2023
CSR Report

Sumitomo Densetsu Co., Ltd.
2-1-4 Awaza, Nishi-ku, Osaka 550-8550
Phone: 06-6537-3400
URL https://www.sem.co.jp/

Published August 2023

Our history began with the restoration of underground power lines during therecovery following World War II and later expanded to encompass indoor
electrical, communications, telecommunications, and plant air-conditioning work.
In keeping with the Sumitomo Spirit and the Corporate Philosophy of theSumitomo Densetsu Group, we contribute to the development of society by
striving to maintain social infrastructure, including by ensuring a stable supply ofelectricity.
In April 2020, we formulated Vision 24, a Medium-term Management Plan whose
theme is “Sustainable Development through a New Growth Strategy andComprehensive Strength!” Key measures include “Safety, quality, and compliance,”“Securing and developing human resources and implementing work style reform,”“Pursuing improved customer satisfaction,” and “Enhancing enterprise value inanticipation of the future.” As a comprehensive facilities corporate group, weʼremaking a concerted effort to boost each departmentʼs installation and technicalcapabilities while boosting growth and expanding operations.
To ensure the Group can continue to fulfill all stakeholdersʼ expectations, we willcontinue to work to improve our corporate value by pursuing initiatives in areas
such as environmental, social, and governance (ESG) management, theSustainable Development Goals (SDGs), human resource development, healthmanagement, and employee satisfaction.
Going forward, we will continue to work to help build a sustainable society and to
improve our corporate value by pursuing fair and highly transparent management
and corporate activities that harmonize with society and the environment, and welook forward to stakeholdersʼ understanding and support as we do so.

CONTENTS■ Sumitomo Densetsu Group Management
Principles ...3
The Sumitomo Spirit
Corporate Philosophy of theSumitomo Densetsu GroupSEM VALUE
Employee Code of Conduct■ About Sustainability Management...5■ Disclosing Information in Accordancewith TCFD Recommendations...7■ ESG Management Initiatives...11

Environmental
Social

...11

...12

Safety and Quality
Diversity & Inclusion
Work-life Balance
Human Resource Development
Health and Productivity Management
Community Service
Improving Customer Satisfaction

Governance...19

Corporate GovernanceCompliance
Risk Management
Human Rights■ Company Information...23

Profile, Organizational Chart, Network,
Share Information, Financial Information,
Financial and Non-financial Data

Time period covered
April 1, 2022, to March 31, 2023 (FY2022)
Scope
Sumitomo Densetsu GroupCSR REPORT 2023 2

Sumitomo Densetsu Group Management Principles

The Sumitomo Densetsu Group carries out its businesses in accordance with the Sumitomo Spirit and Corporate
Philosophy of the Sumitomo Densetsu Group, both presented below, so that it can earn the trust of customers,
shareholders, the general public, and other stakeholders.

The Sumitomo Spirit
Sumitomo Spirit is based on the Founder's Precepts (“Monjuin Shiigaki”), which Masatomo Sumitomo,
the founder of the Sumitomo family, wrote and handed on to describe how merchants should conductbusiness. They were first compiled as part of a series of Sumitomo family rules in 1882 and latersummarized as a pair of “Business Principles” as part of the rules in 1891.

Business Principles
Article 1. Sumitomo shall achieve prosperity based on solid foundation by placing prime
importance on integrity and sound management in the conduct of its business.
Article 2. Sumitomoʼs business interest must always be in harmony with public interest;
Sumitomo shall adapt to good times and bad times but will not pursue immoral
business.
*From the Sumitomo Goshi Kaisha Rules (formulated 1928).

Integrity and sound management
Article 1
The article explains that Sumitomo businesses shall make integrity and trust the most importantconsiderations in all operations.

Avoidance of shortsighted conduct
Article 2
The articles describe how the company should accommodate changes in society quickly andprecisely as it pursues profit. It notes the importance of adopting a proactive approach bycontinuously working to develop businesses, without resting on the laurels of existing businesses.
At the same time, the article offers a strict warning against pursuing temporary, shortsighted, or
morally questionable profits, or acting in an imprudent or halfhearted manner.

“Be sincere in all things.”
The philosophy exhorts employees to be sincere, painstaking,and meticulous not only in business, but in all things, while
avoiding a lax or halfhearted attitude, and to refine oneʼs
character by respecting sincerity and hard work before trying
to become a merchant.

3 CSR REPORT 2023

Sumitomo Densetsu Group Management Principles

Corporate Philosophy of the Sumitomo Densetsu Group(Enacted January 2000 and revised January 2016)
Recognizing its social mission and responsibility, the Sumitomo Densetsu Group:-

Aims to develop a favorable environment to support a prosperous and secure society.

-

Values its technical prowess and the customer's confidence in it, and provides high quality
engineering service that gives a high level of customer satisfaction.

-

Practices fair and transparent management based on compliance in keeping with a high standardof corporate ethics.

-

Seeks to create a vibrant and pleasant business environment while fostering employees rich increativity.

In addition, weʼve formulated a statement of “SEM VALUE” and an Employee Code of Conduct that set forth
the companyʼs approach for employees to ensure they act in the spirit of sincerity based on the moral values
required of adult members of society and company workers while adhering to laws and corporate policies andrules.

SEM VALUE(Enacted January 2022)

Sincerity: Employees should devote themselves to satisfying society's needs in a spiritof sincerity
Teamwork: Employees should recognize diversity and strive to leverage teamwork
Creation: Employees should create a sustainable future through sophisticatedtechnologies

Employee Code of Conduct(Enacted November 2003 and revised June 2020) *Headings only
1. Purpose

2. Respect for Human Rights

3. Assurance of Safety and Quality

4. Appropriate Accounting

5. Appropriate Business Transactions

6. Treatment of Gifts and Business Entertainment

7. Avoidance of Conflicts of Interest

8. Treatment of Company Information

9. Treatment of Company Assets

10. Tackling of Environmental Problems

11. Opposition to Anti-social Forces

Sumitomo Densetsu Management Principles
Corporate
Philosophy

SEM
VALUE
Employee Codeof Conduct
The Sumitomo Spirit

The Sumitomo Densetsu Group’s mission and approach
Values and stance that should be valued in order for Sumitomo
Densetsu and its employees to realize its vision for the futureStandards that determine how Sumitomo Densetsu and its employees
should act based on compliance and corporate ethics considerations
The business philosophy inherited from the Sumitomo GroupCSR REPORT 2023 4

About Sustainability Management

In November 2021, we established Policy for Sustainability Management of Sumitomo Densetsu Group, andbased on that policy we have been actively pursuing sustainability-related activities.

Policy for Sustainability Management of Sumitomo Densetsu GroupAs our corporate philosophy, the Sumitomo Densetsu Group "aims to develop a favorable environment that supports aprosperous society, and contribute to the prosperity of society." Based on this philosophy, we strive to earn even greater
trust from customers, shareholders, members of society and all other stakeholders through equitable and highly
transparent business activities in harmony with society and nature, while also contributing to the building of a sustainable
society and growing our corporate value over the medium term. To these ends, we pursue sustainability-related activities
in accordance with the guidelines listed below.
•
•
•
•
•

Aim to reduce the environmental impact of our business activities, products and services, and expand business fields
with a low environmental impact
Provide engineering services that earn high customer satisfaction while emphasizing trustworthiness andtechnological capabilities
Further strengthen the foundations of our overseas business ventures while expanding our business fields
Strive for safe and rewarding workplaces characterized by respect for human rights and diversity
Emphasize compliance and pursue equitable business dealings while striving to guarantee transparency throughsuitable disclosure

Materiality

Following revisions to the environmental, social and governance (ESG) considerations in our "Vision 24" mediumterm management plan, we identified the following six materiality items as necessary for both solving social
issues and ensuring sustained growth for the Sumitomo Densetsu Group.

Environmental(E)

Materiality• Reducing environmental impacts by reducing energy
 Active contributions to societywide decarbonization throughenvironmental impact reductions

resilient and sustainableinfrastructure Ensuring safety and quality while
making improvements to technicalcapabilities

Social (S)resource consumption and waste and improving resource
efficiency in business activities, products, and services• Strengthening our presence in the renewable energy
market Contributions to the building of• Strengthening technical proposal capabilities• Hiring and retaining human resources and assigning themflexibly in ways that transcend departments• Ensuring quality (providing high-quality services)• Incorporating new technologies and techniques• Working to prevent and mitigate disasters• Strengthening the foundation of our overseas business tofoster deep connections to the communities we serve• Ensuring a safe workplace environment and practicing
 Promoting health and productivity
management, and creating
workplaces where all employees
can enjoy peace of mind and feelexcited by their jobs
 Respect for human rights, andpromoting diversity and inclusion

Governance(G)

Principal Measures

 Promoting equitable andtransparent management
operations based on compliancerules and regulations

5 CSR REPORT 2023

health and productivity management• Respecting human rights, protecting privacy, andpreventing all forms of harassment• Enhancing social education structures• Pursuing workstyle reforms• Implementing gender equality measures• Hiring and training global human resources• Tapping the abilities of older employees• Practicing fair, transparent management based oncompliance• Information security• Corporate governance

Related SDGs Items

About Sustainability Management

In January 2022, we established the Sustainability Management
Committee with the president as chairperson and Management
Meeting members as committee members, and we are promoting
initiatives such as discussing and verifying important issues and goals
related to sustainability.
Furthermore, we have established subcommittees under the
Sustainability Management Committee to handle issues related to theSDGs, TCFD, carbon neutrality, etc., and each of these subcommittees
are promoting specialized initiatives for each theme.

Materiality KPIs

Environmental (E)Materiality■ Active contributions
to society-wide
decarbonization
throughenvironmental impact
reductions

Governance (G)Social (S)■ Contributions to thebuilding of resilientand sustainableinfrastructure■ Ensuring safety andquality while making
improvements totechnical capabilities■ Promoting health andproductivity
management, andcreating workplaces
where all employees
can enjoy peace ofmind and feel excitedby their jobs
■ Respect for humanrights, and promoting
diversity andinclusion■ Promoting equitable
and transparent
management
operations based oncompliance rules andregulations

TargetFY2021ResultFY2022
ResultScope 1 + 2:
46.2% reduction in FY2030(compared to FY2021)

5,766(t-CO2)(Calculation
pending as ofAugust 31)

Scope 3:
27.5% reduction in FY2030(compared to FY2021)

688,809(t-CO2)(Calculation
pending as ofAugust 31)

Frequency rate

0.00%
(improvement compared toprevious year)

0.28%

0.90%

Severity rate

0.00%
(improvement compared toprevious year)

0.02%

0.01%

Number of accidents
requiring time off fromwork

0
(improvement compared toprevious year)

2

4

Periodic health checkup
participation rate

100%

100%

100%

Annual paid leaveacquisition rate

80% or higher

58.5%
(12.1
days)

64.4%
(13.4 days)

Male childcare leaveacquisition rate

100%

14
employees(34.1%)

19
employees(44.2%)The proportion of women in
managerial positions

2.6% or higher
by Mar. 31, 2031

1.6%

2.1%

Number of workplacecompliance training
sessions(implementation rate)

Once per month for eachdepartment (100%)12(100%)

12(100%)

Number of information
security training sessions(implementation rate)

Once per quarter for eachdepartment (100%)4(100%)

4(100%)KPI

CO2 emission reductions

CSR REPORT 2023 6

TCFD Initiatives

Disclosing information in accordance with TCFD recommendations
Recognizing that climate change and other global environmental problems are a top management challenge,
the Company operates its businesses in accordance with the Basic Environmental Philosophy and Environmental
Policy (see page 11), which it enacted in 2003.
In May 2023, the Company announced its support for the Task Force on Climate-related Financial Disclosures*(TCFD). Based on the Corporate Governance Code, which was revised in June 2021, we disclose the following
important information related to climate change in line with the TCFD recommendations.
* The TCFD was established by the Financial Stability Board (FSB).
In June 2017, the TCFD announced a series of recommendations calling on financial institutions, companies, government
agencies, and other bodies to disclose information about the impacts of climate change in their financial reporting.

Information whose disclosure is recommended by the TCFD
Governance

Strategy

Disclose the organizationʼsgovernance around climaterelated risks andopportunities.

Disclose the actual andpotential impacts ofclimate-related risks andopportunities on theorganizationʼs businesses,
strategy, and financial
planning where suchinformation is material.

Risk management
Disclose how theorganization identifies,
assesses, and manages
climate-related risks.

Metrics and targets
Disclose the metrics andtargets used to assess andmanage relevant climaterelated risks andopportunities where suchinformation is material.

1. GovernanceWe actively pursue sustainability activities in line with Policy for
Sustainability Management of Sumitomo Densetsu Group and its
guidelines.
In January 2022, we established the Sustainability Management
Committee, which is chaired by the president and which counts
Management Meeting members as members, to serve as an advisory
body to the Management Meeting. The committee deliberates andmakes decisions concerning business strategies related toenvironmental problems, including the Companyʼs response to
climate change, and initiatives related to risks and opportunities.
It offers proposals and reports to the Management Meeting and theBoard of Directors on a quarterly basis.
We've created a TCFD Promotion Project under the aegis of the
Sustainability Management Committee to pursue initiatives withcompany departments to reduce greenhouse gas (GHG) emissions.
It regularly reports on progress and results to the Sustainability
Management Committee.

2. Strategy (scenario analysis)
Concerning the impacts (risks and opportunities) of climate change on our businesses, we've analyzed risks
related to a transition to a low-carbon economy and risks related to the physical impacts of climate change
occurring midway on the scenarios envisioning 2050 based on the TCFD framework.
We will work to continue refine our analytical techniques going forward by revising them on an ongoingbasis.
In addition, we plan to disclose in the future how our strategies will impact our financial position.

7 CSR REPORT 2023

TCFD Initiatives■Scenario analysis steps●Gathering information
We organize risks and opportunities in
the construction industry while taking
into account external information
based on the TCFD’s recommended
disclosure items.

●Identifying risks and opportunities
We study the impacts of climate change
on our businesses and identify risks andopportunities with a substantial potential
impact.

●Studying and deciding on countermeasures
Our TCFD Promotion Project team takes the lead in
exchanging views with other departments andcreating a list of measures to address the identified
risks and opportunities. The team reports to the
Sustainability Management Committee.

●Disclosing
information*We refer to the following scenarios in our scenario analysis:· Scenario in which humanity transitions to a decarbonized societyInternational Energy Agency: Scenario equivalent to a temperature increase of 1.5°C over preindustrial levels by the end of the current century· Scenario in which natural disasters intensify
Intergovernmental Panel on Climate Change: Scenario equivalent to a temperature increase of 4°C over preindustrial levels by the end of the current century

Transition risk
Risk type

Risk

Introduction of acarbon tax

Policy andregulatory

Strengthening ofenergy-saving
policies

Information
disclosure
obligations

Risks of a transition to a low-carbon economy
Likely impact

 Tax on CO2 emissions from businessactivities
 Increases in construction material
procurement costs due to theintroduction of carbon pricing;associated deterioration in profitability
and reduced price competitiveness Growth in countermeasure costs as aresult of the strengthening of laws andregulations related to GHG emissions
and energy use; changes in industry
structure or capital investment
demand as part of the transition to a
decarbonized society; violations oflaws as a result of delays incompliance or failure to implement
suitable countermeasures Growth in the cost of complying withexpanded information disclosure
obligations

Adoption of newtechnologies
 Contraction in order opportunities as arelated toresult of declining customer trust or
Technology
renewable energy
competitive capability due to delays inand energy
accommodating related technologies
conservation

Markets

Changes incustomerpreferences

Changes in
Reputation stakeholder
expectations

 Loss of order opportunities as a resultof failing to accommodate customer
needs, for example for reduced GHG
emissions or ZEB designs
 Loss of order opportunities as a resultof intensified competition against the
backdrop of a general preference forlowering environmental impacts
 Loss of order opportunities as a resultof delays in accommodating high-level
expectations from customers related tosustainable management
 Deterioration in the Companyʼs
reputation among investors as a resultof delayed or insufficient information
disclosure Inevitable withdrawal from market asa result of a failure to satisfy
stakeholdersʼ expectations

Degree ofimpact

Time
frame

High

Short-,
medium-,andlong-term Pursuing energy savings in corporate
activities Reducing procurement costs by using
construction materials that generate
lower CO2 emissions during
manufacture (low-carbon materials);
proposing VE/CD plans and equipment
 Regularly collecting information about
new material development and making
use of such information internally Lowering GHG emissions, for example
by switching to hybrid and electricvehicles (HVs and EVs) andpurchasing electricity derived fromrenewable energy

High

Short-,
medium-,andlong-term Developing new technologies andinstallation techniques related torenewable energy and energy
conservation
 Actively proposing solutions tocustomers; collecting information
about laws related to businessactivities in a timely manner

MediumShorttermHigh

Short-,
medium-,andlong-termHigh

Short-,
medium-,andlong-term Ascertaining market trends and needs
in a timely manner; assessing anddeveloping new technologies foraccommodating them and acquiring
related permits and licenses

Short-,
medium-,andlong-term Assessing customer expectations in atimely manner and disclosing
information in an accurate and timely
manner Addressing environmental issues on
an ongoing basis and disclosing
information in an appropriate manner,for example by complying with TCFD
recommendations

High

Our response Assessing disclosure requirements in atimely manner and disclosing
information in an appropriate manner Developing new technologies andinstallation techniques related torenewable energy and energy
conservation
 Educating employees about newtechnologies and actively proposing
them to customers*Time frame (short-term: 2025; medium-term: 2030; long-term: 2050)

CSR REPORT 2023 8

TCFD Initiatives

Physical risk
Risk type

Acute

Chronic

Risks related to physical changes caused by climate change

Risk

Likely impact

Intensification ofnatural disasters Growth in the cost of operating ourbusinesses and loss of orderopportunities as a result of the impactsof more frequent and intensifying
rainfall and typhoons, including
damage to company buildings andconstruction sites, infrastructure
outages, damage sustained byinvolved parties, and postponement ofwork

Intensification of
extreme weather
Rising averagetemperature Increased health risk at construction
sites (from heat illness, infectious
disease, etc.)
 Reduced work efficiency, delays intransfers of completed projects tocustomers, increased limits onsummer-season work, and growth incountermeasure costs
 Increased technical problems causedby rising temperatures aroundequipment (electrical and machinery) Growth in costs such as utilities used
to power equipment

Degree ofimpactMediumMediumTime
frame

Our response

Shortterm Strengthening business continuity
planning (BCP) to ensure ourbusinesses can continue to operate
 Maintaining structures that allow us torespond to disasters in a flexible
manner (telework, etc.)
 Putting in place structures to facilitate
support and cooperation with partners(affiliates, suppliers, and othercompanies) in the event of disasters

Mediumand longterm

 Strengthening organizational
mechanisms related to healthmanagement and introducing newtechnologies and products (wrist
alarms, web cameras, etc.)
 Balancing quality and productivity
improvements made possible by thedigital transformation (DX) with limits
on working time
 Developing comprehensive energysaving technologies with otherindustries
 Working to reduce costs andimplementing the Companyʼs own
energy-saving measures
 Ensuring new construction complies
with ZEB standards*Time frame (short-term: 2025; medium-term: 2030; long-term: 2050)

Opportunity
Opportunity
type

Opportunities from measures to mitigate or adapt to climate change

Opportunity

Likely impact

Resource
efficiency

Adoption ofefficient buildings Growth in order opportunities as
demand for energy conservation,
renewable energy, ZEB-compliant
buildings, and related products andservices grows
 Growth in the number of inquiries for
ZEB planner-registered companies

Energysources Growth in demand for renewableenergy-related construction
Increased use of
 Growth in the number of inquiries andrenewable energy
orders as a result of the development
and introduction of new technologies

Products
andservices Growth in the level of need for resilient
infrastructure; growth in opportunities
to generate revenue from moving up
equipment replacement time frames(for equipment, products, and services
Development andgeared toward preparing for disasters
expanded use ofand extreme heat, etc.)
low-carbon Increased trust from customers as acompatible
result of proposing technologies for
products andlowering various risks from theservices
construction planning stage; growth in
the number of inquiries and orders Growth in the level of need for using
sensors, IT, and related technologies tomonitor infrastructure from a disasterprevention standpoint

9 CSR REPORT 2023

Degree ofimpactTime
frame

Our responseHigh

Short-,
medium-,and longterm

 Strengthening renewable energy-related
sales and construction structures andtechnical capabilities
 Developing technologies for
implementing the viability and comfort
of ZEB-compliant designs andstrengthening our proposal capabilities
 Registering the Company as a ZEB
plannerHigh

Short-,
medium-,and longterm

 Strengthening internal and external
structures for accommodating renewableenergy-related construction

Short-,
medium-,and longterm

 Actively pursuing the renewable energy
business and communicating
information, including about ourconstruction track record (solar systems,
perovkskite panels, etc.)
 Creating a new business by establishingtechnologies for recycling SF6 gas
 Discovering needs by collecting
information from customers (new andexisting) Building sales structures so that we canprovide products and services that arecompatible with climate change Strengthening engineering monitoring
technology so that it can be used tomonitor sensors related to disasterprevention and mitigation (via the IoT)High

TCFD Initiatives

Markets

Resilience Growth indemand forrenewableenergy Expansion ofneed fordisasterresistantbuildings andequipment Formation ofsustainable
cities andregions
 Stakeholder
assessments

 Growth in inquiries and orderopportunities as demand for renewableenergy-related equipment and facilities
grows Growth in infrastructure-related
solutions and order opportunities
 Inspiration of trust on the part ofcustomers by undertaking
decarbonization initiatives and earning
various certifications (ZEB planner,etc.) Growth in demand and opportunities inareas such as workstyle reform andsolution services like information andcommunications technology (ICT)
management based on ICT

Changes ininvestment
decision-making
by investors(growth in ESG
investment) Improvement in corporate value as aresult of efforts to address climatechange and the appropriate disclosureof related information

Growth in
demand forresilienttechnologies

 Growth in demand for resilient services
 Growth in equipment update demand Increased trust from customers as aresult of proposing BCP-compatible
technologies during planning

Short-,
medium-,and longterm

 Strengthening renewable energyrelated sales and construction
structures and technical capabilities
 Promoting development oftechnologies that can accommodate
new infrastructure and otherwise
improving our technologicalcapabilities

MediumShortterm Addressing climate change on an
ongoing basis and disclosing
information in an appropriatemanner, for example by complying
with TCFD recommendations

High

Short-,
medium-,and longterm

 Strengthening structures that let us
quickly respond to customer needs

High*Time frame (short-term: 2025; medium-term: 2030; long-term: 2050)

3. Risk management
We consider climate change to be a risk that will have a substantial impact on our management, and we
manage it in an appropriate manner through the Sustainability Management Committee. In addition, weʼveestablished the TCFD Promotion Project under the aegis of the Sustainability Management Committee.
Working with other departments, project members classify and assess the impacts of climate change-relatedrisks on the Company and plan and implement countermeasures.
4. Metrics and targets
Weʼre redoubling our efforts to reduce CO2 emissions in keeping with the Japanese governmentʼs policy ofachieving carbon neutrality by 2050. In addition, weʼve established the following CO2 emissions reduction
targets, and weʼre working to achieve carbon neutrality by 2050:

CO2 emissions reduction targets (vs. FY2021)
FY2030FY2050·Scope 1 + 2, 46.2% reduction

Achievement ofcarbon neutrality·Scope 3, 27.5% reduction

FY2021 greenhouse gas emissions (unit: t-CO2)
ActualemissionsTargetemissions

FY2021

2030

Scope1+2

5,766

3,102

(Scope1)(3,087)––(Scope2)(2,679)––

Scope3688,809499,387

Scope

Scope: Sumitomo Densetsu affiliates, consolidated basis (FY2021)
Calculation standard: Calculation method based on GHG Protocol
Calculation scope: Scope 1, direct emissions of greenhouse gases
from the business itself (vehicle fuel, etc.)
Scope 2, indirect emissions from use of electricity,heat, or steam supplied by other companies
Scope 3, indirect emissions other than Scopes 1
and 2 (emissions by other companies involved
with the business’s activities)

CSR REPORT 2023 10

ESG Management Initiatives

Environmental

We pursue ESG initiatives to improve our corporate value in order to continue to live up to
the expectations of all stakeholders.

E: Environmental
Sumitomo Densetsu operates its businesses inaccordance with the Basic Environmental
Philosophy and Environmental Policy in an effort torealize a sustainable society.
We also contribute to environmental conservationin business activities related to areas such as
renewable energy and energy conservation.

Basic Environmental Philosophy(enacted February 2003)
We consider voluntary initiatives to address

Topic

Tree-planting activities in La Mesa
Nature Reserve, Philippines
As part of Sumisetsu Philippines, Inc.ʼs CSR
activities, 20 of the companyʼs employees
participated in a forest regeneration program
overseen by the Philippines Department ofEnvironment and Natural Resources in the La
Mesa Nature Reserve, planting 40 mahogany
trees under the slogan, “Let's give Mother
Earth back her power.”

environmental issues and their ongoing improvement
to be important management priorities, and wecontribute to the creation of a society that candevelop in a sustained manner by considering
environmental impacts and working to protect theenvironment through all corporate activities.

Environmental Policy(Enacted February 2003 and revised
September 2017)
 We strive to protect the environment by reducing
the environmental impacts of our businessactivities, products, and services, including by
reducing energy and paper resources, pursuing
recycling and reuse initiatives, and working to limit
and properly process waste.
 We actively utilize unique technologies related toenvironmental protection, and we strive to develop
even more effective technologies.
 In addition to protecting the natural environment,
for example by preventing pollution, weʼve built anenvironmental management system to improve
environmental performance, set environmental
targets, and review them on a regular basis while
striving continuously to improve them.
 We adhere to laws and regulations related toenvironmental conservation and protection, as wellas to other requirements to which we have agreed.
 We strive to improve awareness of environmental
conservation and protection by spreadingawareness of this Environmental Policy among all
employees and everyone else who works on behalfof our organization, for example by offering
environmental education.
 We make this policy available to the general public.

11 CSR REPORT 2022

Topic

Kawasaki Technical Center installs
solar power system
Sumitomo Densetsu Kawasaki Technical Center,
which opened in March 2023, has installed acaptive-use rooftop solar power system.
In addition to the system, the Center has
installed a range of environmentally friendly
equipment, including EV chargers. In addition,it has acquired Nearly ZEB and ZEH
certification for its administrative offices andmanager housing, respectively.

Social

ESG Management Initiatives

S: Social
Safety and Quality
Ensuring health, safety, and quality is of fundamental
importance in managing a business, and the Sumitomo
Densetsu Group considers doing so a top priority as it
pursues an active program of related activities in close
partnership with affiliates.
With regard to safety and quality activities, weʼve put inplace a Health and Safety Policy as well as a Quality Policy,
and in keeping with those policies, our Vision 24 Mediumterm Management Plan sets forth a basic policy for safety
and quality as well as a number of slogans. Along theselines, weʼre undertaking a range of activities to create safe
workplaces that align with current attitudes so that
employees can do their jobs with peace of mind.

Basic Policy

Give top priority to safety, quality, and healthand strengthen the foundations of our businessby cultivating a “safety first” culture.

Companywide organizational chart for safety andhealth management

Slogans

Cultivate safety awareness.
Practice safe conduct.
Safe, secure workplaces built by all

Ensuring safety is fundamentally important when working
in the field, and itʼs essential to master the level ofknowledge necessary to do so. In order to help workers
master knowledge necessary to cultivate a “safety first”
culture, weʼve put in place a diverse curriculum, and weoffer practical safety and quality education for everyone,from management to front-line employees in the field,
while welcoming outside instructors.
We work to share safety
awareness and information
about risks by verifying frontline conditions in the field froma variety of perspectives, fromsafety patrols by the president
and other executives to patrols
by staff members including
department managers andsafety coordinators, as part ofan approach that seeks toprevent problems through close
coordination between the Head
Office, branches, and field personnel.
With regard to the sharing of safety- and quality-related
information, we strive to facilitate sophisticated safety andquality activities by exposing workers to a wide range ofknowledge and creating opportunities for them to interact
effectively with safety and quality information in a variety ofways, for example by raising awareness among all workers,
including foreign workers, by publishing the Safety & QC
Issue, which features key considerations in safety activities,
in Japanese as well as six other languages and by including
topical information, accident case studies, and various
educational materials on our safety and quality website.

A safety patrol by the president■Quality management systemWeʼve earned certification under ISO 9001, aninternational standard governing quality management
systems.
We provide services with high customer satisfaction
through ongoing improvement activities under thissystem.

Quality management organizational chart

CSR REPORT 2023 12

Social

ESG Management Initiatives

Diversity & Inclusion
The Sumitomo Densetsu Group believes that in order toTraining

realize sustained growth and improved corporate value in a

We offer training to give female employees a chancebusiness environment characterized by sweeping change andto take responsibility for their careers by thinking

to operate as a general engineering company that truly

about their own lives, as well as training that helps

satisfies societyʼs expectations, it is necessary to achieveline managers with female subordinates understandcontinuous personal and technological growth. As a result,

their own unconscious bias and manage all

we strive to hire, train, and promote a diverse workforce

subordinates, including female employees, in a way

with different experiences, skills, careers, and otherthat lets them do their jobs in an energetic andcharacteristics on an ongoing basis and to create a workplaceengaged manner. We also offer training to help female

environment that allows each employee to make the most of

employees maintain and improve their health.

their characteristics and skills.

■Gender equality

We strive to create workplaces where female employees
can do their jobs in an energetic and dynamic manner. In
addition to working to increase the percentage of main
career track (management) positions held by women by
actively hiring new graduates and strengthening careerdevelopment programs for female employees, weʼreworking to transform awareness and revamp the working
environment and related programs based on our belief
that an environment that makes it easy for female
employees to do their jobs is a workplace that makes it
easy for all employees to do their jobs.

Activities of the Gender Equality Working GroupIn January 2020, we launched a working group consistingof female employees representing different departments,
occupations, ages, experiences, and household
environments with the goal of revitalizing our genderequality activities. Many of the working groupʼsrecommendations to management have led to theformulation of human resources policies as it (1) proposes
specific policies to promote gender equality, (2) proposes
specific policies to spur workstyle reforms, (3) supports
hiring of female employees for main career track positions,and (4) participates in the formulation of action plans inaccordance with the Act on the Promotion of Women's

Hiring new female graduates for main career track
positions
Having established the goal of hiring women for atleast 10% of our new-graduate main career track
positions, weʼre working to increase understanding of,and interest in, the construction industry and
Sumitomo Densetsu, for example by hosting
information sessions about the Company and site
tours for female students and by offering more
information on our recruiting website (by offering
videos and introducing female employees).

<Percentage of women hired for new-graduate
main career track positions>*Figures in parentheses indicate the number of women hired for newgraduate main career track positions and the total number of new hires.

Active Engagement in Professional Life and the Act on

FY2018FY2019FY2020

FY2021

FY2022

Technical

7.1%(3/42）

5.9%(2/34）

6.7%(3/45）

4.1%(2/49）

17.3%(9/52）

Administrative

20.0%
(1/5）

14.3%
(1/7）

50.0%
(2/4）

25.0%
(1/4）

33.3%
(1/3）

Total

Advancement of Measures to Support Raising Next-

8.5%(4/47）

7.3%(3/41）

10.2%(5/49）

5.7%(3/53）

18.2%(10/55）Generation Children.
Career change program
For employees who joined their company in a regular
position but later wish to move up to main career track or
management positions as they pursue their careers, weʼve
put in place a program that allows them to make themove to an “area main career track” position (a main
career track position in a limited region) after a screening
process (including a performance report and interview).

<Movement from regular positions to “area main
career track” positions>
FY2018FY2019FY2020

FY2021

FY20225 employees 5 employees 6 employees 3 employees 2 employees

13 CSR REPORT 2023

Social■Hiring of workers with disabilities

We hire workers with disabilities to fulfill our social
responsibility and to improve our organizationʼs diversity.
In addition to supporting the activities of parasport
athletes, weʼve hired top athletes in the sports of deaf
table tennis and deaf soccer, and we help them balancecompetition with their jobs. Going forward, we willcontinue to support the activities of people withdisabilities by further expanding the scope of their
responsibilities at work and by developing new
occupational fields in which they can make a

ESG Management Initiatives■Hiring of foreign employees

We hire, train, and promote foreign employees forvarious reasons, including to secure a talented
workforce, expand the horizon of employees throughinternal globalization and increase our organizational
diversity, and strengthen our overseas business.
<As of March 2023: We have 15 foreign employees(representing 6 nationalities).>■Mid-career hiring

We make mid-career hires and train and promote

contribution.

those workers for various reasons, including to add<Percentage of worker with a disability>

human resources who can make an immediate*Figures in parentheses indicate the legally mandated employment rate.

contribution to the departments that employ them as

FY2018FY2019FY2020

FY2021

FY2022for example digital transformation (DX) specialists and2.48%(2.20%)

2.42%(2.20%)

2.29%(2.20%)

2.44%(2.30%)

2.75%(2.30%)

Topic

well as human resources with specialized knowledge,
data scientists, and to increase our organizational
diversity by hiring human resources with experience ina variety of careers.

<Number of newly hired graduates andmid-career hires>

Supporting parasport athletes

FY2018FY2019FY2020

FY2021

FY2022New
graduates

60
employees

55
employees

70
employees

65
employees

63
employees

Midcareerhires

34
employees

46
employees

24
employees

52
employees

35
employees

Total

94
employees

101
employees

94
employees

117
employees

98
employees

We hired Keita Furushima, a top athlete in the sportof deaf soccer, on July 1, 2022. Furushima was thesecond athlete to join the Company, following Riho
Kamezawa (deaf table tennis), who was hired on
February 1, 2022.
Furushima, a top athlete who appeared consecutively
in the 2013 and 2017 Deaflympics*, was the flagbearer for the Japanese team and captain of thesoccer team at the 2017 Deaflympics in Samsun,
Turkey. Currently, he continues to compete with thegoal of participating in the 2025 Deaflympics.
Kamezawa has been competing at various
tournaments with accolades including winning
womenʼs team silver and womenʼs doubles bronze
medals at the Deaflympics held in May 2022.
In addition to supporting both athletesʼ competitiveefforts and work, we will continue to promote hiringof workers with disabilities and support the activitiesof parasport athletes.
*A global multi-sport competition for deaf athletes.

■Tapping the abilities of older employees

Against the backdrop of a decline in Japan's labor
force due to its aging population and shrinking
birthrate and major challenges posed byenvironmental changes that particularly affect theconstruction industry, including labor shortages and anincrease in older workers as a percentage of theworkforce, we raised the retirement age from 60 to 65
in April 2021 and introduced a re-employment thatallows employees to work until age 70. In this way,
weʼre striving to put in place a workplace environment
in which veteran human resources with extensive
experience and advanced technical skills can work in ahighly motivated and engaging manner so that we canprovide engineering services that earn an even higher
level of customer satisfaction.

CSR REPORT 2023 14

ESG Management Initiatives

SocialWork-life Balance
As part of our effort to create workplaces where
employees can do their jobs in a healthy and energetic
manner, we both take various opportunities tocommunicate messages from our executive leadershipand work to rectify overwork through labormanagement cooperation. We streamline andrationalize operations by assessing working hours in
an appropriate manner and taking concrete steps suchas engaging in model site activities and establishing asite support organization. In addition, as a mechanism
to address the growing diversity of workstyles basedon the characteristics of individual businesses andindividual employeesʼ personal circumstances, weʼve
introduced telework and flex time structures, andweʼre working to boost productivity by pursuing
workstyles whose rhythm can be modulated toaccommodate fluctuations in the pace of ouroperations.

■Promotion of workstyle reforms

Recognizing rectifying overwork, which has become achronic problem for the construction industry, as oneof our top priorities, weʼve taken a variety of steps toreduce total actual working hours, effectively moving
up compliance with the Act on the Partial Revision to
the Labor Standards Act one year from its entry into
force in April 2024.

• Communicating messages from the Companyʼs executive
leadership• Introducing a work management system (accurately
assessing actual work conditions)• Introducing telework, flex time, and hourly paid leave• Setting action targets based on the characteristics ofindividual departmentsʼ operations and tracking theirimplementation• Establishing an organization to allow the Head Office andbranches to manage some site operations• Engaging in model site activities• Utilizing IT devices and operational support apps

Topic

Workstyle reform: The Challenge 22
companywide campaign■Support for balancing work, parenting, andnursing careWeʼre introducing various mechanisms designed tofacilitate flexible workstyles that can accommodate avariety of circumstances and offering economic
support that utilizes social welfare structures with thegoal of helping employees balance parenting andnursing care responsibilities with their jobs in waysthat avoid the need to take extended time off fromwork. We particularly recommend that male
employees do their share of household chores andparenting, and weʼve put in place programs that offer
compensation for some leave and time off as a way to
encourage employees to take spousal maternity leaveand childcare leave. Weʼre also working to enhanceleave programs targeting pregnancy, child nursing
care, family nursing care, and infertility treatment.

Formulating an action plan to support
development of next-generation children
In keeping with the Act on Advancement of Measures to
Support Raising Next-generation Children, we formulated
our 7th Action Plan in March 2020, and we've been
studying and implementing a variety of measures.
[Plan time frame]

3 years from April 1, 2020, to March 31, 2023

[Measures]

Objective 1:
To study and implement measures to encourage fathers to taketime off for childbirth and parenting• Changing some parenting leave or special leave related to a
spouseʼs childbirth from unpaid to paid
• Implementing measures to encourage employees to takeannual paid time off and other benefits
Objective 2:
To enhance programs such as reduced-hour work related toparenting and nursing care, and to study and implement
measures to help employees return to work as quickly as
possible after taking parenting or nursing care leave or using
reduced-hour work
• Extending the amount of time employees can use programs
such as reduced-hour work related to parenting or nursing care
• Studying how to enhance social welfare and other benefit
programs
Objective 3:
To study and implement measures related to diverse workstyles
in order to rectify overwork and help employees balance theirjobs with parenting and nursing care
• Introducing telework (work at satellite offices, work from home)• Introducing flex time and paid hourly time off

Topic

We launched the Challenge 22 companywide

campaign in FY2022 with the goals of facilitating theCompanyʼs ongoing development and adhering tolimits on overtime during FY2024 by streamlining
operations and boosting productivity.
Under the campaign, each department creates a
voluntary working group; identifies specific problems
with a focus on the characteristics of individual
businesses and types of construction work,
programs, mechanisms, practices, and operations;and works to resolve them over about a year.
Going forward, we will continue this initiative with thegoal of advancing workstyle reforms.

15 CSR REPORT 2023

Earning Eruboshi certification forgender equality

In October 2022, we earned Eruboshi (level 2) certification inrecognition of our efforts to promote gender equality.
Weʼre working to transform awareness and revamp the working
environment and related programs based on our belief that anenvironment that makes it easy for female employees to dotheir jobs is a workplace that makes it
easy for all employees to do their jobs, forexample by actively hiring female newgraduates for main career track positions,increasing the percentage of main career
track positions (management positions)occupied by women, and enhancing
programs related to childbirth andparenting.

Social

ESG Management Initiatives

Human Resource Development■Human resource development policy

In keeping with our educational philosophy of “Human■Development of global human resources

To ensure that the Groupʼs overseas business, which isResource Development: Forging a Group ofa major segment of its operations, can continue toProfessionals,” weʼre building an educational system

operate in a stable manner, weʼre focusing on

shaped by the basic policies listed below so that eachfostering the development of human resources whoand every employee can become part of just such a

can contribute to global operations through programsgroup.

that assign employees overseas, for example training
assignments (which last one year) and careeradvancement assignments (which last two years). By
allowing workers to experience operations in countries
other than Japan and helping them improve theirmulticultural understanding and global communication
skills, these programs make possible smooth rotationof employees in Japan and overseas while fostering

Basic Policy on Human Resource Development

the development of human resources who will become Promoting development of technical and other skills

candidates to serve as executives at overseas group

 Creating mechanisms and an organizational culturecompanies in the future.

in which individuals can make the most of their

In addition, we offer executive education and training

skills and abilities

for employees assigned overseas and senior national

 Training “multi-engineers”

staff with the goal of fostering the development of Training global human resources

global human resources who can think and act from a

In addition, weʼve identified “securing and developing

managerial standpoint and contribute to thehuman resources and implementing workstylestrengthening of the foundations of overseas groupreforms” as a key priority under the Medium-term

companiesʼ businesses, expand their business

Management Plan (Vision 24) that began in FY2020,

domains, and advance localization.

and weʼre working to further enhance our educational
programs.

■Creation of a companywide educational system■Establishment of a new companywide training
facility

The newly completed Sumitomo Densetsu Kawasaki

In addition to offering conventional knowledge-focused

Technical Center, the Company's first training facility

education and helping employees earn professional

specializing in education, began full-scale operations

qualifications, we offer education focusing on

on April 1, 2023. In addition to various training

development of skills such as the ability to identify

facilities, the center provides lodging for trainees.

problems, trace their root causes, categorize andIn addition to coursework and technical training usingorganize related issues, and resolve problems and issues.

actual equipment including electrical and power,

Specifically, we're working to adopt an integrated,

telecommunications, HVAC, and plumbing equipment,

companywide approach to human resources

the center includes a room designed to let trainees

development that organically combines level-specificexperience safety hazards using VR devices and othertraining and various specialized courses withequipment, allowing them to master both practical

department-specific education, including on-the-job

skills and specialized knowledge.

training covering content relevant to various

Going forward, we will take advantage of thisdepartmentsʼ operations.

companywide facility to offer training for new hires■Career development support for female
employees

and other educational programs.

In FY2022, we launched a new training program
designed to create career plans that would help
female employees prosper professionally.
The program, which links training sessions forsupervisors and their subordinates, will foster thedevelopment of role models for female employees andhelp individual employees advance their careers byhaving supervisors and subordinates alike think about
specific career plans and articulate skills and©SS Tokyo

experiences that are needed in the workplace.

CSR REPORT 2023 16

ESG Management Initiatives

SocialHealth and Productivity Management
To give shape to our implementation of health andproductivity management as part of the effort to■Outside evaluation

On March 8, 2023, we were recognized as a “2023“enhance enterprise value in anticipation of the future,” aCertified Health & Productivity Management

key measure identified in the Vision 24 Medium-term

Outstanding Organization” (large corporation

Management Plan, we adopted the Sumitomo Densetsu

category) at an awards event hosted by the Ministry ofGroup Health and Productivity Management Declaration

Economy, Trade and Industry and Nippon Kenko Kaigi

to serve as our basic policy on health and productivity

to honor companies and corporations implementing

management. Going forward, we will implement a range

outstanding initiatives to maintain and improveof policies to maintain and improve the health of theemployeesʼ health. We received the same certification

Groupʼs employees.

last year for the first time.

Sumitomo Densetsu Group Health and Productivity
Management Declaration

At the Sumitomo Densetsu Group, we believe that humanresources are our greatest asset, and we consider the healthof employees and their families to be essential for the Groupʼsbusiness operations.
To improve workplace productivity and spur creativity, we will
actively implement health and productivity management withthe goal of creating workplaces where employees can work
energetically with peace of mind as well as physical andmental health and fostering an organizational culture thatgives top priority to health, just as it does to safety.
February 1, 2022
Sumitomo Densetsu Co., Ltd.
*Health and Productivity Management is a registeredtrademark of Nonprofit Organization Kenkokeiei.

Weʼre undertaking highly specialized, high-added-value
initiatives by assigning public health nurses, certified
psychologists, and worksite mental health promotion
coordinators and facilitating collaboration withoccupational health consultant physicians andoccupational physicians.

Topic

SEM Health Challenge MonthWe designate the month starting on October 1 eachyear as SEM Health Challenge Month and conduct a
series of activities with the goal of deepening
individual employeesʼ understanding of theimportance of preventing lifestyle-related diseases,
fostering health, and spurring internal
communication. Last year, the first fiscal year inwhich the month-long program was held, included
exercise (walking) seminars, a pace-counting
challenge, a quit-smoking seminar, and a quitsmoking challenge.
Going forward, we will continue to pursue initiatives

In addition to helping employees reassess their habits inorder to prevent cancer and lifestyle-related diseases, wewill move forward with a variety of measures to solve
problems like overwork and stress deriving from issues
such as the workplace environment and interpersonal
relationships.

17 CSR REPORT 2023

to give employees opportunities to incorporate
exercise into their daily lives, quit smoking, andotherwise promote health.

Social

ESG Management Initiatives

Community Service
The Sumitomo Densetsu Group carries out its businessactivities in accordance with the principle of “aiming to

Eco Cap Collection DriveWeʼve participated in the Eco Cap Collection Drivedevelop a favorable environment to support a prosperous

since 2011. Sorted plastic bottle caps are sold for use

and security society.” As a responsible member of society,as recycled plastic raw materials and the proceeds are

we strive to coexist with the communities we serve, andused to fund a variety of community service activities.

we're involved in an active program of community

In addition, the program helps reduce CO2 emissions

service activities.

that would otherwise be produced by the incinerationof the bottle caps.

Our Osaka Head Office has participated in local clean-up<Cumulative total: 596,597 caps / CO2 reduction:

activities organized by local governments every year

4,393.71 kg>

since 2006, allowing us to work together with local
residents and people from local schools and neighboring
companies to beautify the community.

Improving Customer Satisfaction

Weʼve introduced a gift-matching program under which

We provide engineering services that earn a high level of

the Company matches employee contributions andcustomer satisfaction by improving our proposal sales,

donates funds to the Japanese Red Cross Society, Unicef,

installation, and technical skills and strengthening ourand the World Wide Fund for Nature (WWF).

overseas business so that we can better leverage theGroupʼs total capabilities.

In addition, overseas subsidiaries in Thailand andIndonesia are working to maintain good relationships

Topicwith local residents, for example by donating computers,
temples and schools.

Topic

Beach clean-up
Thai Semcon (a Thai subsidiary) participated inclean-up activities at Pa Tong Beach organized by the
local Phuket government in October and December.
In addition to contributing to the community, the allhands project served to boost morale among
employees.
The company earned the gratitude of the local
Phuket government for its participation.

Installing electrical equipment for a
datacenter

We recently installed electrical equipment for a
datacenter in Bangkok, Thailand. In addition to
installing electrical equipment including incoming andtransforming equipment and an uninterruptible
power supply (UPS), the project, which was theCompanyʼs first involving an overseas datacenter,extended to installation of telecommunications andother equipment in tenant-leased spaces.
In addition to an extremely high level of difficulty, theproject, which was completed at a time of global
instability, presented challenges including equipment
shortages, changes in shipping methods, numerous
delivery delays, and interruptions to the testing andcommissioning process. Nonetheless, everyone
involved came together under the watchword of“teamwork” to compete the job without any
accidents or quality complaints, earning thecustomerʼs praise.
Project overview

cameras, and other equipment used in operations to local

Project
type

Installation of all facility electricalequipment (except generators)

Dates

November 2021 to April 2023

Location

Bangkok, Thailand

Scale

9,983 m2 (3 aboveground stories)

CSR REPORT 2023 18

ESG Management Initiatives

Governance

G: GovernanceCorporate GovernanceIn addition to working to allow more timely and efficientmanagement in accordance with the Sumitomo Spirit and“Corporate Philosophy of the Sumitomo Densetsu■Board of Directors and operational execution
structuresWeʼve adopted an executive officer system in order toGroup”, we strive to enhance our corporate governanceseparate managerial decision-making (by directors) andin line with the following basic approach in order tooperational execution (by executive officers). In

secure sustained growth while improving our corporate

principle, the Board of Directors meets monthly andvalue over the medium and long term in keeping withotherwise as needed to deliberate important mattersour belief in the importance of the interests of all

related to the Companyʼs management and to oversee

stakeholders, including shareholders.
a) We put in place an environment that allows
shareholders to exercise their rights in an appropriatemanner.
b) We take the interests of stakeholders, including
shareholders, into consideration and collaborate withstakeholders in an appropriate manner.
c) We ensure transparency by disclosing corporate
information in an appropriate manner.
d) We emphasize the Board of Directorsʼ decision-making
and oversight functions for basic policies related to
management and other directions, and we focus on
putting in place structures to ensure the effectivenessof those functions and on the operations of the Boardof Directors. With regard to operational execution, we
define clear lines of authority and responsibility, andweʼve introduced an executive officer system anddivisional organization with the goal of establishing
dynamic structures to ensure operational execution
can respond to changes in the business environment.
In addition to working to strengthen Audit &Supervisory Board membersʼ oversight from thestandpoint of ensuring healthy and robust
management, weʼve put in place structures that allow
outside independent auditors and Full-time Audit &Supervisory Board Member to work together withinternal audit departments and accounting auditors toprovide oversight ensuring that the Groupʼs operations
are conducted in an appropriate and legally compliant
manner.
e) We participate in constructive dialog withshareholders within a reasonable scope to contributeto sustained growth and medium- and long-term
improvement in our corporate value.

operational execution.

■Corporate governance structures

The Board consists of a well-balanced selection ofpeople who are well versed in fields that are importantfor decision-making involving corporate strategy,
including finance and accounting, legal affairs andcompliance, and personnel and human resource
development; people who are well versed in businessfields such as engineering and development; people
with extensive experience in corporate management
and global business; people with knowledge in otherindustries; and people with a level of independence thatallows them to contribute to the improvement ofcorporate value from a comprehensive perspective. An
appropriate number of members are appointed so thatthe body can carry out its functions effectively. In
addition, at least one-third of the Board consists of
independent outside directors.
With regard to operational execution structures, weʼveestablished a Management Meeting to support decisionmaking by the Board of Directors by deliberating Groupwide management strategy, medium- and long-term
management policies, and other directions.

■Audit structuresWeʼre organized to have an Audit & Supervisory Board,which in principle meets monthly and otherwise asneeded. The body has five members, of which three are

independent outside auditors with specialized
knowledge or experience in areas such as finance,accounting, and legal affairs. Weʼve put in placestructures that allow outside Audit & Supervisory Board
members, full-time Audit & Supervisory Board
members, and full-time auditing staff to work together
with internal audit departments and accounting auditors
to provide oversight ensuring that the Groupʼs
operations are conducted in an appropriate and legallycompliant manner.
An Internal Audit Department has responsibility overinternal audits. Department staff members investigate
issues and propose improvements to facilitate
appropriate and efficient operations through internal」

audits of business departments and Group companies,
and they also work as necessary with Audit &Supervisory Board members and accounting auditors to
conduct audits.

19 CSR REPORT 2023

Governance

ESG Management Initiatives■Advisory committees
To ensure objectivity in decision-making by the Board of Directors concerning the nomination of candidates for director and
Audit & Supervisory Board positions and directorsʼ compensation and to strengthen accountability, weʼve created a
Nominating Advisory Committee and Compensation Advisory Committee to serve as advisory bodies for the Board of
Directors.
Each committee consists of at least three members, and to foster deliberations from diverse perspectives, a majority ofeach must consist of outside directors. Additionally, each must be chaired by an outside director.

■Director and Audit & Supervisory Board member skill matrix
The following skill matrix is designed to depict job descriptions for the entire Board of Directors by summarizing the skills
brought by officers and candidates.
Specialization and experience
Name

PositionIndependence

Corporate
management

Finance andaccounting

Legal affairs
Compliance

Personnel
Human resource
development●●

International Engineering
GlobalDevelopment

Knowledgeof otherindustries

Chairman of the

Masao
SakazakiBoard●of Directors,
Representative
Director

MakotoTani
Tadashi
Honda

President,●

Representative

●

●

●

Director
Senior Managing●

Executive Officer
Director and●●

Tetsunari
ShimadaManaging ExecutiveKenʼichiShimadaManaging Executive

Hideyuki
Takahashi

Outside Director

●

●

Ryoko
Shimizu

Outside Director

●

●

●

●

RikiyaHattori

Outside Director

●

●

●

●

●

Hirofumi
Yasuhara

Outside Director

●

●

●

●

●

WataruMatsushita

Supervisory Board

Kazuhiko
UchiikeSupervisory Board

YasuakiTarutaniSupervisory Board

Yoko
Koga

Supervisory Board

TakumaUsui

Supervisory Board

●

●

●

Officer
Director and

●

●

●

OfficerFull-time Audit &

●

●

●

MemberFull-time Audit &

●

●

●

MemberOutside Audit &

●

●

●

●

●

MemberOutside Audit &●●MemberOutside Audit &●●MemberCSR REPORT 2023 20

ESG Management Initiatives

GovernanceComplianceIn keeping with our basic policy of treating compliance as
the heart of management and giving top priority tocompliance whenever thereʼs a conflict between profit andcompliance, we pursue fair, transparent management by
taking various steps such as establishing structures andrules to ensure legal compliance and offering training whileworking to eliminate legal violations and improve
compliance awareness among executive staff.
Concerning the structures we put in place to ensurecompliance, the Compliance Subcommittee meets fivetimes a year to formulate specific plans, apply them todepartments, and plan and implement various guidance
measures with the goal of ensuring that businessactivities are carried out in accordance with applicable■Compliance MonthWe hold Compliance Month each July as anopportunity to regularly review our basic policy oncompliance, specifically to give top priority tocompliance whenever thereʼs a conflict between profit
and compliance.
During the month, we pursue priority initiatives toencourage compliance, including by raising awareness,for example by offering special training on compliance;
investigating business activities from the standpoint ofcompliance, identifying concerns, and organizing
issues; and working to ensure compliance withcompetition law while preventing inappropriate
conduct.

laws and corporate ethics.
In addition to establishing a Competition Law ComplianceDepartment as part of the Sales Headquarters so thatsales activities can be carried out appropriately and in
keeping with the Anti-Monopoly Act and other laws,
weʼre working to strengthen the organizationʼscompliance structures, for example by appointing acompetition law compliance officer and coordinator ineach department.
Moreover, we offer compliance workplace training in each
workplace, including legal affairs and compliance
content, to help raise awareness of the importance ofcompliance and improve knowledge about applicable■Operational consultation and hotline programs

laws and regulations.

Weʼve put in place operational consultation and hotline■Competition law compliance initiatives

consultations and reports of fraudulent conduct andrules that set forth mechanisms to ensureWeʼre implementing initiatives to address three key
areas: competition law compliance training, audits,and crisis management.
Component
Training

AuditsCrisismanagementwith the Whistleblower Protection Act.
In addition to our internal hotline, weʼve establishedan external hotline administered by a law office and an

Overview
Specialcompliancetraining(yearly)

Offered once every three years
with a competition law theme.

Complianceworkplacetraining(monthly)

Offered once every six months
with a competition law theme.

Selfinspection(monthly)

Conducted to review inquiry
management charts and reports.
Employees review advanceapplications and after-the-fact
reports covering contacts withother companies and attendanceat trade association meetings.

Audit(yearly)

Conducted to review compliancewith rules, status of selfinspections, and compilation andretention of written records inkeeping with the Competition Law
Compliance Regulations.

Compilation
and retentionof records

Conducted to ensure that
substantive records are being
compiled and retained.

21 CSR REPORT 2023

other issues are treated properly and in accordanceexternal hotline for use by overseas affiliates. By
accepting consultations and reports, responding tothem appropriately, and ensuring that whistleblowers
are protected from being penalized for reporting
questionable conduct, weʼre working to prevent,quickly discover, and rectify inappropriate conduct.
Going forward, we will continue to carry out businessactivities in a fair, transparent manner founded oncompliance so that we can earn the trust of society
and customers.

Governance

ESG Management Initiatives

Risk Management
We formed the Risk Management and Compliance
Committee in September 2005 to provide an organizational
basis for strengthening corporate ethics, legal compliance,
and information security and dealing with urgent risks suchas those posed by natural disasters such as earthquakes
and quality accidents.
The committee, which encompasses three subcommittees(the Risk Management Subcommittee, the Compliance
Subcommittee, and the Information Security
Subcommittee), has responsibilities including the planningand implementation of measures to prevent risks andstrengthen information security in a way that cutshorizontally across the Companyʼs organization.

■Information securityWeʼre working to ensure information assets aremanaged in an appropriate manner in the course of
our operations by putting in place various rules,
including on the management of personal data andconfidential information, in keeping with ourFundamental Policy for Information Security. We
continue to implement appropriate information
security measures as the workplace environment
undergoes significant change, for example with the
adoption of telework and other new workstyles. In
addition to offering information security training when
new employees and mid-career hires join the■Dealing with infectious diseases
The Group has formulated a business continuity plan
(BCP) for dealing with infectious diseases (in the formof Infectious Disease Action Plan Guidelines), andweʼre building crisis management structures.

■Responding to accidents and natural disasters
We've formulated Crisis Management Regulations thatprovide for advance measures and after-the-fact
responses as well as a series of standards for responding
to accidents and natural disasters such as earthquakes toaddress risks affecting ongoing corporate activities. To
enable individual employees to take specific action inaccordance with these rules in the event of an accident
or natural disaster, we conduct exercises that involve thecreation of a companywide task force as well as general
disaster-prevention exercises, including regular exercises
focusing on how to account for the safety of personnel.

Company, we work to improve security and raise
employee awareness of topics such as the importanceof information security, including the hazards ofinformation leaks and infection with computer viruses,
by holding regular workplace training and targeted
threat email exercises.
We also offer regular training for domestic andoverseas affiliates, and weʼre working to improve theirlevel of information security by conducting security
diagnostics, holding interviews about the status of
security measures, and offering guidance.

Human Rights
The Sumitomo Densetsu Group Employee Code of Conduct
includes provisions concerning respect for human rights andprivacy and the prevention of harassment, and the Group
strives to raise employee awareness of human rights througha variety of training programs. Weʼre working to create apositive, worker-friendly workplace for all employees andother people involved with our business activities by
eliminating discrimination, unfavorable treatment, bullying,and harassment.
Weʼve established hotlines through which employees andothers (including seconded employees, contract employees,
part-time employees, and temporary employees) can seek
advice in the event they experience harassment or otherhuman rights issues in the workplace. These hotlines include
both our internal personnel department and an outside
hotline (administered by a designated law office), and callers
to both are able to remain anonymous as circumstances
necessitate.
Callersʼ privacy is fully protected, and both callers and others
who cooperate with efforts to review the facts areguaranteed not to suffer disadvantageous treatment, forexample by being terminated.

■Companywide human rights training
To promote everyday respect for human rights, we offer
companywide training (lectures) for executives andmanagers on a wide range of topics during Human
Rights Week from December 4 through 10 each year.
We also offer introductory human rights training as partof the training of newly hired employees.

CSR REPORT 2023 22

Company Information

ProfileName

Sumitomo Densetsu Co., Ltd.

Head OfficeOsaka: 2-1-4 Awaza, Nishi-ku, Osaka 550-8550
Tokyo: 3-12-15 Mita, Minato-ku, Tokyo 108-8303

FoundedApril 1950

President

Makoto Tani

Capital¥6,440,430,000

Employees

Consolidated: 3,518(As of March 31, 2023)

Non-consolidated: 1,707

Construction permit[Specified construction business]

numbers

Minister of Land, Infrastructure, Transport and Tourism permit (Special-3) No. 180(Permit date: December 3, 2021)
Civil engineering, construction, scaffolding and earthwork, electrical work, plumbing work,
steel structural work, paving, interior finishing work, machinery and equipment installation,
telecommunications work, water supply facility work, demolition work
[General construction business]
Minister of Land, Infrastructure, Transport and Tourism permit (General-3) No. 180(Permit date: December 3, 2021)
Painting work, firefighting equipment work

Electrical work

Minister of International Trade and Industry Submission No. 46191

submission number
Offices

Osaka, Tokyo, Nagoya, Sapporo, Sendai, Utsunomiya, Ota, Chiba, Saitama, Yokohama, Kyoto,
Kobe, Hiroshima, Niihama, Fukuoka, others

History

April 1950: Taiyo Densetsu Co., Ltd., is established.
November 1962: The Company is listed on the Second Section of the Osaka Stock Exchange.
March 1969: The Company changes its name to Taiyo Kudo Construction Co., Ltd.
November 1972: The Company is listed on the Second Section of the Tokyo Stock Exchange.
July 1985: The Company changes its name to Sumitomo Densetsu Co., Ltd.
October 1985: The Company merges with Sumiden Kucho Co., Ltd.
September 1995: The Company is listed on the First Section of the Tokyo and Osaka Stock
Exchanges.
April 2022: The Company's listing moves to the Prime Market.

Organizational Chart

23 CSR REPORT 2023

(As of June 1, 2023)

Company Information

Network

China

MyanmarPhilippines
ThailandCambodia
Vietnam

Malaysia

Indonesia

Share Information
Share overview
Total number of authorized shares

73,000,000

Total number of outstanding shares

35,635,879 (including 230,084 shares of treasury stock)

Number of shareholders

3,812 (a decrease of 51 from the end of the previous fiscal year)(As of March 31, 2023)

Major shareholders and number of shares(Thousands of shares)

Sumitomo Electric Industries, Ltd.

17,828The Master Trust Bank of Japan, Ltd. (trust account)

3,429

Custody Bank of Japan, Ltd. (trust account)

790

Sumitomo Densetsu Kyoeikai

716

J.P. MORGAN BANK LUXEMBOURG S.A. 381572

656

Hokkoh Transportation Inc.

624

Sumitomo Densetsu Employee Stock Ownership Association

559

CSR REPORT 2023 24

Company Information

Financial Information

25 CSR REPORT 2023

Company Information

Financial and Non-financial Data
FY2018FY2019FY2020

FY2021

FY2022●Finance
Orders received (millions of yen)

160,225

167,277

162,140

179,019

188,787

Sales (millions of yen)

157,016

172,910

154,053

167,594

175,120

Operating profit (millions of yen)

10,952

13,581

11,31913,005

13,461

Ordinary profit (millions of yen)

11,561

14,201

11,937

13,90014,394Current net profit attributable to owners of theparent (millions of yen)

5,292

9,772

8,048

9,140

9,384

Current net profit per share (yen)148.73274.67226.22257.43265.05

7.9

13.8

10.3

10.6

10.2

Return on equity (ROE) (％)

Net assets (millions of yen)

71,44475,99786,381

93,385

99,618

Total assets (millions of yen)

130,157

138,328

146,733

161,036

162,587

Shareholdersʼ equity ratio (％)
Book value per share (yen)

52.7

52.7

56.5

55.5

58.4

1,926.22

2,047.89

2,331.62

2,526.98

2,681.14

Cash flows from operating activities (millions of yen)

4,905

9,386

14,965

6,861

5,094

Cash flows from investing activities (millions of yen)

6,460

(1,275)(2,711)

11,525(2,388)Cash flows from financing activities (millions of yen)

(2,107)(2,626)(2,929)(3,382)(3,502)

Cash and cash equivalents at end of period(millions of yen)

24,75730,036

39,58954,921

54,428Annual dividends per share (yen)

60.00

70.00

74.00

86.00

94.00

Dividend payout ratio (％)

40.3

25.5

32.7

33.4

35.5

Dividend on equity (DOE) ratio (％)

3.2

3.5

3.4

3.5

3.6

5

5

6

3

2

●Human resources
Number of employees moving from regular
positions to “area main career track” positions
Percentage of women hired fornew-graduate main career track
positions (％)

Technical

7.1(3/42)

5.9(2/34)

6.7(3/45)

4.1(2/48)

17.3(9/52)

Administrative

20.0(1/5)

14.3(1/7)

50.0(2/4)

25.0(1/4)

33.3% (1/3)

Total

8.5%(4/47)

7.3%(3/41)

10.2%(5/49)

5.7%(3/53)

18.2% (10/55)

32.8%(6.0 days)

47.5%(7.0 days)

55.9%(11.7 days)

58.5%(12.1 days)

64.4%(13.4 days)

60

55

70

65

63

Percentage of available annual paid leave taken (％)
Number of newly hired
graduates and mid-career hires
Percentage of male employees
taking childbirth or parenting
leave or time off (％), (numberof employees)

Newly hired
graduates
Mid-career hires

34

46

24

52

35

Spousechildbirth leave

0.0%(0 employees)

0.0%(0 employees)

11.4%(4 employees)

23.1%(9 employees)

38.0%(16 employees)

Parenting leave

0.0%(0 employees)

2.8%(1 employee)

17.1%(16 employees)

34.1%(14 employees)

44.2%(19 employees)

2.48

2.42

2.29

2.44

2.75

Consolidated

3,042

3,444

3,466

3,485

3,518

Nonconsolidated

1,339

1,535

1,600

1,680

1,707

Stoppage of 1
day or more

0.11

0.54

0.40

0.28

0.90

0.00

0.82

0.01

0.02

0.01

Percentage of employees with adisability (％)
Employees●SafetyAccident frequency rate (％)
Accident severity rate (％)

CSR REPORT 2023 26