ESG Management Report(Published in FY2023)
Period subject to activities: January 1 – December 31, 2022
Published: April 28, 2023

CORPORATE MESSAGE

IDEAL to REAL
Bringing ideals into reality to create a new future

INDEX
１

Basic Management Philosophy on ESG

・・・2

２

Organizational Overview

・・・3

３

ESG Management Organizational Chart and Roles,
Responsibilities, Authority

・・・4

４

Main ESG Quantitative Results

・・・5

５

ESG Management Targets and Results

・・・5

６

Initiative Results and Evaluations of ESG
Management Plan

・・・6

７

ESG Initiatives

・・・9

８ Results of Checking and Evaluating Compliancewith ESG-related Laws, Regulations, etc.

・・・22

９

Results of Evaluation of ESG Internal Audit

・・・22

10 Overall Report from the Chief ESG Officer andComments from the Representative

・・・23

１

Basic Management Philosophy on ESG
Management Philosophy on ESG
Our IDEAL to REAL corporate message calls for the creation of a new culture by making ideals reality.
Based on this working slogan, as a lifeways developer committed to creating ideal modes of life that meet today’s changing needs,
we will seek to build a sustainable society and achieve sustainable growth by addressing social issues through our ESG initiatives.

Basic Philosophy on ESG

Established: March 23, 2018

We strive to grow as a company needed by society by promoting ESG initiatives in strict compliancewith laws, regulations, and our pledges related to the environment, society, and self governance.

Revised: February 24, 2021

Takatoshi Ito

President & Representative Director

Environment

Social

1. Creating new environmental value throughnext generation urban development andother measures to realize a carbon-neutral
society by 2050

1. In addition to contributing to community
vitality through urban development, creating
new futures by promoting local community
building

2. Promoting real estate development andcorporate activities that give fullconsideration to the environment

2. In addition to developing workplaces where
employees can demonstrate their abilities tothe fullest while doing rewarding work,
promoting diversity to enable diverse humanresources to thrive

3. Taking on the challenges of new businessdomains based on the key theme of theenvironment, thereby creating both
environmental value and business value

3. Supporting safe and comfortable lives in our
many communities by contributing tosolutions to social challenges posed byhealth and welfare, including low birth rates
and aging populations

Governance
1. Enhancing timely, appropriate, and fairdisclosure of management information
2. Promoting governance structures
capable of securing management
stability, soundness, and transparency
3. Enhancing risk management
capabilities in response to growing
risks accompanying businessexpansion and diversification
4. Pursuing business activities based on
the Corporate Ethics Charter andrespect for the human rights of all

4. Promoting business development to achieve
SDGs on a global basis throughinternational business development

2

Organizational Overview
Name and representative

Certified/registered organization/lines of business

Prime Market, Tokyo Stock Exchange

ES-CON JAPAN Ltd.

President & Representative Director: Takatoshi Ito

Registered organization:

ESCON JAPAN Ltd.

Subject locations:Tokyo Head Office

Locations

Osaka Head Office

Tokyo Head Office: 2-10-4 Toranomon, Minato-ku, Tokyo, 105-0001

Nagoya OfficeOsaka Head Office: 4-1-1 Fushimimachi, Chuo-ku, Osaka-shi, Osaka, 541-0044

Kyushu Office

Nagoya Office:2-4-1 Sakae, Naka-ku, Nagoya-shi, Aichi, 460-0008

Kyushu Office:13-15 Kamikawabatamachi, Hakata-ku, Fukuoka-shi, Fukuoka,
812-0026
4-1-1 Kita 3-jo Nishi, Chuo-ku, Sapporo-shi, Hokkaido, 060-0003

Hokkaido Office:Hokkaido Office
Real estate development,
leasing, planning,brokerage and consultation

Period subject to activities: January 1 – December 31,
2022

Name of Chief ESG Officer and contact information for person in charge
Director:Lines of business:

Kenji Fujita, tel. 03-6230-9303

Person in charge: Toru Tanaka, ESG Promotion Group, tel. 06-6223-8056
Lines of business
Real estate development, leasing, planning, brokerage and consultation

Scale of businesses

21st term 22nd term 23rd term 24th term 25th term 26th term
Fiscal year
2015
2016
2017
2018
2019
2020
January 1 – December 31
Net sales (millions yen)

27th term 28th term
2021
2022

26,54833,55644,10853,97370,09673,90373,40789,999Number of employees at end of
fiscal year (employees)

79

91

123

142

159

192

221

256

Number of for-sale condominiums
supplied (units)

349

491

476

539

648

652

1,020

1,185

3

ESG Management Organizational Chart and Roles,
Responsibilities, Authority
ESG Management Organizational Chart

Roles, Responsibilities, Authority
Representative

Board of Directors
Nomination and Remuneration
Committee

President and Representative
Director

Compliance Office

Management Division

Chief ESG
Officer

Health & Culture FosteringTeam

Coordinate

President Office

ESG Promotion GroupE TeamCoordinate

S Team

G TeamCoordinate

Related departments

Under our Management Philosophy on ESG, we have identified
solutions to social challenges by promoting ESG as part of ourmanagement strategies. The officer responsible for the
President’s Office is assigned responsibility for promoting ESG
initiatives. The ESG Promotion Group, whose membershipconsists of staff chosen from each department, is divided into
the E Team, S Team, and G Team. These teams are charged
with promoting efforts to achieve annual targets in the
categories of the environment, society, and governance.

ESG
Secretariat

Facility or
sectionemployees
andresponsible
individuals
Internal
Auditing Office• Responsible for overseeing ESG management• Appointment of Chief ESG Officer• Formulation of Basic Philosophy on ESG
Management• Formulation of ESG implementation structure• Evaluation and review of ESG management• Operational management of ESG management
implementation structure• Formulation of ESG management targets and ESG
management plans• Overall evaluation of state of initiatives related to ESG
management and rectification of issues• Implementing ESG education and training• Maintenance of structures for emergencies andresponding to emergencies• Reporting to the representative on the results of ESG
activities• Assisting the Chief ESG Officer and serving as
secretariat for ESG-related matters• Drafting ESG management targets and ESG
management plans• Companywide promotion of ESG activities• Promoting internal implementation and awareness of
SDGs• Data collection and evaluations of results of ESG
activities• Evaluation of compliance with ESG-related laws,
regulations, etc.
• Serving as a liaison for external communications
regarding ESG• Preparation of ESG Management Reports• Promoting awareness of ESG management policies infacilities and sections• Implementing ESG activity plans in facilities andsections• Promoting ESG and the SDGs in business activities• Identifying, rectifying, and taking preventive measures
for issues in facilities and sections• Planning internal audits related to ESG management• Implementing and reporting on internal audits related
to ESG management

4

Main ESG Quantitative Results
Unit

2019

2020

2021

kg-CO2

148,838

157,280

154,152

156,679

General waste emissionskg

13,05813,934

16,157

16,278Industrial waste emissions

m3

74.0

3.8

7.5

1.7

Buildings

1

0

1

1

Persons

15

19

70

106

Item
Total CO2 emissions

2022 (period of activity)

Total waste emissions

Development of ZEH-M*1 Condominiums
Cumulative total number of employees who haveundergone dementia support training sessions

2019

2020

2021

2022
Period ofactivity

Fiscal year
Item
Reducing CO2 emissions
from electricity

kWhkg-CO2
YoY change

Reducing CO2 emissions
from vehicle fuelTotal CO2 emissions
reduced
Reducing general waste

kg-CO2
YoY change

Developing one ZEH-M
condominium
building/period
Cumulative total number of
employees who haveundergone dementia
support training sessions

Results
332,604
138,932
18,349-Results
336,350
137,446
16,706-

148,838969
13,058157,280793
13,934
70

154,152673
16,15771

kg-CO2kg-CO2/person
kg

YoY change
Reducing industrial waste

Results
280,553
132,818
16,021--kg/person

85

㎥

74.0

YoY change
Buildings-

YoY change-

1

Persons
YoY change

3.8

0
15

-

7.5

1
19

-

130,57395%
15,871
95%
146,444581
15,349
95%
61
7.1
95%
1

(Results)
332,726 138,936 ✕
101% ✕
17,743 ✕106% ✕
156,679 ✕604 ✕16,278 ✕101% ✕
63 ✕
1.7 ○
23% ○
1 ○

2023

2024

(Target)(Target)131,989
95%
16,856
95%
148,845521
15,46495%
54

125,389
95%
16,013
95%
141,403450
14,691
95%
47

1.6
95%
1

1.5
95%
1

100% ○
106 ○

100%

100%

105

140

175

150%

151% ○

132%

125%

100%
70

-

(Target)Evaluation

ESG Management Targets and Results

1. Bases for CO2 emissions coefficients from electricity (kg-CO₂/kWh): Tokyo 0.441, Osaka 0.350, Nagoya 0.377, Kyushu 0.479, Hokkaido 0.549
2. “Per person” units are calculated based on the average number of employees during the period. Water and natural gas use are excluded from the quantitative targets
because they cannot be identified separately.
3. The cumulative total number of employees who have undergone dementia support training sessions includes employees of Group companies.

5

Initiative Results and Evaluations of ESG Management Plan
・Reducing CO2 emissions from electricity use
Current
statusReducing CO2 emissions from electricity

×

Numerical target• Promoting work from home×○△

• Turning off unneeded lights• Promoting no-overtime days (every Wednesday)

CO2 emissions from electricity (kg-CO2)
2021

2022

15,000

2021
2022

10,000
5,000
0

1

2

3

4

5

6

7

8

9 10 11 12

2021
2022

Initiative results and evaluations and plans for the next fiscal year
Although we are proud to have reduced CO2 emissions and per-employee
emissions from last year, we failed to achieve the reduction target of 5%. Likewise,
although we promoted awareness companywide to conserve use of electricity, we
will strive to reduce emissions still further through sustained efforts to promoteawareness.
The Tokyo Head Office switched to renewables for some of its electricity in
FY2023. This helped reduce emissions.

1
11,09911,984
8
10,556
11,5272
13,023
12,797
9
10,764
11,9003
11,227
11,252
10
10,764
10,583

4
11,761
12,73911
11,29911,1535
6
7
10,273
11,790 11,630
9,951
11,691 11,612
12
Consumption per person
11,9801,469
11,748
1,282

・Reducing CO2 emissions from use of vehicle fuel
Reducing CO2 emissions from vehicle fuelCurrent
statusNumerical target

×• Promoting use of public transportation and bicycles△△• Eco-friendly driving

Gasoline (kg-CO2)
2021

3,000

2022

2021
2022

2,000

2021
2022

1,000
0
1

2

3

4

5

6

7

8

9 10 11 12

Initiative results and evaluations and plans for the next fiscal year
We set the target of reducing emissions by 5%. However, total emissions
increased due to more frequent use of company vehicles as our business areas
expanded. Still, we reduced emissions on a per-employee basis; in this we takepride. Next fiscal year, we will continue to promote the use of public transportation
by raising awareness within the organization and switching to EVs when the leaseson the current vehicles expire.

1
924
997
8
1,205
1,390

2
1,205
1,327
9
1,476
1,708

3
1,039
1,107
10
1,716
1,484

4
1,402
1,767
11
1,886
1,718

5
6
7
1,346
1,809 1,447
1,208
1,500 2,055
12Consumption per person
1,250
31.44
1,484
29.46

6

Initiative Results and Evaluations of ESG Management Plan
・Reducing general waste emissions
Reducing general waste emissions

Current
statusNumerical target×• Shifting from disposable to reusable• Promoting paperless offices• Promoting the Three Ss

General waste (kg)

Although we continued to promote paperless work by deploying tablets and othermeasures, we failed to achieve our target—5% reductions from the previous
year—due to the increase in number of employees, which led to a slight increase
from last year. Nevertheless, we reduced per-employee emissions. We plan tobolster our efforts in the next fiscal year to reduce the volume of generated waste
by posting regular reminders on the intranet and in other ways.

○
△
○
△

• Thorough waste segregation

2021

Initiative results and evaluations and plans for the next fiscal year

2022

2021
2022

5,000

2021
2022

0
1

2

3

4

5

6

7

8

9

10 11 12

1
1,074
1,267
8
1,275
1,263

2
1,028
790
9
1,240
1,428

3
1,360
1,231
10
1,392
1,565

4
1,300
1,696
11
1,456
1,263

5
6
7
1,183
1,349
1,517
1,079
1,447
1,465
12
Consumption per person
1,984
71
1,785
63

・Reducing industrial waste emissions
Reducing industrial waste emissions

Numerical target• Ascertaining waste volumes• Promoting reuse, including waste sales• Promoting awareness of the need to reduce
waste in everyday operations

Industrial waste (m3)Current
status○○

Initiative results and evaluations and plans for the next fiscal year
We cut emissions significantly from last year, generating industrial waste on only
two occasions during the year. Although this waste cannot be eliminatedcompletely because it is created on unexpected occasions, we will continue tocarefully consider the need to minimize waste and its potential sale or reuse.

×

1

2
0
0

2021
2022
8
2021
2022

3
0
0

9
0
0

4
5
0

10
3
0

3
1.5

5
0
0

11
0
0

0
0.2
12
0
0

6

7
0
0

0
0

7

Initiative Results and Evaluations of ESG Management Plan
・Promoting green procurement
Current
statusPromoting green procurement• Adopting energy-efficient, eco-friendly fixtures in realestate under development• Purchasing highly energy-efficient electric appliancesand hardware• Using fuel-efficient vehicles• Promoting green procurement of office supplies

2022(January-December)

○
○
×
○

Initiative results and evaluations and plans for the next fiscal year
Due to efforts by the procurement team to switch to carefully selected green
products at prices close to those of ordinary products, the percentage of green
products purchased grew at each facility. We achieved the overall green
purchasing target of 60%. We will continue to select products, targeting apercentage of more than 60% in the next fiscal year.

Osaka Head Tokyo Head
OfficeOfficeTotal

KyushuOfficeNagoyaOfficeHokkaido
Office

729

164

445

24

69

27

Green

1,285

406

626

72

104

77

Total (units)

2,014

570

1,071

96

173

104

Green procurement rate

63.8%

71.2%

58.5%

75.0%

60.1%

74.0%

Green procurement rate (2021)

52.9%

56.1%

52.2%

56.7%

45.6%

47.4%

Non-green・Initiatives to solve problems and make the most of opportunities
Initiatives to solve problems and make the most ofopportunities• Developing one ZEH-M condominium per year
• Increasing development of Green Building-certified
properties• Increasing the durability, safety, and environmental
performance of properties purchased and developed• Encouraging employees to undergo dementia support
training sessions• Work-style reforms (real-world measures planned for the
future)• Expanding industry-government-academia partnershipinitiatives (Tokyo University of Science, ZEH, EA21, etc.)

Current
status○○△○×* Percentage of all office supplies

Initiative results and evaluations and plans for the next fiscal year
Le JADE Honkawagoe Koedo Terrace obtained ZEH-M Oriented certification. In
addition, 36 more personnel underwent dementia support training sessions in
FY2022. Since establishing Health & Culture Fostering Team in July 2021, we
have promoted health management through efforts to reduce overtime hours
and health-related e-learning for all employees. These efforts led to recognitionby the 2023 Certified Health & Productivity Management Outstanding
Organizations. We will continue to enhance efforts to improve the mental andphysical health of our employees.

○

For an introduction to related initiatives, see “ESG Initiatives,” starting from the next page.

8

ESG Initiatives
9▮ Real estate development and other initiatives reflecting consideration
for the environment and society
Environment(1) ZEH-M Oriented certified condominium project Le JADE Yao Sakuragaoka completed
Results of ZEH-M initiatives
Le JADE Yao Sakuragaoka, our second condominium projected to acquire ZEH-M
Oriented certification after Le JADE Okurayama, which also won the Good Design Award
in FY2021, was completed in December 2022.
A ZEH-M condominium project is one intended to achieve significant reductions in energy
consumption (at least 20% less than the standard energy conservation base level) while
maintaining a comfortable interior environment by significantly improve thermal insulation
performance and using high-efficiency equipment. ZEH-M condominiums also reduce theannual balance of primary energy consumption to zero throughout the project, includingcommon areas, through the adoption of renewable energy.

This property’s environmental considerations include thicker than usual insulation, energysaving low-e double-glazing, and high-efficiency HVAC and hot water supply in exclusive
zones. These measures reduce primary energy consumption by 37%.
It has earned independent accreditation of its outstanding energy conservation
performance by BELS.
In addition, a ZEH condominium incorporates disaster prevention efforts to deliver greater
peace of mind for residents, including power generators for use in exclusive areas in theevent of a power failure, stores of emergency supplies in each residential unit, andinstallation of water coolers equipped with water purifiers that can run on emergency
power supplies in common areas.

Le JADE Yao Sakuragaoka(Total units: 72)

We will continue to promote the development of ZEH condominiums based on
consideration for the environment and for society.

Residents’ comments• I see the appeal of a ZEH condominium, which offers comfortable interior temperaturesand humidity in an eco-friendly building and a comfortable living environment.
• I’m glad to be able to save on utilities in this ZEH condominium, with its spacious livingroom and wide windows that let in plenty of sunshine.
These comments indicate residents are also impressed by ZEH condominiums.

10▮ Real estate development and other initiatives reflecting consideration
for the environment and society
Environment

Comfortable and economical next-generation housing(2) Le JADE Honkawagoe Koedo Terrace condominium project
becomes first to obtain ZEH-M Oriented certification in
Kawagoe*Continuing to pursue active ZEH-M development
Le JADE Honkawagoe Koedo Terrace obtained ZEH-M Oriented certification in August2022 as a project that reduces annual primary energy consumption through the use of highperformance thermal insulation and high-efficiency energy-saving equipment. This makes it
our third ZEH-M condominium project, after Le JADE Okurayama (a winner of the Good
Design Award in FY2021) and Le JADE Yao Sakuragaoka, to gain this certification.
Featuring an exterior design accented by vertical lines evoking strips of Kawagoe tozan
fabric, a traditional textile passed down from the Edo Period of the 17th through 19th
centuries, this project is characterized by a subdued color scheme that harmonizes with thesurrounding townscape. It delivers comfortable residential environments that reflect
consideration for the environment through insulating double windows, low-e double-glazing,and high-efficiency HVAC.
We plan to continue to leverage our development expertise as a comprehensive real estatedeveloper to build ZEH-M condominiums that satisfy residents and are good for theenvironment.
* First ZEH-certified project in the city of Kawagoe since January 1993

健康に
HealthやさしいfriendlyThethree “friendlies” of a
ZEHマンション3つのやさしさ
ZEH-M condominium
BudgetEco-に
やさしい
やさしい
friendlyfriendly

Le JADE Honkawagoe Koedo Terrace(Total units: 102)

Staff interview: Manager Okazaki, Greater Tokyo Area Architectural Planning
Department
After working in the Kawagoe area on a project in Semba, I also worked on planning forthis project in Kawagoe Nakacho. The area of this project, called Koedo, or “Little Edo,”is characterized by its traditional Kurazukuri style storehouses.
The design concept called for a place befitting Kawagoe, where residents would want tolive their entire lives. We prioritized design and spaces in harmony with the atmosphereof Kawagoe. We incorporated this vision at every stage, from planning to construction
management.

11▮ Real estate development and other initiatives reflecting consideration
for the environment and society
Environment(3) Suita Fujishirodai 5-chome multipurpose development
project* This project is currently underway.

Development concept:

A living environment connecting people
to each other and to the future

A sustainable, smart city
Plans for this project on the former site of the National Cerebral and CardiovascularCenter call for the development of multi-unit dwellings, single-family residences,serviced senior residences, and retail facilities in an appealing urban development
project in harmony with the surrounding residential environment. In developing thisproject, we will establish the foundations for a smart community by adopting state-of-theart digital, Internet of things (IoT), and other technologies to help realize the United
Nations Sustainable Development Goals (SDGs) via real-world measures.
Plans for the site call for a landscape with diverse greenery to create an environment inwhich people can experience the relaxation and comfort of the four seasons as part oftheir daily lives, in harmony with existing trees and plants, and local fauna, and based on
consideration for its connections to the Senri Greenbelt and the Japanese zelkova trees
along Senri Keyaki-dori Avenue behind the site. The plan includes the greening of open
spaces and developed slopes, greening on the roofs of parking facilities, and streetside
greenery.

We also plan to provide emergency supplies in all multi-unit dwellings and emergency
storerooms on site to strengthen safety, peace of mind, and preparedness for possible
disasters in the area.

Staff interview: Sub-Manager Sasaki, West Japan Architectural
Planning Department
We’re planning this project as a sustainable multipurpose development reflecting
consideration for its suitability to the Senri Fujishirodai area next to the Senri
Greenbelt. This will feature solar panels to power EV charging stations, with capacity
sufficient to serve 30% of the mandatory parking spaces to promote EV use. This
project will earn ABINC certification as well as the highest “S” rank in CASBEE
certification. To encourage growth in step with the community, it also includes area
Wi-Fi that will be made available for public use in the event of an emergency, gazebosthat can serve as temporary shelters, and benches suitable for camp stove use in thepark facility provided by the project in response to disasters. We will seek to make thisproject a welcome member of the community through various efforts, including
planning programs in which local residents can take part as part of seasonal
condominium events.

Senri Global Linkage Town Vision
A community in which people born and raised here
will want to return and raise their own children
to sustain the community well into the future

Links to energy
Links to

Links

Links toconservation

vegetation

among

lifestyleand a cyclicaland naturepeoplesociety

Links to safety
and peace ofmind

Putting the Sustainable Development
Goals (SDGs) into practiceRaising funds through Sumitomo Mitsui Banking
Corporation’s ESG/SDGs assessment fundraisingprogramThis project raised 3 billion yen through an assessment
fundraising program included as part of a syndicated loanarranged by SMBC, earning an overall rank of A* (third highestof seven ranks) for excellent ESG/SDGs initiatives anddisclosure in an ESG/SDGs assessment program developedby SMBC and the Japan Research Institute, Ltd.

12

▮ Real estate development and other initiatives reflecting consideration
for the environment and society
Environment(4) Participation in development project on city-owned land in front ofShin-Omura Station in Omura, Nagasaki Prefecture * This project is currently underway.
Developing an attractive city center
This long-range urban development project will involve efforts in the areas of community building,health, safety and security, community collaboration, and the SDGs, with goals including enhanced
resident services and resilience.
The development area is divided into an urban residential zone, a roadside retail zone,
and a zone for enriched living. The project will leverage its site as a hub fortransportation, including Shinkansen high-speed rail, to improve convenience for
local residents as well as visitors from afar.
▼ SDG initiatives(i) Use of renewable energy and installation of solar panels(ii) AI-powered food loss reduction efforts(iii) Food recycling(iv) Holding food drives

Artist’s rendition of the completed project(5) 2 Star and Green Star ratings earned in GRESB Real Estate Developer
Assessment
Taking on the challenge of GRESB participation
Since 2018, we’ve participated in GRESB, an annual benchmark evaluation program to gauge
consideration for ESG in the real estate sector. In FY2022 (from January 1 to December 31, 2022), we
earned an evaluation of Two Stars in the five-level GRESB ratings, based on relative evaluations of overall
scores. We also earned high marks for both management and development components, earning a GreenStar for the fourth consecutive year.
We will continue to actively engage in ESG activities to improve our evaluations.

13▮ Developing living environments and communities to connect people
to people and communities to the future

Social(1) tonarie retail facilities with roots in the community
Our tonarie retail developments seek to strengthen local communities and contribute to regional
revitalization by developing commercial facilities with roots in local communities—facilities beloved by
local residents, in which they can take pride.

[tonarie Hoshida]tonarie Hoshida opened in March 2023 as the 10th property in the tonarie series of retail facilities
based on the concept of serving and growing together with the community, existing alongside (“tonari”)
people’s everyday lives.
tonarie Hoshida was developed jointly with Mirarth Holdings.
Since its completion, this has been operated by the subsidiary ES-CON PROPERTY Ltd., which willleverage the retail facility development and operational expertise accumulated to date by the ES-CON
Group to help strengthen and stimulate the local community.

(2) Himeji Hirohata Clinic Mall development project

tonarie Hoshida* This project is currently underway.

Project details
This project planned for part of the former site of the Steel Memorial Hirohata Hospital will involve thedevelopment of welfare facilities and other properties as a health and long-term care zone, centeredon the Saneikai Hirohata Hospital, which opened in February 2023. On this new commercial site, wewill develop a clinic mall offering care in some seven medical fields, in cooperation with the new
hospital next door. This project will leverage the properties of its site to meet community healthcare
needs.
Staff interview: Staff Member Hirano, Commercial Development Business Department
Based on a mixed structure of reinforced concrete and wood construction, this property, the ESCON Japan Group’s first clinic mall, strongly reflects the SDGs in spatial values and structural
performance. Use of wood materials in common areas helps protect the environment by reducing
CO2 emissions.
Featuring a cafe terrace where visitors can enjoy the sense of nature nearby and interiors
featuring the natural warmth of wood, the clinic mall will leverage the calming effects of natural
wood and the environment.
In cooperation with the adjoining general hospital and welfare and other facilities, this project willcontribute to the lives of residents by securing a structure for providing healthcare services.

Himeji Hirohata Clinic Mall (tentative name)14▮ Developing living environments and communities to connect people
to people and communities to the future

Social(3) Iwaki Station Namiki-dori District Type I urban redevelopment
project: Namikinomori City
* This project is currently underway.

Integrated development of residential, retail, and parking facilities
We are participating in the Iwaki Station Namiki-dori District Type I urban
redevelopment project (zone name: Namikinomori City [total project area: approx.
11,400 m2]) together with the Iwaki Station Namiki-dori District Urban
Redevelopment Association and Hoosiers Corporation. This project will redevelop
the area around Iwaki Station through integrated improvements of the site, buildings,
and public facilities to create a more vital community, allowing sound and efficient
high-density use and upgraded urban functions.
Namikinomori City consists of two zones. The first will include a four-story
commercial building occupied by stores, offices, and other facilities. The second willcontain a 21-story residential building with 216 residential units, as well as stores,
clinics, and a parking structure with city-managed parking, resident parking, andbicycle parking. Each zone will include a plaza. A pedestrian promenade will connect
both zones to create a relaxing space for residents and visitors alike.
Plans call for the residential building (Mid Tower Iwaki) to become Iwaki’s tallest
aseismic high-rise condominium. In addition to an exterior design that features
vertical lines to accent the townscape, 55 of the residential units in this new landmark
for the station area will incorporate barrier-free design for seniors and otherresidents. This next-generation condominium project will house residents of multiple
generations.
It will also offer vital and comfortable living spaces based on a design that ensures allunits face south, a club lounge where residents can interact and invite guests, andstudios.

A new central urban community
balancing urban living, communication, and peace

Mid Tower Iwaki(Total units: 216)

15

▮ Developing living environments and communities to connect people
to people and communities to the future
Social(4) ES CON FIELD HOKKAIDO, integrated development project centeredon the new Hokkaido Nippon-Ham Fighters baseball stadium
Hokkaido Ballpark F Village: Community Development Concept

Le JADE Hokkaido Ballpark(Total units: 118)

Senior residence

We are participating in development of F Village around ES CON FIELD
HOKKAIDO, the new Hokkaido Nippon-Ham Fighters stadium that opened
in March 2023. We have secured naming rights to the new stadium.
As the first phase of the development project, we began selling units in Le
JADE Hokkaido Ballpark, the only condominium project in F Village, inFebruary 2022. All units sold quickly, with the project attracting positive
attention from buyers across Japan. In February 2022, we began
developing the second phase, a senior residence on the southeast cornerof F Village.
Plans call for this residence for active seniors, combined with a medicalmall, to be completed in spring 2024.
This initiative will help us maintain the health of young and old alike andcontribute to community health care. It will create residential spaces where
people can enjoy sports and other activities amid the blessings of natureand promote a sustainable community that invites multi-generational
interaction.
Through our support for athletics and for cultural activities, we remaincommitted to strengthening the community and delivering satisfaction to all
those who live and work in the area.

16▮ Empowering diverse human resources to succeed; supporting safe
and comfortable living in the community
Social(1) Promoting health management
Efforts to enhance health management
In July 2021, we established a team to foster a culture of health management. Since then, we
have provided training on harassment and raised awareness of hotlines throughout theorganization, as well as enhancing compliance initiatives and providing health-related training.
In addition, as part of our employee welfare programs, we adopted the Benefit Station services
in July 2022.
In December 2022, we formulated and released our corporate action plan (covering the period
from January 1, 2023 to December 31, 2024) under the Act on Advancement of Measures to
Support Raising Next-Generation Children and the Act on Promotion of Women’s Participation
and Advancement in the Workplace. This plan will help employees caring for children and family
members who need long-term care to balance home and work life and develop workplaces inwhich all human resources, including women, can continue with and thrive in their careers.

(2) Efforts to achieve a rewarding work environment
Surveys on working environments and business efficiency
improvements

Staff comments: Chief Staff Okuda, Health & Culture
Fostering TeamWe hold annual surveys on working environments and businessefficiency improvements to learn how well management policies
are communicated to employees and about employee opinions
and thoughts on the details of the personnel system, rules of
employment, and employee benefits. The results of these surveys
are shared within the organization to make issues visible andcreate more comfortable working environments.

As part of our health management efforts, in this fiscal year,
the Health & Culture Fostering Team introduced new
benefit services and held e-learning on health-related
subjects.

Work-life balance
We monitor employee overtime hours to make them visible andto reduce them. We also actively post and announce information
on site to ensure that all employees are aware of no-overtimedays.

Our efforts since 2022 to earn recognition by the CertifiedHealth & Productivity Management Outstanding
Organizations Recognition Program were rewarded withrecognition in March 2023. We will continue aiming toachieve sustained increases in corporate value by steadily
promoting health management.

17▮ Promoting governance structures capable of securing management
stability, soundness, and transparency
Governance(1) Disclosure based on the TCFD framework
We have announced our support for the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations. In June
2022, we disclosed financial impact based disclosed a financial impact statement based on our own scenario analysis. Recognizing
issues related to climate change as an important part of management strategies, we also consider this understanding to be an
important element in formulating future business strategies.
Category

Assessment of Financial
Impact3C Scenario

15C Scenario

Low

Moderate

Costs increase for low-carbon measures such as investments in energy-saving
equipment. Operational and renovation costs for owned properties also rise.

• Increase in costs for capital
investment and renovations, etc.

Low

High

MarketProperties that do not comply with ZEH or ZEB standards are no longer chosen bycustomers, resulting in higher vacancy rates, lower closing rates, rents, and sales
prices.

• Decrease in sales due to lower
rents and sales prices

Low

Moderate

Lack of decarbonization efforts at real estate held and real estate for sale increases
finance costs. Failure to meet investor expectations with regard to decarbonization
activities affects Company's share prices.

• Increase in financing costs

Reputation

Low

High

On-site construction of properties under development is disrupted; construction
schedules are delayed.

• Increase in construction costs

Owned properties located in disaster-prone areas may see property damage,equipment failure, and other functional issues resulting from disasters. This could
lead to the need for repair costs and reduced property reputation that may result inincreased vacancy rates. In addition, the Company may be held liable for humancasualties attributable to disasters at commercial facilities.

• Repair costs required• Decrease in sales due to higher
vacancy rates• Compensation obligations

Products/
Services

Competitiveness of properties with low CO2 emissions grows. The reputation ofbuildings with environmental certification increases.

• Increase in sales due to improved
competitiveness of properties• Increase in sales due to increased
opportunities for mixed-use
development

MarketCompact cities contribute to reduced travel distances and expand opportunities formixed-use urban area development, allowing energy to be produced locally for local
consumption and a wide range of generations to coexist and enjoy a high quality oflife.
Decarbonization efforts are recognized by financial institutions; the acquisition ofenvironmentally-friendly loans reduces financing costs. The improved reputation of
the Company for decarbonization efforts boosts share prices.

• Lower financing costs

Transition
Risks

Opportunities

Financial Impact

Procurement prices for steel, cement, and other highly carbon-intensive construction • Increase in procurement costs formaterials rise; costs increase due to taxing of CO2 emissions from property
materials
construction and owned properties.
• Increase in costs related to CO2emissions

Policy andRegulations

Physical Risks

Risks/Opportunities Relating to the Company

UrgentResilience

Sales opportunities for disaster-resistant properties expand in disaster-prone areas. • Increase in sales due to expanded
The ability to serve as a local recovery center in the event of disasters helps gain theproperty sales opportunities andsupport of local residents and customers, leading to lower tenant vacancy rates.
lower tenant vacancy rates

High

High

Low

Moderate

Low

High

Low

High

Moderate18▮ Promoting governance structures capable of securing management
stability, soundness, and transparency
Governance(2) New Compliance Office establishedPurpose and roles of the Compliance Office
Based on the Corporate Ethics and Conduct Charter, which declares our intentions to implement corporate ethics and to fulfill our corporatesocial responsibilities (CSR), we established the Compliance Code of Conduct as a code calling for executives and employees to act incompliance with laws, regulations, the articles of association, and social norms. We also established the Compliance Manual andCompliance Rules, which describe systems to ensure thorough compliance. On October 1, 2022, we established the new Compliance
Office.
As an organization under the direct supervision of the President and headed by the officer in charge of compliance (Director and Head of
President’s Office Kenji Fujita), the Compliance Office will enhance promotion of compliance management while clarifying management
approaches related to legal and regulatory compliance throughout the Company and the Group.

Harassment training

Organization chart

In 2021, we held Web-based training on harassment(sexual harassment, maternity harassment, and abuse of
power) led by an outside instructor. This training forindividual job tiers helps prevent potential risks byensuring that all employees recognize them.

Board ofDirectors

In 2022, we posted harassment training materials for all
employees. In February 2023, we undertook harassment
training through e-learning.

President

We will continue these training initiatives to raiseawareness further among all employees.

Compliance Office

We also established a compliance hotline (internalreporting / whistleblowing program).
Strategic
Business Division

Development
DivisionManagement
DivisionManagement
Planning Division19▮ Other initiatives(1) Creating an endowment to establish a cancer immunology program at Osaka University
Purpose of donations
Endowed academic programs use funds, personnel, and other resources provided by private sector firms and other donors to stimulate
education and research at universities, research institutions, and other institutions. This endowed program is intended to promote research
related to cancer immunology by establishing specialization in the subject at Osaka University, training specialists, and clarifying relatedroles and responsibilities.
Previously, in 2019 and 2021, we contributed funding to support research on the WT1 cancer vaccine and the development of a W T1
prophylactic cancer vaccine, projects headed by Professor Haruo Sugiyama of the Graduate School of Medicine/Faculty of Medicine, at
Osaka University.
[Overview of donations]
Recipient:

Osaka University

Period covered by the funding: July 1, 2022-June 30, 2025 (three years)
Funds donated:

30,000,000 yen (10,000,000 yen/year)

Timing of donation:

End of May of each year

We will continue striving to increase corporate value by promoting ESG management and contributing to society from the perspectives of theenvironment, society, and governance.

(2) Support for the city of Kitahiroshima, Hokkaido through the corporate hometown tax program
Purpose of this initiative
The city of Kitahiroshima has devised a general strategy consisting of four basic goals along theaxes of hope, exchange, growth, and taking on challenges to ease the impact of depopulation andto maintain a vital community into the future. It uses funding from the corporate hometown tax
program to help reach these targets.
We have concluded a partnership agreement with the city of Kitahiroshima on a project to promote
the vitality of the area around Kitahiroshima Station. The activities currently underway include
improvements of the station plaza and the development of a multipurpose hub for community
exchange, including retail facilities and a hotel. Through this project, we will pursue urban
development to stimulate vitality and exchange throughout the city of Kitahiroshima.

ES-CON JAPAN Ltd.
President &Representative
Director
Takatoshi Ito

City of Kitahiroshima,
Hokkaido
Mayor
20
Masami Ueno▮ Other initiatives(3) The Eye City Eco Project collects used contact lens cases
Eco ProjectThis activity will contribute to society by recycling empty cases for disposable contact lens to reduce CO 2
emissions. Disposable contact lenses are often incinerated as waste. The Project will also donate toemployment support programs and to the Japan Eye Bank Association.
We have continued to collect used contact lens cases since we began supporting this activity in October
2018.
We will continue contributing to our local communities through various SDG initiatives.

Participating sites
Osaka Head Office (ES-CON JAPAN, ES-CON PROPERTY, ES-CON LIVINGSERVICE), management offices of the tonarie Minamisenri and tonarie Yamato-Takada
retail facilities

Staff comments: Staff Member Watanabe, CS Committee
At the Osaka Head Office, staff members bring used contact lens cases from home anddeposit them into the collection box. It’s heartwarming to see the box fill up.
I’m delighted to see how this activity contributes to society while protecting the environment.
It gives individual staff members the opportunity to do what they can for the environment.

ES-CON JAPAN
Osaka Head Officetonarie Minamisenri(4) Communicating information on ESG activities in the in-house bulletin
Reporting on ESG activities
The (digital) in-house bulletin is published bimonthly. Since February 2021, it has featured ESG reports from the ESG
Promotion Group.
This is intended to reduce environmental impact by raising the awareness of each and every employee based oncommunications on the ESG Promotion Group’s activities and the SDGs.
In addition to communicating information through the in-house bulletin, we hold events related to the SDGs from time to time.

21

Results of Checking and Evaluating Compliance with ESG-relatedLaws, Regulations, etc.
Activities to check and evaluate compliance with ESG-related laws and regulations show we are in compliance.
Date of compliance evaluation: April 27, 2023
No violations or cases involving litigation were found related to ESG-related laws, regulations, etc.
Name of legal system
Waste Disposal and Public Cleansing Act
Act on Rational Use and Appropriate Managementof Fluorocarbons*No response required, since building owners
are responsible for management.

Matters identified (facilities, substances, business activities)
General waste (paper waste, textile waste, wood waste, raw waste, etc.), industrial waste

Commercial air conditioning equipment

Fire Service Act

Appointing fire prevention managers, preparing fire prevention plans, holding fire drills (participation in drills
conducted by building owners)

Home Appliance Recycling Act

Air conditioners, televisions, refrigerators/freezers, washers/dryers

Small Home Appliance Recycling Act
28 types of small electronic devices
Act on Promotion of Procurement of Eco-Friendly
Items purchased/procured, suppliers/subcontractors
Goods and Services by the State and Other Entities

Act Concerning Recycling of Materials
from Construction Work

Building Energy Conservation Act

Construction work at or above a certain scale- Demolition: 80 m2- New construction/expansion: 500 m2- Repair, remodeling: 100 million yen- Fixture disassembly/new construction: 5 million yen(i) Regulatory measures such as the obligation to comply with energy conservation standards for large nonresidential buildings (2,000 m2)(ii) Obligation to report new construction or expansion of residential and non-residential buildings withfloor areas of 300 m2 or more

Results of Evaluation of ESG Internal Audit
No issues were identified in the ESG internal audit.
• Staff view: General Manager Suzuki, Internal Audit OfficeThis year, in response to a change in secretariat membership, we conducted assessment activities centered on thestate of maintenance of ESG management systems, as we did the last time. Last year, we were able to verify that goals
had been set and companywide initiatives were underway in accordance with ESG management policies not just on
environmental topics, but on ones related to society and governance. At the same time, quantitative targets (CO 2 andgeneral waste emissions) remained unmet, due mainly to the fact that the effects of an increase in the number of
employees outweighed the impact reductions achieved on a per-employee basis. We also identified a number of
deficiencies in recording impact.
It is my impression that diligent efforts are underway to achieve our targets this year. I look forward to seeing activities
intended to ensure that the ESG management system become firmly established and permeate among employees andthat related efforts are promoted and intensified.

22

Overall Report from the Chief ESG Officer and Commentsfrom the Representative
Overall report from the Chief ESG Officer(i) 2022 annual report
As part of efforts to promote ESG, we as an enterprise, we are committed to meeting societal expectations and formaking steady progress on Eco Action activities. In June 2022, we announced our support for the Task Force on
Climate-Related Financial Disclosures (TCFD) recommendations. We will fulfill our responsibilities to society byaddressing the issue of climate change in addition to lessening our environmental impact.
While we failed to achieve our goals for certain targets this year as totals grew with an increase in the number of
employees, per-employee figures fell. Henceforth, we will consider setting targets that account for increases inpersonnel through green procurement and other measures.
(ii) Next fiscal year
In the next fiscal year, we will calculate and reduce GHG emissions in line with corporate activities targeting zero
emissions being promoted by the Chubu Electric Power Group. In construction, we will strive to reduce emissions
through means such as eco-friendly construction methods with a mixture of reinforce concrete and wooden construction.

April 27, 2023
Director Kenji Fujita

Comments from the representative(i) 2022 annual report
Since the Japanese government declared its goal of carbon neutrality by 2050, the movement toward a decarbonizedsociety has been accelerating in Japan. We consider climate change solutions to be an important part of our businessstrategies. In FY2022, we announced our support for the recommendations of the Task Force on Climate-Related Financial
Disclosures (TCFD). Since then, we have analyzed the risks and opportunities that climate change poses for ourbusinesses and studied various responses. As seen in the Suita Fujishirodai 5-chome project and the development projecton city-owned land before Shin-Omura Station, we are promoting business activities to help realize a decarbonized society
and to contribute to the SDGs through eco-friendly urban development. This year was marked by efforts to reduce ourenvironmental impact by promoting awareness among all employees through the Eco Action 21 activities.
(ii) Next fiscal year
Last year, we disclosed information based on the TCFD recommendations and set the FY2030 target to reduce total
emissions generated by Company offices and vehicles, calculated under Eco Action 21, by 40% vs. the FY2021 figure.
Henceforth, through Eco Action 21 activities, we will calculate the GHG emissions generated by our business activities in
addition to progress in reducing GHG emissions generated by Company offices and vehicles as we accelerate efforts to
reduce total GHG emissions throughout our business activities.

[Environmental Policy] Need to change:

□Yes

☑No

[Targets/Plans] Need to change:

□Yes

☑No

[Implementation System] Need to change:

□Yes

☑No

[Other] Need to change:

□Yes

☑No

April 27, 2023

President & Representative Director Takatoshi Ito23