click here (content from page 181 will open in a new window).
5 2 until FY2021, 3 in FY2022.
6 1 until FY2021, 3 in FY2022.
We disclose our diversity-related initiatives and results in the Ministry of Health, Labour and Welfare’s Database on Promotion of Women’s Participation and Advancement in the Workplace.

Database on Promotion of Women’s Participation and Advancement in the Workplace (Japanese only)Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

Diversity and Inclusion(FY)
Indicator

Scope
Male

Number of employees

FemaleMale
FemaleUnit

1Persons
Note 1

Under 30
Number of employees
by age group30-50

Note 2

Persons

51 andabove
Average years ofservice
Average age
Number of new
graduates hired
Number of mid-career
hires
Number of new hires
Average monthly work
hours per person

Male
FemaleMale
FemaleMale
FemaleMale
FemaleMale
FemaleNote 2Years

Note 2Age222Note 3

Average monthly
overtime work hours
per person

Note 3

Annual paid leave
take-up rate andnumber of days taken

Note 3

Average annual salary1

Persons
Persons
Persons
Hours

2020

2021

2022

11,354

11,222

11,315

3,717

3,795

3,617

16,54916,54018,810

6,225

6,454

7,054

2,844
(18.87%)2,768(18.43%)

4,976(19.24%)8,111(53.82%)

7,941(52.88%)13,347(51.60%)4,116(27.31%)

4,308(28.69%)7,541(29.16%)

17.97

18.12

18.43

11.96

12.36

11.73

45.00

45.28

44.36

36.80

37.28

38.15

430

397

434

305

278

350

—

—

417

—

—

186

—

—

851

—

—

536

176.71

177.64

170.73

Hours

22.0

23.9

21.7
73.1

%

46.5

52.7

Days

8.4

9.5

13.1

Yen

7,927,285

7,995,230

8,342,460

For the scope of the data, click here (content from page 181 will open in a new window).
1 2 until FY2021, and 3 in FY2022
2 1 until FY2021, and 3 in FY2022
3 Sekisui House, Ltd.; Sekisui House Real Estate Group; Sekisui House Remodeling, Ltd.

Gender Wage Gap4, 5, 6, 7
Total workers

Regular workers

Non-regular
workers8

Sekisui House, Ltd.

53.0%

58.1%

38.0%

Major Group companies

63.1%

63.3%

53.3%

Company name

4 Major Group companies include Sekisui House Remodeling, Ltd.; Sekisui House Real Estate Group; Sekisui
House Construction Group; Sekisui House noie; and Konoike Construction.
5 The applicable period is the fiscal year under review (February 1, 2022–January 31, 2023).
6 Seconded employees are calculated as employees at the company they have been seconded to.
7 The figure is calculated as average female annual wages ÷ average male annual wages × 100%. In addition,
the average annual wages are calculated as total wages (including bonuses and non-standard wages) ÷number of personnel.
8 Non-regular workers are temporary employees (rehired employees, contracted employees and part-­timers).
Figures for part-timers are calculated based on the wages actually paid and not converted into the equivalent for full-time employees.

Supplemental Explanation of Gender Wage Gap
The gender wage gap for all of Sekisui House Ltd.’s workers is 53.0%
and the gap for regular workers is 58.1%. The ratio of regular workers
among total workers is around 90%. The ratio of main career track
employees is over 70%, which has a large impact on the genderwage gap. As such the following details mainly concern main career
track employees.
1. One factor behind the gap is the difference in the composition of
personnel by occupation type and grade. The average years of service for main career track employees is 9.9 years for women and19.9 years for men, a gap of 10 years. Therefore, the pool of candidates for managerial positions contains relatively few women.
We have been committed to the advancement of women for 20
years and began actively hiring women in main career track positions from 2005. When hiring new graduates in 2023, around 30%
of sales representatives and 40% of technical positions were
women. In addition, to encourage the training and retention of
female employees, we established a specialized department (currently the Diversity and Inclusion Promotion Department) andactively work to promote female employees to managerial positions, such as by training female candidates for managerial positions. By successfully undertaking these initiatives, from 2007 to

2022, the average years of service expanded to 2.2 times its previous level for women (4.6 years to 9.9 years) and 1.3 times the previous level for men (15.8 years to 19.9 years). This major increaseshows that the factors behind the gap are being eliminated.
2. The gender ratio of sales representatives is another factor behind
the gap. The ratio of non-standard wages (such as performancebonuses) to total wages is especially large for sales representatives.
The ratio of women among sales representatives is low at 10%.
3. Wages for individuals in the same job grade are equal. The Company
sets wage standards for each occupation and job grade. The gender gap in base monthly salary for main career track employees is
as detailed below, but there is no gap within each job grade.
Average female base salary/
Average male base salaryManagerial positions
Regular employees9



96.8%

P5

97.0%

P4

100.4%

P3

99.9%

P2

99.8%

P1

97.3%

9 There are five job grades for regular employees (P5–P1).

5. Activities and Other Related Information
Implementation of training for female managerial candidates
and creation of role models
As part of its aim to appoint 310 or more
female managers by the year ending March
31, 2026, the Sekisui House Group provides
training for female manager candidates andcreates role models for career development
according to job types.

Sekisui House Women’s College

194

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Diversity and Inclusion

Sekisui House Women’s College, which opened in 2014, is held annuallyto train management candidates. Twenty women are selected from the
Sekisui House Group nationwide as promising management candidates.
We systematically and effectively develop suitable candidates using a twoyear curriculum. This program nurtures female employees who have capabilities suited to management and serves as a pipeline to properly promote
them to managerial positions.

Promoting participation by women in sales positions
Since 2005, we have been actively hiring female sales representatives toprovide customers with detailed proposals from a female perspective. As
of January 31, 2023, 428 female sales representatives (non-consolidated
basis) are working all over Japan.
In the housing industry, due to the specific characteristics of its business structure, there have been only a small number of women in bothsales and technical positions. We have faced this issue head-on andfocused on the development and retention of female sales representatives.
In addition to providing opportunities to build networks across officeboundaries, the Diversity and Inclusion Promotion Department works toresolve the concerns and problems of female sales representatives by taking 10 positive action measures (five for retention and five for training).
1998

Hired first female new graduates for sales positions.

2005

Started proactive hiring efforts targeting 20% for new graduate female sales
representatives.

2006

Diversity Development Team set up within the Corporate Management Planning
Department.

2007

Launched the annual Nationwide Women’s Sales Representative Conference.
This nationwide conference of female sales representatives provides an excellent opportunity for improving skills, increasing motivation, and networking
through the presentation of successful cases and group discussions.
Built a promotion system led by the Women’s Sales Support Committee. The
committee meets twice a year, where members from all over the country gather
to share successful cases and initiatives.
Started Women’s Sales Representative Conference for housing manufacturers.

2008

Started support for balancing work and family life.
For female sales representatives who serve as role models, the Company allows
them to change their work location due to marriage or spouse’s transfer and towork in a variety of ways according to their individual circumstances until theend of childcare.
First female chief manager appointed.

2014

Diversity and Inclusion Promotion Office established. (Diversity Development
Team was formalized as a permanent office.)

2018

Diversity and Inclusion Promotion Office was reorganized into Diversity andInclusion Promotion Department.

2019

The Women’s Sales Support Committee implemented a mentoring system tooffer support on daily struggles, including those related to human relations andcommunication.

2020

Proactive hiring efforts targeting 30% for new graduate female sales
representatives.

2021

15 female area sales leads and 34 female deputy area sales leads who are candidates for the next area sales lead position, including the sales leader of theCondominium Department (as of January 31, 2022).
The percentage of female sales representatives reached 10% on a non-­consolidated basis (August 2021: 10.2%)

2022

15 female area sales leads and 30 female deputy area sales leads who are candidates for the next area sales lead position as of January 31, 2023, including
four leaders who serve as the area sales leads of the condominium and Sha
Maison businesses. 54.6% of female area sales leads have elementary schoolage or younger children.
Held the 16th Nationwide Women’s Sales Representative Conference in a hybridmanner, livestreaming the event at five locations across Japan. The percentage
of female sales representatives remained strong at 11.3%. Of these, 30.4% aremarried and 19.4% have elementary school-age or younger children.

Top management and board members have participated in the Nationwide Women’s Sales Representative
Conference since the inaugural event.

The latest conference was held in a hybrid format,
livestreaming the in-person event to various locations.

Expanding the advancement of women in remodeling sales
Sekisui House Remodeling, which is in charge of our proprietary remodelingsolutions for homes built by the Company, actively recruits women with families and experience in childcare as remodeling advisors (sales representatives). In the remodeling business, where we often have meetings withfemale customers, female sales representatives can provide a sense of security and ease, and these professionals are active throughout the country.
With the option of a four- or five-day workweek and the use of childcare

leave and shorter working hours, many of our female employees are able
to balance work and family life. As a result of these measures, women are
making steady progress, and Sekisui House Remodeling has two female
executives, 642 female sales representatives (59% of remodeling sales
representatives), one female office sales lead, one female deputy officesales lead and 88 female area sales leads as of January 31, 2023.

Promoting the participation of women in technical positions
We also have female employees who have excellent qualities, achievements and reliability in planning operations. These include Chief Architectswith advanced design skills, Platinum Specialists with highly specialized
design skills for elderly housing and welfare facilities, and Structural
Planning Specialists with advanced skills in architectural structural design.
Moreover, an increasing number of female employees have been certified
as Chief Constructors, specialists in onsite supervision. As of January 31,
2023, there are 11 Chief Constructors, 18 Chief Architects, four Structural
Planning Specialists, and five Platinum Specialists working in the field. The
key points of the measures are: 1. human resource development of top
performers; 2. expansion of job scope; and 3. support of employees
attempting to balance work and family life.
1. Human resource development of top performers
Sekisui House has been hiring female technical staff since before the Equal
Employment Opportunity Law came into effect. Currently, we have an
increasing number of female managers, including architect leads and operations leads. Furthermore, we have established a development plan for young
employees in each area and are working to expand the pool of candidates
for operational management positions. We are also working to appoint rolemodels other female employees can look to in their future career plans.
2. Expansion of job scope, including design, onsite supervision, costestimation and management
Under the Female Onsite Supervision Support Program, we operate a system to train female onsite supervisors through cooperation between
nationwide sales administration headquarters and the head office by facilitating the interaction of female onsite supervisors across areas and195Value Report 2023
SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Contents

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Diversity and Inclusion

improving the working environment. As part of this effort, we continue tohold the Company-wide Women’s Onsite Supervisor Meeting. Even during
the COVID-19 pandemic, we continued to hold meetings online. In
FY2022, the meeting was held in-person with infection prevention measures in place. Participants broke into smaller groups based on thethemes that interested them and exchanged relevant information.
Under the program, the Kanagawa Sales Administration Headquarters
has created a three-year roadmap for the systematic promotion of female
onsite supervisors and the creation of a nationwide network by expanding
the successful model of building horizontal ties through the assignment of
one female onsite supervisor to every branch nationwide. In addition, we
are improving the onsite environment and providing new services andvalue to our customers through new perspectives gained from the ideas offemale onsite supervisors in planning temporary work sites and holding
opinion exchange meetings.
Along with the active promotion of women, we have redesigned our uniforms for construction workers by incorporating the opinions of women anddesigned uniforms to maternity specifications. We have also utilized theopinions of women in the development of the Orihime toilet1 and improvement of temporary toilets at construction sites, and are promoting the creation of a comfortable working environment for everyone who works onsite.
1 The city of Sendai (Miyagi Prefecture) and Sekisui House jointly developed a temporary portable toilet that isfriendly to women and children based on the lessons learned from the Great East Japan Earthquake. The
Orihime toilet was the winner of the Japan Toilet Award in 2015 and the Kids Design Award in 2014 and2016. On the back of this success, we are working to make all temporary toilets more comfortable, including those for men.

Women’s meeting to exchange opinions
regarding construction uniforms

Maternity uniform

Orihime toilet

FY2022 Company-wide Women’s Onsite Supervisor Meetings for the construction business team and thedetached homes team

3. Support of employees attempting to balance work and family life
We set a target of 40% for new graduate female employees in technicalpositions and have steadily achieved this target since 2019, with 47% in
FY2022. At the same time, there has been an increasing number of employees who are playing active roles at work while engaging in childcare or nursing care. Since 2012, the Company has been holding Study and Exchange
Meetings for Female Technical Personnel across the country with the aim ofenabling female technical staff to play an active role in the Company overthe long term. The participants share familiar role models and expand their
network to help build career visions and increase motivation.

Encouraging all eligible male employees to takechildcare leave2
In September 2018, the Group launched a male employee childcare leave
program to encourage male employees with a child or children under theage of three to take one or more months off work to focus on childcare.
The leave is paid for the first month, and leave can be divided into as
many as four increments as needed to accommodate individual circumstances. We have created our own Family Meeting Sheet that facilitatescommunication on such issues as determining when to take the leave andfor what purpose, as well as how to share childcare and housework during
the period of leave. The sheet is available on our website so that anyone
can use it, not just Group employees.
Since February 2019, when full-scale operation was implemented, all
1,571 male employees whose children reached their third birthday (thedeadline for taking childcare leave) by January 2023 have taken at least
one month of childcare leave, maintaining a 100% take-up rate.
We are promoting awareness of the importance of husbands staying
close to their wives during the eight weeks after childbirth, which is a period of great physical and mental strain for mothers and a time when therisk of developing postpartum depression is high. We expanded the system in April 2021 to make it easier for husbands to stay close to theirwives, enabling them to more flexibly take leave and expanding theiroptions, such as taking leave in one-day increments.
Since 2019, we have held the Paternity Leave Forum every year andpublished the White Paper on Paternity Leave as we continue disseminating such information externally. In 2022, as a first attempt, we expanded
our project to encourage the taking of paternity leave alongside 81 supportive companies and organizations. The promotion of paternity leavethroughout all of society is expected to help solve social issues, including
the advancement of women in the workplace and counteracting the lowbirth rate. We also aim to ensure that men taking childcare leave becomes
the standard in Japan, as it is in other parts of the world.
Normalizing childcare leave for men in Japan (IKUKYU.PJT) (Japanese only)
2 In the childcare leave system in Japan, in principle, employees may take leave for one year until their childreaches one year of age, during which time childcare leave benefits are paid. In addition, we allow employees to take childcare leave, which is paid for the first month, until their children turn three years old.

The Family Meeting Sheet can be downloaded from our website.

196

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Diversity and Inclusion

Promoting diversity management
Since FY2015, we have held forums on successfully balancing work andchildrearing every year (theme: balancing work and childrearing; participants: childrearing parents and their supervisors). This forum is for managers responsible for fostering workplaces where anyone can work
independently and grow sustainably in line with their family and individual
situations, including child rearing, nursing care and medical treatment. This
forum was renamed the Diversity Management Forum from FY2022. This
forum helps foster mentally safe workplaces and nurture bosses considerate of childcare, namely supervisors in managerial positions who can enjoy
work and their private lives while racking up results in terms of organizational performance, supporting subordinates’ careers and lives, andremaining considerate of the work-life balance of the subordinates andstaff they work with.

Expanding our support system for balancing work and life
We are expanding various systems to help employees balance work withchildcare, nursing care and medical treatment with the aim of maximizing
their happiness while also boosting talent retention.

  Shortening and changing working hours for childcare
Employees who care for children up to the third grade of elementary
school can apply for a reduction in their prescribed working hours. Thiscan be set for each day of the week, up to two hours per day, in 15-minuteincrements. In addition, until their children enter sixth grade, these employees are allowed to adopt a sliding work schedule, in which it is possible tostart or end their work day earlier or later than normal between 7:00 a.m.
and 8:00 p.m., provided they work the prescribed number of hours.

  Nursery school hunting concierge
For employees who are planning to enter their child into a childcare facility
within one year after birth, we provide individual support from pregnancy

to the decision on a facility by providing information on activities, expertiseand childcare-related information according to the individual’s circumstances, such as the child’s birthday and their place of residence.

  Financial aid for childcare
Under this system, the Company pays a portion of the facility usage fees
for temporary childcare so that employees who are raising children canwork with peace of mind, as well as supporting the use of Sunday childcare and full-time work. If the prescribed conditions are met, the Company
subsidy will be added to the facility usage fee (up to 70%).

  Nursing care support program
Employees can take paid leave for five days a year (10 days for two or
more care recipients) on an hourly basis (legally, in half-day increments) tocare for their children when they are sick or to provide nursing care forother family members.

  Systems that support balancing cancer and infertility
treatment and work
We support employees undergoing cancer or infertility treatment in balancing treatment and work by enabling the utilization of systems to shortenprescribed working hours and days, change working hours and makeother accommodations. We provide consultations to employees undergoing treatment for illnesses other than cancer to flexibly offer support.

Promoting diverse workstyles
The Group will revitalize communication by reforming its work environment, upgrading the ICT environment, and optimizing systems and rules.
In addition, we promote workstyles that are not bound to any single location, such as working from home, and diverse workstyles aimed atenhancing productivity and generating new ideas.
We formalized a system for telecommuting to support independentworkstyles suited to the post-pandemic era. From March 2023, we set the

number of initially provided annual paid leave days at 20. We are promoting flexible workstyles in addition to allowing individuals to move their start
time forward or backward in 15-minute intervals between 7:00 a.m. and11:00 a.m. Going forward, we will continue working to reduce total working hours for the entire Company with the aim of becoming the happiest
company in the world where everyone feels a greater sense of fulfillment
and happiness.

Creating an LGBTQ-friendly corporate culture
The Sekisui House Group strives to create a corporate culture that encourages all employees, with their many diverse characteristics, to accept one
another no matter their differences so that everyone may reach their fullpotential, which paves the way to building a society in which everyone canfeel secure and free to work in their own fashion. In November 2019, a
new system was established for registering opposite-sex common law
marriages and same-sex partnerships in order to be eligible for benefits
and protected by internal rules in the same way that spouses in opposite-­sex marriages are. We also set up a consultation desk exclusively for
LGBTQ-related matters.
In recognition of these efforts, we became the first major housing manufacturer to receive the Gold certification in the PRIDE Index for five consecutive years. The PRIDE Index is Japan’s first index for evaluating corporate
efforts concerning the LGBTQ community. It was formulated in 2016 by a
private organization called work with Pride, with the objective of creating aworkplace where sexual minorities such as LGBTQ people can work withpride. We were certified as Silver in 2016 and 2017, and Gold from 2018
through 2022.
In 2022, we were able to acquire Rainbow Certification, which was
newly established in 2021 in addition to the existing PRIDE Index. The certification supports companies who make medium- to long-term commitments to build communities and workplaces where LGBTQ people canwork openly.
Becoming an Industry Leader in LGBTQ Initiatives

197

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable GrowthDiversity and Inclusion

Promoting the employment of persons with disabilities
As of January 31, 2023, the employment rate of persons with disabilities
at Sekisui House, Ltd. was 2.97% on a non-consolidated basis, and therate at the 33 domestic Group companies legally mandated to hire persons
with disabilities (including the Company) was 2.86%, exceeding the legally
mandated 2.3%. We will continue to actively promote the employment of
persons with disabilities, aiming to employ and retain at least one or two at
every worksite and achieve the legally mandated hiring figure at eachGroup company. Since 2015, we have held diversity meet-and-greet
events with employees with disabilities and their supervisors for the purpose of establishing a network that transcends their respective departments, as well as building relationships that allow mutual communicationand consultation, and improving their respective work environments. In
May 2022, we held the second online meet-and-greet event for visually
impaired employees. In the fall, the hearing-impaired business person
Yukie Usuba (Mirairo Inc.) held a seminar entitled, “Facing Diversity: Not
Initially Aiming for 100% Perfection.” Many Group employees participatedby watching the video on-demand. In December, as an initial attempt, we
held an online meet-and-greet event in which any Group employee could
participate, regardless of whether or not they are disabled, and 174 people participated. The first step was for only employees to participate inexchanges according to their specific type of disability. The second step
was to hold discussions in rooms for employees regardless of whether
they are disabled or not according to their preferred theme. In addition tothemes based on specific types of disabilities, there were also the themesof “having a dialogue with the hiring manager,” “people who are learning or
want to learn sign language,” “let’s use universal talk (UD Talk),” and “aseminar by an outside speaker entitled, ‘characteristics of persons withmental disabilities and persons with developmental disabilities as well as
workplace establishment and considerations.’” The third step was to sharethe content of dialogues. We will utilize the content discussed in future
developments.

In March 2022, “Realization of Universal Talk” won the second-placeprize in the performance category in the Sekisui House Innovation &Performance (SHIP) Awards Program. Employees with hearing impairments were having difficulty obtaining information as a result of the sudden
spread of people wearing masks and holding web conferences due to the
COVID-19 pandemic. In this project, we used the ZOOM web conferencing system along with the UDTalk voice recognition application so that participants with hearing impairments could acquire accurate information, andalso created a manual for sending communications that we distributed
internally. This manual compiled results obtained through a process of trial
and error by concerned employees and workplace colleagues at multiple
bases. Going forward, we will strive to improve various environments
through meet-and-greet events and other meetings based on the participation of employees who themselves have disabilities.
We have participated in the Accessibility Consortium of Enterprises(ACE) since its establishment in 2013. ACE was established for the purpose of creating an employment model for persons with disabilities that
contributes to corporate growth and providing society with the humanresources companies need. As of September 2022, a total of 37 major
companies have joined ACE. We are developing a variety of activities,
including awards for exemplary activities, inter-company collaboration
activities, as well as internships and career seminars for school officials
and students with disabilities.

Encouraging the employment of senior citizens andpromoting their advancement
Sekisui House used to have mandatory retirement age set at 60 years old
and a system for re-employing retired workers up to the age of 65. In April
2015, the retirement age was raised to 65 so all individual employees of
the Group can work more enthusiastically, capably and energetically for alonger period. In addition, in April 2020 we introduced a post-retirement
re-employment system for employees aged 65 through 70 to support theiractive participation.

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

198

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

S Happiness Health Management
1. Governance
Organizational structure to promote “happiness healthmanagement”
With employee health enhancement positioned as one of the important
issues for promoting ESG management, the Sekisui House Group is rollingout strategic initiatives based on the annual goals and plans approved by
the ESG Promotion Committee (including two outside experts who havespecialized expertise) under the Board of Directors. We consider healthenhancement to be a source of employee happiness, and have accordingly
named this idea “happiness health management.” The Social Improvement
Subcommittee was established within the ESG Promotion Committee and,in June 2021, launched the Happiness Health Project, which comprises
employee volunteers, to promote initiatives related to improving sociability.
The committee strives to enhance employee health in cooperation withpromotion leaders at offices, the Health and Safety Committee, the health
Health management promotion structure diagram
Board of Directors
Report &Suggestion

Approval

External advisors

ESG Promotion Committee
SocialEnvironmental
GovernanceImprovement
Subcommittee Subcommittee Subcommittee

Happiness Health ProjectSekisui Health
Insurance Society

insurance union, external advisors and many others.
As a result of our efforts to achieve happiness health management
based on the aforementioned policy, we were selected as a Health andProductivity Management Outstanding Organization(White 500) by METI for the fourth consecutive year
as a corporation that makes strategic efforts to consider the health of its employees and others from amanagement perspective.

Behavior and awareness change indicators

Happiness healthmanagement goals

The Social Improvement Subcommittee
verifies the effects of measures.
We identify any issues and use themto plan for the next fiscal year.

We will help more employees to work energetically in their own ways, happy and healthyboth mentally and physically, and create innovation driven by active communication.

Working to foster employee health and happiness by steadily
implementing PDCA cycles based on the strategy maps
Ensuring every employee’s physical and mental health, happiness, andability to thrive at work in their own way is indispensable to a company’ssustainable growth and innovation. The Group positions employee healthenhancement initiatives as key management issues and promotes happiness health management by steadily implementing PDCA cycles based on
the strategy map.
The Happiness Health Project takes the central role in developing specific measures and promoting them to all employees. The Social
Improvement Subcommittee identifies issues and assess results based on
indicators set for each measure and then utilizes this information when formulating plans for the following year.

Industrial physicians,
medical nurses, andpublic health nurses

1 In cooperation with the Health and Safety Committee

Employees proactively walking outside
to improve their health

Health measures

Management issues we hope to solve with happiness health management

2. Strategy

Office promotion leader1

Employees

Strategy Map

The members of Happiness Health Project discussing measures

Social value and corporate value
We aim to realize the health and happiness of customers and local communities,
and also to achieve sustainable business growth.
Note: For details of the strategy map, please use the link below.

Sekisui House’s Happiness Health Management (Japanese only)

3. Risk Management
According to the medical checkup results of our male employees over 40,
we found that obesity risk exceeds 50%, lipid risk is roughly 70% andblood sugar risk is nearly 50%. These percentages are high compared toother companies in the same health insurance union, and we recognizethat preventing lifestyle-related diseases (including metabolic syndrome) is
an urgent health issue. To this end, it is important that employees makelifestyle adjustments while in their 20s or 30s. We are therefore promoting
initiatives to improve lifestyle habits using indicators for exercise, diet,sleep, smoking rate and other factors.
Furthermore, in order to maintain mental health and improve happiness,
we have established initiatives to improve mental health as an indicator, as
well as measure the level of happiness of employees and the organization,
which will be used to promote happy lifestyles. By helping more employees to work energetically in their own ways, happy and healthy both199

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

Happiness Health Management

mentally and physically, we promote innovation, which contributes to the health and happiness of our customers, communities and society, and leads tosustainable business growth.

Happiness Health Challenge 6

4. Metrics and Targets
Goals of happiness health management

Systems Helping Boost Employee Health

We have set the following five goals and are working to achieve thembased on analysis of the results of medical checkups.
1. Reducing the number of employees at risk of lifestyle-related diseases(including metabolic syndrome and pre-metabolic syndrome risk)
2. R
 educing the percentage of smokers
3. Boosting the happiness of employees and workplaces
4. Improving productivity (reducing presenteeism)
5. Preventing mental disorders (decreasing long-term absenteeism andleave taking)

Know

START

Plan

Setting targets
Selecting challenges

AI Simulation
Health challenge
Well-Being Survey

Supporting
sustainable
habits to boost
happiness andhealthHealth checkup andexam results
Confirmation of healthchallenge results

Taking on the
Challenge 6 initiative

Daily monitoring
Use of the Sekisui
House FIT App

Promotional eventsResults assessment

AchieveDo

Organizational support

The main indicators and results for the targets of happiness health management are as follows.

(FY)

2020

2021

2022

2023

Results

Results

Targets

%

—

—

53

60

Moderate exercise

Balanced diet

Moderate drinking

%

87.0

97.8

98.7

95

Persons

19,138

19,691

20,816

Balanced mealchallenge
5,019 people

Moderate drinking challenge
1,410 people

Steps

5,388

5,641

6,600

—

Steady exercise
challenge
9,521 people
Quality sleep

No smoking

Good sleep
challenge
3,713 people

Quit smoking
challenge
464 people

Mentally healthy
and happy

Scope

Unit

Rate of employees participating in the Happiness Health Challenge 6

Note 1

Rate of employees opting for the secondary medical checkup

Note 2Average step countNote 3

Percentage of people with obesity risk4

%

38.9

38.1

37.9

35

Percentage of smokers5

%

25.4

24.0

23.9

20

Points

65.51

65.75

65.86

—
107

Well-Being Circle total score

1

%

—

106

106

Rate of absence due to mental health issues

%

0.62

0.79

0.86

—

Monthly average working hours per person

Hours

176.71

177.64

170.73

175

Presenteeism (productivity)6

For the scope of the data, click here (content from page 181 will open in a new window).
1 Sekisui House and domestic Group companies (excluding Konoike Construction)
2 Only the sales department of Sekisui House Ltd. until FY2022, and all of Sekisui House Ltd. from FY2023
3 Sekisui House and domestic Group companies (excluding Konoike Construction) until FY2021
Sekisui House and domestic Group companies from FY2022
Note: Please see below for details regarding KPI performance, target values and more based on the strategy map.

Sekisui House’s Happiness Health Management (Japanese only)

The Group promotes activities related to health management in six fields
under the title “Happiness Health Challenge 6.” Employees first identify
their own health issues using an AI-based service that utilizes medical
checkup results and a Well-Being Survey that enables them to visualize
their happiness level and that of their organization. Employees can proactively engage in activities in the six fields by registering an original My
Happiness Health Declaration based on the issues they have identified.
In February 2022, we formally launched various programs for theHappiness Health Project. We regularly provide information and hold seminars and promotional events that contribute to the promotion of happinessand health. We also offer support to individuals so they can achieve thechallenges they set in their My Happiness Health Declarations. This project’s seminars and events have reached 11,916 participants, including
people who watched archived footage, as of January 31, 2023.

Results

Main KPIs in Happiness Health Management

Walking Challenge participants

5. Activities and Other Related Information

4 Defined as a BMI of 25kg∕m² or higher, or a waist circumference of 85cm or higher for men and 90cm or
higher for women (all medical checkups)
5 Results of health checkup questionnaire
6 Using WHO-HPQ; Self-comparison over past one to two years

Who Chose What for the Challenge 6 Initiative

Smiling heart
challenge
1,491 people

200

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

S Occupational Health and Safety
1. Governance
Health and safety management structure
Sekisui House has established the Health and Safety Management
Regulations based on occupational health and safety laws and regulations
and its Rules of Employment. These regulations set out the Company’s fundamental tenets of health and safety management and are designed to help create a pleasant work environment and ensure health and safety at workplaces.
To prevent occupational accidents, we provide relevant instruction for
employees. The Health and Safety Management Regulations lay out ahealth and safety management structure headed by the President(Yoshihiro Nakai, Representative Director of the Board, President, Executive
Officer and CEO). For employees, the director of the Board responsible forthe Division of Administration and Human Resources (Satoshi Tanaka,
Representative Director of the Board, Executive Vice President andExecutive Officer) is assigned to oversee the system, and the Human
Resources and General Affairs Department administers system operations.
A health and safety committee meets monthly at each workplace, working to increase occupational health and safety awareness and improve
related initiatives at workplaces. The committee members are diverse interms of rank, position, age and gender. Matters discussed by committees
are shared with employees through email and notices. Furthermore, every
year, each division and worksite selects a non-managerial employee as aworker representative to engage in dialogue with management.
For partner building constructors and construction workers that Sekisui
House engages as a specified principal employer, the officer in charge of
the Division of Technology and Production (in FY2022, Toshiharu Miura,
Director of the Board and Senior Managing Officer) is assigned to oversee
the system, and the Construction Strategy Department administers system operations. We formulate Company-wide annual health and safety
plans for partner building constructors and construction workers and draw
up occupational accident prevention measures as needed. To improve thelevel of operational safety, we provide partner building constructors andconstruction workers with guidance and support regarding their health,safety and employment management training.

Occupational health and safety management system for 
construction departments and Sekisui House employees
In our construction departments, in addition to the Occupational Healthand Safety Management System recommended by the Ministry of Health,Labour and Welfare, we have incorporated the Sekisui House Zero Hazard
System, which we developed ourselves to take into account the characteristics of construction sites. Using these systems together, we implement
health and safety management activities. In order to reduce occupational
accidents, it is important not only to take steps to prevent legal action andthe recurrence of past accidents, but also to identify and evaluate sourcesof risk through risk assessment, as well as formulate and execute annual
plans for implementation items. By building and improving our management tools while respecting and passing on the knowledge we have accumulated over many years, we are working to raise the overall standard,
and intend to maximize the benefits of efforts to ensure health and safety
at construction sites.
We are systematizing safety management to improve the efficiency ofanalyzing trends in accidents and incidents throughout the Company. In
addition, we have digitized the reporting of accidents to enable prompt
reporting, information sharing and more efficient information management.
This enables us to digitize information and analyze accident trends moreaccurately and thoroughly.
In addition, in order to make the safety management system more efficient and reliable, we have developed and operate a Safety Promotion
App that runs on smart devices. This app makes it possible to quickly
confirm and report on findings and corrections issued to partner building
constructors and construction workers, and keeps records of findings
during safety patrols of construction sites.
In the event of an occupational injury or accident involving an employee,
the Human Resources and General Affairs Department is promptly notified
by the workplace where the injury or accident occurred, and the incident isshared with the entire Company through the Health and Safety Committee
and other means. If an occupational injury or accident occurs at a construction site, the site informs the Construction Strategy Department,
which shares the information with the entire Company.

Outline of Sekisui House Zero Hazard System
Core of the Zero Hazard System(foundation)
Basic cycle
1.	Identify source of risk, specify
implementation items
2.	Formulate annual health andsafety plan
3.	Announce health and safety
policies
4.	Implement and operate annual
health and safety plan

Steps for effectively
implementing basic cycle (left)
5.	Daily inspections andimprovements
6.	Incorporate worker feedback
7.	Health and safety
management structure
8.	Evaluate partner building
constructor health andsafety activities
9.	Document in writing andkeep records

Review annual plan in preparation forformulation of next year’s plan

10. R esponse in the event of an
emergency or accident

11. Evaluate system
12. Revise system

2. Strategy
Construction site priority accident prevention themes andplan outline
The Sekisui House Group is promoting initiatives to reduce accidents,
including those at construction sites. Our priority themes for FY2023 are“elimination of fall accidents,” “elimination of loss of balance accidents”
and “prevention of accidents involving the general public.” In particular, we
are working hard to eliminate accidents caused by falling or loss of balance, which carry a high risk of serious injury and can impact the construction team. In addition, we continue working to prevent accidents
involving the general public, as these can negatively impact residents
neighboring our construction sites. In FY2023, we will continue to thoroughly practice basic safety activities and establish practical measures torealize safe and secure construction sites.

201

Value Report 2023
SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Contents

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Occupational Health and Safety  Outline of annual construction health and safety plan for FY2023• Further intensify our focus on countermeasures against serious accidents (accidents
that could potentially be fatal), such as falls.
• Work to eliminate loss of balance accidents
by securing safe walkways and using the
Safety Promotion App to promote worksite
tidiness.
• Thoroughly implement Company-wide standard health and safety policies and safe
construction standards to prevent recurrences of events that could lead to injury,
such as falling objects and contact withheavy machinery.

4. Metrics and Targets
Occurrences of occupational accidents
Accidents and illnesses resulting in lost worktime in FY2022 were as shown
below. The Health and Safety Committee, a committee mandated by theIndustrial Safety and Health Act and other laws, thoroughly analyzes thecauses of occupational and commuting accidents and shares its findings,
thereby raising awareness of health and safety, preventing unsafe behavior,and discouraging long working hours that lead to accidents and illnesses.

FY2022: Employees of Sekisui House, the Sekisui House Real Estate Group (11 companies), Sekisui House Trust and Sha Maison SAST Insurance (excluding part-time workers)
Frequency rate of occupational illness: Sekisui House (non-consolidated basis)
Production departments: Employees and contractors of Sekisui House (non-consolidated basis)
Construction departments: Contractors of Sekisui House, Sekisui House noie, and Konoike
Construction (including sole proprietors and employers)
Total working hours of administration and production department employees and contractors of Sekisui House are calculated based on actual working hours.
Total working hours of construction department contractors of Sekisui House and Sekisui
House noie are calculated as eight hours per person per day.
Total working hours of construction department contractors of Konoike Construction arecalculated as nine hours per person per day.

Comparison with Industry Averages1(FY)
Poster of slogan for FY2023

3. Risk Management
Construction-related health and safety training
Due to amendments to the law, on January 2, 2022 we completed ourtransition to the use of equipment compliant with new standards for fall
prevention devices (safety belts), which are worn when working at highplaces. In accordance with this change, we implemented surveys to determine how many of the individuals engaged in such work had equipmentthat met the new standards and how many had completed special training
for work with full harness safety belts. This training was held by the head
office for 791 individuals who signed up for it from across the country,
such as staff newly appointed to relevant positions.
When holding training, we took thorough measures to prevent the
spread of COVID-19 and provided subsidies and support for acquiring
necessary qualifications, such as offering online lectures and practicaltraining in small groups.
Going forward, we will continue to provide necessary subsidies andsupport for attendance tailored to evolving circumstances in order toimplement health and safety training at our construction sites.

Frequency Rate of Accidents Resulting in Lost Worktime(Resulting in One or More Days of Lost Worktime)(FY)

Occupational accident rate

2019

2020

2021

General contractors

1.69

1.30

1.39

Departments

2020

2021

2022

¥1 billion or more

1.65

1.29

1.42

Administration (employees)

0.45

0.32

0.16

Employees

0.00

1.30

0.44

¥500 million toless than ¥1 billion

1.61

1.70

1.59

Contractors

Less than¥500 million

2.06

0.97

1.12

Production

1.59

0.61

0.31

Construction (Contractors only)

2.27

2.49

2.55

Reference: Total for employees

—

—

0.18

Frequency Rate of Occupational Illness(Resulting in One or More Days of Lost Worktime)(FY)

Contracted amountof business

Source: Ministry of Health, Labour and Welfare, “Survey of Industrial Accidents”
1 Data is presented up to FY2021, as figures for FY2022 had not yet been published as of the publication ofthis report.

Number of Deaths(FY)

Departments

2020

2021

2022

2020

2021

2022

Administration (employees)

0.32

0.00

0.03

Employees2

0

0

0

Employees

0.00

0.00

0.00

Construction department contractors3

0

1

1

Contractors

0.00

0.00

0.00

Construction (Contractors only)

0.37

0.20

0.35

Reference: Total for employees

—

—

0.03

Production

Calculation standards
Frequency rate of accidents resulting in lost worktime: Number of fatalities and injuries due
to lost worktime injuries per million working hours
Frequency rate of occupational illness: Number of occupational illnesses per million
working hours
Scope: Frequency rate of accidents resulting in lost worktime:
Administration departments:
FY2020 and FY2021: Employees of Sekisui House (non-consolidated basis; excluding parttime workers)

Departments

2 Figures for Sekisui House and major domestic Group companies
3 Scope: Contractors of Sekisui House (including sole proprietors and employers)

The number of Sekisui House employee fatalities over the past three years
was zero. The number of contractor fatalities due to occupational accidents
in Sekisui House construction departments over the past three years waszero in FY2020, one in FY2021 and one in FY2022 (due to heat stroke).

202

Value Report 2023
SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Contents

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Occupational Health and Safety  Occupational accidents at construction sites• The number of occupational accidents resulting in one or more days oflost worktime at construction sites was up slightly at 101% of that in theprevious fiscal year.
• In FY2022, there was one fatal accident (heat stroke).
• The number of fall accidents (including those not resulting in lost worktime), which can lead to serious injury and were a FY2022 priority theme,
decreased to 85% of that in the previous fiscal year.
• The number of incidents of heat stroke (including those not resulting inlost worktime) rose to 121% of that in the previous fiscal year. 94% of
these incidents resulted in three days or less of lost worktime, but there
were two incidents resulting in four days of lost worktime or more, one ofwhich was fatal.
• There were also reports of accidents involving third parties, such aspedestrians tripping over equipment set up outside of construction sites,
as well as vehicles moving when unmanned and components falling,although these did not result in human injury. We will therefore reinforce
preventive measures by thoroughly investigating the causes of such accidents, conducting thoroughgoing risk management at the planning stage,and ensuring the implementation of measures to prevent recurrence.
Number of Cases

(FY)

2020

2021

2022

Construction site accidents(excluding heat stroke)

100

99

100

Heat stroke

15

8

17

Note: Numbers of accidents resulting in one or more days of lost worktime.
Scope: Contractors of Sekisui House (including sole proprietors and employers)

After surveying and analyzing the occupational accidents that occurred in
FY2022, we found that, by job type, accidents were most common amongcarpenters and erectors. As such, to raise awareness among front-line workers, we coordinated with newly appointed safety representatives at eachheadquarters to implement training for job types with high accident rates.
We also implement safety audits of one worksite under each headquarters to raise awareness of safety management.

5. Activities and Other Related Information
ISO 45001 certification
One of our overseas bases, Sekisui House Australia, has acquired certification under ISO 45001, an international occupational health and safety
management standard, at its head office and factory (the Ingleburn
Manufacturing and Quality Control Centre). The company undergoes
annual external audits to maintain this certification.

Promoting traffic safety
Sekisui House makes considerable use of Company vehicles in its business activities. Raising awareness of safe driving protects both the lives of
employees and others on the road. In concert with the National Traffic
Safety Campaign organized by the Cabinet Office, we implement annual
traffic safety promotion activities for employees. At worksites, employees
watch videos of traffic accidents and hold group discussions to learn
about diverse hazard prediction approaches and techniques, providing an
opportunity to think about actions individuals can take to promote safety.
We are also implementing an initiative in which employees sign pledges
to prevent drunk driving. Through such initiatives, we are encouraging all
employees to obey traffic rules and strive to drive safely in order to reduce
the number of accidents they are involved in.

Occupational health and safety activities at construction sites
Our priority themes for FY2022 were “elimination of fall accidents,” “securing appropriate working environments,” and “prevention of accidents
involving the general public.”• To eliminate fall accidents, which can lead to serious injury or death, we
focused efforts on the construction environment.

1. We revised operating methods to accommodate narrow spaces andother areas where it is difficult to receive shipments in order to further
expand factory shipments of handrails for installation around the outer
periphery of buildings.
2. We clarified standards for installing scaffolding around internal stairways
and conducted verifications to ensure their safety and workability. We
plan to roll out these standards nationwide.
• To secure appropriate working environments, we continued efforts tothoroughly ensure worksite tidiness.
1. In particular, we advanced and strengthened the designation of tidiness,securing safe walkways, and preventing slippage as check items duringsite patrols.
2. We created a check system using the Safety Promotion app, incorporating items related to worksite tidiness.
• To prevent accidents involving the general public, we designated the priority theme of preventing falling objects, contact with heavy machineryand vehicle accidents as we took measures to prevent recurrences ofpast accidents. The number of vehicle accidents decreased. We werenot, however, able to eliminate accidents involving the movement of
unmanned vehicles, nor did incidences of falling components or contact
with heavy machinery decrease. These remain challenges in FY2023.

Health and safety management initiatives
As a form of internal occupational health and safety audits, Sekisui House
conducts special safety audits of individual worksites.
When deemed necessary by the head of the Construction Strategy
Department, these audits are conducted at worksites where accidents or
infractions defined as significant by the Company have occurred.
In FY2022, we conducted a special safety audit of one worksite. This
site was selected for audit because of the number of accidents resulting inlost worktime that had occurred there and the repeated occurrence of203

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Occupational Health and Safety

similar accidents in a short time. The audit examined the implementationof recurrence prevention measures at the construction site and compliance with manuals. Instructions were issued based on the audit findings.
Special Safety Audits Conducted

(FY)

2020

2021

2022

2

0

1

of a fatal accident occurring. We therefore carry out site inspections at eachbusiness site for all new projects for which we receive orders. In addition toplanning construction in accordance with manuals and checking risks related to the safety of construction workers, in accordance with Japaneselaws, we consider the impact on local residents from the planning stage.

Benefit programs for partner building constructors and collaboration with the Sekisui House Association

Onsite safety patrols (including contractor sites)1
To prevent accidents, Sekisui House conducts regular safety patrols atworksites. These patrols check that construction is being carried out inaccordance with our safety standards and are performed not only by
Sekisui House’s onsite managers, but also by contractors. By involving
construction contractors, we aim to go beyond merely issuing one-sided
corrections and directions to foster a more substantive understanding of
our health and safety standards.
1 Since FY2020, due to the COVID-19 pandemic, these activities have been on hiatus or, depending on pandemic conditions, conducted at a reduced scale.

Occupational health and safety initiatives at
Konoike Construction
Group company Konoike Construction has maintained certification under
the Construction Occupational Health and Safety Management System(COHSMS) since FY2014 at all its offices as an initiative for occupational
health and safety. Striving to eliminate accidents, Konoike Construction
conducts regular internal audits of construction sites, safety patrols, aswell as education on health and safety for its workers and the management and workers of partner companies.

Checking safety risks at construction sites
Sekisui House’s business operations entail the use of heavy machinery andwork performed in high places, and as such there is a significant possibility

The greatest strength of the Group is the Sekisui House Association,
which consists of Group companies involved in construction and partner
building constructors. As of February 1, 2023, the association includes
eight Sekisui House Construction (renamed from Sekiwa Construction
effective February 1, 2023) companies that are part of the Sekisui HouseGroup and approximately 7,000 partner building constructors throughout
Japan (including the partner building contractors of Sekisui House
Construction companies, which are members of the Sekiwa Association).
From its very start, Sekisui House has pursued “design-build” construction. As such, our partner building constructors are irreplaceable, and we
hold them in high regard, fostering relationships of trust and mutual interest to work together over the long term in the spirit of a “community with acommon destiny.”
To realize customer satisfaction, the Sekisui House Association cooperates with each Sekisui House office to pursue initiatives aimed at implementing safety measures, improving construction quality, providing
solutions for customers and neighbors, achieving zero emissions, keeping
construction sites tidy, developing human resources and improving working conditions. Moreover, the association serves as a venue for informationexchange that allows individual construction sites and partner building
constructors to share issues they face and study possible solutions. The
association also offers training and study opportunities to improve work
processes and construction quality.
The Sekisui House Association is a tremendous driver of action in timesof natural disaster, such as when an earthquake or flood strikes, from theinitial response to restoration and reconstruction.

We will continue working with the association to strive for customer satisfaction and raise the value of the Sekisui House brand, aiming for coexistence and co-prosperity as “a community with a common destiny.”
We also run various benefit programs to support partner building constructors and construction technicians who work on our construction sites
across Japan.
The Sekisui House subsidy system is designed to support improvement
in workforce management at partner building constructors and to expand
benefits for construction workers. The system granted subsidies amounting to approximately ¥900 million in FY2022.
In FY2024, we plan to phase out the employee service fund, which isone of the systems subsidized by Sekisui House, and switch to a superior
technician and team compensation system that provides compensation
based on productivity and skill level. We have begun the transition process.
The Sekisui House Cooperation Association was established in 1982 to
improve employment practices and benefits among partner building constructors. It assists in the running of various systems at Sekisui House, including
our construction site safety assurance system and funded pension system.
Achieving Customer Satisfaction with the “Community with a Common Destiny”
Mindset• Training programs• Construction Quality Council• Educational Training Center
and Training School

Improving
construction quality• Chief Technician certification• Construction Meister system• “My Idea” construction
improvement proposal system

Ensuring
qualityZeroemissions

Safetymeasures

Keepingworksites
tidy

Sekisui House

Sekisui House
Association(Sekisui House
Construction companies
and partner building
constructors)

Shared businessinterests and benefits
Thorough occupational
health and safety• Foreman education• Occupational health and safety education

Enhancing benefits• Incentive system• Subsidy system

204

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Occupational Health and Safety

Sekisui House Chief Technician certification
The Sekisui House Chief Technician certification, established in 1983, is aself-certification system run by the Sekisui House Cooperation
Association. In April 1985, this certification became the first of its kind in
the construction and housing industry to obtain ministerial authorization as
being in line with national certifications. Sekisui House supports theadministration of certification examination.
The examination is held once a year, and in FY2022, 116 people
passed. Certified individuals now number 6,464, and the certification is
helping onsite work leaders to maintain and improve construction quality.
The purpose of the certification is to evaluate the skills of technicians
fairly and accurately, and to maintain and improve quality. To be eligible totake the certification exam, one musthave three years or more experience
doing the relevant type of technicalwork onsite for Sekisui House andcomplete a short course. The three
types are: foundation work, framing/
exterior work and interior finishing.
The blue construction helmet is worn bycertified Sekisui House Chief Technicians

The Construction Meister System
The Sekisui House Group has two systems that honor superior technicians in the field across Japan—the Construction Meister System andSekisui House Remodeling Meister System.
The Construction Meister System, established in 2010, recognizes thetechnical skills of construction workers at our construction sites and honors them as superior technicians. It aims to foster the development ofadvanced skills in young workers. Certified Construction Meisters boost
the motivation and pride of all construction technicians by becoming rolemodels. This fosters an atmosphere of diligence and the pursuit ofhigh-level skills, thereby contributing to higher quality and greater customer
satisfaction throughout the Company.

In FY2022, we certified a total of 343 Construction Meisters—66 foundation work technicians, 98 framers/exterior specialists and 179 interiorcarpenters. Among these were 79 First Meisters and 10 Top Meisters.
Each recipient is awarded a certificate and incentive pay. Since 2010, a
total of 3,570 technicians have been certified as Construction Meisters.
In 2020 we created a new Quality Champion Commendation System torecognize Construction Meisters who are exceptional promoters of quality.
The commendation also focuses attention on our social responsibility as aleading construction company to ensure superlative quality and technique.
Under this system, the number of Construction Meisters commended for
quality was 66 in FY2020, 67 in FY2021 and 62 in FY2022.
In 2024, we plan to update the Chief Technician Certification System,
Construction Meister System and Quality Champion Commendation
System, integrating them along with elements of the employee service
fund, which will be abolished, into the new superior technician and teamcompensation system. The new system will provide generous incentives totechnicians who exhibit superior productivity and technical skill.
We also have the Sekisui House Remodeling Meister System, established in 2008 by Sekisui House Remodeling, which certifies and registers
superior technicians working for partner building constructors who do
remodeling work for Sekisui House Remodeling. In addition to volume ofwork and technical skills, the certification system extends to areas including homeowner satisfaction, attitude and consideration for others on theconstruction site, attention to safety, management capabilities, and ability
to foster young talent.

Initiatives to improve worksite productivity
With the total number of construction workers on the decline, we areworking to ensure ongoing, reliable construction capacity by strengthening
our technologies while also taking steps to make the most of our existing
construction capabilities. We have launched two working groups toimprove productivity—one to focus on solutions employing physicalresources and the other to focus on solutions involving systems andpeople. Through these efforts, we seek to reduce person-hours and theburdens of construction work. We have organized a Technical Directors’Council, Construction Management Committee and Worksite Productivity
Improvement Working Group, consisting of technical deputy directors representing locations around the country, as well as staff from the head
office and factories. These groups have successfully promoted initiatives
to improve productivity, such as developing the SHAWOOD large-scale
fixed sash combined construction method.
We also have in place the “My Idea”
construction improvement proposal system, through which construction workers
across the country can make suggestions
based on the creative ideas or items they
are using onsite. We select submissions
that can help improve productivity andwork to spread them among construction
workers, mainly through the Chief
The SHAWOOD large-scale fixed sash
Constructors of each area.
combined construction method

205

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

Occupational Health and Safety

Educational training centers and training schools
Sekisui House has established educational training centers and training
schools where we conduct training that allows technicians from our Groupto learn techniques and acquire skills. These facilities also teach proper
conduct to facilitate interaction as professionals and prepare trainees forthe working environment. Our educational facilities are unique in that they
do not merely provide the opportunity to acquire technical skills andknowledge necessary for construction with Sekisui House, but also theopportunity to study our Corporate Philosophy, which is indispensable forachieving customer satisfaction.
In FY2022, classes were once again held under strict restrictions due tothe COVID-19 pandemic, with 27 trainees completing the framing/exteriorcourse and 38 completing the interior finishing course, for a total of 65
newly minted technicians. A cumulative total of 3,033 technicians havecompleted courses and are working as construction technicians and construction managers around Japan. After the training courses end, we holda variety of training offerings at each educational facility, working continuously to improve technical knowledge and skills.

We have a service agreement with the JIC Kyodo Kumiai Support
Association to help local organizations prepare recruits. The center gives
technical trainees a chance to learn Sekisui House’s construction techniques and study practical Japanese while remaining in familiar surroundings in their home country so that they can start work without any
problems when they arrive in Japan. Explanatory meetings are held forfamilies, training fees and other expenses are fully covered by Sekisui
House, and a supportive atmosphere is created so that technical trainees
can work in Japan without any concerns.
In January 2020, the six trainees who went through the foundation
course in Hanoi came to Japan. However, the spread of COVID-19 prevented us from conducting subsequent education or training as planned.
In 2021, we began online support for recruitment interviews, technicaltraining lectures Japanese language study and other activities. We also
hired more local staff and established a system that enables us to conduct
training at any time in preparation for resuming the entry of technical trainees into Japan.
In April 2022, most border restrictions related to COVID-19 were lifted,
and we resumed education and training as originally planned.

• FY2022 Results: 38 trainees came to Japan, 112 potential recruits wereinterviewed

Local fundamental training

Local exterior training

Online interviews

Online Japanese studies

Recruitment and Assignment Schedule (Requires a minimum of 10 months from application acceptance to assignment)
Acceptance
Application

Framing/exterior course: completion test

Interview/Pass

1st month

One month

Overseas technical training centers

Explanatory
meetings(1) Acceptanceprocess

2nd month

3rd month

4th month

5th month

Six months(2) Hiring
interview,
explanatory
meeting forfamilies(3) Preparationof immigration
documents
Confirmationof placement
availability

6th month

7th month

Entry into
Japan
Technical
training(fundamental
course)Preliminary
education(Japanese, etc.)

Local
recruitment

Interior finishing course: completion test

We became the first housing manufacturer to establish a technical training
center in Vietnam for housing construction with the November 2019 opening of our facility in Hanoi, Vietnam. The center strengthens our system fortaking on technical trainees from Vietnam.

Recruitment(4) Technicaltraining plan
approval
application

8th month

Assignment

One monthApplication
for issuanceof certificationof enrollment
qualification(7) Joining the(5) Visa
company
application
at local office (6) Immigration (8) Working
training
onsite9th month206

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

S Customer Initiatives
1. Governance

Quality Management Certification

Even after handing over a house to a customer, Sekisui House continues
working to further improve customer satisfaction based on an approach ofalways being there for customers and continuing to look after their homes
for a lifetime.

In 1998, our entire Production & Procurement Division, including all
domestic consolidated Group factories,1 was the first in the industry toacquire certification under the ISO 9001 international quality management
system standard, and we continue to maintain this certification.
1 The Tohoku Factory, Kanto Factory, Shizuoka Factory, Hyogo Factory and Yamaguchi Factory

Customer service promotion structure
Sekisui House has established the CS Promotion Department as a division
dedicated to enhancing customer satisfaction. The department manages
the Customer Service Centers, which provide support and service forhomeowners, and comprehensively plans, develops and executes quality
control measures. The CS Promotion Department also serves as the contact point for customer inquiries and complaints, which are then handled
by either its internal Customer Service Center Supervisory Office or
Customer Support Office. Furthermore, the department monitors and provides support related to customer service at Group companies.

Customer support framework
Sekisui House’s customer support framework centers on roughly 100
Customer Service Centers (based in 30 offices) nationwide. After buildings
are d­ elivered, these centers provide customer support, such as regularinspections and maintenance, in coordination with the rest of the Group,
including Sekisui House Remodeling and the Sekisui House Real Estatecompanies. When problems with products are discovered, these centers
work with the Comprehensive Housing R&D Institute and the head office
to improve quality.
In August 2020, we opened a Customer Service Center Owner Desk,
establishing a system to accept customer inquiries 24 hours a day, 7 daysa week. To strengthen our responsiveness, we also started operating asystem for handling inquiries that utilizes a chatbot and other automatedcommunication tools.

2. Strategy
Sekisui House strives to contribute to the formation of a sustainable society that effectively utilizes supplied housing through a system that allows
high-quality housing to be passed on to the next generation as an asset ofsociety, rather than repeating the scrap-and-build process that has predominated in Japan. In addition, we work to protect the value of buildings
through such efforts as establishing relationships with new customers after
a change in occupants so that quality housing can continue to be usedover the longer term.
To realize our global vision to make home the happiest place in theworld, our Customer Service Centers must always be closely attuned tocustomers and strive to provide the best service. We are expediting largescale upgrades to our support operations so that all services are available
to all customers.

Smart universal design provides safety, peace of mind,ease of use and comfort
Since the 1980s, based on the lifelong housing concept, we have consistently pursued safety that takes into consideration the changing physicalcharacteristics of people over time as well as the construction of houses
that are convenient for everyone over their entire lifetime, including theelderly and those with disabilities.
In 2002, we were ahead of the curve in establishing the proprietary
Sekisui House Universal Design (SH-UD) standard, based on the conceptsof safety, peace of mind and ease of use. Furthermore, since 2010 wehave been pursuing smart universal design, a conception of universal
design that extends to comfort. In the area of safety, in particular, we applyinternal rules for safety enhancement from the research and developmentof housing components onward. This process has received Child Safety
through Design (CSD) Certification from the Kids Design Association.
Specifically, we apply internal rules when planning and designing all buildings, including the outdoor landscaping. In addition to these initiatives, forthe design and development of all real estate, including lots for sale andcondominiums, we have established guidelines regarding access to train
stations, bus stops, public and commercial facilities, and other essentials.
By applying these guidelines, we ensure that our housing design incorporates barrier-free and other such considerations. These smart universal
design efforts have been well received by the public and won Good
Design Awards and numerous Kids Design Awards.

3. Risk Management
Quality improvement (systems to prevent flaws and recurrences, and complaint database)To supply customers with homes where they can live safely with peace ofmind and enjoy good health and comfort over their entire lives, we constantly strive to improve quality, and have set up a system for preventing
flaws and ensuring that they do not recur.
In order to improve and enhance the quality of our housing, we place
great importance on customer satisfaction surveys and feedback from
customers received at our Customer Service Centers and consultation
desks. We investigate and analyze services and products based on homeowner feedback and share the results with the relevant departments, specifically applying them to improve design and construction and in productdevelopment. Such efforts made to date include improvements made to
the design of water-use areas and the interior fixtures.

207

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Customer Initiatives

Improving customer service through the Customer Service
Center Owner Desk
We set up the Owner Desk as a centralized body for handling customer
inquiries, improving the consistency of customer service that had not always
been uniform in the past because of the varying responses of the individual
staff members providing service. In addition, we have built a system to convert inquiry details into data managed as a corporate asset. We analyze thecollected data to improve the quality of service and customer satisfaction.

Scope of certification against internally developed productsafety/quality standards
We set specific quality standards for each housing component and partdeveloped and manufactured within the Group. Products and components
are designed in accordance with wide-ranging quality standards that are
based on expertise accumulated in our business and research activities,
and thorough design vetting ensures high quality with excellent safety andperformance. At all our factories that produce internally developed components and parts in Japan and overseas, we have built quality ISO
9001-compliant quality management systems to maintain the high standard of quality we have developed over the decades and carry out manufacturing in compliance with our proprietary quality standards.
Factories, and manufacturing and quality control divisions implement
quality checks and inspections in the course of daily operations and atscheduled intervals, maintaining consistently high quality through the useof a PDCA cycle. In recent years, we are increasingly using automation
and DX technologies in inspections, aiming for even higher quality.
Furthermore, factories periodically audit one another to eliminate disparities between them and maintain a high level of quality.

Training to maintain and enhance quality
The Sekisui House Group has established a quality inspection framework
to make ongoing improvements in processes to maintain and enhanceconstruction quality. This system is based on the individual responsibilitiesof, and cooperation between, Sekisui House onsite supervisors and theconstruction managers and technicians of Sekisui House Construction
companies and partner building constructors.
Sekisui House onsite supervisors undergo inspector certification training, and construction managers of Sekisui House Construction companies
undergo construction manager inspection training in order to learn inspection skills used in quality control in the course of ordinary work. We implement periodic renewal tests to maintain inspection skills. The Sekisui
House Construction companies also regularly hold training for construction
managers in an effort to enhance their inspection skills.
In addition, chief inspectors monitor worksite construction quality, management systems and inspection capabilities while providing training andsupport for the inspections carried out by onsite supervisors and construction managers. In this way, we seek to consistently provide high-­
quality buildings to customers all across the country.
(FY)

Program for maintaining andimproving quality

2022

Chief inspector training

8 participants

Inspector certification training,
construction manager inspection training

781 participants (individuals were counted
for each course they took)

Supervising technician training(inspector certification course)

229 participants (individuals were counted
for each course they took)

Construction manager training

329 participants

4. Metrics and Targets
Customer satisfaction surveys
Sekisui House conducts customer satisfaction surveys in which homeowners rate its housing products and services. We ask customers ofdetached houses to complete a questionnaire on the homebuilding process. A pre-construction letter of inquiry gives us the chance to allay anxieties by clarifying any unresolved matters listed in order to proceedsmoothly through to the post-construction phase. A questionnaire upon
move-in allows customers to rate their satisfaction level with each phaseof the process, from preliminary discussions to the handing over of thehouse, and with the staff they worked with at each step. A questionnaire
one year after moving in lets customers rate the success of the design
proposal and their satisfaction in terms of ease of use, after-sales service
and other factors. Owners of our Sha Maison rental housing are asked tofill out a questionnaire two years after closing. These questionnaires coveroverall satisfaction, the workmanship of the building, the customer’s willingness to recommend Sekisui House, satisfaction with various parts ofthe building and satisfaction with the power generation system.
Since August 2012, customers have been able to answer surveys online
at the homeowner member site, Net Owner’s Club. The improved convenience has seen more customers use the online system year by year. At
present, more than 70% of detached house customers respond to thequestionnaire online. In light of this success, beginning in FY2023, surveys
will be moved entirely online.
The views of customers collected through these surveys are regularly collated and analyzed. The results are communicated to the relevant departments, helping to improve daily operations, expand services, and enhancesafety and comfort at the new component and product development stage.
Respondents who Answered Customer Satisfaction Surveys with
“Very Satisfied,” “Satisfied” or “Fairly Satisfied” (FY)
Unit

2020

2021

Built-to-orderbusiness

Custom detached houses

Segment

%

96.1

96.0

2022
96.3

Rental housing

%

95.4

94.0

94.3

Development
business

Condominiums for sale

%

92.6

87.8

89.9

Ready-built detached houses

%

98.3

96.7

98.9

Survey overview:
Custom detached houses, ready-built detached houses and condominiums for sale: Survey one year after moving in
Rental housing: Survey two years after closing
Survey with a choice of seven levels: Very satisﬁed, satisﬁed, fairly satisﬁed,
neutral, slightly dissatisﬁed, dissatisﬁed and very dissatisﬁed

208

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

Customer Initiatives

5. Activities and Other Related Information
Certified as Long-Life Quality Housing
The average lifespan of houses in Japan is said to be about 30 years.
Making houses that last longer is the key to effectively utilizing resources
and improving asset value.
Under the Act for the Promotion of Long-Life Quality Housing that went
into effect in June 2009, the Japanese government established the LongLife Quality Housing Certification Program, which aims to build up a stockof high-quality, long-lasting housing. Houses that are built according to set
standards for structure and facilities are certified as “Long-Life Quality
Housing” and are eligible for various tax benefits. In FY2022, 92.1% of thehomes we built were certified as “Long-Life Quality Housing.”
We also operate Ie-Log, a regularly updated database of historical data
about each residence, ranging from such basic building information as
homeowner information to the design plans, inspection results and repair
records. Homeowners can use the Ie-Log database in managing maintenance or renovations of their home.
Sekisui House also offers an initial 30-year warranty program (for contracts signed on or after April 1, 2018) that covers the structural framing
and any parts used to prevent rainwater leakage. This program provides
20 years of warranty on top of the 10-year defect liability period required
under the Housing Quality Assurance Act. In addition, all other parts areunder warranty for varying periods of time. Even after the initial warranty
period has expired, homeowners can take advantage of our unique U-trus
System to extend warranties in 10-year intervals any time they pay for
inspections or repairs not covered by active warranties.
We will continue striving to craft longer-lasting homes that provide safety,
peace of mind and comfort.

Percentage of Sekisui House Residences Certified asLong-Life Quality Housing

SumStock Promotion through Collaboration within the Group
(FY)

2020

2021

2022

93.3%

93.4%

92.1%

SumStock quality housing stock system
Sekisui House’s Customer Service Centers are promoting SumStock incollaboration with the Sekisui House Remodeling and Sekisui House Real
Estate Group companies.
SumStock is a circulation system for high-quality existing housing stock.
It is run by the Provision of Quality Housing Stock Association, a generalincorporated association founded in 2008 that comprises 10 major housing
manufacturers including Sekisui House, and is chaired by Yosuke Horiuchi,
Sekisui House’s current Representative Director of the Board, Vice
Chairman and Executive Officer. Under this integrated circulation system forexisting homes, members carry out all steps from value appraisal and certification through to resale. Through SumStock, the industry is working toincrease quality housing stock and invigorating the resale market.
A house’s basic structure (“skeleton”) and its interior furnishings and fixtures (“infill”) are appraised separately by years of depreciation, and thevalue of the building and the land are indicated separately in this proprietary circulation system. Each house supplied by member companies
must fulfill three requirements to qualify: Has a database of residential
data; has been on a 50-year-plus maintenance program; and has seismic
resistance that exceeds recent standards.
Also, using the data accumulated in Ie-Log, our proprietary housing history database, homeowners are able to promote the resale their homes as
high-quality houses.
We are working to firmly establish the SumStock brand. In addition to
the conventional goals of increasing sales volume and brand recognition,by promoting SumStock, we are working to further improve quality andcontribute to society, including in the area of decarbonization, by promoting the resale of high-quality existing homes.

Renovation
upon moving inSekisui House
Homeowner

Consultation
to sell house

SumStockappraisals andbrokerage

Periodic inspections

Customer Service Centers
Sekisui House Remodeling

Sales information

Sekisui House
Real Estate companies

Ratio of SumStock housing in the Group’s existing home transactions(FY)
2020

2021

Results

Results

Targets

2022
Results

Targets

2023

59%

70%

75% or higher

63%

800 contracts¹

1 Beginning with the target for FY2023, this indicator has been changed from a ratio to the number of contracts reached.

209

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

S Coexisting with Local Communities
1. Governance
The Sekisui House Group has positioned coexisting with local communities as a key issue in the social (S) area of ESG management, from theperspective of wishing for the happiness of local communities. We areworking to address this issue from two directions: social contributions
through our business, and social contribution activities in aspects not covered by business. In terms of aspects not covered by our business, we
focus on children and the environment as local issues. The ESG
Promotion Committee, which is an advisory body to the Board of Directors
and includes two external experts, defines initiatives in this area throughdiscussion. To promote activities to this end, we have established theSocial Improvement Subcommittee, which sets targets and KPIs for initiatives to enhance their efficacy.

2. Strategy
In addition to the accelerated aging of society and low birthrate, disasterprevention and mitigation measures, and carbon neutrality, particularly
since the COVID-19 pandemic, local issues and the needs of residents
and businesses are changing. These changes call for community development aimed at sustainable lifestyles tailored to individual cultural climates.
To address social issues through its business, such as dealing with longer
lifespans across society and regional revitalization, the Sekisui HouseGroup is advancing town development that solves social issues whiledeveloping existing infrastructure services such as medical care, nursing
care and welfare, as well as the use of real estate. Sekisui House hascomprehensive proposal capabilities that integrate ESG considerations
with its technologies, lifestyle design and services. Using this strength, incollaboration with homeowners and organizations ranging from NPOs andNGOs to governments and public welfare organizations, we aim to create
and maintain strong relationships between residents and property operators to bring about a society where people can be happy in their communities throughout their lives.
In addition, on the non-business side, we support local NPOs that are

working on issues surrounding children and the environment through the
Sekisui House Matching Program, a corporate program to match employee
donations that has been providing funds to such organizations since 2006.
In addition, we encourage employees to volunteer using their own expertise,providing frameworks to enable them to feel satisfaction, pride and happiness by participating in activities that spread happiness in the community.

impact of our operations on the environment and community, referencing
relevant laws, regulations and internal rules.

Conceived as a project to rebuild and redevelop the Misonoza kabuki theater, the tower
incorporates a theater with new functionality
as well as high-rise housing and shoppingwith the aim of invigorating the surrounding
community and creating a lively townscape.

Making Communities Happy through Business and Social Contribution Activities

Citizen’sgroupsNPOs, NGOs
NeighborsChild-rearing
generation
The elderly andpeople withdisabilities

Government
Neighborhood
associations

Contributing tosociety•	Utilization of ourexpertise•	Employee educationand motivation•	Sharing issues withthe community

Educational
institutions
Students

Companies
Tenants
Operators

Resolving social
Businessissues throughactivities
collaboration with•	Boosting the value of
diverse stakeholders

Coexistingwith local
communities

community assets•	Raising awarenessinternationally anddomestically

Collaboration
Architects anddesigners

Grand Maison Misonoza
Tower

Tax-related
TKC

Medical,nursing care,and welfare
providers

Realization of a sustainable society
Contributing to the happiness of society

This property was developed as alarge-scale office building complex on
the site of the former Sony headquarters. Surrounded by greenery, including an expansive rooftop garden, theoffice building features a seismically-­isolated structure, and its design
incorporates the concept of keinenbika, or creating a townscape thatgrows more beautiful over time. The
property harmonizes with the surrounding community while providing
comfortable spaces for office workers.

Basic Policy of the urban redevelopment business

Garden City Shinagawa Gotenyama

Leveraging our decades of expertise in housing construction, we are implementing urban redevelopment that goes beyond mere scrap-and-build.
Through the urban redevelopment of rental and for-sale condominiums,
offices, hotels, commercial facilities, and complexes incorporating theseproperty types, we aim to realize buildings that are accommodating to all
and will be passed on to subsequent generations, thereby creating value
for society as a whole with focus on people, communities and the future.
When planning urban redevelopment projects, we always consider theInitiatives for tenants and local communities
Sekisui House is engaged in business centered on the residential domainthat goes beyond just housing itself. Protecting the lives and assets of residents and tenant employees from increasingly severe natural disasters is asignificant social issue and part of Sekisui House’s mission. We therefore
develop properties with attention to not only environmental and social
issues, but also local communities.

210

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Coexisting with Local Communities

3. Risk Management

Cumulative Buildings Constructed in our Platinum Business1

Connections with communities and strong organizational
expertise
In advancing business that contributes to coexistence with local communities, it is important to understand local issues, maintain relationships oftrust with business owners, and assure (and strengthen) their compatibility
with the property operator. Sekisui House implements projects that aremeaningful to the community through relationships with owners; utilizationof the knowledge and networks of specialized departments, such as the
Corporate Real Estate Strategy Office and the TKC Project Department;
and collaboration with external experts and others.

2020

2021

2022

Elderly and nursing
care facilities

Buildings

1,379

1,407

1,511

Medical facilities

Buildings

3,603

3,700

3,775

Facilities for people
with disabilities

Buildings

400

468

561

Childcare facilities

Buildings

330

402

424

1 The platinum business refers to the construction of medical facilities, such as assisted living facilities forseniors, group homes and clinics, as well as facilities for people with disabilities and childcare facilities.

Spending on social contribution activities

In FY2022, spending on social contribution activities in and outside Japan
totaled ¥443 million.
Sekisui House Matching Program SubsidiesVolunteer Web
Since 2021, we have operated Volunteer Web to empower our employees
to participate in safe and appropriate volunteer activities. The Volunteer
Web website provides information on NPOs and other volunteer opportunities that meet certain standards to improve employee safety. In addition,
users can search for NPOs and other organizations that are active in eachregion and registered as recommended organizations for Sekisui House
Matching Program subsidies.

4. Metrics and Targets
Coexistence with local communities through business by
the numbers
Cumulative Roadside Rest Station Facilities Opened through the
Trip Base Michi-no-Eki Stations Project, a Regional Revitalization Project(FY)
KPI

(FY)

Unit

2020

2021

Results

Results

2022
Targets

Results

2023
Targets

Trip Base Michi-no-Eki
4 prefec5 prefec9 prefec- 10 prefec- 14 prefecStations Project, a projecttures: 8tures: 14tures: 20tures: 23tures: 29
for regional revitalizationbuildings
buildings
buildings
buildings(total numbers since start buildings
596 rooms 1,053 rooms 1,582 rooms 1,848 rooms 2,336 roomsof project)

(FY)

2020

2021

2022

¥38.33 million¥49.00 million¥45.80 million

their unique charms through a system of roadside rest stations known as“Michi-no-Eki.” In the first stage of the project, 15 roadside hotels wereopened in six prefectures as of March 2022, providing a total of 1,152
rooms. During the second stage, we began opening additional facilities in
May 2022, with plans to have 1,184 rooms at 14 locations in 8 prefecturesby the end of 2023.
The project operates Fairfield by Marriott roadside hotels specializing inovernight stays. With the aim of promoting the use of local stores andother facilities, the project is deepening collaborations with local communities and alliance partners. To help solve local issues and revitalize local
communities, the project has realized a series of initiatives such as theYorimichi Map, which uses DX to provide travelers with information regarding a tour of the Udatsu Wall Historical District in Mino City, Gifu
Prefecture, and cooperation with the KURADASHI Challenge, which aims
to reduce food loss by supporting the harvesting of agricultural products in
Kyotamba Town, Kyoto Prefecture. Aiming to expand the number ofrooms to roughly 3,000 nationwide, we will continue to contribute toregional revitalization by promoting tourism.

(FY)

KPI

Unit

Percentage of employees joining
employee-company joint donation
programs (Sekisui House Matching
Program employee participation rate)

%

2020

2021

Results

Results

Targets

2022
Results

27

31

35

32

Fairfield by Marriott Kyoto Kyotamba

5. Activities and Other Related Information
Social contribution through our business rip Base Michi-no-Eki Stations Project to promote regionalT
revitalization
The Trip Base Michi-no-Eki Stations Project, a regional revitalization projectthat we are developing with Marriott International, proposes a style of travelthat encourages the exploration of lesser-known destinations to discover

Yorimichi Map

 ommunity café with senior living: creating a free andC
comfortable place for all
San Fellows Aomori is an assisted-living complex for senior citizens run by
a medical corporation with a long history of medical and nursing care in
the community. The facility was designed as housing for a variety of residents, whether individuals or couples, and functions in coordination with
the neighboring clinic and private nursing home to provide better living inresidents’ senior years. The head office’s specialized medical and nursing

211

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Coexisting with Local Communities

care division worked with the local office to develop the facility based on
the aspirations of the operating company to create a space that allows
senior residents to be themselves, is open to the community and makes
the most of the scenery provided by the greenery and people in the neighboring park. This vision was realized with a facility featuring a multi-­
purpose common area and design that incorporates a rich variety ofloosely linked spaces, light, air and greenery.
Residents are free to spend their time as they like—sometimes active,
sometimes quiet—in accordance to how they feel each day. The adjoining“cafe & space ivy” is open to the public as a cheery café but also functions
as a multi-purpose rental space that fosters exchange between residents
and the community. The organization that operates the facility usedsubsidies for community facilities tocreate a space that the elderly, people with disabilities, parents withsmall children and others can enjoy
San Fellows Aomori
within their local community.

  The Dai-no-mori Project: Creating a center of interaction topass on local resources to the future
The Dai-no-mori Project is a project to create a symbiotic community thatkeeps alive memories of daily life in times gone by together with a forested
property, wells that have been passed down from generation to generation, and a zelkova tree that is now more than 300 years old and is a valuable local resource. Its facilities include a group home for people withdisabilities, pottery workshop, café, gallery and restaurant. Based on thelessons learned from the Great East Japan Earthquake, we felt that it was
important to build face-to-face, multi-generational relationships.
Accordingly, we interviewed 90-year-old residents about their childhood
memories, exchanged opinions with residents in the neighborhood, anddeveloped a plan to create a new kind place to spend time that would
encourage visitors to get attached to and involved with the area.
The group home for persons with disabilities was designed with an eye

to coexistence with the local community, including creating ways of naturally drawing people in and expanding the value of interpersonal connections. It has also been recognized for creating spaces where children andyoung families could spend time outdoors while maintaining a safe distance from others during the COVID1 9 p a n d e m i c . T h e p r o j e c t ’s
development process received highpraise as a potential model for children’s participation in community
development and was awarded theKids Design Association President’s
Dai-no-mori ProjectAward in FY2021.

A place for children to be free
The NPO Hull Pong1 operates a children’s development support center.
The center was established in 2013, after its operators met children with
developmental difficulties and realized the need for community spaces forchildren other than the home and schools, becoming the first permanent
privately run facility of its kind in Japan. Sekisui House proposed a space
for the center featuring the warmth of wood based on its SHAWOOD construction method and continues to work with Hull Pong after delivering thebuilding to address, for example, changes in building use over time. The
center has collaborated with local cafeterias and parents’ clubs, hosted a
traveling parent-child consultation salon, held a Santa program, and madenumerous creative efforts to promote connections in daily life, receiving a
Kids Design Award in 2022.

   EGOTANOMORI Project
In cooperation with Egotanomori Park, the EGOTANOMORI Project(Nakano-ku, Tokyo) is intended to create harmony with the rich naturalenvironment. This project is a multi-generational exchange and circulation-­oriented community redevelopment, with rental housing and for-sale housing for families with children, an assisted-living complex for seniors, aprivate retirement home with nursing care, rental housing for students andfor nurses, along with convenient facilities such as restaurants and convenience stores, and child-rearing support facilities, such as a nursery school
and after-school center.
Above all, the project focuses on enriching the lives of households raisingchildren and fostering community among both residents of the development and the local area. The Livinlabo has been established as community
space for related activities. Comprising a kids’ room, picture book library,soundproof studio, multi-purpose room and dining room that doubles asan event space, the facility is a place for multigenerational interaction centered on children, while also serving as a kind of “community living room”
for all residents of the surrounding community. Seasonal events throughout
the year and regular musical performances are held at Livinlabo, bringing
joy and ongoing growth to individuals and the community.
In addition, to strengthen their disaster prevention functions, a total of
915 homes have been equipped with Ene-Farm household fuel cells forcondominium use. These cells enable continuous power generation evenduring power outages. In addition, photovoltaic power generation and EV
car sharing have been introduced to provide multiple sources of power,
thereby reducing CO2 emissions and enhancing disaster preparedness.

1 An organization selected for support in FY2013
under the Sekisui House Matching ProgramChildren’s development support center

EGOTANOMORI Project212

Value Report 2023
SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Contents

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Coexisting with Local Communities  Miramachi, a large-scale development complex
Miramachi is a 27-hectare redevelopment project on a former factory sitein Toyohashi City, Aichi Prefecture. This complex was developed with theaim of solving local issues and realizing a compact city. The concept wasformulated based on the four values of community contribution, environmental awareness, sustainable growth and disaster resilience, then further
developed through proposals and coordination with the relevant government agencies as well as explanations and dialogue with local residents.
The complex was finally realized through the comprehensive capabilities
and collaboration of the Sekisui House Group. In addition to the existingneighborhood association, which also serves as a community of residents
in the surrounding area, a management association has been establishedto manage common assets and maintain the townscape, with the aim ofencouraging residents to become attached to the community.
Residents are strongly aware of their involvement in community development, and actively express their opinions. Sharing the value of the townscapehas deepened their understanding of greenery maintenance and crime prevention measures, and they have cooperated in lighting the streets at night toprevent crime. We have also received positive feedback from residents, who
say they did not feel the stress of the COVID-19 pandemic due to the manyparks, greenery and supermarkets nearby, which allowed them to get outof their houses without worrying about maintaining safe distancing. This
project was the first in Japan to use smart electric meter communication
technology to read electric, gas and water meters. This offers residents
greater convenience because they can more clearly see their utility use.
Four Types of Value Created at Miramachi
Community Contribution

Environmental AwarenessComplex development to raise thevalue of the southern part of
Toyohashi, creating a “compact city”

About 400 ZEH homes planned—anenvironmental approach to goals for2030 as an Eco-First company

Sustainable Growth

Disaster Resilience

Systematic greening using existingtrees to create relaxing spaces andprotect the environment

Roundabouts and underground power
cables assure safety and resilience

Education for a sustainable feature starting with housebuilding
Working with the national government, municipalities and educational institutions, we provide fun, hands-on opportunities for children—tomorrow’s
leaders—to learn about housing. We also accept students for work experience events. These efforts help contribute to society though educationand inform the public on our efforts to create happy homes.
Sekisui House’s educational support activities (Japanese only)

Environmental education
We offer traveling environmental education programs based on the themes
we have designated as an Eco-First Company (global warming prevention
and ecosystem preservation). In addition, we provide opportunities for children to learn about nature using Company facilities, such as ShinSatoyama, which neighbors the head office, or the Sekisui House Eco First
Park on the grounds of the Kanto Factory.

  Sekisui House Eco First Park
In 2008, the same year that Sekisui House was certified as the industry’s first
Eco-First Company, we opened the Zero Emission Center in conjunction
with the Kanto Recycling Center. To symbolize the environmental efforts wehave made over the years, in May 2015 we reopened the facility as the
Sekisui House Eco First Park. The park is a place where visitors can learn
first-hand about our environmental activities in the areas of preventing global
warming, ecosystem preservation, resource recycling and environmental
education, based on our Eco-First Promise. Through our efforts in this park,
we are building a resource recycling system in line with the plan for establishing a recycling-oriented society formulated based on the Basic Act on
Establishing a Sound Material-Cycle Society. Furthermore, we have begun
to study new methods for resource recycling with a view toward responding
to calls from the international community for the creation of a circular economy, and to incorporate these methods in specific initiatives.

  “A Letter from Dr. Forest” Program
Dr. Forest (a Sekisui House employee) is a specialist in plant life who visitsschools and uses examples of nature—on a schoolground, for example—
to conduct lessons. While completing a mission set by Dr. Forest, children
learn about the connections between greenery and fauna, fostering aninterest in close-at-hand aspects of nature and encouraging them to think
about what they can do to protect nature with the aim of promoting ongoing action. We take requests for Dr. Forest traveling lessons (instructor dispatch to classrooms) and for educator training based on the program(instructor dispatch to school boards and educator study meetings).

Captain Earth “Ie-cology” Seminar
The Captain Earth “Ie-cology” Seminar is an educational program centeredon experiments in which an instructor (an employee) dressed up as
Captain Earth works with children to learn about ways they can save energy to combat global warming in their daily lives. Participants use housing
as a familiar platform to learn about the links between climate change andour daily lives by exploring the key themes of comparing housing insulation
performance and understanding energy-­saving appliances. The seminarhelps children understand eco-friendly living and encourages them to think
about eco-friendly actions that they themselves can take immediately.

“A Letter from Dr. Forest” Program“Ie-cology” Seminar213

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Coexisting with Local Communities   Learning about happy living with model houses   Participation in the Minecraft Cup 2022 National Tournament

We utilize the model houses Sekisui House operates around the country toprovide children with fun, hands-on opportunities to learn about housing.
The program is designed for students to explore the interior of a house, lookfor innovative aspects of house construction that promote happiness fromtheir own perspectives, and think and learn about the reasons behind these
innovations first-hand. There are two types of programs: the tour type, inwhich students experience virtual reality (VR) at actual model houses andtour exhibition spaces, and the online type, in which classes are conducted
via remote relay webcast from model houses to schools. Since the program
was launched in FY2021, approximately 600 students have participated.
In addition, we use this program to create workplace visit opportunities
for children, holding classes to encourage children to think about the significance and roles of work.

Minecraft is an open-world game that was introduced to Japan in 2011.
Minecraft: Education Edition is used in educational settings around theworld to develop programming thinking in children. The game allows players to build and design freely with blocks, making it a perfect fit for collaboration with our business.
Sekisui House participated as a gold partner for a second year in the
Minecraft Cup 2022 National Tournament, soliciting entries of Minecraft
works based on the theme of “Houses and communities that connect animals, nature and people: protecting biodiversity.” The works of entrants near
our model houses were displayed in 109 model house sites nationwide. The
tournament was further enlivened by offering an educational program about
the SDGs in housing to entrants who visited the model houses. Of a total of
426 entries, 39 advanced to the final judging, and the final judging andawards ceremony was held at the Company’s SUMUFUMU TERRACE
Shinjuku via webcast. In partnership with the Minecraft Cup, we are communicating our efforts related to the SDGs and housing to the next generation.
 inal judging and awards ceremony, Minecraft Cup 2022 National Tournament
F(Japanese only)   Shin-Satoyama Garden
Remote exploration of model houses by children using a tablet   Supporting programming education:“Everyone’s House! Houses of the Future!”
In 2019, Sekisui House was the only company in the housing and construction industry to participate in the “Programming Education Promotion
Month in Future Studies,” an educational initiative conducted in collaboration with the Ministry of Education, Culture, Sports, Science andTechnology, the Ministry of Internal Affairs and Communications, and theMinistry of Economy, Trade and Industry. Since then, at our fiveTomorrow’s Life Museum hands-on, experience-based housing facilities
nationwide and other facilities, we have accepted visits from children fromelementary schools around the country. In classes on housing titled“Everyone’s House! Houses of the Future!” elementary school children are
given the chance to take ideas from our facilities to design and build theirown house of the future using architectural simulation software on computers. In the four years since 2019, about 650 students have participated.

In 2006, on the north side of Shin Umeda City, where the head office of
Sekisui House is located, we built a landscaped area known as ShinSatoyama covering about 8,000 m² and modeled on a traditional Japanesesatoyama—a biotope consisting of a wooded area, bamboo forest, riceterrace, and vegetable farm in one compact area. The design is based on
our Gohon no Ki Project, which focuses on planting trees native to thearea. Since 2007, the year after it opened, we have used the area to support the education of children from the community. We give elementary
school children the chance to experience the entire process of growing
rice using traditional farm tools, from planting in a wet paddy to harvesting
and threshing. Nursery school children, meanwhile, get to plant sweet
potatoes and to dig them up when they are grown. By coming into physical contact with a diversity of flora and fauna, the children learn the importance of food and deepen their understanding of the ecosystem.

  Fostering a new art culture with the Koji Kinutani Tenku
Art Museum
Sekisui House operates the Koji Kinutani Tenku Art Museum to promoteculture and the arts in society. The museum is located in the Umeda Sky
Building, home to our head office, in Tower West (27F). The museum isdedicated to the works of renowned fresco painter and Order of Culture
recipient Koji Kinutani. On display are many of Kinutani’s colorful, energetic
frescos, along with sculptures and interactive content, such as the world’s
first 3D visual system that allows viewers to seemingly enter the world of
the painting, and a virtual reality presentation in which the artist himself
introduces the museum and the artist’s atelier.
Since opening in December 2016, the museum has been very popular,
attracting over 260,000 visitors from inside and outside of Japan (as ofMarch 31, 2023). It is also used as a venue for extracurricular lessons by
nearby elementary schools. Its special exhibitions, held twice a year, havebeen certified under Japan Cultural Expo, an initiative of the Agency for
Cultural Affairs to promote Japanese arts worldwide, and it holds monthly
fresco painting workshops. These and other efforts have received three
Kids Design Awards from the Kids Design Association. Such activities
have been widely recognized, and have been certified every year since2019 by the Association for Corporate Support of the Arts as “This is
MECENAT”—certified activities for promoting arts and culture in a richly
creative way. In addition, a conference of the International Council ofMuseums (ICOM) held in Kyoto in 2019 offered an excursion to this highrise interactive museum, gaining the interest of museum staff from aroundthe world. Furthermore, since 2021, the museum holds an annual kids’
painting contest, aimed at encouraging elementary and junior high school
kids from across the country to experience the joy and fun of creation.
This one-of-a-kind, cutting-edge museum will continue to foster culture
and art both in Japan and around the world.

Kids’ painting contest

Fresco painting workshop, which received a
Kids Design Award214

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Coexisting with Local Communities   Tsunagari Café

Working with local communities
Sekisui House Matching Program
In FY2006, we launched the Sekisui House Matching Program, throughwhich the Company matches employee donations to NPOs and otherorganizations engaged in addressing social issues
through the Sekisui House Children’s Fund and Sekisui
House Eco-Fund. About 8,100 employees participate
in this program, which to date has donated over ¥500
million to 590 organizations.
Sekisui House Matching Program Framework

Employees

Desired amountwithheld from salaries
for donation(Participation in the
program is voluntary)

Contributes thematching amountas grants

SekisuiHouse

Program for joint donations with employees

Sekisui House Matching Program Association
Activities supporting children and the environment
Administrativeboard

Six board members as well as auditors andexternal advisors engage in screening.
(Secretariat: ESG Management Promotion Headquarters)

Application

Screening and grants

Grant recipient organizations:
Volunteer organizations, NPOs, educational institutions, and others

In FY2023, we decided to provide a total of ¥50.54 million in grants to 94
civic groups from among those recommended by employees nationwide.
Focusing on activities that lead to coordination with our employees, thespirit of collaboration and the SDGs, we are supporting activities related tothe development of the next generation and environmental considerations.
Sekisui House Matching Program (Japanese only)
List of charitable groups (Japanese only)

We hold regular online seminars entitled Tsunagari Café, in which any
Group employee can freely participate from anywhere, to provide easy
opportunities to learn about the Sekisui House Matching Program. Everyseminar features different guests from inside and outside the Company
who present basic knowledge about NPOs and their involvement in issues
ranging from support for persons with disabilities to the LGBTQ community.
Employees from offices that are actually working with NPOs also participate, encouraging others to volunteer and discussing the projects they
worked on. In addition to presentations, these seminars also include
time for discussion among participants. Tsunagari Café has been
held a total of 45 times since its
start in 2021, with a cumulative totalof approximately 1,900 participants.
Employees making candles with the NPO Tabula Rasa

Collaborative initiatives with charitable groups
We hold presentation ceremonies with charitable groups supported by the
Sekisui House Matching Program at the Sekisui House office closest towhere the group is active. The ceremonies provide opportunities forexchange and advance coexistence with local communities by promoting
further cooperation and synergistic initiatives between the groups
and our offices. At the same time,
we are expanding links with ourbusinesses, such as support fromour employees for the construction of buildings and landscaping
for recipients’ facilities.
Presentation ceremony with a supported group   Support for children’s cafeterias in collaboration with
KURADASHI
Sekisui House is participating in a demonstration experiment jointly implemented by KURADASHI Co., Ltd., which operates the social contribution
shopping site KURADASHI, and the Keio Research Institute at SFC. The
purpose of the experiment is to match data on corporate stockpiles of
emergency food with children’s cafeterias in Osaka Prefecture. By providing them with emergency food supplies that are nearing the point of
replacement, the initiative aims to support children’s cafeterias, which help
promote community revitalization and food education.

Overseas initiatives
Wholly owned U.S. subsidiary Woodside Homes contributes to the Dream
Home Giveaway1 charity events held by St. Jude Children’s Research
Hospital2 on an ongoing basis.
These events are held in roughly 40 cities across the United States.
Woodside Homes covered nearly all of the construction and material costs
associated with construction of the lottery homes in Las Vegas, Nevada,and Sacramento, California. By supporting the activities of St. Jude, thecompany is helping to improve pediatric medical care in the United States.
1 A charity lottery in a portion of solicited donations are given to lottery winners in the form of houses and land.
2 Established in Memphis, Tennessee, in the United States in 1962, this globally renowned pediatric treatment
and research facility provides medical treatment to children and supports their families free of charge.

215

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

S Supply Chain Management
1. Governance
PDCA practice for CSR procurement
We are committed to CSR-based procurement based on a basic purchasing policy of providing the best quality, robust delivery, and reasonable
prices while also incorporating ESG considerations.
Upon signing the United Nations Global Compact in 2018, we joined the
supply chain subcommittee of the Global Compact Network Japan(GCNJ). We established the CSR Procurement Guidelines for our suppliers,
which are compliant with the GCNJ’s self-assessment questionnaire (SAQ).
Since then, we have asked suppliers to submit a signed agreement to confirm their understanding and compliance with the purpose and content of
the guidelines, as well as cooperation with periodic checks or audits
regarding their efforts, and we explain the significance and importance of
CSR procurement to our suppliers at our annual action policy briefings heldeach February. In addition, at the end of each year, we conduct a CSR
evaluation using a self-assessment check sheet based on the GCNJ’s
SAQ, in order to confirm compliance with the guidelines. By implementing
the PDCA cycle for CSR procurement, we are raising awareness of social
responsibility among our suppliers and deepening CSR procurement.
The CSR evaluation covers nine areas (including corporate governance,
human rights and labor), with suppliers asked to self-evaluate their own
initiatives from five perspectives: legal awareness, policies, systems andresponsibility, verifying initiative outcomes, and corrections. The results arescored and evaluated.
Prior to commissioning a new supplier, we perform evaluations basedon internal regulations to confirm the company’s suitability in terms of ESG
and other factors. In addition, we require a signed agreement confirming
their understanding of the purpose and content of the CSR Procurement
Guidelines before any transactions are conducted.
Guidelines and other regulations are available for procurement staff to refer
to at any time. In addition, related departments use seminars and working
groups to keep efforts up to date with the latest laws and social issues.

QDC plus ESG
Strive to procure materialsof the best quality in orderto earn customer trustand satisfaction

Work with suppliers to
improve value andachieve reasonable prices

Best

qualityQ

Reasonable

price

C

delivery

Promote supply chain
resilience, ensure stabledelivery, and prepare fordelivery constraint risks

ESG

Proactively addresssocial issues such as
respect for human rights
and decarbonizationin the supply chain

RobustD

2. Strategy

Standard

Sub-categories

Labor

Basic stance: Recognizing the labor principles expressed ininternational norms, etc., we will apply them to the basic rulesof the workplace as universal values.
Prohibition of discrimination in employment; Provision of humanresources development; Prohibition of inhumane treatment;
Payment of fair wages; Fair working hours; Prohibition of forcedlabor; Prohibition of child labor; Respect for religious traditions
and customs; Respect for freedom of association and the rightto collective bargaining; Health and safety

4

Environment

Basic stance: We will create a system for resolving international
environmental issues, in addition to identifying and managing
factors that affect the environment.
Management of chemical substances; Control and reduction ofwastewater, sludge, and air emissions; Sustainable and efficientutilization of resources (energy, water, raw materials, etc.);
Reduction of GHG emissions; Identification, management, andreduction of waste; Initiatives related to biodiversity

5

Basic stance: We will conduct fair business practices such as
anti-corruption, responsible political involvement, fair competition, and rejection of relationships with antisocial forces and/ororganizations.
Fair business Appropriate relationships with politics and governments;
practices
Appropriate relationships with customers and trade partners;
Competition law; Rejection of relationships with antisocial forces
and/or organizations; Intellectual property; Responding to complaints from outside the company and consultations; Insider
trading; Acts with conflicting interests; Import and export control

6

Quality andsafetyEnsuring product and service quality and safety; Response to
product and service accidents and the circulation of defective
goods

7

Information
security

Defense against threats to computer networks; Management
and protection of personal data and confidential information

8

Basic stance: In order to put CSR procurement into practice not
only within our company but also throughout the supply chain,
we will establish CSR Procurement Guidelines and strive to make
Supply chain
them widely known and instilled in and outside the company.
Purchase and use of raw materials not involved in conflict or
crime

9

Harmonious
coexistence Reducing negative effects on local communities; Initiatives
with local
toward sustainable development
communities

3

CSR Procurement Guidelines
In 2018, we established the CSR Procurement Guidelines, in compliancewith the GCNJ’s SAQ, for our suppliers, with the aim of realizing a sustainable society that includes the supply chain.
CSR Procurement Guidelines

The Nine Standards of the CSR Procurement Guidelines

12Standard

Sub-categories

Corporate
governanceCompliance with laws and regulations, establishment of a CSR
promotion system; Establishment of internal controls;
Establishment of a business continuity planning (BCP) system;
Establishment of a whistle-blower system; Dissemination of
CSR-related information within and outside of the company

HumanrightsBasic stance: We will support and respect the protection ofhuman rights that have been declared internationally, and will
not be complicit in human rights abuses.
Respect for human rights and prohibition of discrimination;
Avoidance of complicity in (or contribution to) human rights
abuses; Respect for indigenous peoples and local communities216

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Supply Chain Management

Supply chain policy on social issues

3. Risk Management

We recognize “human rights and labor” as one of the most importantsocial issues in our supply chain.
The Sekisui House Group Human Rights Policy was set up in April 2020
and applies to all officers and employees of the Sekisui House Group. We
also expect our business partners, including partner building constructors
and suppliers, to understand and support this policy. The Sekisui HouseGroup Human Rights Policy is available on the online information-sharing
platform we maintain with our suppliers and we promote compliance withthe policy.
The CSR Procurement Guidelines prohibit discrimination based onnationality or race, inhumane treatment, forced or compulsory labor, andchild labor. They also require appropriate management of employee healthand safety. We obtain signed agreements from our suppliers indicatingthat they understand the purpose and content of the guidelines.
In order to promote respect for human rights in the supply chain, it isessential to expand the circle of engagement from our suppliers to their
suppliers. To this end, in February 2022, we held a study session with external lecturers. Approximately 150 suppliers participated in the session withthe aim of raising awareness and acquiring basic knowledge. Furthermore,in September 2022, in response to the establishment of the Guidelines on
Respecting Human Rights in Responsible Supply Chains by the Japanese
government, we surveyed 360 of our suppliers about their efforts to establish human rights policies, publish these, and promote awareness throughout their supply chains in order to understand current conditions.
In February 2023, we held a study session with 157 suppliers andSekisui House procurement staff. Participants shared information about
leading initiatives and deepened their understanding of the Japanese government’s guidelines.
We will continue these efforts going forward to promote respect forhuman rights in our supply chain. We will also use these meetings to trainprocurement staff on environmental and social issues.

Supplier monitoring

Sekisui House Group Human Rights Policy

In the event that risks are found in the results of the CSR evaluations ofexisting suppliers in areas such as the environment or human rights, we
conduct monitoring to understand actual conditions by visiting the individual suppliers in question and providing advice on the evaluation criteria
and achievement levels. In this way, we practice due diligence.
As of the end of 2022, we conducted CSR evaluations of 161 suppliersand determined that eight suppliers should be closely monitored in termsof human rights, labor and the supply chain. We are monitoring each company to promote improvement. In serious cases, we work with the department concerned to determine the proper response and stipulate measures
to be taken, which might include cutting back on transactions, dependingon the score in the supplier assessment.
Furthermore, as a construction company, we consume a large volume
of lumber and recognize the need for especially strict lumber procurement.
For this reason, we implement an annual wood procurement risk survey ofabout 60 major wood building material suppliers. In FY2022, we surveyed
63 companies.
When necessary, we conduct onsite inspections in Japan and overseas,
including visits to logging areas at the most upstream portion of the supply
chain. However, due to the COVID-19 pandemic, we were unable to conduct such inspections in FY2022.

Risk assessment of social issues
Since FY2021, we have been requesting suppliers to report violations oflaws and regulations in addition to answering each question in the CSR
evaluation. This complements the results of the CSR evaluation and allows
us to identify high-risk suppliers who may be in violation of complianceand take prompt action.
In FY2022, there were three reported cases, all of which wereappropriately resolved in accordance with guidance from governmental
authorities. No high-risk suppliers were identified.

Enhancing sustainable procurement
Conducting annual action policy briefings for suppliers
We hold an annual action policy briefing for our suppliers to ensure the best
quality, robust delivery and reasonable price while promoting ESG in procurement. The purpose of the briefing is to deepen the understanding of
suppliers regarding our procurement activities, and approximately 150 major
suppliers participate. In addition to explaining specific procurement initiatives, we share examples of improvements that suppliers have made andhonor outstanding suppliers. We also provide feedback on CSR evaluations
and hold lectures by external lecturers to raise awareness of ESG issues.

Strengthening policy-based action and partner relationships
We are strengthening policy-based actions and our partner relationships topromote a common understanding of priority issues with key suppliers,align the directions of activities, and promote major reforms and improvements. In FY2022, we carried out activities in these areas with 10
companies.

Business continuity planning
Recent years have seen numerous events related to procurement risks
that could not previously have been anticipated. These include not only
natural disasters and industrial fires, but also geopolitical risks, a global
shortage of semiconductors and raw materials, as well as imbalances
between supply and demand due to infectious disease spread followed bya rapid recovery in demand.
We have long worked with our suppliers to establish an initial response
communication system for use in the event of natural disasters and conduct associated drills. With the aim of addressing a wide range of procurement risks, we hold the Supply Chain Resilience Promotion Conference
online; approximately 160 suppliers participated in September 2021, and217

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Supply Chain Management

approximately 260 participated in September 2022. In order to strengthen
the supply chain, it is necessary to expand the circle of encouragementfrom our primary suppliers to secondary and tertiary suppliers. At the conference, we explained our activities to strengthen business continuity planning (BCP) and shared specific examples of our suppliers to raiseawareness. We aim to build a more robust supply chain based on thethree pillars of delivery, specifications and information.

Supplier assessment chart

5. Activities and Other Related Information
Declaration of Partnership Building

Process improvement through supplier assessments
To ensure fair and impartial transactions, we conduct supplier assessments for our suppliers in order to evaluate such factors as quality, delivery and cost (QDC) as well as technical capabilities. We disclose theassessment results to the concerned suppliers so that they can use themto improve and strengthen their structures. The FY2022 supplier assessments covered 110 companies representing 74.8% of total procurement
spending.1
In carrying out these assessments, the focus is on process management to encourage reforms, rather than uniform evaluations of the resultsof such efforts. Going forward, we plan to implement highly transparent
supplier assessments and continue to support the strengthening of suppliers’ frameworks while maintaining fair and impartial transactions.
1 Ratio of suppliers covered by assessments to all suppliers (by purchased value; trading companies are notincluded in these assessments)

An overall rating is assigned from A to E, based on the evaluated areas. Results are presented on a spider
chart to identify both positive points and issues.

4. Metrics and Targets

Declaration of Partnership Building portal site (Japanese only)
Full text of Sekisui House’s declaration (Japanese only)

(FY)

KPI

Unit

2020

2021

Results

Results

2022
Targets

2023

Results

Targets

%

88.0

93.8

90.0

94.8

—

CSR procurement score

Points

91.2

91.9

92.0

92.1

—

CSR procurement humanrights and labor scores

Points

90.1

90.9

91.0

92.5

—

CSR procurement humanrights and labor supply chainscores2

Points

—

—

—

—

85.8

CSR procurement coverage1

In November 2022, Sekisui House joined the Declaration of Partnership
Building system set up by the Japanese Cabinet Office. Under this system, the representatives of companies that contract out work make a
Declaration of Partnership Building in which they commit to coordinating
and promoting coexistence and co-prosperity with business partners andvalue-creating contractors in the supply chain to build new partnerships.
As of December 2022, more than 16,000 companies had made declarations under the system.
The declaration includes commitments to
1. Coexistence and co-prosperity throughout the supply chain and new
partnerships that transcend scale and business affiliation
2. Compliance with preferred business practices between contractors andsubcontractors (a “promotion standard” based on the Act on the
Promotion of Subcontracting Small and Medium-sized Enterprises)
The declaration is published on a dedicated portal site.

1 Ratio of CSR assessments related to human rights and labor to all suppliers (procurement value basis;includes major raw material manufacturers)
2 In light of the establishment of the Guidelines on Respecting Human Rights in Responsible Supply Chainsby the Japanese government, we have adopted this item as a new KPI with the aim of promoting respectfor human rights not just among primary suppliers, but throughout the supply chain, including secondary
suppliers, tertiary suppliers and beyond.

218

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Participation in International Initiatives and Activities with Government and Industry Groups
We are actively participating in international initiatives to contribute to the resolution of social issues on a global scale. In Japan, the Sekisui House Group has a large role and responsibility in improving housing and living conditions.
We therefore participate in the initiatives of many industry groups.
Major Initiatives We Support
Name

Association with Government-Led Initiatives
Logo

Activities

United Nations Global Compact(UNGC)

An initiative advocated by the United Nations that requires companies to comply with and implement 10 principles in the areas of"human rights," “labour,” “environment” and “anti-corruption.” Wejoined in September 2018 and participate in a subcommittee of
the Global Compact Network Japan (GCNJ).

RE100 Initiative

An international initiative of major companies around the world
pledging to use 100% renewable energy in their business operations. We joined in October 2017, becoming the second Japanesecompany to do so.

TCFD Consortium

The Task Force on Climate-related Financial Disclosures (TCFD) isa framework for disclosing financial information on corporate climate change initiatives and impacts. The TCFD Consortium wasorganized by companies supporting the TCFD. We joined in July
2018, with an endorsement of the TCFD.

SBT Initiative

An initiative requiring companies to adopt evidence-based CO2
emissions reduction targets. We acquired verification in April 2018.

Japan Climate Initiative (JCI)

A network of non-governmental organizations encompassing
enterprises, local governments and other organizations working
actively on climate change countermeasures. We have participatedin the network since its establishment in July 2018.

Japan Climate Leaders’ Partnership(JCLP)A group of corporations aiming to achieve a carbon-free society
committed to sustainability. We formally joined as a full member inAugust 2016. We participate in the construction working group,
renewable energy promotion project, and communications andpublic relations project.

Global Alliance for Buildings andConstruction (GlobalABC)

An organization of numerous companies, local governments,organizations, NGOs and others aiming for zero emissions, highefficiency and resilience in the fields of architecture and construction. We have participated since May 2016.

Japan Business Initiative for
Biodiversity (JBIB)

An initiative of highly motivated companies committed to biodiversity conservation and sustainability. We have participated in thisinitiative since its beginning in April 2008.

TNFD Forum

An initiative that shares the vision and mission of the Taskforce on
Nature-related Financial Disclosures (TNFD) and provides technicalsupport aimed at sharing information and building frameworks.
We have participated since February 2022.

Name
Ministry of Land, Infrastructure,
Transport and Tourism

Committees and others
The Panel on Infrastructure Development: Building Subcommittee,
Building Environment Subcommittee, Building Energy Efficiency
Standards Subcommittee

Association with Industry Group-Led Initiatives

indicates a member of the Company serves as chair or representative director.

Group nameCommittees and others

Japan Business Federation

Standing Executive Committee, Executive Committee, Urban Housing
Policy Committee, Women’s Advancement Promotion Committee

Kansai Economic Federation

Urban Tourism & Culture Committee, Urban Development Special
Committee, Labor Policy Committee, D&I Expert Committee

The Osaka Chamber of Commerce andIndustry

Construction and Building Materials Subcommittee, Human Resource
Development Committee

Japan Federation of Housing Organizations

Board of Directors, Steering Committee, Policy Committee, Housing
Taxation and Finance Committee, Housing Performance Improvement
Committee , Building Regulations Rationalization Committee,
Environment Committee, Housing Stock Committee, Construction CS
and Safety Committee, International Exchange Committee, Mature
Society Housing Committee , Advertising Committee and others

Japan Prefabricated Construction
Suppliers and Manufacturers Association

Board of Directors , Planning and Steering Committee , Financial
Taxation System Study Group , Public Relations Committee, Board of
Education, Education Implementation Committee, Defect Warranty
Insurance Promotion Committee, Housing Subcommittee, and others

House Construction Promotion Foundation

Board of Directors, Business Steering Committee

The Provision of Quality Housing Stock
Association

Board of Directors , Executive Committee, Planning & General Affairs
Committee, Public Relations Website Committee, Technical Committee,
Evaluation and Education Committee

NPO Kids Design Association

Board of Directors, Steering Committee, Research & Development
Subcommittee, Standardization Review Subcommittee, Awards
Subcommittee, and others

Eco-First Promotion Association

Executive Committee, Steering Committee, Information Exchange
Conference

ESG Disclosure Study Group

Founding member

219

Value Report 2023
SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Contents

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Independent Third-Party Assurance Report
KPMG AZSA Sustainability Co., Ltd. was engaged to provide assurance on Sekisui House, Ltd.’s Value Report 2023 (Japanese version) and to verify that the report provides reliable information on the Company’s energy consumption;
waste and greenhouse gas emissions volumes; water used in factory production; COD, phosphorus and nitrogen emissions volumes; and social reporting (frequency of occupational illnesses and accidents resulting in lost worktime). Below
is a digital copy of the items stated in the original independent third-party assurance report; the original is maintained separately by Sekisui House Ltd.

Independent Assurance Report
May 17, 2023
KPMG AZSA Sustainability Co., Ltd.
3-5-29 Kitahama, Chuo-ku Osaka, Japan
Shinnosuke Kayumi, Director

Sekisui House, Ltd.
Mr. Yoshihiro Nakai, Representative Director of the Board, President, Executive Officer, CEO
We were engaged by Sekisui House, Ltd. (the “Company”) to undertake a limited assurance engagement of the environmental
and social performance indicators listed below for the period from February 1, 2022 to January 31, 2023 (the “Indicators”) included
in its Value Report 2023 published in Japanese (the “Report”) for the fiscal year ended January 31, 2023.
Indicators and pages in the Report
Indicator

pages“Waste generated”, “Non-recyclable waste”, “Recyclable waste”

161“Chemical oxygen demand (COD)”, “Phosphorus”, “Nitrogen”

164

Energy (total amount) and Water (total amount) of Factory in Input

169

CO2 emissions, Waste (total amount) in Output

169“Scope 1 CO2, HFC”, “Scope 2 CO2”, “Total of Scope 1,2 CO2, HFC” in Scope 1,2 GHG emissions and “Category 1”,“Category 4”, “Category 5”, “Category 11” and “Category 12” in Scope 3 GHG emissions

171

Frequency Rate of Accidents Resulting in Lost Worktime, Frequency Rate of Occupational-Illness

202

presented in the Report, and applying analytical and other procedures, and the procedures performed vary in nature from, andare less in extent than for, a reasonable assurance engagement. The level of assurance provided is thus not as high as thatprovided by a reasonable assurance engagement. Our assurance procedures included:• Interviewing the Company’s responsible personnel to obtain an understanding of its policy for preparing the Report andreviewing the Company’s reporting criteria.
• Inquiring about the design of the systems and methods used to collect and process the Indicators.
• Performing analytical procedures on the Indicators.
• Examining, on a test basis, evidence supporting the generation, aggregation and reporting of the Indicators in conformity with
the Company’s reporting criteria, and recalculating the Indicators.
• Visiting one domestic factory and one construction site managed by one of the domestic Company’s subsidiaries selected on
the basis of a risk analysis.
• Evaluating the overall presentation of the Indicators.

Conclusion
The Company is responsible for the preparation of the Indicators in accordance with its own reporting criteria (the “Company’s
reporting criteria”), as described in the Report.

Based on the procedures performed, as described above, nothing has come to our attention that causes us to believe that the
Indicators in the Report are not prepared, in all material respects, in accordance with the Company’s reporting criteria as
described in the Report.

Our Responsibility

Our Independence and Quality Management

Our responsibility is to express a limited assurance conclusion on the Indicators based on the procedures we have performed.
We conducted our engagement in accordance with the ‘International Standard on Assurance Engagements (ISAE) 3000,
Assurance Engagements other than Audits or Reviews of Historical Financial Information’ and the ‘ISAE 3410, Assurance
Engagements on Greenhouse Gas Statements’ issued by the International Auditing and Assurance Standards Board. The
limited assurance engagement consisted of making inquiries, primarily of persons responsible for the preparation of information

We have complied with the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for
Accountants, which includes independence and other requirements founded on fundamental principles of integrity, objectivity,
professional competence and due care, confidentiality and professional behavior. In accordance with International Standard on
Quality Management 1, we design, implement and operate a system of quality management including policies or procedures
regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

The Company’s Responsibility

This is an English translation of the “Independent Assurance Report” dated May 17, 2023 originally issued in Japanese by KPMG AZSA
Sustainability Co., Ltd. for the “Value Report 2023” published in Japanese by Sekisui House, Ltd.

220

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

221

Section5

Financial Data,
Company
Information andShare Information
Consolidated Financial Statements

222

11-Year Highlights (Consolidated)

226

Company Information

230

Share Information

231

External Recognition and Awards

232

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

222

Consolidated Financial Statements
Consolidated Balance Sheet(Millions of yen)

As of January 31, 2022
AssetsCurrent assets   Cash and deposits  Notes receivable and accounts receivable fromcompleted construction contracts  Notes receivable, accounts receivable fromcompleted construction contracts and others  Costs on construction contracts in progress  Buildings for sale  Land for sale in lots  Undeveloped land for sale  
Other inventories
  
Other
  Allowance for doubtful accounts  Total current assets
Non-current assets   Property, plant and equipment   Buildings and structures    Machinery, equipment and vehicles    Tools, furniture and fixtures   Land   Leased assets   Construction in progress   Accumulated depreciation    Total property, plant and equipment  Intangible assets   Goodwill   Industrial property    Leasehold interests in land   Software    Right to use facilities   Telephone subscription right   Other   Total intangible assets   Investments and other assets   Investment securities   Long-term loans receivable   Retirement benefit asset   Deferred tax assets   Other    Allowance for doubtful accounts    Total investments and other assets   Total non-current assets
Total assets(Millions of yen)

As of January 31, 2023

As of January 31, 2022

As of January 31, 2023

Liabilities
Current liabilities
515,283

332,903

132,471——
18,299436,973
589,879
149,828
9,501
101,672(1,179)1,952,729

157,123
17,202534,391
723,941
177,095
12,160140,200(1,136)  
2,093,883

365,224
71,33337,007284,788
5,157
49,597(272,397)
540,711

388,523
75,10839,657
277,568
19,74632,080(278,123)
554,562   Notes payable and accounts payable for construction contracts

111,022

124,420   Electronically recorded obligations—operating

96,635

102,416  Short-term borrowings

219,218

305,503   Current portion of bonds payable   Current portion of long-term borrowings—

30,000

16,23571,664   Income taxes payable

43,021

34,641   Advances received on construction contracts in progress

207,798

192,236
36,497   Provision for bonuses

31,270   Provision for bonuses for directors (and other officers)

1,385

1,019

   Provision for warranties for completed construction

3,897

4,906

  Other

137,416

141,337   Total current liabilities

867,903

1,044,643

Non-current liabilities  Bonds payable

170,000

20,000  Long-term borrowings

136,556

157,372   Long-term leasehold and guarantee deposits received

59,07959,535   Deferred tax liabilities

464

933

   Provision for retirement benefits for directors (and other officers)

864

692

   Retirement benefit liability

30,73329,286  Other

14,62627,525   Total non-current liabilities
Total liabilities

250
31
2,575
14,586201308
34
17,98831,406716
2,292
14,807
172
258
1,462
51,117

190,334
5,793
7,206
24,09162,626(294)
289,759
848,459
2,801,189

191,500
5,636
32,501
18,21962,321(2,206)
307,973913,653
3,007,537

412,325

295,347

1,280,229

1,339,990

Net assets
Shareholders’ equity  Share capital

202,591

202,591  Capital surplus

258,989

259,864  Retained earnings

940,135

1,056,475  Treasury shares(20,975)(50,656)

1,380,740

1,468,274

41,48840,449   Total shareholders’ equity
Accumulated other comprehensive income   Valuation difference on available-for-sale securities   Deferred gains or losses on hedges   Foreign currency translation adjustment

141

623

47,245

99,689   Remeasurements of defined benefit plans

4,323

23,793   Total accumulated other comprehensive income

93,199164,556

Share acquisition rights

186

134

Non-controlling interests

46,832

34,581

Total net assets
Total liabilities and net assets

1,520,959

1,667,546

2,801,189

3,007,537

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

Consolidated Financial Statements

Consolidated Statement of Income

Consolidated Statement of Comprehensive Income(Millions of yen)

Fiscal year ended
January 31, 2022
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Selling expenses
General and administrative expenses
Total selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity method
Foreign exchange losses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on liquidation of subsidiaries and affiliates
Gain on sale of investment securities
Gain on sale of shares of subsidiaries and affiliates
Total extraordinary income
Extraordinary losses
Impairment losses
Provision of allowance for doubtful accounts
Loss on sale and retirement of non-current assets
Loss on sale of investment securities
Loss on valuation of investment securities
Loss related to COVID-19
Total extraordinary losses
Profit before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent(Millions of yen)

Fiscal year ended
January 31, 2023

Fiscal year ended
January 31, 2022

2,589,579
2,060,702
528,877

2,928,835
2,344,537
584,297

56,031
242,684
298,716
230,160

54,787
268,020322,808
261,489

2,604
1,904
1,134
3,446
9,088

2,284
2,096
—
4,526
8,907

3,836
1,238
—
4,080
9,155
230,094

5,317
2,087
723
4,995
13,124257,272

3,088
1,166
2,246
6,501

16,813397
517,216

539
—
1,629
51
21
19
2,261
234,334
75,789(5,470)70,319164,015
10,109
153,905

2,898
1,991
1,759
128
—
—
6,778
267,710
77,214(831)
76,383
191,327
6,806
184,520

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax Share of other comprehensive income of entities accounted forusing equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to   Comprehensive income attributable to owners of parent   Comprehensive income attributable to non-controlling interests

Fiscal year ended
January 31, 2023

164,015

191,327862
40,766
15,103(703)
44,957
19,373

4,315
61,048225,063

7,976
71,604
262,931215,253
9,810

255,876
7,054

223

Value Report 2023
SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Contents

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

224

Consolidated Financial Statements

Consolidated Statement of Change in Equity
Fiscal year ended January 31, 2022

(Millions of yen)

Shareholders’ equity
Share capital
Balance at beginning of year

Retainedearnings

Capital surplus

Accumulated other comprehensive income
Treasury shares

Total
shareholders’equityValuationdifference on
available-for-salesecurities

Deferred gains
or losses onhedgesForeign currency Remeasurementsof definedtranslation
benefit plansadjustment

Total accumulated
othercomprehensive
incomeShare
acquisitionrightsNon-controllinginterests

Total net assets

1,368,887

202,591

258,989

839,985(6,883)

1,294,682

40,174

(45)

2,355

(10,631)

31,852508

41,842

—

—

—

—

—

—

—

—

—

—

—

—

—

202,591

258,989

839,985(6,883)

1,294,682

40,174

(45)

2,355

(10,631)

31,852508

41,842

1,368,887

Dividends of surplus——(55,608)—(55,608)

—

—

—

—

—

—

—

(55,608)

Profit attributable to owners of parent——

153,905—

153,905

—

—

—

—

—

—

—

153,905

Purchase of treasury shares

—

—

—

(15,015)(15,015)

—

—

—

—

—

—

—

(15,015)

Disposal of treasury shares

—

—

(361)

923

562

—

—

—

—

—

—

—

562

Change in scope of consolidation

—

—

2,214

—

2,214

—

—

—

—

—

—

—

2,214

Purchase of shares of consolidated subsidiaries

—

(0)

—

—

(0)

—

—

—

—

—

—

—

(0)

Net changes in items other than shareholders’ equity

—

—

—

—

—

1,314

187

44,89014,95561,347

(322)

4,989

66,014—(0)100,149(14,091)

86,057

1,314

187

44,89014,95561,347

(322)

4,989

152,072

202,591

258,989

940,135(20,975)

1,380,740

41,488141

47,245

4,323

93,199186

46,832

1,520,959

Cumulative effects of changes in accounting policies
Restated balance at beginning of year
Changes during year

Total changes during year
Balance at end of year

Fiscal year ended January 31, 2023

(Millions of yen)

Shareholders’ equity
Share capital
Balance at beginning of year

Capital surplus

Retainedearnings

Accumulated other comprehensive income
Treasury shares

Total
shareholders’equityValuationdifference on
available-for-salesecurities

Deferred gains
or losses onhedgesForeign currency Remeasurementsof definedtranslation
benefit plansadjustment

Total accumulated
othercomprehensive
incomeShare
acquisitionrightsNon-controllinginterests

Total net assets

1,520,959

202,591

258,989

940,135(20,975)

1,380,740

41,488141

47,245

4,323

93,199186

46,832——(1,715)—(1,715)

—

—

—

—

—

—

—

(1,715)202,591

258,989

938,419(20,975)

1,379,025

41,488141

47,245

4,323

93,199186

46,832

1,519,243

Dividends of surplus——(66,400)—(66,400)

—

—

—

—

—

—

—

(66,400)

Profit attributable to owners of parent——

184,520—

184,520

—

—

—

—

—

—

—

184,520

Purchase of treasury shares

—

—

—

(30,014)(30,014)

—

—

—

—

—

—

—

(30,014)

Disposal of treasury shares

—

—

(64)

333

269

—

—

—

—

—

—

—

269

Change in scope of consolidation

—

—

—

—

—

—

—

—

—

—

—

—

—

Purchase of shares of consolidated subsidiaries

—

874

—

—

874

—

—

—

—

—

—

—

874

Net changes in items other than shareholders’ equity

—

—

—

—

—

(1,039)481

52,443

19,47071,356(52)(12,250)

59,053—874

118,055(29,680)

89,249(1,039)481

52,443

19,47071,356(52)(12,250)

148,302202,591

259,864

1,056,475(50,656)

1,468,274

40,449623

99,68923,793

164,556

134

34,581

1,667,546

Cumulative effects of changes in accounting policies
Restated balance at beginning of year
Changes during year

Total changes during year
Balance at end of yearValue Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

225

Consolidated Financial Statements

Consolidated Statement of Cash Flows(Millions of yen)

Fiscal year ended
January 31, 2022

(Millions of yen)

Fiscal year ended
January 31, 2023

Fiscal year ended
January 31, 2022

Cash flows from operating activities

Cash flows from investing activities

Profit before income taxes

234,334

267,710Purchase of property, plant and equipment

Depreciation

24,06926,711

Proceeds from sale of property, plant and equipment

539

2,898

Purchase of investment securities

Increase (decrease) in retirement benefit liability

3,382

980

(Increase) decrease in retirement benefit asset

158

112

Interest and dividend income(4,508)(4,380)Interest expenses

3,836

5,317

Share of (profit) loss of entities accounted for using equity method

1,238

2,087

(1,114)

(269)

21

—

(Gain) loss on liquidation of subsidiaries and affiliates(3,088)(16,813)(Gain) loss on sale of shares of subsidiaries and affiliates(2,246)(5)

Impairment losses (Gain) loss on sale of investment securities(Gain) loss on valuation of investment securities

Provision of allowance for doubtful accounts

—

1,991

(Increase) decrease in trade receivables

13,462(24,158)(Increase) decrease in inventories(85,515)(38,493)

Increase (decrease) in trade payables

17,6408,276(7,059)(20,526)(16,001)

3,887

Increase (decrease) in advances received on construction contracts   in progress
Other, net
Subtotal

Fiscal year ended
January 31, 2023

179,149

215,326

Interest and dividends received

8,151

11,437

Interest paid

(4,530)(6,812)

Income taxes paid

(64,735)(94,487)

Net cash provided by (used in) operating activities

118,034

125,464

Proceeds from sale and redemption of investment securities Purchase of shares of subsidiaries resulting in change inscope of consolidation
Proceeds from sale of shares of subsidiaries resulting in   change in scope of consolidation(82,951)(92,162)

727

2,843

(11,487)(5,163)

3,670

3,010

(35,701)(69,595)

87—

Loan advances(2,187)(753)

Proceeds from collection of loans receivable

11,6691,014

Other, net

2,467(4,604)(113,706)(165,409)

Net increase (decrease) in short-term borrowings

33,21937,357

Proceeds from long-term borrowings

26,74866,291

Repayments of long-term borrowings(64,168)(21,768)

Redemption of bonds(30,000)(120,000)

Dividends paid

(55,608)(66,400)

Purchase of treasury shares(15,015)(30,014)(0)(15,956)

Net cash provided by (used in) investing activities
Cash flows from financing activities

Purchase of shares of subsidiaries not resulting in change in   scope of consolidation
Other, net
Net cash provided by (used in) financing activities(6,876)(5,288)(111,701)(155,780)

Effect of exchange rate change on cash and cash equivalents

20,124

13,298Net increase (decrease) in cash and cash equivalents(87,248)(182,426)

Cash and cash equivalents at beginning of year

600,234

515,174

Increase (decrease) in cash and cash equivalents resulting fromchange in scope of consolidation
Cash and cash equivalents at end of year

2,188

—

515,174

332,747

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

226

11-Year Highlights (Consolidated)
Financial Data
(Millions of yen)

(Fiscal year)

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Net sales

1,613,816

1,805,102

1,912,721

1,858,879

2,026,931

2,159,363

2,160,316

2,415,186

2,446,904

2,589,579

2,928,835

Gross profit

299,503358,499

368,446

373,867

418,297445,082444,596

478,036

473,511528,877

584,297

Business performance

18.6

19.9

19.3

20.1

20.6

20.6

20.6

19.8

19.4

20.4

19.9

Total selling, general and administrative expenses

213,306

226,569

221,851

224,222234,132

249,541

255,373272,780

286,992

298,716

322,808

Operating profit

86,196

131,930

146,595

149,645

184,164

195,540

189,223

205,256

186,519

230,160

261,489

5.3

7.3

7.7

8.1

9.1

9.1

8.8

8.5

7.6

8.9

8.9

Ordinary profit

91,767

137,794

156,426

160,589

190,989

203,678

195,190

213,905

184,697230,094257,272

Profit attributable to owners of parent

46,45879,801

90,22484,302

121,853

133,224

128,582

141,256

123,542

153,905

184,520Gross profit margin (%)

Operating margin (%)

Return on investment
ROE (%)

6.0

9.2

9.0

7.9

11.3

11.6

10.8

11.5

9.5

11.0

11.9

ROA (%)1

6.0

8.2

8.4

8.3

9.4

9.0

8.3

8.8

7.3

8.6

9.1

1,539,272

1,769,005

1,929,409

2,029,794

2,184,895

2,419,012

2,413,035

2,634,748

2,625,861

2,801,189

3,007,537

Total net assets

814,063

941,415

1,079,064

1,068,428

1,118,264

1,208,121

1,196,923

1,306,850

1,368,887

1,520,959

1,667,546

Net assets attributable to ordinary shares

806,406

930,944

1,068,423

1,057,696

1,103,359

1,194,975

1,182,808

1,266,195

1,326,535

1,473,940

1,632,830

Equity capital ratio (%)

52.39

52.63

55.38

52.11

50.50

49.40

49.02

48.06

50.52

52.62

54.29

Interest-bearing debt

Assets and interest-bearing debt
Total assets

268,622289,860

351,731426,013491,017622,084

639,510586,891

562,966

549,862

607,198

Debt/Equity ratio (Times)

0.33

0.31

0.33

0.40

0.45

0.52

0.54

0.46

0.42

0.37

0.37

Asset turnover ratio (Times)

1.08

1.09

1.03

0.94

0.96

0.94

0.89

0.96

0.93

0.95

1.01

1 (Operating profit + Interest income + Dividend income + Equity in earnings of affiliates) ÷ Total assets

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

227

11-Year Highlights (Consolidated)(Millions of yen)

(Fiscal year)

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Cash flows
Net cash provided by (used in) operating activities

82,582

78,073

117,358

45,884

115,820

165,355

125,088363,766

191,972

118,034

125,464

Net cash provided by (used in) investing activities(58,124)(80,637)(128,529)(76,166)(107,397)(76,150)(70,184)(65,229)(95,504)(113,706)(165,409)

Net cash provided by (used in) financing activities(17,289)(782)

19,611

32,084

5,511

30,154(31,030)(148,160)(77,614)(111,701)(155,780)

Cash and cash equivalents at end of year

179,242

181,324

195,008

192,338

204,701

324,693

342,898583,297

600,234

515,174

332,747

Capital expenditure

60,915130,243

121,550

81,25898,277

68,79958,68073,25596,60989,512

95,330Depreciation

19,015

22,581

25,692

24,43823,12521,98322,15521,51821,72624,06926,711

Research and development expenses

4,318

4,507

4,726

4,772

4,991

5,181

6,041

7,313

9,665

9,478

9,562

Market capitalization at end of period

680,946

985,007

1,067,964

1,329,946

1,297,656

1,379,985

1,123,051

1,630,703

1,382,375

1,584,699

1,678,159

Stock price at end of period (Yen)

1,006.0

1,434.0

1,526.0

1,874.0

1,828.5

1,998.0

1,626.0

2,361.0

2,019.0

2,314.5

2,451.0

EPS: Earnings per share (Yen)

69.17

118.63130.91

120.16175.48193.06186.53205.79181.18227.37276.58

BPS: Book value per share (Yen)

1,200.63

1,358.60

1,527.52

1,508.81

1,598.90

1,731.60

1,718.82

1,852.62

1,948.12

2,184.36

2,466.04

Dividends per share (Yen)

28.00

43.00

50.00

54.00

64.00

77.00

79.00

81.00

84.00

90.00

110.00

Payout ratio (%)

40.5

36.2

38.2

44.9

36.5

39.9

42.4

39.4

46.4

39.6

39.8

PER: Stock price at end of period ÷ Net income   per share (Times)

14.54

12.09

11.66

15.60

10.42

10.35

8.72

11.47

11.14

10.18

8.86

PBR: Stock price at end of period ÷ Shareholders’ equity   per share (Times)

0.84

1.06

1.00

1.24

1.14

1.15

0.95

1.27

1.04

1.06

0.99

Investments

Corporate value

Per-share information

Stock price indicators

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

228

11-Year Highlights (Consolidated)

Key Performance Indicators(Fiscal year)

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Owner-occupied houses

311,589354,772

285,270

283,366

292,287

284,283

283,235

288,738

261,088285,575

253,287

Built for sale houses

246,810

263,931

237,428

241,201

250,532

255,191

255,263

267,696240,268

243,944

255,487  Condominiums

123,203

127,599

110,475

115,652

114,570

114,830

110,510

117,803

107,884

101,292

108,198  Detached houses

122,590

134,888

125,421

123,624

133,739

138,189

142,393

147,522

130,753

141,094

145,992

Rented houses

318,521356,263

362,191

378,718

418,543

419,397

396,404

342,289306,753

321,376

345,080

Corporate houses

5,877

5,059

7,372

6,014

5,875

5,770

7,468

6,400

7,231

5,589

5,675

882,797

980,025

892,261

909,299

967,237

964,641

942,370905,123

815,340

856,484

859,529

Custom detached houses

13,94515,04913,104

11,248

11,105

10,617

9,822

10,663

8,411

8,349

7,842

Built for sale houses

2,246

2,368

2,162

2,364

2,071

2,677

2,336

2,589

1,958

2,261

2,219

Rental houses

27,86930,41434,70932,63135,15632,93730,07827,981

26,03325,321

27,203

New Housing Starts in Japan (Units)1

Total
Number of Houses Built by Sekisui House (Units)

Condominiums (for sale)

1,038

1,921

1,250

2,002

1,231

1,184

1,499

2,081

1,510

2,320

1,865

Total

45,09849,752

51,22548,24549,56347,41543,73543,31437,912

38,251

39,129

5.1

5.1

5.7

5.3

5.1

4.9

4.6

4.8

4.6

4.5

4.6

2,135,437

2,185,189

2,236,414

2,284,659

2,334,222

2,381,637

2,425,372

2,468,686

2,506,598

2,544,849

2,583,978

1,966

3,494

4,706

5,345

8,251

12,731

16,13722,301

27,95333,166

38,767   Sales per detached house (Thousands of yen)

33,44234,50335,65937,00237,292

38,07438,75339,93541,38842,65646,196   Floor area per detached house (Square meters)

139.93141.09140.25140.43138.63137.94138.03137.68135.91135.04137.41   Sales per building (Thousands of yen)

55,196

61,28468,54976,771

83,612

93,959100,194

102,415

117,962

126,566

141,619   Floor area per building (Square meters)

301.67324.95346.64366.10385.19418.35432.28427.67470.83

485.52515.23

Sekisui House’s market share in Japan (%)
Cumulative number of dwellings built (Japan)2
Cumulative number of dwellings built (overseas)
Trends in Housing Built by Sekisui House
Built-to-order detached houses

Built-to-order rental housing

Trends in Sekisui House Real Estate Block Leasing Operation
Occupancy rate (%)3
Number of units under management (Units)
1 Calendar year basis
2 Figures for FY2016 onward are for the entire Group.
3 Presentation changed to monthly data from month-end data as of FY2018

96.0

96.2

96.4

96.5

96.5

96.7

97.8

97.7

97.7

97.9

97.8

506,353526,276545,757

565,471584,096

601,582

619,494

639,780

657,190

674,125

691,635

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

229

11-Year Highlights (Consolidated)

Sales and Operating Profit by Segment(Millions of yen)

(Fiscal year)

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Built-to-Order Business		

Custom detached houses

465,149

517,691

427,044393,786

383,129

371,171357,944

390,995

323,332

352,732

352,463		

Rental housing

303,712356,202398,483

400,601

440,312442,845

416,062

360,026

358,745

384,022426,116		Architectural/Civil engineering		

Subtotal

—

—

—

—

—

—

—

120,986

302,837

261,930

298,777

768,862

873,894

825,527

794,388823,442814,017774,006

872,008

984,915

998,685

1,077,357

Supplied Housing Business

Sales

		

Remodeling

111,548

125,046

134,166

134,458

133,498

136,843

141,416

152,729

141,090

156,167

165,910

		Real estate management fees

393,978

408,403428,227

448,751

469,132

489,891

514,035

534,876

557,632

584,969

619,271		

Subtotal

505,527

533,450

562,393583,210602,631626,735

655,452

687,606

698,722

741,136

785,182
238,252

Development Business		

Houses for sale

127,810

133,405

118,730

137,484

142,014

155,481

148,880

151,268

139,151

191,488		

Condominiums

52,53863,08356,69981,47066,12577,49789,581103,984

77,091

90,61290,883

		Urban redevelopment

45,52842,428178,344

93,038130,491

103,777

173,391

131,920

104,953

102,736

135,320

		

Subtotal

225,877

238,917353,774

311,993338,631

336,756

411,853

387,173

321,195

384,837

464,456
521,124

Overseas Business
54,84485,392

79,83589,522

182,127

306,716

245,953

389,866

370,686

388,936

Other

58,70473,447

91,19079,76480,09975,13773,05078,531

71,38475,98480,715

Total

1,613,816

1,805,102

1,912,721

1,858,879

2,026,931

2,159,363

2,160,316

2,415,186

2,446,904

2,589,579

2,928,835

		

Subtotal

Built-to-Order Business		

Custom detached houses

48,80065,81348,89447,20849,51448,04342,25545,942

32,23142,47538,309		Rental housing

27,54736,49245,82551,91860,83260,88350,37649,71047,05256,04758,407

		Architectural/Civil engineering		

Subtotal

—

—

—

—

—

—

—

3,730

16,051

15,146

13,214

76,347102,306

94,71999,127110,347

108,926

92,632

99,383

95,335

113,668

109,931

Supplied Housing Business

Operating Profit		Remodeling

11,542

14,037

14,997

15,847

17,544

19,76021,10923,53520,47925,546

27,561		Real estate management fees

17,03920,064

23,405

26,81931,27833,13339,40741,054

43,86950,48050,659		

Subtotal

28,582

34,101

38,402

42,667

48,82352,89360,51664,58964,34876,02778,221Development Business		

Houses for sale

1,580

8,143

8,491

11,9198,822

13,46011,08812,2597,586

14,548

20,777

		Condominiums

1,004

3,978

4,738

8,031

2,248

9,229

6,478

10,134

8,817

12,486

13,403

		Urban redevelopment

9,787

8,561

25,802

24,747

23,414

16,99440,403

17,045

16,565

11,276

15,051

		

Subtotal

12,372

20,68339,032

44,69834,48539,68457,97039,43932,96938,311

49,23373,860Overseas Business
4,247

8,581

4,419

(5,673)25,172

29,761

16,34044,551

39,70850,147

(445)

1,690

3,123

2,511

726

1,234

(44)

(273)

(2,480)(1,208)(439)

Eliminations and adjustments(34,907)(35,434)(33,102)(33,686)(35,390)(36,960)(38,192)(42,434)(43,363)(46,786)(49,317)

Total

86,196

131,930

146,595

149,645

184,164

195,540

189,223

205,256

186,519

230,160

261,489		

Subtotal

Other

Note: Architectural/Civil engineering became a reportable segment as of FY2020. The figures for FY2019 have been restated to reflect this change.

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSECompany Information
Sekisui House, Ltd.

Head Office

Umeda Sky Building Tower East, 1-1-88,
Oyodonaka, Kita-ku, Osaka, 531-0076, Japan

Date of Establishment

August 1, 1960

Number of Employees

29,052 (consolidated basis)
14,932 (non-consolidated basis)

Research Institutes

Sales andService Offices

G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Locations

Corporate Name

Production Bases

ESG Management

Mid-Term Management Plan for
Sustainable Growth(As of January 31, 2023)

Corporate Profile

Share Capital

Mechanisms andCatalysts for Creating Value¥202,591.2 million
Five locations in Japan (in Miyagi, Ibaraki,
Shizuoka, Hyogo and Yamaguchi prefectures)
Comprehensive Housing R&D Institute andHuman Life R&D Institute

In Japan

Head Office,Sales Administration Headquarters,
Factories, Research Institutes
Subsidiaries

Sekisui House Real Estate
Tohoku, Ltd.

Hyogo FactorySekisui House, Ltd. Head Ofﬁce

Sekisui House, Ltd. Head Office
Sekiwa Construction¹
Business Headquarters
International Business Department

Chugoku Shikoku Sales
Administration Headquarters

Condominium Headquarters

Comprehensive Housing
R&D Institute (TLM Kansai)

Kansai Building Sales
Administration Headquarters

Sekisui House Real Estate
Chugoku & Shikoku, Ltd.

Tohoku Factory

Tohoku Factory (TLM Tohoku)
Joshinetsu Sales Administration Headquarters
Saitama Tochigi Sales Administration Headquarters
Kanto Factory (TLM Kanto)
Sekisui House Real Estate Tokyo, Ltd.

Yamaguchi Factory(TLM Yamaguchi)

Sales Offices: 112
Customer Service Centers: 30
Display House Locations: 308

Tohoku Sales
Administration Headquarters

Kansai Daini Sales
Administration Headquarters

Hyogo FactorySekisui House Asset Management, Ltd.
Higashi Kanto Sales Administration Headquarters
Development Department

Affiliated Companies

Consolidated Subsidiaries
345 companies (54 in Japan, 291 overseas)
Sekisui House Real Estate Group: 14 companies
Sekisui House Remodeling, Ltd.
Sekiwa Construction: 15 companies1
Sekisui House noie Limited
Sekisui House Asset Management, Ltd.
Konoike Construction Co., Ltd.
Other

East Japan Building Sales Administration Headquarters
Tokyo Building Sales Administration Headquarters
Shizuoka Factory(TLM Shizuoka)
Yamaguchi FactorySekisui House Real Estate Kyusyu, Ltd.

Sekisui House Real Estate
Chubu, Ltd.

Tokyo Sales Administration Headquarters
Kanagawa Sales Administration Headquarters
Chubu Daini Sales Administration Headquarters

Chubu Building Sales
Administration Headquarters

Chugoku Kyushu Building Sales
Administration Headquarters Kyushu
Sales Administration Headquarters

Chubu Daiichi Sales

Kanto Factory

Administration Headquarters

Equity-method Affiliates
40 companies (11 in Japan, 29 overseas)

Sekisui House Real Estate Holdings, Ltd.
Sekisui House Real Estate Kansai, Ltd.
Sekisui House Remodeling, Ltd.
Sekisui House noie Limited

1 The names of the Sekiwa Constriction companies changed to the Sekisui House Construction
companies as of February 1, 2023.

Overseas

Please see Section 3 for details.

Konoike Construction Co., Ltd.

P.71 Overseas Business Regions and Major Projects

Shizuoka Factory

TLM Kanto(TLM: Tomorrow’s Life Museum)230

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Share Information

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

231(As of January 31, 2023)

Total number of shares authorized

1,978,281,000

Share Distribution

Total number of shares issued

684,683,466(including 22,384,361 treasury shares)Securities companies
46,482 thousand shares

Trading unit

100 shares

Other companies
47,090 thousand shares

Total number of shareholders

122,811

Financial institutions
251,742 thousand shares

36.77%

6.79%

1,000 or more 5.74%

500 or more 0.64%

5,000 or more 1.38%

100 or more 1.29%

10,000 or more 2.90%

Fewer than 100 0.07%

50,000 or more 1.57%

6.88%

100,000 or more 7.29%

Distribution by
Shareholder
Type

Individuals and others
120,642 thousand shares

17.62%

500,000 or more 5.02%
1,000,000 or more 23.38%

Overseas shareholders
218,725 thousand shares

Distribution by
Number of
Shares Held

5,000,000 or more 50.72%

31.94%

Note: 22,384 thousand treasury shares are included in “Individuals and others”

Major Shareholders (Top 10)
Name
The Master Trust Bank of Japan, Ltd.
(Trust account)

Number of Shares
Held (Thousands)
112,607

Shareholding
Ratio (%)
17.00%

Custody Bank of Japan, Ltd.
(Trust Account)

40,785

6.16%

SMBC Nikko Securities Inc.

24,048

3.63%

Sekisui Chemical Co., Ltd.

22,168

3.35%

Employees’ Stockholding

20,183

3.05%

State Street Bank West Client –Treaty 505234

14,326

2.16%

MUFG Bank, Ltd.

10,899

1.65%

JAPAN SECURITIES FINANCE CO., LTD.

7,961

1.20%

The Dai-ichi Life Insurance Company, Limited

7,903

1.19%

STATE STREET BANK AND TRUST COMPANY
505103

7,851

1.19%

Stock Price and Trading Volume(Yen)

Share price (Left scale)

Trading volume (Right scale)(Million shares)

3,000

12,000

2,000

8,000

1,000

4,000

0

Notes:
1. Employees’ Stockholding is the Company’s employee stockholders association.
2. The Company holds 22,384 thousand shares of treasury stock. These shares are excluded from the above
list of major shareholders. The shareholding ratio is calculated by dividing the number of shares held by the
total number of shares issued, excluding treasury shares.

0
2013/1

2013/7

2014/1

2014/7

2015/1

2015/7

2016/1

2016/72017/1

2017/7

2018/1

2018/7

2019/1

2019/72020/1

2020/72021/12021/72022/12022/72023/1 (Year/Month)* Prepared using quarter-end data (from the Tokyo Stock Exchange) for each month

Total Shareholder ReturnFiscal Year

2018

2019

2020

2021

2022

Sekisui House

85.3%

126.2%

113.3%

132.6%

144.9%TOPIX (including dividends)

87.2%

96.1%

105.7%

113.2%

121.1%

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

External Recognition and Awards

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Note: Includes some awards received in FY2023

Environmental
Received the Minister of the Environment’s Award in the 5th EcoPro Awards

September
2022

News Release (Japanese only)

Sponsor: CDP

November2022

Sponsor: work with PrideNews Release (Japanese only)

Received First Place at WEPs AWARDS 2022

November2022

Sponsor: UN Women Regional Office for Asia and the PacificNews Release (Japanese only)

Received the 15th Parenting Award

November2022

Sponsor: Parenting Award Executive Committee(Access International Ltd.)News Release (Japanese only)

Sponsor: The Energy Conservation Center, Japan
News Release (Japanese only)

Received Environmentally Sustainable Company Category, Silver Award
Fourth ESG Finance Awards Japan

February
2023

Received Rainbow Certification under the PRIDE Index 2022 and presented with the PRIDE Index
2022 Gold Award for the fifth consecutive year

News Release (Japanese only)

Received the Fiscal 2022 Energy Conservation Grand Prize
Energy Conservation Best Practices at Workplaces Category
Prize of the Chairman of ECCJ
December
2022

SocialSponsor: SuMPOAwarded double “A” rating by the CDP for its leadership in terms ofclimate change and forests

December2022

Sponsor: Ministry of the Environment
News Release (Japanese only)

Financial Data, Company
Information and Share Information

Selected for the 2023 Bloomberg Gender-Equality Index(third consecutive year)
January2023

Sponsor: Bloomberg L.P.

232

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

External Recognition and Awards

Selected for the Best Workplace category of D&I Award 2022
February2023

ESG indices selected by GPIF

Sponsor: Ministry of Economy, Trade and Industry

ESG (overall)Received First Place in the Construction, Housing and Real Estate Category of the 2022 Award
for Excellence in Corporate Disclosure (second consecutive year)
October2022

has been included in each of them. GPIF holds one of the world’s largest pools of pension assets.

Sponsor: JobRainbow Co., Ltd.

Certified Health and Productivity Management
Outstanding Organization 2023, Large Enterprise Category(White 500) for the fourth consecutive year
March
2023

In addition, since Japan’s Government Pension Investment Fund (GPIF) adopted six ESG indices, Sekisui House

Sponsor: The Securities Analysts Association of JapanMSCI Japan ESG
Select Leaders Index

ESG (overall)

MSCI Japan
Empowering Women
Index (WIN)S (Social)

Sekisui House
selection

Since
July 2017

FTSE Blossom
Japan Index

ESG (overall)

S&P/JPX
Carbon Efficient Index

E(Environmental)

Since
September 2018

FTSE Blossom
Japan Sector
Relative Index

ESG (overall)

Since
March 2022

S (Social)

Since
March 2023

News Release (Japanese only)

Morningstar Japan
ex-REIT Gender
Diversity Tilt Index

Voted “Best CEO” in the Institutional Investor 2023
All-Japan Executive Team ranking for third consecutive year

THE INCLUSION OF SEKISUI HOUSE, 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 SEKISUI HOUSE, 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.

Disclaimer regarding the use of a Morningstar, Inc. logo

April
2023

Index category

Sponsor: Bloomberg L.P.
News Release (Japanese only)

233

Head ofﬁce:
Umeda Sky Building Tower East, 1-1-88, Oyodonaka,
Kita-ku, Osaka 531-0076, Japan
Contact:
ESG Management Promotion Headquarters(Head ofﬁce)
Tel: +81-6-6440-3440
Email: esg@sekisuihouse.co.jp
ESG Management Promotion Headquarters
Investor Relations Department
Akasaka Garden City, 4-15-1, Akasaka, Minato-ku,
Tokyo 107-0052, Japan
Tel: +81-3-5575-1730
Email: investor.relations@sekisuihouse.co.jp

Global website:
https://www.sekisuihouse.co.jp/english/
Sustainability / ESG management:
https://www.sekisuihouse.co.jp/english/company/sustainable/
Investor relations:
https://www.sekisuihouse.co.jp/english/company/financial/This document serves as Sekisui House’s report on the status of implementation for the 10 Principles of the United Nations Global Compact (UNGC),
which the Group submits to the UN Global Compact Ofﬁce.

Published July 2023

1

GRI Content Index
Statement of use

In Value Report 2023, Sekisui House has reported in accordance with the GRI Standards for the period from February 1, 2022 to January 31, 2023 (FY2022).

GRI 1 used

GRI 1: Foundation 2021

GRI 2: General Disclosures 2021
GRI 2: 1. The organization and its reporting practices
GRI Standard

2-1

2-2

GRI 2: 3. Governance

Topic disclosures

Organizational details
Entities included in the organization’ssustainability reporting

Value Report 2023 section

2-4
2-5

Reporting period, frequency and contact
point
Restatements of information
External assurance

2-6

Pages

Editorial Policy / Communication Overview

2

Corporate Governance > Directors of the Board and Audit andSupervisory Board Members

128-132

Company Information

230

Corporate Governance > Major Organizations/Committees andTheir Roles

104

Editorial Policy / Communication Overview
Back cover

2-9

2

2-10

Nomination and selection of the highest
governance body

2-11

Chair of the highest governance body234
166-174

Social > Metrics and Targets

181-218

Independent Third-Party Assurance Report

220
2-12

Value Report 2023 section

Role of the highest governance bodyin overseeing the management of
impacts

Pages

Business Portfolio

4Company Information

230

Value Chain

51-52

Supply Chain Management

141,
147-148,151,
216-218

Activities, value chain and other business
relationships

Governance structure and composition

WEB

Environmental Data

Topic disclosures

Employees
Workers who are not employees

Value Report 2023 section

Corporate Governance > Corporate Governance System

11-Year Highlights (Consolidated)

2-7
2-8

Topic disclosures

230

GRI 2: 2. Activities and workers
GRI Standard

GRI Standard

Company Information(Securities Report (Japanese only))
2-3

Pages

226-229

Company Information

230

Diversity and Inclusion and KPIs

32-35

Developing Human Resources

187-191

Diversity and Inclusion

192-198

2-13

Delegation of responsibility for managing
impacts

2-14

Role of the highest governance body insustainability reporting

2-15

Conflicts of interest

103

Corporate Governance > Personnel Affairs and Remuneration Committee

106

Corporate Governance > Stance on and Procedures for Selectionof Prospective Directors of the Board

109-110

Corporate Governance > Major Organizations/Committees andTheir Roles

104

Stakeholder Engagement

54

Participation in International Initiatives and Activities with
Government and Industry Groups219

Corporate Governance > Major Organizations/Committees andTheir Roles

104

The Sekisui House Group’s Stance and Initiatives to Promote ESG
Management (Sustainability)

97-98

Sekisui House’s Operating Environment, Risks and Opportunities

38

Corporate Governance > Major Organizations/Committees andTheir Roles

104

The Sekisui House Group’s Stance and Initiatives to Promote ESG
Management (Sustainability)

97-98

The Sekisui House Group’s Stance and Initiatives to Promote ESG
Management (Sustainability)

97-98

Corporate Governance > Officer Remuneration

112-114

Corporate Governance > Enhancing the Group Governance System
Corporate Governance > Cross-Shareholdings

115
116

Promoting Compliance

117-120

Strengthening Risk Management121-124

2-16

Communication of critical concerns

2-17Collective knowledge of the highest
governance body

Corporate Governance > Skill Matrix and Reasons for Selection ofEach Skill Category

2-18

Evaluation of the performance of thehighest governance body

Corporate Governance > Evaluation of the Effectiveness of theBoard of Directors

104-105

2-19

Remuneration policies

Corporate Governance > Officer Remuneration

112-1142-20

Process to determine remuneration

Corporate Governance > Officer Remuneration

112-114Annual total compensation ratio

Total Consolidated Remuneration for Directors of the Board(Excluding Outside Directors of the Board)
Average annual salary

114, 194

2-21

108

2
GRI Content Index

GRI 2: 4. Strategy, policies and practices
GRI Standard

Topic disclosures

2-22

Statement on sustainable development
strategy

2-23
2-24

GRI 2: 5. Stakeholder engagement
Value Report 2023 section

Message from the President

Pages

7-10

Policy commitments(Respect for Human Rights > Sekisui House Group Human
Rights Policy)

WEB

Embedding policy commitments

The Sekisui House Group’s Stance and Initiatives to Promote
ESG Management (Sustainability)

97-98

The Sekisui House Group’s Stance and Initiatives to Promote
ESG Management (Sustainability)

97-98

Promoting Compliance

117-120

2-25

Processes to remediate negative impacts

Strengthening Risk Management121-124

2-26

Mechanisms for seeking advice andraising concerns

Promoting Compliance

117-120

2-27

Compliance with laws and regulations

Promoting Compliance > Legal compliance status

120

Membership associations

Participation in International Initiatives and Activities with
Government and Industry Groups

219

2-28

GRI 3: Material Topics 2021
GRI 3: 2. Disclosures on material topics
GRI Standard

3-1

Topic disclosures

Process to determine material topics

Value Report 2023 section

Sekisui House’s Material Issues
Our Material Issues and the Value We Provide

3-2

3-3

List of material topics

Management of material topics

Pages

15-17
17

Creation of High-Quality Housing Stock and KPIs

22-25

Contributing to a Sustainable Society and KPIs

26-31

Diversity and Inclusion and KPIs

32-35

Sekisui House’s Material Issues

15-17

The Sekisui House Group’s Stance and Initiatives to Promote
ESG Management (Sustainability)

97-98

GRI Standard

Topic disclosures

Value Report 2023 section

Pages

2-29

Approach to stakeholder engagement

Stakeholder Engagement

54

2-30

Collective bargaining agreements

Respect for Human Rights > Dialogue with employees on
freedom of association and respect for collective bargaining rights

183

3
GRI Content Index

Topic Standards (Economic Topics)
GRI 201: Economic Performance 2016
GRI Standard

201-1

Topic disclosures

Direct economic value generated anddistributed

GRI 205: Anti-corruption 2016
Value Report 2023 section

11-Year Highlights (Consolidated)

226-229(Securities Report (Japanese only))WEB

Promoting Compliance > Breakdown of taxes paid in each country
201-2

Financial implications and other risks andopportunities due to climate change

201-3

Defined benefit plan obligations andother retirement plans

201-4

Financial assistance received fromgovernment

Pages

119

Contributing to a Decarbonized Society

136-141

Disclosure in Line with Task Force on Climate-related Financial
Disclosures (TCFD) Recommendations

142-145(Securities Report (Japanese only))

WEB

—

—

GRI Standard

Topic disclosures

205-1

Operations assessed for risks related tocorruption

205-2

Communication and training aboutanti-corruption policies and procedures

205-3

Confirmed incidents of corruption andactions taken

Value Report 2023 section

Pages

Promoting Compliance

117-120

Promoting Compliance

117-120

Strengthening Risk Management121-124

Promoting Compliance > Legal compliance status

120

GRI 206: Anti-competitive Behavior 2016
GRI Standard

Topic disclosures

Value Report 2023 section

Pages

206-1

Legal actions for anti-competitive behavior,anti-trust, and monopoly practices

Promoting Compliance > Legal action related to monopolistic
practices120

Topic disclosures

Value Report 2023 section

Pages

GRI 202: Market Presence 2016
GRI Standard

Topic disclosures

Value Report 2023 section

Pages

202-1

Ratios of standard entry level wage by
gender compared to local minimum wage

—

—

202-2

Proportion of senior management hiredfrom the local community——

GRI 207: Tax 2019GRI Standard

207-1

Approach to tax

Promoting Compliance > Tax transparency

119(Full text
online )207-2

Tax governance, control, and risk
management

Promoting Compliance > Tax transparency

119(Full text
online )

Pages

207-3

Stakeholder engagement andmanagement of concerns related to tax

Coexisting with Local Communities

210-215

207-4Country-by-country reporting

Contributing to a Decarbonized Society

136-141

Coexisting with Local Communities

210-215

GRI 203: Indirect Economic Impacts 2016
GRI Standard

Topic disclosures

203-1

Infrastructure investments and services
supported

203-2

Significant indirect economic impacts

Value Report 2023 section

GRI 204: Procurement Practices 2016
GRI Standard

204-1

Topic disclosures

Proportion of spending on local
suppliers

Value Report 2023 section

Pages

Biodiversity Conservation > Percentage of Wood Products by Region

148

—

—

Promoting Compliance > Breakdown of taxes paid in each country119

4
GRI Content Index

Topic Standards (Environmental Topics)
GRI 301: Materials 2016
GRI Standard

301-1

GRI 303: Water and Effluents 2018
Topic disclosures

Materials used by weight or volume

Value Report 2023 section

Environmental Data

Pages

166-174

301-2

Recycled input materials used

Initiatives to Realize a Circular Economy > Recycling initiatives

158

301-3

Reclaimed products and their packaging
materials

Initiatives to Realize a Circular Economy > Basic program forincreasing the resource usage rate

157

GRI Standard

Topic disclosures

Topic disclosures

Value Report 2023 section

Pages

302-1

Energy consumption within theorganization

Environmental Data

166-174

302-2

Energy consumption outside of theorganization

Environmental Data

168

302-3

Energy intensity

Environmental Data

166

302-4

Reduction of energy consumption

Environmental Data

173

302-5

Reductions in energy requirements ofproducts and services

Environmental Data

167

Pages

Interactions with water as a sharedresource

Water Security

162-165

303-2

Management of water discharge-related
impacts

Water Security

162-165

303-3

Water withdrawal

Water Security

163

303-4

Water discharge

Water Security

163

303-5

Water consumption

GRI 302: Energy 2016
GRI Standard

Value Report 2023 section

303-1

Water Security

163

Factory Site Report175-180

GRI 304: Biodiversity 2016
GRI Standard

Topic disclosures

304-1

Operational sites owned, leased, managed in, or adjacent to, protectedareas and areas of high biodiversity
value outside protected areas

304-2

Significant impacts of activities,
products and services on biodiversity

Value Report 2023 section

146-147

Biodiversity Conservation > Practicing due diligence inprocurement147-148

Biodiversity Conservation > Wood Procurement Risk Survey

304-3

Habitats protected or restored

304-4

IUCN Red List species and national
conservation list species with habitats
in areas affected by operations

Pages

Biodiversity Conservation > The Gohon no Ki Project, an
eco-friendly landscaping and greening project148

Disclosure in Line with the Taskforce on Nature-related
Financial Disclosures (TNFD) Draft Recommended Disclosures152-153

Biodiversity Conservation

146-151

Disclosure in Line with the Taskforce on Nature-related
Financial Disclosures (TNFD) Draft Recommended Disclosures152-153

Biodiversity Conservation > Commitment to biodiversity inwood procurement

147

5
GRI Content Index

GRI 305: Emissions 2016
GRI Standard

GRI 306: Waste 2020
Topic disclosures

Value Report 2023 section

Pages

305-1

Direct (Scope 1) GHG emissions

Environmental Data > Scope 1 and 2 GHG Emissions

171-174

305-2

Energy indirect (Scope 2) GHG
emissions

Environmental Data > Scope 1 and 2 GHG Emissions

171-174

Other indirect (Scope 3) GHG emissions

Environmental Data > Scope 3 GHG emissions

GHG emissions intensity

Environmental Data > Scope 1 and Scope 2 Emissions per Unitof Net Sales

305-3
305-4

305-5

305-6

305-7

Reduction of GHG emissions

Emissions of ozone-depleting substances(ODS)

Nitrogen oxides (NOx), sulfur oxides(SOx), and other significant air emissions

171-172,
174

Contributing to a Decarbonized Society > Decarbonization ofBusiness Activities and Response to Climate Change

139-140

Contributing to a Decarbonized Society > Reduction of CO2
emissions at procurement stages for components and raw materials

141

Disclosure in Line with Task Force on Climate-related Financial
Disclosures (TCFD) Recommendations > The Sekisui HouseGroup’s Scope 1 and 2 CO2 Emissions Reduction / The Sekisui
House Group’s Scope 3 CO2 Emissions Reduction

145

Environmental Data > GHG emissions (Scope 1, 2, 3)

174

Scope 1 and 2 GHG Emissions

171

Initiatives to Realize a Circular Economy > Initiatives forprocessing hazardous waste and preventing contamination bychemical substances

159

161
175-180

Value Report 2023 section

Pages

306-1

Environmental Management
Initiatives to Realize a Circular Economy

154-161306-2

Management of significant waste-related
impacts

Environmental Management134-135

Initiatives to Realize a Circular Economy

154-161306-3
136-139

Factory Site Report

Topic disclosures

Waste generation and significant
waste-related impacts

166

Contributing to a Decarbonized Society > Achieving Comfortable
Living alongside Decarbonization While Strengthening Disaster
Resilience

Initiatives to Realize a Circular Economy > SOx and NOx
emissions (factories in Japan)

GRI Standard

Waste generated

Initiatives to Realize a Circular Economy > Pollution, Waste andResource Use Costs and Investment in R&D on Reducing or
Avoiding Their Impacts
Environmental Data > Material balance134-135160
169-170

Factory Site Report175-180

306-4

Waste diverted from disposal

Initiatives to Realize a Circular Economy > 4. Metrics and Targets

156-158

306-5

Waste directed to disposal

Initiatives to Realize a Circular Economy > 4. Metrics and Targets

156-158

GRI 308: Supplier Environmental Assessment 2016
GRI Standard

Topic disclosures308-1

New suppliers that were screenedusing environmental criteria

308-2

Negative environmental impacts in the
supply chain and actions taken

Value Report 2023 section

Pages

Biodiversity Conservation > Practicing due diligence in procurement147-148

Biodiversity Conservation > Practicing due diligence in procurement147-148

Biodiversity Conservation > Wood Procurement Risk Survey

148

Biodiversity Conservation > Wood Procurement Risk Survey

148

6
GRI Content Index

Topic Standards (Social Topics)
GRI 401: Employment 2016
GRI Standard

401-1

401-2

401-3

GRI 404: Training and Education 2016
Topic disclosures

New employee hires and employee
turnoverBenefits provided to full-time employeesthat are not provided to temporary or
part-time employees
Parental leave

Value Report 2023 section

Pages

Developing Human Resources > Employee Turnover Rate

189

Diversity and Inclusion > Metrics and Targets

194

—

—

Diversity and Inclusion > Metrics and Targets

193

Diversity and Inclusion > Encouraging all eligible male employees
to take childcare leave

196

GRI Standard

Topic disclosures

Value Report 2023 section

404-1

Average hours of training per year per
employee

Developing Human Resources > Investment in Training and
Ability Development

404-2

Programs for upgrading employee
skills and transition assistanceprograms

Developing Human Resources

404-3

Percentage of employees receiving
regular performance and career development reviews

Developing Human Resources > Career interviews

Pages

189

187-191

190

GRI 405: Diversity and Equal Opportunity 2016
GRI 403: Occupational Health and Safety 2018
GRI Standard

403-1

403-2

403-3

Topic disclosures

Occupational health and safety
management system
Hazard identification, risk assessment,
and incident investigation

Occupational health services

GRI Standard
Value Report 2023 section

Pages

Occupational Health and Safety > Occupational health and safety
management system for construction departments and Sekisui
House employees

201

Strengthening Risk Management > Labor management

123

Occupational Health and Safety > Occurrences of occupational
accidents

202-203

Happiness Health Management

199-200

Occupational Health and Safety > Occupational health and safety
management system for construction departments and Sekisui
House employees

201

Strengthening Risk Management > Labor management

123

Occupational Health and Safety > Occupational health and safety
management system for construction departments and Sekisui
House employees

201
202

403-4

403-5

Worker training on occupational healthand safety

Occupational Health and Safety > Construction-related health andsafety training

403-6

Promotion of worker healthHappiness Health Management

403-7

Prevention and mitigation of occupational
Occupational Health and Safety > Occupational health and safety
health and safety impacts directly linked
activities at construction sites
by business relationships

203

403-8

Occupational Health and Safety > Occupational health and safety
Workers covered by an occupational healthmanagement system for construction departments and Sekisui
and safety management system
House employees

201

Work-related injuries

Contributing to a Sustainable Society and KPIs > Occupational
health and safety & supply chain

30-31

Occupational Health and Safety > Occurrences of occupational accidents

202-203

Work-related ill healthContributing to a Sustainable Society and KPIs > Occupational
health and safety & supply chain

30-31

Occupational Health and Safety > Occurrences of occupational accidents

202-203403-9

403-10199-200

Value Report 2023 section

Diversity and Inclusion and KPIs

405-1

405-2

Worker participation, consultation andcommunication on occupational healthand safety

Topic disclosures

Diversity of governance bodies andemployees

Ratio of basic salary and remuneration of
women to men

Pages

32-33,35

Corporate Governance > Corporate Governance Highlights

101

Corporate Governance > Board of Directors Composition / Audit
and Supervisory Board Composition104

Directors of the Board and Audit and Supervisory Board
Members

128-132

Diversity and Inclusion > Metrics and Targets

193

Diversity and Inclusion > Metrics and Targets

194

Diversity and Inclusion > Gender Wage Gap

194

GRI 406: Non-discrimination 2016
GRI Standard

Topic disclosures

Value Report 2023 section

Pages

406-1

Incidents of discrimination and corrective
actions taken——

Value Report 2023 section

Pages

—

—

GRI 407: Freedom of Association and Collective Bargaining 2016
GRI Standard

407-1

Topic disclosures

Operations and suppliers in which theright to freedom of association andcollective bargaining may be at risk

7
GRI Content Index

GRI 408: Child Labor 2016
GRI Standard

408-1

GRI 414: Supplier Social Assessment 2016
Topic disclosures

Value Report 2023 section

Operations and suppliers at significant
risk for incidents of child labor

—

Pages

GRI Standard

Topic disclosures

—

414-1

New suppliers that were screened usingsocial criteria

Supply Chain Management

Value Report 2023 section

216-218

Pages

414-2

Negative social impacts in the supply
chain and actions taken

Supply Chain Management > Risk Management217-218

GRI 409: Forced or Compulsory Labor 2016
GRI Standard

Topic disclosures

Value Report 2023 section

Pages

409-1

Operations and suppliers at significant risk
for incidents of forced or compulsory labor——

GRI 415: Public Policy 2016
GRI Standard

415-1

Topic disclosures

Value Report 2023 section

Pages

—

—

Political contributions

GRI 410: Security Practices 2016
GRI Standard

410-1

Topic disclosures

Value Report 2023 section

Pages

—

—

Security personnel trained in humanrights policies or procedures

GRI 416: Customer Health and Safety 2016
GRI Standard

416-1

Assessment of the health and safety
impacts of product and service
categories

416-2

Incidents of non-compliance concerning
the health and safety impacts of products and services

GRI 411: Rights of Indigenous Peoples 2016
GRI Standard

Topic disclosures

Value Report 2023 section

Pages

411-1

Incidents of violations involving rights ofindigenous peoples——

Value Report 2023 section

Pages

GRI 413: Local Communities 2016
GRI Standard

Topic disclosures

413-1

Operations with local community
engagement, impact assessments,
and development programs

413-2

Operations with significant actual andpotential negative impacts on local
communities

Stakeholder Engagement

54

—

—

Topic disclosures

Value Report 2023 section

Pages

The Sekisui House Technology and Mindset Behind Our MaterialIssues > Creation of High-Quality Housing Stock

18-19

Strengthening Risk Management > Response in the event of anatural disaster

124

Customer Initiatives
Promoting Compliance > Infractions and penalties related to
products and services, health and safety

207-209120

GRI 418: Customer Privacy 2016
GRI Standard

Topic disclosures

418-1

Substantiated complaints concerning
breaches of customer privacy and losses of customer data

Value Report 2023 section

Promoting Compliance > Infractions and penalties related tocustomer privacy

Pages

120

8

SASB Index (Home Builders)Land Use & Ecological Impacts
Unit

Provisional Metric Code

Value Report 2023 section

Number of (1) lots and (2) homes delivered on redevelopment sites

Accounting Metric

NumberIF-HB-160a.1—

Number of (1) lots and (2) homes delivered in regions with High or Extremely High Baseline
Water Stress

NumberIF-HB-160a.2—

Presentation currency

IF-HB-160a.3• Promoting Compliance > Legal compliance status>Infractions and penalties related to the environment (P.120)
There were no major infractions or penalties of environmental laws or regulations in FY2022. There were no accidental spills or other incidents
impacting the environment surrounding our factories. Although we are aware of the need of allowances to secure our preparedness to a major
environmental accident or other incident arising from our operations, we recorded no allowances for ESG-related issues, including environmental
issues, in said fiscal year.

n/a

IF-HB-160a.4• Biodiversity Conservation (P.146-151)• Disclosure in Line with the Taskforce on Nature-related Financial Disclosures (TNFD) Draft Recommended Disclosures (P.152-153)• Environmental Data > Evidence of urban brownfield redevelopment (P.168)• Environmental Data > Commitment regarding Greenfield Development (P.168)

Unit

Provisional Metric Code

Value Report 2023 section

Rate

IF-HB-320a.1• Contributing to a Sustainable Society and KPIs > Occupational health and safety & supply chain (P.30)• Occupational Health and Safety > Occurrences of occupational accidents > Frequency Rate of Accidents Resulting in Lost Worktime, Frequency
Rate of Occupational Illness, Number of Deaths (P.202)• Occupational Health and Safety > Occupational accidents at construction sites (P.203)

Unit

Provisional Metric CodeTotal amount of monetary losses as a result of legal proceedings associated withenvironmental regulations

Discussion of process to integrate environmental considerations into site selection, site designand site development and construction

Workforce Health & Safety
Accounting Metric(1) Total recordable incident rate (TRIR) and (2) fatality rate for (a) direct employees and(b) contract employees

Design for Resource Efficiency
Accounting Metric

Value Report 2023 section• Contributing to a Decarbonized Society > Promoting ZEH through Green First ZERO detached houses > Growth in the Number of DetachedHouse ZEH (P.136)
The cumulative number of ZEH houses sold since the launch of sales in FY2013 reached 76,509 (as of March 2023)(1) Number of homes that obtained a certified residential energy efficiency rating and(2) average rating

Number,RatingIF-HB-410a.1

Percentage of installed water fixtures certified to a water efficiency standard

Percentage(%)

IF-HB-410a.2

NumberIF-HB-410a.3• Environmental Data > Evidence and ratio of buildings with green certification in the real estate portfolio (P.168)

IF-HB-410a.4• Environmental Strategy (P.83-84)• Environmental Management (P.134-135)• Contributing to a Decarbonized Society (P.136-141)• Biodiversity Conservation (P.146-151)• Disclosure in Line with the Taskforce on Nature-related Financial Disclosures (TNFD) Draft Recommended Disclosures (P.152-153)• Initiatives to Realize a Circular Economy (P.154-161)• Water Security (P.162-165)

Number of homes delivered certified to a third-party multi attribute green building standard

Description of risks and opportunities related to incorporating resource efficiency into homedesign, and how benefits are communicated to customers

n/a

—

9
SASB Index (Home Builders)Community Impacts of New Developments
Accounting Metric

Description of how proximity and access to infrastructure, services, and economic centersaffect site selection and development decisions

Unit

Provisional Metric Code

Value Report 2023 section

n/a

IF-HB-410b.1—

Number of (1) lots and (2) homes delivered on infill sites

NumberIF-HB-410b.2—(1) Number of homes delivered in compact developments and (2) average density

NumberIF-HB-410b.3—

Climate Change Adaptation
Accounting Metric

Number of lots located in 100-year flood zones
Description of climate change risk exposure analysis, degree of systematic portfolio exposure,and strategies for mitigating risks

Unit

Provisional Metric Code

Value Report 2023 section

NumberIF-HB-420a.1—

n/a

IF-HB-420a.2• Disclosure in Line with Task Force on Climate-related Financial Disclosures (TCFD) Recommendations (P.142-145)

Activity Metrics
Unit

Provisional Metric Code

Number of controlled lots

Accounting Metric

NumberIF-HB-000.A• 11-Year Highlights (Consolidated) > Trends in Sekisui House Real Estate Block Leasing Operation (P.228)

Value Report 2023 section

Number of homes delivered

NumberIF-HB-000.B• Management Resources (Four Types of Capital) > Cumulative dwellings built (global): 2.62 million (P.40)• 11-Year Highlights (Consolidated) > Number of Houses Built by Sekisui House (Units) (P.228)

Number of active selling communities

NumberIF-HB-000.C—

10

Recommended disclosures from TCFD
Recommendations

Governance
Disclose the organization’s governance around climate-related risks
and opportunities

Recommended Disclosuresa) Describe the board’s oversight of climate related risks andopportunities.

Value Report 2023 Section / Related Information• Sekisui House’s Material Issues(P.15)• Contributing to a Sustainable Society and KPIs(P.26-31)• The Sekisui House Group’s Stance and Initiatives to Promote ESG Management (Sustainability) >Governance (P.97)• Corporate Governance > Major Organizations/Committees and Their Roles (P.104)• Environmental Management > Governance (P.134)• Disclosure in Line with Task Force on Climate-related Financial Disclosures (TCFD) Recommendations >Governance (P.142)b) Describe management’s role in assessing and managing climaterelated risks and opportunities.

• Sekisui House’s Material Issues (P.15)• Message from the President (P.7-10)• Contributing to a Sustainable Society and KPIs(P.26-31)• The Sekisui House Group’s Stance and Initiatives to Promote ESG Management (Sustainability) (P.97-98)• Corporate Governance > Major Organizations/Committees and Their Roles (P.104)• Corporate Governance > Officer Remuneration (P.112-114)• Environmental Management > Governance (P.134)• Disclosure in Line with Task Force on Climate-related Financial Disclosures (TCFD) Recommendations (P.142)

Strategy
Disclose the actual and potential impacts of climate-related risks andopportunities on the organization’s businesses, strategy, and financial
planning where such information is material.

a) Describe the climate-related risks and opportunities the organization
has identified over the short, medium, and long term.

• Our Material Issues and the Value We Provide (P.17)• Sekisui House’s Operating Environment, Risks and Opportunities (P.38)• Value Chain > Risks and Opportunities (P.51-52)• Contributing to a Decarbonized Society (P.136-141)• Disclosure in Line with Task Force on Climate-related Financial Disclosures (TCFD) Recommendations> Strategy (P.142-144)b) Describe the impact of climate- related risks and opportunities on
the organization’s businesses, strategy, and financial planning.

• The Sekisui House Technology and Mindset Behind Our Material Issues >Contributing to a Sustainable Society (P.20)• Management Resources (Four Types of Capital) >Tangibles (Manufactured capital and natural capital) (P.39)• Value Chain > Risks and Opportunities (P.51-52)• The Evolution of Our Mid-Term Management Plans (P.58)• Environmental Strategy (P.83-84)• Disclosure in Line with Task Force on Climate-related Financial Disclosures (TCFD) Recommendations > Strategy (P.142-144)c) Describe the resilience of the organization’s strategy, taking into
consideration different climate- related scenarios, including a 2°C
or lower scenario.

• Disclosure in Line with Task Force on Climate-related Financial Disclosures (TCFD) Recommendations > Strategy (P.143-144)• Disclosure in Line with Task Force on Climate-related Financial Disclosures (TCFD) Recommendations > Confirmation of the resilience of the Sekisui
House Group’s existing strategies (P.144)• Disclosure in Line with Task Force on Climate-related Financial Disclosures (TCFD) Recommendations > Future issues for the Sekisui House Group (P.145)

11
Recommended disclosures from the TCFD

Recommendations

Risk management
Disclose how the organization identifies, assesses,
and manages climate-related risks.

Recommended Disclosuresa) D escribe the organization’s processes for identifying and assessing
climate-related risks.

Value Report 2023 Section / Related Information• Stakeholder Engagement (P.54)• The Sekisui House Group’s Stance and Initiatives to Promote ESG Management (Sustainability) (P.97-98)• Corporate Governance > Major Organizations/Committees and Their Roles (P.104)• Strengthening Risk Management (P.121-124)• Contributing to a Decarbonized Society>Other Initiatives>Reduction of CO2 emissions at procurement stages for• components and raw materials (P.141)• Disclosure in Line with Task Force on Climate-related Financial Disclosures (TCFD) Recommendations >Governance (P.142)• Disclosure in Line with Task Force on Climate-related Financial Disclosures (TCFD) Recommendations >Risk management (P.144)• Participation in International Initiatives and Activities with Government and Industry Groups (P.219)b) Describe the organization’s processes for managing climaterelated risks.

• The Sekisui House Group’s Stance and Initiatives to Promote ESG Management (Sustainability) (P.97-98)• Corporate Governance> Major Organizations/Committees and Their Roles (P.104)• Strengthening Risk Management (P.121-124)• Disclosure in Line with Task Force on Climate-related Financial Disclosures (TCFD) Recommendations >Governance (P.142)• Disclosure in Line with Task Force on Climate-related Financial Disclosures (TCFD) Recommendations >Risk management (P.144)c) D escribe how processes for identifying, assessing, and managing
climate-related risks are integrated into the organization’s overall risk
management.

• The Sekisui House Group’s Stance and Initiatives to Promote ESG Management (Sustainability) (P.97-98)• Corporate Governance > Major Organizations/Committees and Their Roles (P.104)• Strengthening Risk Management (P.121-124)• Disclosure in Line with Task Force on Climate-related Financial Disclosures (TCFD) Recommendations >Governance (P.142)• Disclosure in Line with Task Force on Climate-related Financial Disclosures (TCFD) Recommendations >Risk management (P.144)

Metrics and targets
Disclosure of metrics and targets used to assess and manage
climate- related risks and opportunities where such information
is material.

a) Disclose the metrics used by the organization to assess climaterelated risks and opportunities in line with its strategy and risk
management process.

• Contributing to a Sustainable Society and KPIs(P.26-31)• Management Resources (Four Types of Capital) > Tangibles (Manufactured capital and natural capital) (P.39)• Environmental Strategy (P.83-84)• Contributing to a Decarbonized Society (P.136-141)• Disclosure in Line with Task Force on Climate-related Financial Disclosures (TCFD) Recommendations > Metrics and targets (P.145)• Environmental Data (P.166-174)• Independent Third-Party Assurance Report (P.220)b) D isclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhousegas (GHG) emissions, and the related risks.

• Disclosure in Line with Task Force on Climate-related Financial Disclosures (TCFD) Recommendations > Future issues for the Sekisui House Group (P.145)• Environmental Data (P.166-174)• Independent Third-Party Assurance Report (P.220)c) Describe the targets used by the organization to manage climaterelated risks and opportunities and performance against targets.

• Contributing to a Sustainable Society and KPIs > Decarbonization (P.26-27,31)• ESG Strategy > Further Promoting Sha Maison ZEH (P.84)• Contributing to a Decarbonized Society (P.136-141)• Disclosure in Line with Task Force on Climate-related Financial Disclosures (TCFD) Recommendations > Future issues for the Sekisui House Group (P.145)• Environmental Data (P.166-174)