About the Taisei Group

Sustainability Section

Taisei Group’s Growth Strategy

Governance Section

Data Section

Special Feature: SDGs Dialogue

To Become a Leading Company of Choice for
the Customers through the Implementation of
Sustainability Management
Senior Managing Executive Officer;
Chief Sustainability Officer (CSO)
Chief of Sustainability Division (Integrated);
Chief of Clean Energy & Environment Business
Promotion Division

Fellow (Sustainability),
Mitsubishi UFJ Research andConsulting Co., Ltd.

Jiro TANIYAMAMari YOSHITAKA

CSO×Expert

SDGs
Dialoguechange in their Annual Securities Reports, in accordancewith TCFD recommendations. It goes without saying thatcompanies shall take such measures to mitigate climatechange and it is also required for the companies toundertake proactive efforts and disclose information,
being connected to improve their corporate value beyond
such initiatives.
Similarly, Mitsubishi UFJ Financial Group has establishedspecialized departments focusing on sustainable business.
We are assessing investment and loan recipients andexpanding our business through ongoing engagement withcompanies. I have a keen interest in the sustainability
initiatives and future prospects of the Taisei Group.
TANIYAMA: Concerning the national policy of GX investment of ¥150 trillion, we definitely want to leverage it to
expand our business opportunities. I have heard that you
attended the 27th session of the Conference of theParties to the United Nations Framework Convention on
Climate Change (COP27) held in Egypt in November
2022. How was it going there?
YOSHITAKA: While COP27 did have some achievements, such as the decision to establish a dedicatedfund to support measures against “loss and damage”
in developing countries affected by climate change, I feelthat numerous issues to be discussed continuously
remained, such as conflicts between developed anddeveloping countries as well as among developed
countries themselves.

Challenges to Achieving Carbon Neutrality

The Taisei Group has targeted the front-runner status in the environmental sector, accelerating its initiatives
towards carbon neutrality, and aims at the enhancement of corporate value and sustainable development
by solving environmental and social issues through its business.
This time, we invited Ms. Mari YOSHITAKA, an environmental financial consultant and a pioneer inenvironmental business, to have a dialogue with Mr. Jiro TANIYAMA, Chief of Sustainability Division (Integrated)
and Chief Sustainability Officer (CSO). They discussed the prospect of roles the Taisei Group is currently
expected to play in sustainability management, and future possibilities.

Global Trends in Decarbonization
YOSHITAKA: Since July 2022, the government has been
hosting the meetings of the GX (Green Transformation)
Implementation Council chaired by the Prime Minister. In
February 2023, the Cabinet approved a Basic Policy aimed
at implementing GX. The policy sets advancing decarbonization efforts and implementing “growth-oriented
carbon pricing schemes“ to realize the economic growth,
while mitigating climate change and ensuring a stableenergy supply. Efforts towards GX are accelerating, for

57 T A I S E I ANNUA L R EPORT 2023

Sustainability Section

instance, the policy has been announced to realize GX
investment of more than ¥150 trillion by the public andprivate sectors combined over the next decade.
Over 20 years ago, I studied environmental economics
and business management, including emissions trading,in the United States. Although the significance of environmental management was not as widely recognized as it istoday, the environment surrounding the green businesshas dramatically changed over the last two decades. For
instance, companies are now required to include sustainability issues such as the measures to mitigate climate

YOSHITAKA: In October 2020, the government declared
its aim to achieve carbon neutrality and decarbonizedsociety by 2050 by reducing overall greenhouse gas emissions to net zero. Evolving further initiatives by privatecompanies is crucial for achieving this target, but I believe
there are multiple challenges facing companies as well.
First, let me ask about your supply chain initiatives. The
construction industry has a broad reach, involving
companies of various sizes and types—from the leading
general contractors such as your company to small andmedium-sized contractors in regions. How do you plan toachieve carbon neutrality throughout the supply chain, by
involving these companies that are upstream of Scope 3
on your business? When I spoke with the top management of another construction company before, they said
that supply chain was a challenge, and while their own
efforts could be effective, it was very challenging to instillsuch awareness into the end of the supply chain.
TANIYAMA: Unlike general manufacturing business, theconstruction business lacks fixed production facilities, andsupply chain changes depending on the projects construction companies undertake. It is a significant challenge toinstill our sustainability practices consistently into such adiverse range of companies, some of which are publicly

TANIYAMA: Our Company participated in the Japan
Pavilion for the first time and exhibited our T-Green® Multi
Solar and T-eConcrete® technologies. I heard that thebooth attracted a large number of visitors throughout theevent, making it quite a success.
YOSHITAKA: I was there, and it was indeed favorable. I
was aware of a high level of interest from developing countries, particularly in technologies such as T-eConcrete®,that absorb CO2 through concrete. Despite some negative
media coverage in Japan, citing that Japan received theFossil Award for its substantial public funding for fossil
fuels, environmental technologies from Japan are highly
valued globally. I think Taisei Corporation should more
actively promote such technologies.

traded and others are family-owned. However, we believe it
is part of our duty as the prime contractor to continue withpersistent efforts such as briefings, surveys, and interviews.
YOSHITAKA: Cautiousness might also be required inroutine operations, for instance, to what extent the prime
contractor may intervene in the business activities of thecompanies in the supply chain or instruct to such companies, or if such operations are regarded as abusing a
superior bargaining position.
Next, I would like to talk about the issue of cost.
Innovative technologies such as T-eConcrete® which wementioned before will contribute to solving social issues
only if they are widely adopted. Many companies still
operate under the notion that it costs for environmental
initiatives, and I think there are cost-related challenges inbeing widely adopted environmental technologies suchas T-eConcrete® and connecting them to the businesswithin the Taisei Group.
TANIYAMA: Absolutely, the cost of using those technologies is currently higher than that of traditional methods
and materials. We need efforts to seek understanding
from our customers as part of their Scope 3 decarbonization efforts. We believe the key to broader adoption lies in
reducing the costs by continuing to run demonstration
experiments, identify and address issues, and collaborating with various companies.

T A I S EI A N N UA L R EPO R T 2023 58

About the Taisei Group

Sustainability Section

Sustainability Section

Governance Section

Data Section

Special Feature: SDGs Dialogue

Carbon Neutrality and Regional
Cooperation
YOSHITAKA: Carbon neutrality is not an issue that can be
resolved by companies alone. Naturally, it requires support
from the national government as well as co-creative activities with local governments. The Ministry of the Environment
has selected “Decarbonization Leading Areas,” focusing
primarily on local governments and also involving local
companies and financial institutions, has resolved regional
issues in accordance with each area’s unique characteristics, and will indicate a direction towards decarbonization
while improving the quality of life for residents. I serve on
the Evaluation Committee for these Decarbonization
Leading Areas and have observed very interesting initiatives
being launched in various regions. For construction
companies whose operational field includes both domestic
and international locations, I believe such initiatives offer abusiness opportunity to simultaneously enhance corporate
value and solve issues.
TANIYAMA: I fully agree with you. In April of this year, weestablished a specialized department focusing on regional
cooperation within our Sustainability Division (Integrated),
and have started to reinforce such cooperation throughout
the entire company. We have received various requests
and inquiries from local governments and have madeproposals that utilize our cutting-edge technologies towards
achieving carbon neutrality. Some of these initiatives are
already underway. In “Medium- to Long-Term Vision:
TAISEI VISION 2030” formulated in 2021, we aim to be “aInitiatives for Environmental Due Diligence
YOSHITAKA: I would like to shift our discussion fromcarbon neutrality to broader environmental issues. I
understand that Taisei Corporation has begun considering environmental due diligence, is that correct?
TANIYAMA: Yes, we revised our Environmental Policy inMarch 2023 to include “Continuous Implementation ofEnvironmental Due Diligence.” We have already implemented risk measures related to the environment, such as
establishing an environmental management system (EMS)
and formulating the Taisei Group Sustainable Procurement
Guidelines. Currently, we are identifying environmental
risks as a part of systematically implementing a PDCA

Sustainability Management Attracts
Human Capital
YOSHITAKA: I am also a lecturer at several universities,
and when I talk to students, I find that they tend to be
more interested in finding a job or starting a business in

59 T A I S E I ANNUA L R EPORT 2023

Taisei Group’s Growth Strategy

pioneering corporate group contributing to the development of a resilient society where people can live affluent
and cultured lives,” and consider that it is our crucial duty
to contribute to regional revitalization and development
through our business activities.
YOSHITAKA: While there is a strong public perceptionthat “measures to mitigate climate change equals decarbonization,” and thus interest in clean energy tends todominate, adaptation to climate change is also a significant global challenge. To achieve carbon neutrality is agoal for the future—2030 or 2050—but natural disasters
due to climate change are happening right now, andaccordingly a balanced approach that also includes
disaster prevention and recovery initiatives is essential.
Even in the case of renewable energy initiatives, each
local government is seeking not only reduction of electricity cost but also solutions that can serve as
infrastructure during disasters, as part of its BusinessContinuity Plan (BCP). I believe that the expertise of
construction companies is indispensable not only for theenergy sector but also for comprehensive urban planningthat anticipates natural disasters.
The selection criteria of local governments for
Decarbonization Leading Areas which I mentioned earlieremphasize how to incorporate energy-saving and energycreating measures into existing facilities and evolving such
facilities. I believe your company’s environmental technologies, including “Green Renewal ZEB,” offer valuable
solutions for local governments, both from the perspectives of carbon neutrality and BCP in times of disaster.

(Plan-Do-Check-Act) cycle, including the identification andassessment of environmental risks, the implementation of
preventative and mitigative measures, the verification of
their effectiveness, and disclosure of the information.
YOSHITAKA: Historically in Japan, there has been an
attitude that all we have to do is to comply withenvironment-related laws and regulations. However, froman ESG perspective, compliance with environment-related
laws and regulations falls under Governance (G). To strive
for more ambitious goals for the future is part of theEnvironmental (E) aspect. Therefore, I think it iscommendable that you are establishing a mechanism forenvironmental due diligence. I look forward to continuing tomonitor your company’s progressive initiatives.

the IT or environmental fields rather than in joining a large
company, and have high expectations of being able to dosomething new, demonstrate their abilities, and contributeto society. My biggest concern is the gap between thevalues of sustainability natives like them and our generation. I believe that if companies continue to manage

themselves with being tied down to conventional values,
they will eventually lose the interest of these students,
making it difficult to secure human capital in the future.
TANIYAMA: I share similar concerns. I was deeply
involved in the formulation of TAISEI VISION 2030 which I
mentioned earlier, as the then Chief of Corporate
Planning Office. The focus was on solving sustainability
issues through our business, and we had an in-depth
discussion how to link this to the power to generate
capital for growth for the Taisei Group over the long term
and continuously. It is important to equate corporate
value with indicators such as net sales and profits. But,
not only do we have to emphasize such short-term
corporate value, but also do we have to take various
measures by backcasting what our future goals shouldbe, in more long-term; otherwise, sustainability natives
like the ones you mentioned may not join our Group.
TAISEI VISION 2030 embodies the idea that one major
issue is to seriously address both business challenges
and sustainability.
Additionally, our Company established the Taisei Group
Philosophy “to create a vibrant environment for all
members of society” in 1990. More than 30 years havepassed since this Philosophy was established, and I
believe it serves as both a guide and raison d’être thatthe current Taisei Group’s sustainability management
should aim at.
YOSHITAKA: The term “ESG investment” was first introduced as an official phase at the United Nations in 2006.
Financial institutions had been conducting screening toprevent negative societal impact even before that time, but
the idea that ESG investment shall be linked to economic
growth became common between 2010 and 2015, following
the global financial crisis, “the collapse of Lehman Brothers.”
This means your company had integrated sustainability into
its management even before such an approach became
mainstream globally. That is probably why your company
was able to celebrate its 150th anniversary this year.

Taisei Group’s Challenges and Expectations
YOSHITAKA: How do the ESG initiatives of yourcompany distinguish themselves from those of yourcompetitors in the construction industry? As the materiality
in this sector tend to be quite similar across companies, I
often find it hard to identify a unique angle. It is crucial forthe investors to see that there are distinct strengths andunique strategies identified as the character of the TaiseiGroup, even when the Company’s a identifiers are masked.
I expect the Taisei Group to demonstrate such differentiatedinitiatives and public disclosures. Also, it is essential topresent not only your current initiatives but also a roadmap
and future vision outlining further evolutions and steps. In
the current circumstances that various sustainability
issues such as climate change and geopolitical risks are

How are your diversity initiatives? I am currently
researching the correlation between companies
advancing in climate change countermeasures, TCFD
disclosures, and other initiatives, and those that are
working to close the gender gap. Reports from overseas
suggest a correlation exists. There is also data indicatingthat when female participation in management increases
and diversity is enhanced, innovation in climate change
countermeasures and technology is more likely.
TANIYAMA: As we believe that a major point for
promoting active participation and advancement of
women in the workplace lies in changing men’s attitudes,
we ensure that male employees take childcare leavefollowing giving birth by their spouses.
YOSHITAKA: The term “women’s participation andadvancement” is often misunderstood as telling women
to “work more.” While it is natural for women to work, thecurrent situation is that it is difficult for them to fully realize
their potential unless men share responsibilities as you
pointed out. It is said that it is crucial to close the gender
gap. It may appear irrelevant at first glance, but inconstruction industry, which has a strong “male society”
image, I believe that diversity initiatives could potentiallylead to solutions for environmental issues.

complicatedly tangled up, the Ministry of Economy, Tradeand Industry has initiated a program to select and recognize companies, as the “Sustainability Transformation
Brands (SX Brands),” that effectively integrate sustainability
issues and societal needs into their business strategies
and can enhance their corporate value. I serve on theevaluation committee for this program, and I fully believethat the Taisei Group has the potential not only to elevate
its sustainability management and recognized under thisprogram, but also to solve this country’s environmental
and social issues and to lead sustainability thereof. I havehigh expectations that the Taisei Group will accelerate its
initiatives for the future.
TANIYAMA: Thank you for your valuable advice and yourtime today.

T A I S EI A N N UA L R EPO R T 2023 60

About the Taisei Group

Sustainability Section

External Member of the Board

Atsuko NISHIMURAElected since 2017

As we are in a period where evaluations of business efforts towards
environmental and social issues directly impact corporate value andsustainable development, the Taisei Group has an important role to play
and responsibility to lead these initiatives. Pioneering efforts in this field
are crucial as they offer various growth opportunities.
The Taisei Group has clarified its emphasis on sustainability management
through policy formulation, organizational centralization, and feeding
issues back into our Medium-Term Business Plan, and intends toenhance our specific goals and initiatives.
On the other hand, environmental and social issues are broadly
correlated, making it difficult to easily assess the effectiveness of ourinitiatives. Trends in information disclosure and evaluation criteria arealso changing. I wish the Company to continuously update its
approach, paying close attention to the assessment of the effectivenessof its actions, issue analysis, and appropriateness of information disclosure, and thereby to further develop as a business corporation that
pioneers a sustainable future by enhancing the competitiveness andadvantages of its technologies and services.

To Evaluate Sustainability Measures from the Perspectiveof Worksites

External Member of the Board
Elected since 201961 T A I S E I ANNUA L R EPORT 2023

Sustainability Section

Governance Section

Data Section

Message from the External Members of the Board

To Expect Development by Solving Environmental andSocial Issues

Norio OTSUKA

Taisei Group’s Growth Strategy

When it comes to sustainability, while climate change and human rights
have attracted attention previously, issues have now become broader,such as biodiversity, and more urgent issues to be resolved. It can besaid, therefore, that the larger the scale of the business, the greater theburden on companies to take measures against them.
I feel that Taisei Corporation’s sustainability measures are earnest andsincere, as it has taken effective measures with keen awareness ofworksites, even though it has many construction sites under a multilayered contracting system with subcontractors. It is commendable that
the Company has set realistic numerical targets for environmental andsocial issues towards the realization of SX (Sustainability Transformation),and is working to achieve them straightforwardly.
In order to further enhance sustainability measures in the future, I
believe it is important to continue steady efforts while acquiring sufficientunderstanding from worksites that it is also significant to work on those
new issues at worksites, rather than regarding them as problems
unique to the head office.

To Address Challenges with a Broad Perspective andHolistic Solutions
In recent years, as the focus on achieving the Sustainable Development
Goals (SDGs) has grown, companies are increasingly expected totackle sustainability challenges. Taisei Corporation, since its foundation,
has always addressed social issues, thereby providing value andexpanding its business. Thus, one could say that initiatives related tosustainability have been integral to its operations from the beginning.
This fine balance between enhancing corporate value while broadly
meeting customers’ needs and societal demands seems to account forthe company’s longevity—sustaining it for over 150 years.
While the spotlight often falls on decarbonization when discussing
sustainability themes, numerous other challenges like human rights,
poverty, and food crises are becoming apparent, too. What I lookforward to as the future Taisei Group is its role as a leading company
that tackles these issues through holistic solutions and a broader
perspective.
As the chairperson of the Sustainability Committee, I will continue tolend my support to these endeavors.

Newly Elected
External Member ofthe Board

External Member of the Board

Fumiya KOKUBUElected since 2019

To Contribute to the Enhancement of Corporate
Value with Awareness of Sustainability

As a former President in a manufacturing company in the fields of alcoholic
beverages, food, and soft drinks, I have aimed to provide enriching experiences for worldwide consumers, and have also been to work with a wide
range of stakeholders to contribute to the development of a sustainable
society. The Taisei Group shares these values, emphasizing connections
with local communities and dialogue with them, and working towards thedevelopment of a resilient society where people can live affluent andcultural lives. I intend to leverage my past experiences in this new role.
As I take on the position of an External Member of the Board for
Taisei Corporation, celebrating its 150th anniversary, I see it as my duty
to enhance the effectiveness of the Board. This involves building a
relationship of trust with the management, conveying candid opinions
and perspectives, and properly overseeing both the proactive anddefensive aspects of management.
Looking ahead to the future of the Taisei Group, and with the awarenessof sustainability based on global trends, I will support the acceleration
and realization of growth strategy and contribute to the achievement of“TAISEI VISION 2030” and the enhancement of the corporate value of
the Taisei Group.

External Member of the Board

Tsutomu KAMIJOElected since 2023

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About the Taisei Group

Sustainability Section

ustainability Management Promotion▎ SSystem▎Structure of Value and Policies and Taisei Group’s Fundamental Sustainability Policy
The Taisei Group operates under the Group Philosophy of “to create a vibrant environment for all members of society,” aswell as three tenets of the “Taisei Spirit”: “Active and Transparent Culture,” “Value Creation,” and “Evolution of Tradition” inpursuit of the Group Philosophy. The Taisei Group’s Fundamental Sustainability Policy is to realize “sustainability transformation (SX)” by addressing sustainability challenges through businesses centered on the construction industry. The goal is
to contribute to the development of a resilient society where people can live affluent and cultured lives.
Through our business activities, by producing quality social capital and addressing the challenges faced by our clients andsociety, we aim to foster a cycle of increasing both corporate and social value. Our aspiration is to achieve sustainablegrowth alongside society.
Our Structure of Values and Policies

Taisei Group Philosophy

Taisei Spirit
Taisei Group
Philosophy

To Create a Vibrant Environment for
All Members of Society

Active and Transparent Culture /Value Creation / Evolution of Tradition
Key Concepts That All Taisei Group Officers andEmployees Must Adhere to in Order to Pursue
and Realize the Taisei Group Philosophy

Objectives to be Pursued by the Taisei Group(Goals)Taisei Spirit

Individual Policies

Overall
Principles ofConduct

OverallManagement
Perspective● Environmental Policy

Social● Declaration of Biodiversity Preservation by Taisei Group

Fundamental
Policy on
Sustainable
Development● Multi-Stakeholder Policy ● Quality Policy● Safety and Health Policy ● Procurement Policy● Human Rights Policy ● Digital Transformation (DX) Policy● Technology Development Policy● Human Resources Development Policy (Diversity & Inclusion Policy)● Risk Management Policy ● Policy on Business Continuity in Times of Disaster● Fundamental Policy to Enhance Operational Compliance Systems

Governance● Information Disclosure Policy ● Policy on Intellectual Property● Policy on the Protection of Personal Information ● Code of Conduct on

the Use of Social Media ● Fundamental Corporate Governance Polity● IR Policy ● Tax Policy ● Declaration of Partnership Building

TAISEI VISION 2030
Medium-Term Business Plan
(2021– 2023)

Materiality(Issues to be dealt with) ealization of a sustainable and❶Renvironmentally friendly society❷E nsuring quality and improving

technology❸T echnical development for realizing asustainable society❹P romotion of supply chain management❺T horough management of occupational
health and safety❻C ultivation of technical staff andsecuring human resources❼R ealization of an attractive working
environment that is good to work in❽T horough compliance and restructuringof the Group governance system

Our Structure of Values
and Policies

63 T A I S E I ANNUA L R EPORT 2023

Data Section

Sustainability Management Promotion System Chart(As of July 1, 2023)

Board

The Sustainability Committee has been set up as acommittee within the Board to bolster sustainability
management throughout the Group. This committee
deliberates on significant policies and specificmeasures concerning sustainability challenges,
enhancing the effectiveness of our initiatives.
Moreover, under the umbrella of the Management
Committee, we have instituted various committees,such as the Sustainability Promotion Committee
and the Personnel Committee, to discuss crucial
matters related to sustainability, ensuring discussions
are both timely and comprehensive.
To centralize responses to sustainability challenges,
in April 2022, the Group founded the Sustainability
Division (Integrated). Additionally, the chief of thisdivision was appointed as the Company’s Chief
Sustainability Officer (CSO), amplifying our efforts totackle these challenges.

Sustainability Committee
Chairperson | External Member of the Board
Members

President / Executive Vice President, Chief of Marketing & Sales Division(Integrated) / Member of the Board, Senior Managing Executive Officer,
Chief of Marketing & Sales (Civil Engineering) Division / Member of theBoard, Managing Executive Officer in charge of Building Construction
Business Strategy / External Member of the Board

Observers

External Audit & Supervisory Board Member / Chief of Sustainability Division(Integrated), Chief of Sustainability Management Promotion Division

Secretariat

Sustainability Planning Department

Objective

To strengthen and promote sustainability management within the
Company and its entire Group.

Management Committee
Various operation committees related to sustainabilityof Corporate Governance System
P.86 Chart
Governance Section▎Overview of the Sustainability-Related Committees
For significant matters such as sustainability, corporate ethics, and technology strategies, specific committees develop policies
and strategies and drive their respective initiatives. Below is an outline of the various committees associated with sustainability.

Individual Policies and Standards on Sustainability

Environment

Governance Section

Sustainability Section

Sustainability Management

Sustainability Management

Action Guidelines for Taisei
Personnel and the Taisei Group
as a Whole

Taisei Group’s Growth Strategy

Individual Policies

Category

Terms of Reference

Chairperson

Meeting Frequency(FY2022)

Committee within the Board⃝Sustainability Committee

Strengthens and advances sustainability management within the Company and its
entire Group.

External Memberof Board

Twicea yearManagement Committee

Preliminary deliberation of items for the Board and decision-making on tasks delegated by the Board.

President

Once a week

Special Committees⃝Compliance Committee

Upon receiving updates about compliance promotion, highlights issues in the compliancesystem, and suggests measures to fortify the system, including preventive actions against
potential violations of laws and regulations.

External Expert(Lawyer)Once a year

Business Committees⃝Technical Committee

Encourages innovative technical development, establishes and contemplate various
measures, and monitors their execution.

President

Eight times a
year⃝Central Safety Committee

Discusses and advances matters concerning the Company’s safety management,
prevention of environmental accidents, and guidance about safety, health, andenvironmental management for specialized contractors.

Executive Vice
President

Five times a
year

Discusses important environmental and social issues, shares information onsustainability management initiatives, and makes recommendations to the Management
Committee

President

Four times ayear*⃝Risk Management Committee

Selection and deliberation of significant risks throughout the Company, and verification of
the status of risk management for both company-wide critical risks and those risks thatshould be overseen as a headquarters.

Chief of Business
Administration
Division (CRO)Once a year

⃝Central Labor Affairs Committee

Deliberates on the Company’s basic policies and advances various initiatives on labor
issues, concerning professional contractors.

President

Twice a year

⃝Digital Transformation (DX)
Promotion Committee

Establishes, contemplates and monitors the progress of DX advancement measures.

⃝Personnel Committee

Discusses various personnel strategies, and follows up and monitors their execution.

● Sustainability Promotion

Committee

Chief of Corporate Five times a
Planning Office
year
(CDO)
Executive Vice
President

Twelve times ayear* Frequency of meetings of the former Environment Committee (now the Sustainability Promotion Committee)▎Materiality and the Medium-Term Business Plan
The Group has identified three transformative axes (IX, SX, DX) as shifts in the medium- to long-term external environment and structure. Among them, SX emphasizes “Moving to solve environment and social issues through our business.”
In line with this understanding, in our Medium-Term Business Plan (2021-2023), we have laid out priority initiatives
connected to sustainability issues we identified as materiality. These efforts are now being integrated into our overallbusiness strategy.
and Medium-Term Business Plan Initiatives
P.33 Materiality
Taisei Group’s Growth Strategy

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About the Taisei Group

Sustainability Section

Taisei Group’s Growth Strategy

Sustainability Section

Data Section

Materiality Environment

Realization of a Sustainable and Environmentally Friendly Society

Materiality 1

Realization of a Sustainable and Environmentally
Friendly Society

TAISEI Green Target 2050

RelatedSDGs▎ Taisei Group’s Long-Term Environmental Targets

Policies and Basic Approach
The Taisei Group is committed to building quality social capital through its construction-centered corporate activities,
harmoniously with nature. This aligns with its Group philosophy of “to create a vibrant environment for all members of society”
and its Taisei Group’s Fundamental Sustainability Policy.
As a corporate group with its core in the construction industry, we fully recognize both the impact our business activities
have on the environment and the impact the environment has on our business activities. With this understanding, we aim torealize a sustainable and environmentally friendly society.

The Taisei Group has established the TAISEI Green Target 2050 as its long-term environmental targets, aiming for the vision of the “realization ofa sustainable and environmentally friendly society,” as expressed in the core principles of its Environmental Policy. This target encompasses“responsibilities,” “contributions through business activities,” and “initiatives” towards three types of societies: the “Decarbonized Society,” the“Recycling-Oriented Society,” and the “Nature Co-Existing Society.” Additionally, the Group addresses two individual issues: “Forest Resources &Forest Environment” and “Water Resources & Water Environment.” As part of its responsibility to these targets, the Group proactively collaborates
with stakeholders across the entire supply chain.
●Targets for achieving the three types of society▎ Responsibilities and Contributions through Business

DecarbonizedSociety

We believe that it’s the Group’s responsibility to adhere to environment-related laws and regulations and to meet the Group’s long-term environmental
targets. Simultaneously, we aim to precisely identify risks and opportunities related to climate change and other environmental challenges. By
advancing the development and promotion of environmental technologies and services, we are committed to contributing to the realization of“Decarbonized Society,” “Recycling-Oriented Society,” and “Nature Co-Existing Society” through our business endeavors.

▎ Environmental Management
The Group defines environmental management as the corporate activities aimed at realizing the Group’s philosophy concerning the environment. We have set the Environmental Policy as the foundational stance of environmental management, and we have established the TAISEIGreen Target 2050 as the Group’s long-term environmental targets, along with the Environmental Action Plan for meeting the annual environmental targets. We also advance our environmental management through the PDCA cycle of our Environmental Management System (EMS)
that aligns with the international standard ISO 14001. In recent times, environmental challenges, such as global climate change, depletion ofnatural resources, and loss of biodiversity, have intensified. These challenges demand comprehensive, long-term measures, as well as collective
efforts across the entire supply chain. Responding to these societal expectations, in 2023, we revised our Environmental Policy, the TAISEIGreen Target 2050, and the Declaration of Biodiversity Preservation by Taisei Group to fortify our commitment and actions.

FY2050TargetRecycling-Oriented
Society

Nature Co-existingSociety

Develop and disseminate technologies
and services relating to energy savings,
decarbonization of construction materials, renewable energy, etc., in order tocontribute to achieving carbon neutrality.

Increase the green procurement rate forconstruction materials, etc. and promote
recycling of construction byproducts, inorder to contribute to achieving a circular
economy.

Develop and disseminate technologies
and services relating to conserving andcreating natural environments, increasing
biodiversity, etc., in order to contribute toachieving Nature Positive.

CN: Achieving and deepening
carbon neutrality

CE: Achieving and deepening
circular economy

NP: Achieving and deepening
Nature Positive*• Scope 1+2: Zero CO2 emissions• Green procurement rate: 100%•S
 cope 3: Zero CO2 emissions of the
supply chain•F inal disposal rate of construction
byproducts: 0%

CO2 emissions (compared to FY2019)• Promotion of Green procurement

Emissions
per sales

Scope 1+2
Scope 3

-50%
-32%

•R
 educe final disposal rate ofconstruction waste: 3.0% or lessTotal
emissions

Scope 1+2
Scope 3-40%
-20%

Environmental Management

Environmental Management(Corporate activities to realize the Group Philosophy and the Taisei Spirit in terms of the environment)
Environmental Policy(The Company’s basic stance on environmental management)Group Philosophy
To create a vibrantenvironment for all
members of society

Governance Section

Realization of a sustainable and environmentally friendly society(1) Decarbonized Society (2) Recycling-Oriented Society (3) Nature Co-Existing Society

FY2030Target• To minimize negative impact ofconstruction business• To maximize positive impact ofbusiness in harmony with nature• Implementation of Proposals andconstruction that contribute to
Nature Positive* Nature Positive: Halting and reversing biodiversity loss in order to put nature on a path to recovery.
●Targets for addressing two individual issues

Taisei Spirit“Active andTransparent Culture,”“Value Creation” and“Evolution of Tradition”

Environmental Targets

TAISEI Sustainable Action® (TSA)

Specific targets to be achieved under the Environmental Policy(Measures to achieve the Environmental Targets)● TAISEI Green Target 2050

● Annual Environmental Targets● CO2 Zero Action● Green Procurement Guidelines● TAISEI VISION 2030

● Promise of Eco-First● TSA Action List

● Green Procurement Standard Guidelines● Medium-Term Business Plan

● Declaration of Biodiversity● TSA Point System● Guidelines for Conservation of Biodiversity(2021 - 2023)

Preservation by Taisei GroupISO 14001 compliant environmental management system (EMS)
System to continuously promote improvement of environmental performance, compliance withenvironment-related laws and regulations, and achievement of environmental targets through PDCA

Forest Resources &Forest Environment• To minimize negative impact on forest resources and forest
environment through wood procurement based on zerodeforestation concept•T o maximize positive impact on forest resources and forest
environment through conservation and restoration efforts

Water Resources &Water Environment• To minimize negative impact on water resources and water
environment by ensuring proper management and reducing usage• To maximize positive impact on water resources and water
environment through conservation and restoration efforts▎ Compliance with Environment-Related Laws and Regulations, Etc.

▎ Environmental Management System (EMS)
Taisei Corporation operates an Environmental Management System (EMS) that conforms to the international standard ISO 14001, both at its
head office and across all its domestic and overseas branches (achieving a 100% certification acquisition rate). The top management of the
EMS consists of the Sustainability Promotion Committee, the President, and the Chief of Sustainability Management Promotion Division. Under
this leadership, the EMS secretariats at division and branch, as well as the environmental officers of every department, carry out and monitor
environmental initiatives. They engage in a continuous PDCA (Plan-Do-Check-Act) process, the outcomes of which influence the environmental
targets set for the upcoming fiscal year.

Beyond ensuring compliance with environment-related laws and regulations throughout the Group, our ambition at each worksite is to achieve“zero environmental accidents.” This goal is set in line with the “priority management items for worksites” as determined by our Safety
Administration Division.

▎ Environmental Due Diligence

The Group is steadfastly committed to the TSA: TAISEI Sustainable Action®. This is an eco-impact reduction endeavor, calling upon thecollective participation of all Group members, to realize our environmental ambitions. Beyond the “CO2 zero action” initiative, launched in 2011as a fundamental commitment at our worksites, we compiled the “TSA action list” in 2018. This list encapsulates specific endeavors,
spotlighting technologies and activities potent in minimizing environmental impacts. 2020 saw the introduction of the “TSA point system,” a toolthat transparently visualizes and quantifies the efficacy of these endeavors, fostering an evolution in our employees’ perspectives and behaviors.
Moreover, to promote the broader adoption of TSA and facilitate the horizontal deployment of its specific activities, we distribute “TSA
Communications” to all executives and employees, on a quarterly basis.

Aligned with our core philosophy of the “Realization of a Sustainable and Environmentally Friendly Society,” we adhere to the OECD Due
Diligence Guidance for Responsible Business Conduct. Consequently, we have established and continue to execute an environmental due
diligence framework.

▎ Collaboration with Subcontractors and Suppliers
The Taisei Group has formulated the Taisei Group Sustainable Procurement Guidelines. In partnership with our entire supplier base, we’recommitted to initiatives that progress towards “Decarbonized Society,” “Recycling-Oriented Society,” and “Nature Co-Existing Society.”

Compliance with Environmental Laws and Regulations▎ Activities to Mitigate Environmental Impact TSA: TAISEI Sustainable Action®

Activities to Reduce Environmental Impact

Supply Chain (Environment)

65 T A I S E I ANNUA L R EPORT 2023

T A I S EI A N N UA L R EPO R T 2023 66

About the Taisei Group

Sustainability Section

Taisei Group’s Growth Strategy

Governance Section

Sustainability Section

Data Section

Materiality Environment

Realization of a Sustainable and Environmentally Friendly Society▎ Decarbonization Technologies for Each Phase of Construction

For Realization of a Decarbonized Society

The Group is working towards decarbonization in various phases of construction.

T-ZCB (Zero Carbon Building) Aiming for Zero CO2 Emissions in the Building Life Cycle▎ Responsibilities
As construction is the core business of the Taisei Group, the Group has a keen awareness of the effect of its business activities on the transition
to a decarbonized society and the impact of the transition to a decarbonized society on business activities. We consider it to be our responsibility to reduce CO2 emissions from business and related activities to Zero by 2050.

▎ Contribution through Our Business

To promote the construction of Zero Carbon Buildings that achieve net-zero CO2 emissions during the life cycle of the structure, Taisei first visualized
the CO2 emissions throughout the building’s life cycle and the effectiveness of CO2 reduction technologies at the initial planning stage, and thenconstructed a T-ZCB (Zero Carbon Building) as a system that systematically evaluates the decarbonization of the structure.
T-ZCB (Zero Carbon Building)CO2 emissions throughout the life cycle of the building

The Taisei Group identifies the risks and opportunities in anticipation of the achievement of a decarbonized society. We strive to develop anddisseminate technologies and services relating to energy-savings, decarbonization of construction materials, renewable energy and so on, andto promote possession of renewable energy power sources, so as to contribute to “Decarbonized Society.”▎ Risks and Opportunities
Information regarding risks and opportunities related to climate change can be found in the Information
Disclosure Based on TCFD section of our company website.

Disclosure Based on
P.74 Information
the TCFD Recommendation

Procurement

Sustainability Section

Policy / Commitment

Initiatives● Action Guidelines for Taisei: Promoting environmental conservation and creation●United Nations Global Compact “Environment”● Promise of Eco-First ● Taisei Group Sustainable Procurement Guidelines

Demolition

Prolonged
carbon fixation

P.77 T-eConcrete
Sustainability Section®

● Challenge Zero (Japan Business Federation)● Green Procurement Guidelines

Repair● T-e Concrete® environmentally friendly concrete that dramatically reduces CO2 emissions●GX League● TAISEI Green Target 2050: Realization of a decarbonized society

Operation

Ⅰ. Zero Carbon Design: Reducing CO2 in the Procurement Phase● TCFD ● SBT● Environmental Policy

Construction● Voluntary Environmental Action Plan for the Construction● Green Procurement Standard Guidelines● Medium-Term Business Plan (2021–2023): To target the front-runner status in the environmental

Industry (Japan Federation of Construction Industry)● Use of Wood Materials That Fix CO2

sector, accelerating our initiatives towards carbon neutrality

Performance

Promotion of wood use can mitigate climate change through CO2 fixing. At the same time, Wooden spaces will help to maintain physicaland emotional health. TAISEI promotes the construction of wooden buildings using lumber, laminated wood, and other wooden materials
that absorb and fix CO2 from the atmosphere as they grow.

KPIs

Efforts Towards Reduction:○CO2 Emissions through Business Activities:
Scope 1: We promote energy-efficient operations for heavy machinery, the adoption of
hybrid construction equipment, and the introduction of alternative fuels. Additionally, weare exploring the utilization of new energy sources like hydrogen and ammonia.
Scope 2: To accommodate the Group’s electricity consumption, we are advancing
the acquisition of renewable energy sources.
○CO2 Emissions Associated with Business Activities:
Scope 3 - Upstream: Collaborating with companies from diverse sectors like steel,cement, and chemicals, we are progressing in the development of construction
materials that emit less CO2.
Scope 3 - Downstream: We are advancing the development and popularization of
Zero Energy Building (ZEB) technology.

Ⅱ. Zero Carbon Construction: Reducing CO2 in the Construction Phase

Scope 1 + 2: CO2 emission reduction rate per sales
Group target-15% (Compared to FY2019)● TSA：TAISEI Sustainable Action®, Environmental Impact Reduction Activities● System to Measure and Aggregate Worksite CO2 Emission Data

Scope 1 + 2: Reduction rate of total CO2 emission
Group target

We are promoting the development and operation of the System to Measure
and Aggregate Worksite CO2 Emission Data, which efficiently collects, consolidates, and visualizes Scope 1 and 2 at worksites utilizing cameras and AI image
recognition functions installed at construction sites, external system informationsuch as electricity consumption, electronic manifests, and in-house system
information such as fuel purchases.

-6% (Compared to FY2019)

At construction stage: Reduction rate of CO2 emission per sales
Non-consolidated target-41% (Compared to FY1990)

At construction stage: Reduction rate of total CO2 emission
Non-consolidated target○Contributing to the Reduction of CO2 Emissions:
We highlight our contributions to CO2 reduction achieved through the transformation of existing buildings into ZEB—a contribution not assessed within scopes 1, 2,
and 3—and we are working to expand the adoption of eco-friendly ZEB renewals.

-46% (Compared to FY1990)

In-house system

CameraImage recognition
function
Systeminformation
Construction site
Efficient grasp of
CO2 emissions
External system

Ⅲ . Zero Carbon Construction: Reducing CO2 in the Operation PhaseAt building operation stage: Reduction rate of designbuild estimated CO2 emissions
Non-consolidated target

CO2 Emissions Data Aggregation System● Total Management of ZEB

We realize ZEB by utilizing architectural technology to minimize the load on buildings and diminish the overall energy demand. This isfurther enhanced through our efficient facility planning that incorporates Taisei Construction’s distinctive energy-saving and energygenerating eco-friendly techniques.

-43% (Compared to FY1990)▎ TAISEI Green Target 2050 Roadmap to a Sustainable and Environmentally Friendly Society
FY2023

DecarbonizedSociety
Scope 1
Scope 2

CN (Carbon Neutrality)

Construction machinery, vehicles, etc.

FY2030
Scope 1+2: Total emissions -40%
Scope 3:
Total emissions -20%⃝

Hybrid construction machinery, energy-efficient construction machinery,⃝

Introduction⃝

Use

Possession of renewable energy power sources (RE)⃝

Possession of power sources⃝

Possession of RE to cover Group power consumption needs⃝

Contribute to the realization of zero emissions through increased possession and supply of RE

Zero Carbon footprint Buildings (T-ZCB)⃝

Development and demonstration of T-ZCB⃝

Promotion of development and promotion of dissemination of T-ZCB⃝

Increased dissemination of T-ZCB

Increased dissemination and commercial application of construction
materials that contribute to decarbonization⃝⃝New energy (hydrogen/ammonia)

introduction of GTL, introduction of innovative construction machinery (electric, hydrogen etc.)

Construction materials that contribute to decarbonization

Promotion of development and dissemination ofenvironmentally friendly concrete⃝ Promotion of development and dissemination of
T-Green® Multi Solar

Net Zero Energy Building (ZEB)⃝⃝

Green Renewal ZEB
CCUS*

⃝

⃝

100% ZEB rate for TAISEI design buildings
Increase in orders along with increased market size⃝

Development and dissemination of CCUS⃝

Scope 3

Avoidedemissions

FY2050
Scope 1+2: Zero CO2 emissions
Scope 3:
Zero CO2 emissions of the supply chain

Regional cooperation

Promotion of development and dissemination of ZEB for new building
Promotion development and dissemination of Green Renewal ZEB⃝ Development of CCUS technologies

Permeation throughout society of construction materials that contributeto decarbonization

Tremendous advance in ZEB performance
Increased dissemination of Green Renewal ZEB⃝ Commercialization of CCUS⃝

Development of other cooperative activities for
decarbonization and use of local resources⃝* CCUS (Carbon Dioxide Capture, Utilization, and Storage): A technology for capturing CO2 emissions from sources such as thermal power plants and cement factories,
and then utilizing or storing them.

67 T A I S E I ANNUA L R EPORT 2023

⃝Roadmap

Decarbonized Society

T A I S EI A N N UA L R EPO R T 2023 68

About the Taisei Group

Sustainability Section

Experience with New Construction ZEBs across Diverse Buildings

At Taisei Group, leveraging our vast experience in converting not just office buildings but a wide array of structures into ZEBs,
we propose and deliver the most optimal ZEB solutions tailored to the surrounding environment of the building and the specificneeds of our clients.

Kanden Fudosan Yaesu Building

LIFE Toyosu

Acquisition of ZEB for new construction and renewal of Sodegaura City Office Building

New Construction ZEB

Three Facilities Owned by the Group Have Completed Their Green Renewal® for ZEB Conversion

The Taisei Group calls for promoting the use of ZEB in existing buildings Renewal ZEB, and is implementing initiatives to improve
the health of people, buildings, and the planet under six key words: energy conservation, energy creation, decarbonization,wellness, smart, and peace of mind.

Practicing Advanced + General-Purpose ZEB Technology to Meet Diverse Client Needs
ZEB technology for facades
Exterior power generation, line cell, solar
suppression and greening

Line Cell

Biophilic Design

Connection with nature, wellness,and ABW
Inner Cell

Radiant air conditioning andbrightness control

SMART Palcon ZEH: Building Environment- and Budget-Friendly Homes

TAISEI HOUSING CORPORATION, which specializes in concrete housing, isactively promoting ZEH (short for Zero Energy House). They offer homes
constructed using the durable and disaster-resistant precast concrete method
known as Palcon. With the addition of the ZEH specifications, these residences
are both environmentally friendly and budget-friendly.

EnergyConservation
High
Insulation

T-Green® Radiant Duct

T-Green® DI Window

High
Insulation

EnergyConservation

Creating
EnergyRequiring as little
energy as possible

Using energy
efficiently

ProducingenergyNew Construction ZEB

ZEH-M

O

The energy
consumption of theresidence is about zero.

Creating
EnergyPracticing General-Purpose ZEB Technology in Medium Stock Offices
ZEB facade

Exterior wall/window power generation/insulation
strengthening/general equipment ZEB
T-Green® Multi Solar

Wellness

Wooden interior andbiophilic design

New Normal

Infectious disease control measures in offices andtraining institutes, etc.
② T-LEDDUV Light®

See-through type

③ T-Zone Saver®

（ZEB Ready）
BEI＝0.70⇒0.39

Taisei U-LEC Co., Ltd., Kawagoe Plant

ZEH

OKI Honjo Plant, Building H1

Achieving both comfort and energy-saving(ZEB Ready)BEI=
0.93⇒0.37

Yokohama Branch

Data Section

ZEF, a Unique Index for Zero Energy in Production Facilities

Taisei Corporation has incorporated the evaluation of air conditioning, ventilation, lighting, water heating, elevators, and otherelements in the production area of factories, which were previously excluded from the ZEB assessment. As a result, we defined
the ZEF (short for “Net Zero Energy Factory”) as a factory thatappropriately evaluates the energy consumed within, aiming to
make the annual primary energy balance required by the
production factory zero through energy conservation and energy
creation. The OKI Honjo Factory Building H1 achieved thehighest rank in the five-tiered Building Energy Efficiency Labeling
System (BELS*), and simultaneously became the first large-scale
production facility in Japan to receive ZEB certification.

New Construction ZEB

Kansai Branch

Governance Section

ZEB, which stands for Net Zero Energy Building, aims to achieve a comfortable indoor environment whilebalancing the annual primary energy consumption consumed by buildings to zero. The Taisei Group has obtained
certification for office buildings, public research facilities, renovations, and other facilities, and is working topromote and expand ZEB in a variety of facilities by proposing solutions to customers that lead to environmental
considerations and the improvement of real estate values.

ZEB of Taisei Group

Green Renewal ZEB

Sustainability Section

Materiality Environment

Realization of a decarbonized society

New Construction ZEB

Taisei Group’s Growth Strategy① Lighting

Solid type② Deep ultraviolet device ③ Person detection sensor

Carbon Neutral Factory with Mega Solar
Rooftop solar power
Effectively utilizing the large
factory rooftop

Low CO2 material
Carbon-Recycled Concrete CLT

Mega solar

PC LouverConvert to ZEB

Promotion of ZEH-M in Apartment Buildings

TAISEI U-LEC Co., LTD., which is engaged in apartment building construction, is registered as a ZEH developer (C-registeredbuilding contractor) with the Sustainable Open Innovation Initiative and is advancing the construction of ZEH-M (short for
ZEH-Mansion).
Taisei-Yuraku Real Estate Co., Ltd. is committed to promoting ZEH in condominiums. The ZEH-M Oriented condominium
project is an instance where Taisei-Yuraku Real Estate Co., Ltd. placed the order, and it was constructed in collaboration with agroup company of the TAISEI U-LEC Co., LTD.

Realization of 100% ZEB
in office building
Roof solar panels(ZEB (Office Building)) BEI＝0.47⇒-0.09
CLT windproof beam

Low carbon interior materials
ZEH-M-Ready: SHINRYO CORPORATION’s employee dormitory* BELS (Building Energy-Saving Performance Labeling System)
A third-party certification system dedicated to the energy-saving performance of buildings led by the Ministry of Land, Infrastructure, Transport
and Tourism. The BEI (Energy Efficiency Performance Index) value iscalculated in accordance with the calculation method specified by thenational government, and the number of stars is determined in five levels
according to the value, and buildings with even better energy efficiency
among the highest rank of five stars are certified as ZEB.

69 T A I S E I ANNUA L R EPORT 2023

ZEB
Within the Technology & Solutions section,
ZEB introduces the ZEB roadmap andcase studies on newly constructed ZEBs.

ZEH-M Oriented: Terrace Kamishakujii West

Green Renewal ZEB
Under Green Renewal ZEB in theTechnology & Solutions section, you willfind further detailed information and videos
not covered above.

ZEF
Details about the ZEF initiative can be foundin the Technology & Solutions section.

SMART Palcon ZEH
For more on the ZEH initiatives, please visit the
TAISEI HOUSING CORPORATION website.

ZEH-M
For further details on ZEH-M, please visit the
TAISEI U-LEC Co., LTD. website

T A I S EI A N N UA L R EPO R T 2023 70

About the Taisei Group

Sustainability Section

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

Materiality Environment

Realization of a Sustainable and Environmentally Friendly Society

Realization of a Sustainable and Environmentally Friendly Society

For Realization of a Recycling-Oriented Society

For Realization of a Nature Co-Existing Society▎ Responsibilities▎ Responsibilities

As construction is the core business of the Taisei Group, the Group has a keen awareness of the effect of its business activities on thetransition to a recycling-oriented society and the impact of the transition to a recycling-oriented society on business activities. We consider
it to be our responsibility to increase the green procurement rate and reduce the final disposal rate of construction byproducts, in order toachieve a circular economy.

As construction is the core business of the Taisei Group, the Group has a keen awareness of the effect of its business activities on thetransition to a nature co-existing society and the impact of the transition to a nature co-existing society on business activities. We observe
the Declaration of Biodiversity Preservation by Taisei Group and consider it to be our responsibility to minimize the adverse impact ofconstruction business on the natural environment and biodiversity.

▎ Contribution through Our Business▎ Contribution through Our Business

The TAISEI Group identifies the risks and opportunities in anticipation of the achievement of a recycling-oriented society. We strive todevelop and disseminate technologies and services relating to soil and groundwater contamination countermeasures, appropriate management of wastes and final disposal sites and so on, and to promote recycling of industrial byproducts, in order to contribute to a recyclingoriented society.

The Taisei Group identifies the risks and opportunities in anticipation of the achievement of a nature co-existing society. We strive todevelop and disseminate technologies and services relating to conserving and restoring natural environments and enhancing
biodiversity, and to promote activities that, co-exist with nature and maximize the positive impact on the natural environment andbiodiversity, in order to contribute to the realization of a nature co-existing society.

▎ Risks and Opportunities▎ Risks and Opportunities

The transition to a circular economy is becoming a critical global challenge. Companies are now expected to adopt sustainable procurement practices throughout their supply chains. These practices include conserving resources, utilizing renewable materials, and addressing
the environmental pollution caused by plastics.
If the shift to a circular society is delayed and the mass-waste economy persists, our corporate group anticipates potential risks. These
include increasing prices of materials due to resource scarcity and rising waste disposal costs. Furthermore, if our efforts are inadequate,
we face the potential risks of diminished our reputation among our stakeholders and decreased opportunities for securing orders.
Conversely, as society moves towards circularity, our corporate group anticipates more opportunities to secure orders, particularly in projects like the construction of waste disposal sites and soil and groundwater purification, all contributing to the circular economy’s realization.
Additionally, our ongoing initiatives to develop and socially implement systems, products, and technologies that efficiently utilize resources
and construction materials will bolster the Group’s competitive advantage. We believe that for the Group, the transition to a recycling-oriented society offers a significant opportunity to enhance our corporate value and elevate our reputation among our stakeholders.

To protect and harness the natural capital and biodiversity, which serve as the bedrock for the planet’s sustainability and the crux ofhuman security, achieving a Nature Positive stance has emerged as a pressing global challenge. Companies are now expected to undertake initiatives contributing to this goal.
Should the shift towards a society co-existing harmoniously with nature falter, and if the depletion of natural capital persists, our corporate group could potentially face risks. These include increasing prices of materials due to resource scarcities and elevated expenses fromheightened levies imposed for environmental conservation efforts. Furthermore, if our initiatives are deemed inadequate, we face thepotential risks of diminished our reputation among our stakeholders and decreased opportunities for securing orders.
Conversely, as society gravitates towards the nature co-existing society, we anticipate more opportunities to secure orders in areas like
conserving and cultivating abundant natural environments and establishing green infrastructure, aligning with Nature Positive goals. Moreover,the Group’s ongoing development and social implementation of technologies and services will bolster the Group’s competitive advantage.
We believe that, for our corporate group, this shift towards a society intertwined harmoniously with nature represents an opportunity toenhance our corporate value and elevate our reputation among our stakeholders.

Policy / Commitment

Initiatives●A ction Guidelines for Taisei: Promoting environmental conservation and creation● United Nations Global Compact “Environment”● Environmental Policy ● TAISEI Green Target 2050: Realization of a recycling-oriented society● Promise of Eco-First ● Taisei Group Sustainable Procurement Guidelines● Green Procurement Guidelines  ● Green Procurement Standard Guidelines● Construction byproduct processing manualPolicy / Commitment

Initiatives● Plastic Smart (Ministry of the Environment)● Action Guidelines for Taisei: Promoting environmental conservation and creation● United Nations Global Compact “Environment”● Water project (Ministry of the Environment)● Environmental Policy ● TAISEI Green Target 2050: Realization of a nature co-existing society● Japan Partnership for Circular Economy: J4CE (Ministry of theEnvironment, Ministry of Economy, Trade and Industry, Japan
Business Federation)● Promise of Eco-First ● Declaration of Biodiversity Preservation by Taisei Group● Guidelines for Conservation of Biodiversity● Taisei Group Sustainable Procurement Guidelines ● Green Procurement Guidelines● Green Procurement Standard Guidelines

Performance● Efforts to Make Effective Use of Resources

Promotion of recycling of building materials through a patrol collection system• In addition to using the National Permit System*, Taisei has developed a construction byproductpatrol and collection system in which the same vehicle patrols to multiple worksites, sharing
the same rules for transporting scrap materials among building materials manufacturers, inorder to improve transportation efficiency.
• In Tokyo, we are helping to promote a circular economy in the construction industry byrecycling construction materials, including plastic waste, and other valuable materials.
* National Permit System: A system in which building materials manufacturers, etc. are certified by the Minister of theEnvironment to collect waste materials from their products (product scraps, etc.) over a wide area and recycle or properly
dispose of them as product raw materials, etc.

Promote recycling of steel materials through T-Near Zero Steel• In collaboration with Tokyo Steel Corporation, we will utilize T-Near Zero Steel, a steel productmade from scrap steel. By promoting the recycling of steel materials, we will contribute to the
reduction of new natural resources.
• The use of green power in the electricity used in the manufacturing process using electric
furnace steel also contributes to the reduction of CO2 emissions.

TAISEI“Stationery × SDGs” at the Worksites
As part of its SDGs efforts at its worksites, Taisei Corporation collects unwanted office supplies, such as tube files, and distributes and reuses them to departments ofSecondarytransportation
order

Reload order

Reload baseSecondarytransportation(Individual carrier)Recycled asmaterials

Efficient Resource Circulation and Transportation
through a Patrol and Collection System
Inflow
Raw material
processing

Dismantling

Product

71 T A I S E I ANNUA L R EPORT 2023

Tree planting festival conductedFive years post-planting

Rolling

Decarbonization
loop
Electric
furnaceRawmaterial

Collection

Outflow

Roadmap

Recycling-Oriented Society

Ten years post-planting● Various Technologies to Support Green and Waterside

Development
CarbonNeutralchoice. This initiative also helps to expand the opportunities for employees with disabilities. In FY2022, approximately 12,600 tube files were reused.

During the development of the Fujisan Nanryo Industrial
Park, we undertook a “10-Year Forest Creation” initiative,
utilizing trees suitable for the local environment andemulating natural woods. Using the “natural planting”
method that fosters forest growth by allowing trees tocompete with each other, seedlings are planted during
tree planting festivals. Ten years after the initial planting, it
has been verified that the new forest boasts richer
biodiversity than the existing surrounding forests.

Shipment

Construction
Resource
circulation
loop

Circular
EconomyPerformance
Creating a forest inspired by natural woods from seedlings

3PL* Provider

Construction
scrap sorting

Keidanren (Japan Business Federation, Keidanren
Committee on Nature Conservation)● Japan Business Initiative for Biodiversity (JBIB)● 30 by 30 Alliance for Biodiversity (Ministry of the Environment)● TNFD Forum● Technology to Conserve High-Quality Natural Environments

Patrol collection(common carrier)Operation

ColumnTo each plan Receiving plants

To eachworksite Collectionorder● Initiative based on the Declaration of Biodiversity by

Biodiversity Concierge Series
An interactive app designed toassist with plans that consider
biodiversity. It is structured aroundthree unique concierges with
distinct focuses: “Ikimono (livecreatures),” “Mori (forest),” and“Mizube (watersides).”

Plant MatA mat embedded with groundcover, consisting of the forest
floor and grassland vegetation
appropriate for the projected
site’s environment. Simply bylaying them down, it facilitates
the creation of native-species
grasslands and forest floors,promising healthy growth.

Roadmap

Nature Co-Existing Society

T A I S EI A N N UA L R EPO R T 2023 72

About the Taisei Group

Sustainability Section

Sustainable wood use

Restoration of forest resources● Wood procurement status

Sustainable use ofplanted forests

● Sustainable woodprocurement● Promotion of local wood use● Promotion of reuse and recy-

Promotion ofwoodenconstruction

cling of wood

● Carbon capture and storage2023/08/25 17:43

Governance Section

Data Section

Information Disclosure Based on the
TCFD Recommendations

For Resolving Issues Related to the Forest Resources andthe Forest Environment
surveySustainability Section

Materiality Environment

Realization of a Sustainable and Environmentally Friendly Society

Appropriate woodprocurement

Taisei Group’s Growth Strategy● Promotion of wooden

structioncon-● Support for sustainable for-est management

The Taisei Group recognizes the impact of climate change on its business as a significant management challenge. In July 2020,
we endorsed for the TCFD recommendations, and since May 2021, we have been disclosing information in line with the TCFD
guidelines. For more information, please visit our website, “Information Disclosure Based on the TCFD Recommendations.”

Conservation of good forests● Visualization of multifaceted
Evaluation offunctions of forests
ForestConservation activities ● Implementation of forest

Information Disclosure Based on the TCFD Recommendations▎ Governanceconservation activities incooperation with companies
and communities

Conversion of planted ● Creation of forests that function as green infrastructure
forests into natural
through conversion of planted
forests

We have established both the Sustainability Committee and the Sustainability Promotion Committee to discuss and consider
matters related to climate change.

forests into natural forests

Forest Resources / Forest Environment | Realization of a Sustainable and Environmentally Friendly Society | Environment(E) | TAISEI Sustainability

P.64▎ Strategies

Sustainability Management Promotion System
Sustainability Section

There are thought to be two types of risks and opportunities associated with climate change. One is the result of “transitions” that include
market changes and the tightening of regulations to minimize temperature rise. The other is the result of “physical” changes such as acuteabnormal weather occurring due to temperature rise. To devise business strategies that can deal flexibly with climate change, multiple
scenarios are used to identify risks and opportunities and evaluate the impact on business, and then business strategies are formulated andreflected in the Medium-Term Business Plan and the like.

Reuse▎ Risks and Opportunities
Type*For information on our responsibilities, contributions through our businesses, and various initiatives, please
visit our company website, “Forest Environment and Forest Resources.”

Forest Resources /Forest Environment

Realization of a Sustainable and Environmentally Friendly Society

Transitions

For Resolving Issues Related to the Water Resources andthe Water Environment
Sustainable Water Use

Restoration of Water Resources

Conservation of Water Resources

Effective use and reduction of water use
Development and dissemination of technoloReduction of water environment burden⃝ Effective use of water resources and efforts to⃝ Prevention of water contamination during construction
gies and services⃝ Efforts to achieve Zero-Water Buildings, etc.
⃝ Development and application of technologies forsave water through TSA⃝ Promotion of use of reclaimed water, treated⃝ Enhancement of evapotranspiration function bymonitoring water quality and environment
wastewater and rainwater (the Water 3Rs)
greening rooftops and walls urban forest cultivaConservation of groundwater⃝ Collection and management of data on water use⃝ Securing the watershed protection functions oftion, etc.
and discharge
forests
Restoration of water environment⃝ Research and development of technologies to re⃝ Development of groundwater conservation construcContribution to construction of water infration technologies and application to construction work
structure facilities
store biotopes, etc. and application to construction⃝ Dam and other infrastructure construction, conContribution to flood prevention, restoration, etc.
Purification of contaminated soil andhttps://www.taisei-sx.jp/english/environment/tgt/forest.html#anc2⃝ Rapid response for disaster recovery
struction of flood
control basins and other green
groundwater
持続可能な木材利用
森林資源の再生
良質な森林の保全⃝ Development of low-load
infrastructure
purification technologies ⃝ Development
and use of flood prediction, assessand application
to construction
work
ment and response
technologies
Business activities
in high water stressregions
適切な木材調達●木材調達の実態調査
人工林の持続的利用●木造･木質建築推進
森林の評価●森林の多面的機能の●持続可能な木材調達

木質木造建築の推進●地域材の利用促進●再利用･リサイクルの促進

可視化●持続的な林業経営の支援

人工林の自然林化●炭素の固定貯蔵●人工林の自然林化によるグリーンライフとして機能する森林の創出

保全活動の実施●企業や地域と連携した

Risks/Opportunities
Market shrinkage andincrease in construction cost
due to the introduction ofcarbon pricing and tightened
CO2 emission regulations⃝Decrease in private construction investment and equipment investment due to theintroduction of carbon pricing and the reinforcement of CO2 emission regulations

Risks⃝Increase in construction costs due to a hike in the prices of building materials and electricity⃝Increase in costs due to the application of carbon pricing to the CO2 that is generated

by our business activities

MediumLow

Increase in demand for renewal Opportunity ⃝Increase in demand for renewal to improve energy efficiency of existing facilities

Medium⃝Increase in demand related to ZEB and smart cities
Increase in demand related toenergy-saving and renewable Opportunities ⃝Expansion of demand for renewable energy-related works such as offshore wind power
energyMediumIncrease in averagetemperature during summer⃝Decline in productivity due to an increase in damage to the health (heat stroke, etc.) of

Risks

Risks

construction industry because of the degraded working environment⃝Work suspension, process delay, and increase in labor and temporary work costs due
to damage to construction worksites, etc.

MediumMediumHigh⃝Increase in demand to improve the resilience of equipment and infrastructure against

Opportunities

Rise in sea levelskilled construction workers and the avoidance of extremely hot hours⃝Accelerated worker shortage due to the decline in the number of new workers in the⃝Increase in procurement costs and process delays due to damage to suppliers

Physical Rise in severity andfrequency of natural disasters

5/14

Impactlevel

Descriptions

intensified disasters⃝Increase in new construction and relocation works due to growing demand for reloca-

tion from disaster hazard areas⃝
Opportunity Increase in the capital investment for improved resilience in areas with a flood risk anddemand for relocation from areas with a flood risk

High
High

▎ Countermeasures for Climate Change●森林の保全活動の実施

Response to the market shrinkage
and construction cost increase due tothe introduction of carbon pricing andthe tightening of laws and regulations⃝Possession of renewable energy power sources for the purpose of covering the Group’s electricity con-sumption⃝ Examination and introduction of fuel improvement measures (biodiesel fuel/fuel additives) at construction

worksites⃝ Enhancement of green procurement such as development and utilization of carbon-recycle concrete⃝Establishment of an organization dedicated to renewal, and expansion of the organization that handles

Response to the increase in demand
related to renewal, energy-saving andrenewable energy

work related to wind power generation⃝ Development and commercialization of next-generation high-performance ZEB and the development ofenergy support services⃝Technological development that contributes to the industries that are expected to grow through a virtu-

ous cycle of the economy and the environment⃝Reduction of health damage through the nationwide promotion of wellness worksites and the improve-

Response to the reduced productivityof construction worksites due toabnormal weather

ment of working environment during extremely hot hours⃝Consolidate some of the operations of worksites into specialized organizations such as Digital ProductCenter

⃝Reform the production process at worksites by developing and deploying unmanned construction tech-

nology, robot construction technology, etc.

Response to abnormal weather,increase in the severity and frequency
of disasters and sea level rises⃝Advancement of infrastructure development technology for national resilience and the improvement of

the proposing skills⃝ Development of real-time flood risk prediction/simulation for heavy rain, etc.
⃝ Securing a business continuity system by building a BCP system with clients and suppliers and conduct-

ing regular training▎ Risk Management/Indicators and Targets*For information on our responsibilities, contributions through our business activities, and various initiatives,
please visit our website, “Water Resources / Water Environment.”

有効利用と使用量の削減

L R EPORT 2023
TSA による水資源の有効利用と73 T A I S E I●ANNUA
節水への取組み技術・サービスの開発・普及●Zero Water Building 等の実現への取組み

水環境負荷の低減●工事中の水質汚濁の防止● 水質環境モニタリング技術の開発・適用

Water Resources /Water Environment

For more information on governance, as well as risk management/ indicators and targets,
please visit our website.

Risk Management /Indicators and Targets

T A I S EI A N N UA L R EPO R T 2023 74

About the Taisei Group

Sustainability Section

Taisei Group’s Growth Strategy

Data Section

Materiality S o cial

Materiality 2

Ensuring Quality and Improving Technology

RelatedSDGs▎ Towards an Effective System

Policies and Basic Approach
In its Quality Policy, Taisei Construction defines its critical mission as the efficient and ongoing delivery of high-quality construction
products and associated services to its clients and the broader society. Each division—Building Construction, Civil Engineering,
Design, Engineering, and Nuclear Facility—operates under distinct policies, pushing forward their production activities effectively.
Each division and group company has achieved ISO 9001 certification. They implement quality management, and both the Civil
Engineering Division and Building Construction Division have formulated manuals and operational procedures. We collaborateclosely with all relevant departments to uphold stringent quality control, aim to eliminate any defects attributed to quality, carry out
customer satisfaction surveys post-project completion, and prioritize fostering stronger relationships with our clients.

Quality Policies of Relevant Divisions
Building Construction Division

Design Division

Following the revision of ISO 9001 in its 2015 edition, we
have aligned the Construction Operation Standards as thebenchmark for our quality control manual. We champion
quality control by executing workflows in accordance withthis standard. Our divisional quality policies are centered on
consistently offering construction products and services ofhigh caliber that cater to the expectations of clients andsociety. We commit to ensuring customer satisfaction andtrust and place emphasis on nurturing enhanced relationships with our clientele.

Both the Design Division and its eight branch departments
have collectively achieved ISO 9001 certification. This
ensures a consistently high standard of design quality acrossall our departments nationwide. In 2016, we founded theTaisei Construction’s First-Class Architect Supervision Office,granting it independent authority to oversee construction
projects. With the swift advancements in ICT and the
evolving nature of work, it is essential to reassess our
systems to manage emerging risks tied to these changes.
Back in 2002, our Design Division was a pioneer in theconstruction sector by securing the Information Security
Management System Certification (previously BS 7799, now
ISO 27001). We are holistically advancing our quality standards through ISO-driven initiatives spanning quality, environment, and information security.

Civil Engineering Division
Aiming to deliver superior civil engineering structures tailored
to client needs, we harness our expertise and organizational
strength as a general contractor. With the genuine and swift
collaboration of everyone involved in a project, we strive toachieve a standard of quality and service that resonates withclient satisfaction. We also endeavor to enhance customer
satisfaction by perpetually refining the efficiency of ourquality management system, targeting its more proficient
application.

Engineering Division
Aiming for customer satisfaction, and in line with the Company‘s Quality Policy, the department has established its
quality policy as: “Delivering TAISEI QUALITY through innovative services for the growing engineering businessdomain.” We are actively engaging in the following specificquality activities:(1) Precisely identify and address client requirements(2) Develop human capital capable of delivering innovative
services(3) Adhere to all laws and regulations(4) Implement and continuously maintain a suitable quality
management system

Nuclear Facilities Division
Under the umbrella of the Company’s Quality Policy, thisdivision is committed to elevating the safety, reliability, andenvironmental preservation of nuclear-related facilities. This
commitment extends to designing, surveying, researchingand developing, conducting demonstration tests, andoffering technical support to nuclear facilities.
As required, we adhere to the Rules of Quality Assurance
for Safety of Nuclear Power Plants JEAC 4111 (by the Japan
Electric Association), the Guidelines for Quality Improvementof Analysis Services Pertaining to Licensing at Nuclear
Facilities (by the Japan Nuclear Safety Institute), and the
Quality Assurance Requirements for Nuclear Facilities NQA-1(by The American Society for Mechanical Engineers or
ASME). We ensure alignment with the unique quality assurance expectations of our clients, which include major electric
power corporations.

Having reflected upon our failure to satisfy steel erection accuracy requirements highlighted
last year, we are steadfast in our dedication to bolstering mechanisms that prevent areoccurrence. This includes bolstering mechanisms to reliably operate the quality control
process. All our executives and employees are recommitting to the ethos of “TAISEI QUALITY—Quality is Our Pride” and reinforcing the fundamental principles.
As part of our action plan, we have inaugurated a new Quality Control Division. Distinct
from the Building Construction Division and directly overseen by the president, its mandate
is to rigorously uphold the quality control processes related to building projects. Thisdivision, with its specialized focus on quality control supervision and monitoring, takes thelead in forestalling construction-related quality issues. They also ensure adherence tocustomer specifications and contracts. If and when quality issues arise during or postconstruction, the division steps in, offering expert oversight and guidance.
Specifically, the head office’s Quality Patrol, along with interim and final inspections,evaluates the implementation status of the quality control processes from an impartial thirdparty perspective, adhering to the Construction Operation Standards. When on-site construction does not align with these standards or when issues arise, the site supervisor is given
clear directives and deadlines for rectifications. If these issues remain unaddressed, thebranch receives orders to halt the construction and ensure necessary corrections.
Additionally, periodic reviews are conducted on the tasks of branch technical departments. These checks and balances, combined with continual support and guidance, ensure
the sustained effectiveness of our quality control processes and offer invaluable assistanceto dedicated quality control personnel at both worksites and branches.

Policy / Commitment

Initiatives

 ction Guidelines for Taisei: Pursuing customer satisfaction, ensuring and improving●A● ISO9001

safety and quality● Quality Policy
 edium-Term Business Plan (2021–2023): To innovate the production systems and●Mreform the workstyles through DX

Performance● Customer Satisfaction: Building Construction Division
In the Building Construction Division, each branch conducts a questionnaire
survey on customer satisfaction. The survey questions are on a five-point scale,and include those on workmanship, usability, and worksite office management
during construction. The satisfaction rate in FY2022 was 85.9%. For low-scoring
items, we analyze their causes, establish countermeasures, and reflect them inpost-construction review meetings. In this way, we aim for further improvement
and the establishment of good relationships with customers.

▎ Risks and Opportunities● Customer Satisfaction: Civil Engineering Division
Calculated based on the owner’s construction evaluation scores as a metric, thesatisfaction rate for FY2022 was 95.8%. We also conduct interviews, and eachbranch shares these results in construction review meetings, aiming for improvements. Both the head office and branches are united in their commitment tocontinually enhance customer satisfaction.

If our commitment to quality assurance falls short, risks such as harming the health and safety of our clients due to quality deficiencies and malfunctions may arise. This can also result in devaluation of assets, and there is the associated risk of cost escalations and reduced productivity due to the need for rework or modifications. Furthermore, with the demographic shifts of adeclining birthrate and aging population, there is an impending risk of a decreasing pool of skilled technicians and a diminishedlabor force, leading to potential lapses in quality control.
Conversely, adopting new technologies like automation and robot utilization, and leveraging digital technology to enhancequality control and productivity can bolster the Group’s competitive advantage. This not only enhances our corporate value
but also elevates our reputation among our stakeholders.

● Productivity Enhancement
One of the KPIs used to gauge the outcomes of technological advancement is per
capita productivity, calculated as net sales divided by the number of employees.
By making these outcomes transparent and fostering a heightened awareness of“productivity” among every employee, our entire group collaboratively reviews
business processes to strive for enhanced productivity. For FY2022, the productivity figure stood at ¥67 million.

ISO14001/ISO9001/ISO45001

75 T A I S E I ANNUA L R EPORT 2023

Governance Section

Sustainability Section

2023 KPI● Customer satisfaction rate100%

Non-consolidated target● Productivity (Net sales/number of employees)

Taisei Group target¥83 million

satisfaction rate
P.34 Customer
Productivity (Net sales/number of
employees)
Materiality and KPIs

T A I S EI A N N UA L R EPO R T 2023 76

About the Taisei Group

Sustainability Section

Taisei Group’s Growth Strategy

Governance Section

Sustainability Section

Data Section

Materiality S o cial

Materiality 3

Materiality 4

RelatedTechnical Development for Realizing a Sustainable Society SDGs

Promotion of Supply Chain Management

Policies and Basic Approach

Policies and Basic Approach

The Taisei Group, in its Technology Development Policy, grounds its core strategy on realizing technological advancements based on
the priority challenges, business strategies, and the medium- to long-term vision set out in its Medium-Term Business Plan. Under the
Medium-Term Business Plan (2021-2023), a primary focus is to “promote the technical development to solve environmental and social
issues through open innovation.” To this end, the Group is actively pursuing the development and application of next-generation,
high-performance ZEB, exploiting carbon-recycled concrete, and spearheading technologies expected to invigorate industries benefiting from a harmonious cycle between the economy and the environment.

▎ Risks and Opportunities

If we do not sufficiently engage in technological development for the realization of a sustainable society, there is a risk of not
being able to provide our clients with high-quality, high-performance construction products and associated services that meettheir needs.
Conversely, pursuing innovation through the development and societal integration of technologies—whether to establish
new businesses and markets, address diverse sustainability challenges, or enhance quality, productivity, and safety—bolsters
the Group’s competitive advantage. It also contributes to enhancing our corporate value but also elevating our reputation
among our stakeholders.

Policy / Commitment

Initiatives

 ction Guidelines for Taisei: Striving to create value, fulfilling social responsibilities●A● The Japan Intellectual Property Association

RelatedSDGs

For the Taisei Group, specialized contractors, suppliers, and other business partners play a pivotal role as essential business collaborators in addressing environmental, human rights, and other societal challenges. In our “Action Guidelines for Taisei Personnel and theTaisei Group as a Whole,” which emphasizes promoting partnerships with business associates, we are committed to forging fair andmutually trusting relationships. Aligned with our Declaration of Partnership Building announced in 2020, we aim to amplify value andchampion mutual growth and harmony throughout the entire supply chain.
To be specific, we are advancing our sustainability initiatives based on the Taisei Group Sustainable Procurement Guidelines. Byenhancing the reach and understanding of these guidelines—which outline collaborative efforts between the Group and business partners to solve societal sustainability issues through our business—we endeavor to further our sustainability goals.

▎ Risks and Opportunities
Efforts towards addressing sustainability challenges must be advanced not only within the Group but also throughout the entire
supply chain. If these endeavors fall short, there is a risk of adverse impacts on our stakeholders due to potential environmental degradation and human rights breaches within the supply chain. This could subsequently lead to diminished corporate value
and our reputation among our stakeholders.
Conversely, initiatives aimed at resolving sustainability issues across the full supply chain help to achieve mutual growth andharmony with our business partners, further bolstering the Group’s productivity and competitive advantage.

● Policy on Intellectual Property● Policy on Technological Development● Medium-Term Business Plan (2021–2023): To promote the technological develop-

ment to solve environmental and social issues through open innovation

Performance

2023 KPI● Based on our strategy for intellectual property, our proactive efforts in rights

establishment and utilization have resulted in a patent assessment rate of 87.7%.
This figure is notably high when compared to the average rate of 74.7% for allindustry sectors over the past three years, as reported in the 2022 edition of theAnnual Report of Patent Administration.
● Thanks to our client’s appreciation and understanding of our initiatives in renewable energy and other decarbonization measures, we secured orders for 10 net● Number of patent applications filed

8 projects

Non-consolidated target

Taisei Group’s ZEB

T-eConcrete® Series—Pioneering the Use of Environmentally
Friendly Concrete That Substantially Cuts CO2 Emissions
Carbon Recycling

Gate fence of SMC Corporation’s Shimotsuma Plant 2
Carbon Recycling

Aiming to achieve carbon neutrality by 2050, we are
3pushing forward with the274kg/m
introductionof various typesof T-eConcrete®. This includes the T-eConcrete®/
Carbon-Recycle
a 3net-negative CO2-171kg/m3 which boasts
55kg/memission balance.
Amount of CO2
absorbed

CO2 emissions at the timeof production

CO2 Absorption (Sequestration) by T-e Concrete®/Carbon-Recycle
Regular concrete

Carbon-recycled concrete

274kg/m3

Since 2013, the Company has been
advancing the development of the T-iROBO
series, which encompasses construction
machinery that can be remotely operated orfunction autonomously. We have successfully
developed and implemented a bulldozer withautonomous control that can detect piles ofdirt and sand and autonomously determine
its earth-moving route.

77 T A I S E I ANNUA L R EPORT 2023

Pedestrian floor block, Invert block
Construction of a new tunnel in the Inzai
area of Chiba Prefecture (Part 2)
Owner: TEPCO Power Grid, Incorporated● United Nations Global Compact, “Humansuppliers, ensuring fair trade● Procurement Policy ● Human Rights Policy● Taisei Group Sustainable Procurement Guidelines

Rights,” “Labor,” “Environment,” and “AntiCorruption”● Supply Chain Sub-Committee (GCNJ)● Green Procurement Guidelines● HRDD Sub-Committee (GCNJ)● Medium-Term Business Plan (2021–2023): To promote the supply chain manage-● JBIB (Japan Business Initiative for Biodiversity)

ment aimed at solving environmental and social issues● EcoVadis

Performance

2023 KPI● The core cooperative company association, Soyukai, has established several councils

P.69 Sustainability Section

Cement Zero Type ction Guidelines for Taisei: Promoting partnerships with subcontractors and●A

Energy Buildings (ZEBs)

Technology Topics

T-iROBO® Bulldozer

Initiatives● Number of orders received for net Zero

Zero Energy Buildings (ZEBs) in FY2022.

Autonomous Construction
Machine280 cases

Non-consolidated target

Policy / Commitment

Root consolidation block
Right bank levee of Arakawa River
Ministry of Land, Infrastructure,
Transport and Tourism, Kanto Regional Development Bureau-171kg/m3

55kg/m3

Amount of CO2
absorbed

CO2 emissions at the timeof production

CO Intensity = Emissions - Absorption = 55 - 171 = -116 kg/m
Regular concrete
Carbon-recycled concrete
CO2 reduction rate = CO2 intensity of regular concrete - CO2 intensity ofcarbon-recycled concrete = 274 - (-116) = 390 kg/m3
2

3

with the Company both nationwide and at various branches. Regularly, thesecouncils exchange opinions and conduct training sessions. During these discussions,
we deliberate on initiatives aimed at fostering the next generation of leaders andimproving the treatment of employees within our partner companies. The outcomesof these discussions are then integrated into our broader policies and measures. Asa subsidiary body of the Branch Soyukai, we have established the Youth Management Study Group that conducts study sessions and networking events with theobjective of enhancing the qualifications of managers and Soyukai leadership.
Moreover, we offer training on societal challenges, encompassing sustainability
training through safety conventions and e-learning modules based on the TaiseiGroup Sustainable Procurement Guidelines.
● When initiating transactions with new business partners, we make them aware ofvarious policies and guidelines. Additionally, we evaluate the implementation
status of these guidelines using a self-assessment method, conducting interviewsand exchanging feedback for necessary improvements. In the fourth quarter of
FY2022, we carried out self-assessments with 50 new business partners.

● Supplier’s conformity rates with the TaiseiGroup Sustainable Procurement Standards

100%

Taisei Group target

conformity rates with theP.34 Supplier’s
Taisei Group Sustainable Procurement Standards
Materiality and KPIs

 umber of branches offering training to business partners about sustainability activities:●N

12 domestic branches in January 2023.
● Number of participants and companies engaged in e-learning on sustainable procurement:

January to February 2023: 2,579 participants from 1,142 companies
January to February 2022: 7,391 participants from 3,200 companies.

Visits and interviews with subcontractors and suppliers

T A I S EI A N N UA L R EPO R T 2023 78

About the Taisei Group

Sustainability Section

Taisei Group’s Growth Strategy

Governance Section

Sustainability Section

Data Section

Materiality S o cial

Materiality 5

Materiality 6

Thorough Management of Occupational
Health and Safety

Cultivation of Technical Staff and Securingof Human Resources

Related

SDGs

Policies and Basic Approach

Related

SDGs

Policies and Basic Approach

The Taisei Group, in its “Action Guidelines for Taisei Personnel and the Taisei Group as a Whole,” emphasizes maintaining a safeand health working environment, and strive to prevent occupational accidents. Especially in construction activities, the Group
commits to adhering to laws, regulations, internal standards, and safety plans. We prioritize ensuring the safety of construction
personnel and give utmost importance to ensuring community safety, which includes preventing accidents that may affect third
parties. This commitment is deeply ingrained, ensuring strict adherence by all the Group’s executives and employees.
Additionally, within the Group’s Medium-Term Business Plan (2021-2023), we underscore the aim to “achieve zero fatal accidents and zero serious accidents.” Our Safety and Health Policy designates the Occupational Health and Safety Management
System (TAISEI OHSMS), executed in a systematic and organized manner, as the cornerstone of our safety and health management approach. Group executives, employees, and professional contractors collaboratively work towards these aims. We are also
pioneering the adoption and enhancement of safety management and monitoring systems leveraging ICT and AI technologies. In
collaboration with professional contractors, we are establishing a safety and health management system that clearly defines“responsibility and authority.” Our ultimate goal is to create a work environment where individuals feel secure and to be recognized as a company that earns the trust and empathy of the wider community.

▎ Risks and Opportunities
The construction industry faces challenges, such as the aging of skilled workers, an influx of foreign labor, escalating natural
disasters, and persistent severe heat. These challenges necessitate a higher level of commitment to occupational health andsafety management. Inadequate attention to this critical aspect might lead to industrial mishaps, regulatory infringements,
diminishing corporate value, and our reputation among our stakeholders.
Conversely, elevating our occupational health and safety standards, inclusive of our partners, aids in securing commendable
partners and attracting top-tier talent. Innovative measures, like the automation of hazardous tasks and leveraging digitaltechnologies, not only enhance safety standards but also fortify our Group’s productivity and competitive advantage.

The Taisei Group, in its Human Resource Development Policy (Diversity & Inclusion Policy), defines diversity management as the managementthat creates innovations and values by effectively using diverse human capital and providing opportunities to maximize their abilities.
To realize this vision, we actively recruit individuals with varied skills and ensure an environment where their full potential can be
maximized. Furthermore, we have established a framework to bolster career development, skills enhancement, and skills transition, enabling diverse talents to thrive in accordance with their life stages, abilities, and ambitions. As we focus on nurturing thenext generation of engineers, this approach is crucial.
In adherence to our Declaration of Partnership Building with business associates, our goal is to augment value and foster amutualistic relationship throughout the entire supply chain. In collaboration with organizations like Soyukai and the Safety, Health,and Environment Cooperation Association, we are dedicated to both securing and nurturing skilled construction workers.

▎ Risks and Opportunities
Should we fall short in our efforts to educate engineers and secure adequate staffing, there is an inherent risk that we may failto establish an efficient production framework capable of delivering the high-quality, superior-performing construction outputs
and related services catering to our client’s needs.
Conversely, steadfast dedication to the training of engineers and staffing ensures the acquisition of top-tier talent and esteemed business partners. Moreover, by championing the development of innovative construction techniques and technologies
as a remedy for workforce shortages, we significantly bolster the Group’s productivity and competitive advantage.

Policy / Commitment

Initiatives

 ction Guidelines for Taisei: Promoting partnerships with subcontractors and●A● United Nations Global Compact, “Labor”

suppliers, securing a pleasant working environment
 uman Resource Development Policy (Diversity & Inclusion Policy)●H eclaration of Partnership Building●DPolicy / Commitment
 ction Guidelines for Taisei: Securing a pleasant working environment, promoting●A

partnerships with subcontractors and suppliers afety and Health Policy●S edium-Term Business Plan (2021–2023): To achieve zero fatal accidents and zero●M
serious accidents

Performance● Between January and December 2022, Taisei Construction experienced 35

lost-time injuries (compared to 46 in 2021), with an accident frequency rate of
0.31 (0.44 in 2021), and recorded 0 fatal injuries. Even though the total hours
worked increased by about 10% compared to the previous year, the number oflost-time injuries decreased, and the accident frequency rate improved.

● Medium-Term Business Plan (2021–2023): To enhance support for Soyukai member● We prioritize employee training to avert accidents and injuries, enhance safety

and health consciousness, and foster a deeper comprehension of safety-related
laws and regulations. Training is customized based on an employee’s tenure androle, ensuring that they receive education tailored to their specific requirements
and responsibilities. Moreover, we disseminate Accident and Injury Reportsmonthly via our intranet, facilitating the sharing of insights derived from accident
analyses, incident case studies, and their corresponding preventive strategies.

79 T A I S E I ANNUA L R EPORT 2023

Performance● United Nations Global Compact, “Human

2023 KPI

Rights” and “Labor”● In May 2021, in line with the new targets set by Nikkenren, we established the● ISO45001“CCUS Dissemination and Promotion Roadmap for FY2021 to FY2023.” We havebeen progressing well towards our annual targets. For this fiscal year, which is
the last of the period, we are aiming for a 100% rate across three indicators:
business operator registration, skilled worker registration, and accumulation of
employment history. As of a survey conducted in March 2023, the rates stand at
95% for business operator registration, 88% for skilled worker registration, and
87% for accumulation of employment history.

2023 KPI● Number of fatal accidents

0 cases

Taisei Group target

P.21-22 Financial and Non-Financial

Accident Frequency Rate
Highlights● An analysis of accidents in 2022 revealed that the most common cause oflost-time injuries was related to machinery, followed by falls. We are determined
to prevent similar incidents by rigorously identifying the fundamental causes ofeach accident and implementing the appropriate corrective measures andpreventive actions. To mitigate risks, we undertake risk assessments based on
the Occupational Health and Safety Management System (TAISEI OHSMS).
Furthermore, we rigorously carry out various worksite patrols and safety andhealth education for employees, workers, and all individuals associated with theworksites. In 2022, a total of 1,298 employees involved in on-site operations
participated in various safety training sessions.

companies

Initiatives(2022)

Type of Education

No. of persons

Offsite training for head officein-house employees

458 persons

Basic, intermediate and supervisory management courses

599 persons

Administrator, supervisor andformer manager training

160 persons

Supervisor training

46 persons

New employee introductory
training (at time of hire)

35 persons

Total

1,298 persons● Worksite registration rate of Construction

Career Up System (CCUS)

100%

Non-consolidated target

management overtime hours /P.34 HealthWorksite implementation rate of afive-day work week
(closed eight days in four weeks)Materiality and KPIs

● The Soyukai is comprised of core contractors for Taisei Construction. These member companies are vital partners, striving for mutual

growth and prosperity alongside the Company. Regular discussions are held to address various challenges, and they are dedicated tooffering solutions and support.
• In terms of securing the next generation of skilled workers, we have arrangements such as accommodating interns from member
companies at Taisei Construction worksites and accepting member successors for temporary assignments at Taisei Corporation.
• For human capital development, a diverse range of training sessions—from skills courses for new recruits to managerial workshops—are
conducted to foster and retain talent among our member company employees. Furthermore, to nurture future leadership of eachcompany, we have instituted the “Youth Management Study Group.” This sub-organization promotes engagement between company
executives and members, organizing regular study sessions and interactions to energize the Group.
• At Taisei Corporation, an accreditation initiative has been launched to enhance the conditions for member construction technicians. In
the Civil Engineering Division, aiming to bolster facets like quality, safety, and technology, we have introduced a reward system toacknowledge exemplary civil engineers contributing to on-site projects at Taisei Corporation. In the Building Construction Division, withthe goal of elevating the construction management competencies of site supervisors, the “First-Class Foreman System” has been operational since 1995, and the “Special-Class Foreman System” since 2015, emphasizing skill transmission and personnel training.
System name
Civil
Engineering

Building
Construction

Amount paid (Daily)

Cumulative number of awardees (Certifications)

Excellent Civil Engineer Compensation
System (BMT System*)¥2,0001,274 (annually)

First-Class Foreman System (withsome revisions)¥2,000833 (annually)

Special-Class Foreman System¥4,000100 (annually)*As of March 2023

Construction techniciansmeeting certain criteria,
including certifications;
Nationwide

System inception dateJan. 2013
Apr. 1995
Sept. 2015

T A I S EI A N N UA L R EPO R T 2023 80

Sustainability Section

Materiality S o cial / G o ver n an ce

Materiality 7

Realization of an Attractive Working Environment
That Is Good to Work in

Related

SDGs

Policies and Basic Approach
The Taisei Group has established principles in its “Action Guidelines for Taisei Personnel and the Taisei Group as a Whole,” aimed
at securing a pleasant working environment and respect for diversity. The Group is actively promoting these principles. We havealso laid out the Human Resources Development Policy (Diversity & Inclusion Policy) and are pushing forward with various initiatives to foster an environment that respects diversity and ensures every executive and employee can maintain high levels of
engagement and perform optimally. Based on this policy, as well as the TAISEI VISION 2030 and the Medium-Term Business Plan,
we set self-directed goals for the utilization of human capital. The Board regularly monitors the execution of these goals andensures timely and accurate disclosure to our stakeholders.

▎ Risks and Opportunities
If efforts to harness the skills and capabilities of diverse personnel—including women, elderly employees, and non-Japaneseemployees—are inadequate, we risk not being able to secure top talent. Consequently, endeavors to uplift corporate value,such as through innovation, might stagnate, and our reputation among our stakeholders could diminish.
Conversely, by actively promoting Diversity & Inclusion initiatives to realize an attractive working environment that is good towork in, we aim to attract and retain stellar human capital, boost the engagement levels of our executives and employees, andinvigorate the organization as a whole.

Performance & 2023 KPI

P.34 Rate of taking childcare leave by males
Number of female managers /P.51 Taisei Group’s Growth Strategy

Management of Human Capital

Materiality and KPIs

Materiality 8

Thorough Compliance /Restructuring of the Group Governance System

Related

SDGs

Policies and Basic Approach
The Taisei Group has outlined in its “Action Guidelines for Taisei Personnel and the Taisei Group as a Whole” the importance ofcomplying with laws and regulations (i.e., laws, regulations, ordinances, administrative guidance, customs, and other social rules,
as well as internal rules and regulations such as company rules). The Group emphasizes acting with societal integrity. In executing
its business activities, there is a continual focus on ensuring that actions and words serve the best interests of clients, the company, shareholders, business partners, and the broader society.
As part of our fundamental approach to corporate governance, we prioritize the speed, accuracy, fairness, and transparency ofmanagerial decision-making. This ensures the sustainable growth of the Company and helps in securing the trust of the community. To maximize the synergies throughout the Group, we have rebuilt the Group governance framework. This includes the initiation of a Group Personnel Exchange System and the rebuilding of the Group meeting structures.

▎ Risks and Opportunities
Establishing solid compliance is foundational to our management. Insufficient efforts in this area can lead to risks such as adiminished societal reputation, constraints in our business operations, a decline in the perceived corporate value, and potentially lower our reputation among our stakeholders.
If we do not adequately strengthen the Group governance, there is a risk that, while aiming for individual company optimization, the Group may not make decisions that are in the collective best interest.
Conversely, by building and enhancing the Group governance, we ensure transparent, swift decision-making and appropriate risk-taking throughout the entire Group. This approach amplifies the Group’s strength by maximizing synergies.

Performance & 2023 KPI

P.34 Attendance rate at compliance training including

Number of major information security accidents /anti-corruption

Materiality and KPIs

81 T A I S E I ANNUA L R EPORT 2023

P.85 Governance Section

Corporate GovernanceP.93 Governance Section
Compliance