Report on the Incident Regarding Our Failure to Satisfy
Steel Erection Accuracy Requirements and the Incident
Regarding Our Delay of Construction Schedule
We hereby report on the incidents above that occurred recently in the publication of the Annual Report 2023.
First of all, as timely disclosed in March 2023, the failure to satisfy steel erection accuracy requirements
was found in the last fiscal year, in the ongoing construction work for the (Tentative Name) Sapporo Kita
1 Nishi 5 Project undertaken by our Sapporo Branch. We have decided to remove and reconstruct allaboveground portions and the non-conforming portion of the underground structure. Please accept our sincerest and deepest apologies for the great inconvenience and concerns caused to the owner and all otherconcerned parties.
We deeply regret the incident since it should never occur in a company like ours, which centers its activities on construction business. In response to the incident, the Compliance Committee as a Special Committee, with the participation of outside experts, investigated the cause and developed measures to preventthe recurrence of a similar issue. In addition, we have established a Technical Verification Committee whose
members are third parties with technical knowledge. The Committee has implemented assessment of thequality control process. At present, the entire company is working on measures to prevent recurrence of asimilar incident, such as re-enforcing compliance and strengthening the system to ensure the function of
the quality control process, thereby striving to ensure proper quality control.
Furthermore, in May this year, our Tokyo Branch faced delay in the construction work for the Setagaya
City Government’s main office building, primarily due to insufficient verification of detailed construction
schedule at the worksite. It resulted in our request to the owner for an extension of time for completion.
Again, we apologize for the inconvenience and troubles we have caused to the owner and all the concerned parties.
With regard to this incident, we will review our organizational structure and staff assignment, andstrengthen the backup system at the head office and the branch office, thereby ensuring thorough implementation of the construction work at the project through concerted efforts across the company.
We take both incidents as a serious matter that shakes the Company’s trust. In order to prevent similar incidents from occurring again, all executives and employees are reminded of the Group’s mission of“contributing to the development of a resilient society where people can live affluent and cultural lives,” andtake pride in being a member of a company responsible for building social capital, in engaging in work withintegrity. I will lead the way and do my best to restore the trust of our clients and all stakeholders involved.
We are grateful to all of our stakeholders for the continued and invaluable cooperation and support.

TAISEI CORPORATION
Yoshiro AIKAWA
President and Chief Executive Officer,
Representative Director

Contents

About the Taisei Group
05 About This Report

Sustainability Section
57 S pecial Feature: SDGs Dialogue
・MURC Fellow Mari YOSHITAKA × CSO Jiro TANIYAMA

07 Value Creation Story
09 Message from the President

61 Message from the External Members of the Board

17 Tales of Past and Present of the Taisei Group63 Sustainability Management

20 The Taisei Group’s Now / Present

65 Materiality

21 Financial and Non-Financial Highlights

Taisei Group’s Growth Strategy
23 Message from the Chief Financial Officer
27 M edium- to Long-Term Recognition of External
Environment•Environment
1. Realization of a Sustainable and			 Environmentally Friendly Society

75 •Social
2. Ensuring Quality and Improving Technology
3. Technical Development for Realizing a 					 Sustainable Society

TAISEI VISION 2030

29 Medium-Term Business Plan (2021–2023)
・Key Issues
・Numerical Targets and Progress

31 Materiality (Issues to Be Dealt with)
35 Business-Related
・Group Domestic Building Construction
		 Business4. Promotion of Supply Chain Management		
5. Thorough Management of Occupational
			 Health and Safety
6. Cultivation of Technical Staff and Securing			 of Human Resources
7. Realization of an Attractive Working 					 Environment That Is Good to Work in

81 •Governance
8.Thorough Compliance /Restructuring of the Group Governance System

・Group Domestic Civil Engineering Business
・Group Overseas Construction Business
・Group Real Estate Development Business
・Group Engineering Business

45 Sustainability-Related
・Technological Development / DX・TOPICS:
1. Solving Sustainability Issues in Society
2. Management of Human Capital
3. Human Rights Due Diligence Initiatives

Governance Section
82 Message form the Chairman of the Board
83 Message form the External Audit &		Supervisory Board Members

85 Corporate Governance
93 Compliance
96 Risk Management
99 Management Members

Data Section
103 Key Financial Data and Performance History
105 Consolidated Financial Statements
112 ESG Data
116 Corporate Data / Stock Information
117 Overseas Network
118 Glossary

Introduction

Taisei Group Philosophy

To Create a Vibrant Environment for
All Members of Society
The Taisei Group Philosophy of “to create a vibrant environment for all membersof society” represents our objectives (goals) to be pursued by the Taisei Group.
We seek in an environmentally sustainable manner to create safe and attractive
spaces with exceptional value and to create a global community filled with hopes
and dreams for the benefit of future generations.
In response to the rise of environmental problems on a global scale, it clarifies thevalues that we should cherish and the future state that we should achieve as acompany. Based on the Philosophy, the Group is committed to addressingchanging social needs and issues and to contributing to a sustainable society
through the creation of high-quality social capital.

Medium to Long-Term Vision【TAISEI VISION 2030】

A pioneering corporate group “contributing to the development ofa resilient society where people can live affluent and cultural lives.”

The Ever-Evolving CDE3 (cubed)
Company
C onstruction, D evelopment, E ngineering, E nergy, E nvironment
In 2021, taking into account the medium- to long-term external environment and structuralchanges, we established our vision for the next 10 years, “TAISEI VISION 2030,”
grounded in the Taisei Group Philosophy and Taisei Spirit.
We will proactively respond to these significant shifts in the landscape and arecommitted to fulfilling our mission of “contributing to the development ofa resilient society where people can live affluent and cultural lives.”

Taisei Spirit

Active and Transparent Culture
We value diversity and, through open and active communication lines and networks bothinternal and external to the Taisei Group, seek to cultivate a transparent and active corporate
culture in which all of our officers and employees are able to reach their full potential.

Value Creation
Not limited to our understanding of society at large, we carefully take into account the needs ofour clients and using all of the technology and know-how at our disposal,
together with our passion for innovation and ingenuity, seek to construct innovative andvaluable engineering projects that inspire and impress our clients.

Evolution of Tradition
We aim to instill within the Taisei Group the Japanese tradition of monozukuri (precise, superb
craftsmanship) and continually challenge ourselves to provide ever more valuable contributions tosociety and ensure our continued development and growth as a respected corporate group.
As a close-knit team made up of dedicated corporate professionals, we engage inour corporate activities with passion, enthusiasm and sincerity.

Corporate Emblem & Group Slogan Regarding the Symbol Mark & Group Slogan
The symbol mark embodies the Taisei Group’s management philosophy.
It symbolizes the natural environment, such as the invaluable earth, sea,
and sun. While maintaining a balance with these elements, the continuous, higher, deeper, and broader activities of both people and the Groupare depicted with vibrant energy and dynamism in three colors: blue,
green, and orange. The Group Slogan, “For a Lively World,” serves as asuccinct message that conveys the Group’s philosophy to society. It’s adistilled representation of the Group’s philosophy, crafted to beapproachable and easily remembered.

About This Report

Overview of Communication
Information for Shareholders and Investors

Information for ESG and Sustainability

Annual Report

Report・Annual Securities Report
・Business Report
・Taisei Circle (Shareholder Newsletter)
・Corporate Governance Report

Environmental, Social
Governance (ESG) ReportWeb

Shareholder and Investor
Information

Sustainability
https://www.taisei-sx.jp/english/

https://www.taisei.co.jp/english/ir/

Dialogue・Financial results briefing for institutional investors
and analysts
・Individual Meetings・O verseas Investor Relations (IR)・Domestic conferences sponsored by securities firms
・General Meeting of Shareholders

Stakeholder dialogue

Overview
Editorial Policy:

This publication aims to provide shareholders, investors, and other stakeholders with aclear overview of the Taisei Group’s endeavors to enhance sustainable corporate value.
It incorporates management strategies geared towards realizing the Taisei Group’s
Philosophy, and foundational ESG and financial information for growth.

Report Scope:

Covers the Company and its Group entities (consolidated subsidiaries) as of March
31, 2023.
(Note: Any deviations from this scope are clearly annotated.)

Reporting Period:

Fiscal year ended March 31, 2023 (from April 1, 2022 to March 31, 2023).
(Note: Information from periods slightly before or after this range is also included.)Release Date: September 2023

Third-Party Assurance:

P. 105 – 111: Assurance on Financial Information by KPMG AZSA LLC.
P. 112 (Environmental Data): Assurance on Environmental Information by Ernst & Young
ShinNihon LLC

Reporting Framework
The Annual Report and the Sustainability Report (Web Sustainability) are prepared in accordance with the following frameworks.

●●

GRI Standards●

SASB Standard●

Guidance for Integrated Corporate Disclosure and Company Investor Dialogues for Collaborative Value Creation (by the
Ministry of Economy, Trade, and Industry)●●

Task Force on Climate-related Financial Disclosures (TCFD)●

Environmental Reporting Guidelines (2018 version) (by the Ministry of the Environment)●

ISO 26000 (Guidance on Social Responsibility for Organizations)● Annual Report● Sustainability Report (Web Sustainability)

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

Major External Evaluation

2023 Constituent MSCI Japan Empowering
Women Index (WIN)

Note: The inclusion of Taisei Corporation in any MSCI index, and the use of MSCI logos, trademarks, service marks, or index names herein, do notconstitute a sponsorship, endorsement, or promotion of Taisei Corporation by MSCI or any of its affiliates. The MSCI indexes are the exclusive
property of MSCI. MSCI and the MSCI index names and logos are trademarks or service marks of MSCI or its affiliates.

Key Stakeholders
Acknowledging the principles of ESG and SDGs, the Taisei Group deeply understands that we are supported by our shareholders, investors, clients, communities, employees, business partners, and a range of other stakeholders.

Stakeholders

Principles of conduct

Shareholders andInvestors

We respect the rights of shareholders, ensure their genuine equality,
and cultivate a conducive environment for the exercise of their rights.
We endeavor to enrich our constructive dialogues and engagementswith shareholders and investors and are committed to providing
accurate and timely information for these interactions.

Clients

Understanding the broader societal landscape, we stand in our clients’shoes. By pooling our technology and know-how, and persistently pursuingfurther technological innovation and creative efforts, we aim to deliver
optimal construction products and services that align with our clients’ needs
and budgets, thereby meeting their expectations and gaining their trust.

Communities, NPOs,
and NGOs

We seek to establish robust relationships with local communities. As
responsible corporate citizens, we prioritize dialogue and collaboration with society, aiming to contribute positively to its growth anddevelopment.

Employees

Valuing diversity, we promote active communication and networking
both inside and outside our organization. Our goal is to nurture an
open and vibrant corporate culture where every member can maximize
their potential. Furthermore, we strive to develop and retain our humancapital* for the future, ensuring heightened employee engagement.

Business Partners

We emphasize clarity in our mutual roles and responsibilities, aiming
to foster fair and trustworthy relationships. With our commitment to
the Declaration of Partnership Building, we work diligently to promotemutual growth and added value across our entire supply chain.

*Note on terminology: We view our human resources as invaluable assets. Thus, in this Annual Report, we refer to “human resources” as		“human capital.”

TA I SE I A N N UA L R E P O R T 2 0 2 3

6

Value Creation Story
Under the Taisei Group Philosophy, “to create a vibrant environment for all members of society,” the TaiseiGroup is dedicated to forging a resilient society where people can live affluent and cultural lives.
By building high-quality social infrastructure through our business endeavors and by addressing the challenges faced by our clients and the broader society, we aspire to foster a cyclical enhancement of both corporate and societal value, aiming for sustainable growth in harmony with society.
Medium- to long-term external environment and structural changes

Domestic building
construction
Domestic
civil engineering
Overseas
construction

Human Capital
Sensitive human resources that utilize their high level ofexpertise to create more value than clients want

2,557 persons

First-Class Civil Engineering Works Execution
1,921 persons
Managing Engineer (Non-consolidated)

Training hours per person (Non-consolidated) 65 hours
Total amount of training (Non-consolidated) ¥406 million

Financial Capital

D
Input

First-class architects (Non-consolidated)

DX

Construction(Figures for FY2022)

14,466 persons

SX

C

Management Capital

Number of consolidated employees

IX

E

Development

Engineering

Five areas we areparticularly focused on
to realize
TAISEI VISION 2030

Sound financial position and stable funding¥2,016.7 billion

Total assets¥829.1 billion

Equity41.1 %

Equity ratio

E

E

EnergyEnvironmentIntellectual capital
Technological development contributing to expected growth inindustrial areas / Technological, field and proposal capabilities
that support competitiveness

Investment in technology and development ¥25.6 billion
Including investment in environment-related technology¥22.3 billion

DX-related investment¥9.2 billion

Social Capital
Client trust and brand power built over 150 years in business
Strong supply chain

Achieving safety and security
Optimal utilization of “Human Capital,” “Technology”
and “Intelligence.”
Materiality (Sustainability issues to be dealt with)

617 members

Soyukai* 

Safety,Health and Environment

7,930 members
Cooperation Association* (As of March 1, 2023)

Manufacturing Capital
Global bases and construction sites
Efficient production process using digital technology and data

Number of branches

15 branches

Constant number of overseas offices

9 offices

Natural capital
78,300 kL

Electricity usage

167 million kWh

Water (used)

2.39 million m3* For Soyukai and the Safety, Health and Environment Cooperation
Association, see the glossary on page 118.

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

3. Technical development for realizing a sustainable society
4. Promotion of supply chain management
5. Thorough management of occupational health and safety¥18.3 billion

Business activities that respect the natural environmentand biodiversity

Major fossil fuel use

2. Ensuring quality and improving technology

27 companies

Number of Group Companies
Capital investment

1. Realization of a sustainable and environmentally friendly society

Taisei Spirit

To Pursue the Taisei Group Philosophy

Active and Transparent Culture

Value Creation

Mission To contribute to the development of a resilient society

Taisei Group Philosophy

To Create a Vibrant Environment for All Members of Society
Taisei Group’s long-term environmental target

TAISEI Green Target 2050
Realization of a sustainable and environmentally friendly society
Medium- to long-term vision “TAISEI VISION 2030”

The Ever-Evolving

The CDE3 (cubed) COMPANY

FY2022 ResultsGroup operating income¥54.7 billion

Group net income¥47.1 billion

ROE

5.6 %

Dividend payout ratio

53.9 %Net interest-bearing debt substantively debt-free

Outcome

OutputPerformance Numerical Outlook¥1,642.7 billion

Group net sales

A pioneering corporate groupcontributing to the developmentof a resilient society where
people can live affluent andcultural lives

Group net sales

About ¥2.5 trillion

Group net income

About ¥150 billion

ROE

Around 10%

Return to Stakeholders

Number of ZEB building orders

10 cases

Number of patent applications filed

283 cases

Accident frequency rate

0.31

Customers, Suppliers and Society:

Number of female managers

314 persons

Shareholders:

Returns through CDE3

Dividend payout ratio: 25–30%

Rate of taking childcare leave by males 100 %Output as Load

Employees: To promote further diversity and inclusion,
establishing a comfortable working
environment, personnel systems, andsalary plans that enable employees toleverage their diverse range of skills to the
maximum possible extent.

Scope 1 + 2 Total CO2 emissions 291,000 t-CO2
Construction byproduct emissions 2.42 million t

Water (discharge)

3,134,000 m3

TAISEI Green Target 2030 Goals
6. Cultivation of technical staff and securing human resources

DecarbonizedSociety

Reduction in CO2 emissions per unit of sales (comparedto FY2019): Scope 1 + 2: Decrease by 50%
Scope 3: Decrease by 32%

7. Realization of an attractive working environmentthat is good to work in

RecyclingOriented Society

Promotion of green procurement
Final disposal rate of construction waste: 3.0% or lower

Nature CoExisting Society

Implementing proposals and projects that contribute

8. Thorough compliance and restructuring of the Group
governance system

Thoughts that all Group executives andemployees value

to Nature Positive

Contribution to the SDGs

Evolution of Tradition
where people can live affluent and cultural lives

TA I SE I A N N UA L R E P O R T 2 0 2 3

8About the Taisei GroupM e s s a g e from t h e Pres iden t

We Will Fulfill Our Mission of “Contributing to theDevelopment of a Resilient Society Where People
Can Live Affluent and Cultural Lives,” in Order toEnhance Corporate Value and Achieve
Sustainable Growth.

Yoshiro AIKAWA
President and Chief Executive Officer,
Representative Director

Introduction
As mentioned at the outset of this report, I wish to reiterate our apologies for the recent incidents
related to the failure to satisfy steel erection accuracy requirements and the delay of construction
schedule in the ongoing construction projects. Restoring the trust we have lost due to each incident
will require an exceptional effort, and we anticipate a challenging journey ahead.
In order to overcome this difficult situation and lead to new growth, all of the Group’s executives
and employees must align their minds under the mission of “contributing to the development of a
resilient society where people can live affluent and cultural lives,” and approach their daily work withintegrity, valuing the basics of quality, process, and safety. It is important that we continue toprovide our clients with value, satisfaction, and excitement that exceed their expectations andimaginations, and solve social issues through our corporate endeavors.
As President and Chief Executive Officer, I will take the lead and do my best to restore the trust.

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

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

Progress of the Medium-Term Business Plan
(2021–2023)
Construction investments, driven by steady public investment and brisk private capital investment
mainly in the manufacturing industry, in anticipation of a post-COVID surge of business in mind, are now
recovering to the levels exceeding pre-COVID ones. However, as sharp rises in the prices of a wide
range of construction materials tremendously affected the profit/loss of construction projects, the management environment surrounding the Taisei Group was extremely harsh.
Under these circumstances, FY2022, the second year of the Medium-Term Business Plan (2021–2023),
saw the Group’s net sales increase, owing to a steady progress in the initial backlog of projects for the
fiscal year. However, concerning the profit/loss, operating profit and other figures were lower than theprevious fiscal year’s results, due to the recording of costs related to the corrective work for the aforementioned failure to satisfy steel erection accuracy requirements, etc., and the decline in profit margins
in the construction business, affected by the higher prices of construction materials.
The forecast for FY2023, the concluding year of the Medium-Term Business Plan, appears to be lesspromising with the Group’s net sales, operating income, and net income expected to fall short of thenumerical target of the Medium-Term Business Plan.
The shortfall in operating income can be attributed to three primary reasons. The first is “the delay inestablishing production systems.” The current Medium-Term Business Plan aimed to increase profits by
expanding business volume on the assumption that certain profits could be secured, but the expected
improvement in productivity and the securement of sufficient personnel were not achieved. The second
is “the impact of several large low-profit construction projects.” As competition intensified due to the
expansion of the size of projects, profits were depressed by several projects that were awarded at low
profitability. The third is a “delay in passing the soaring prices of construction materials on to our contract prices with clients.” Profit margins declined, due to a failure to pass the soaring prices of construction materials and higher oil costs at some group companies on to the contract prices, in design andconstruction projects that required time between the selection of a contractor and the commencementof the works.
Based on these unachieved factors, we have been working on the following measures since this fiscal
year, ahead of the next Medium-Term Business Plan. The first step is “to secure an appropriate businessvolume and to rebuild the production systems.” Based on the working environment of our employees,
we will operate, balancing between the volume of construction projects and profitability. In addition,
considering the profit decline due to heightened competition after the Tokyo Olympics, we will re-enforce
our profit-oriented approach, apply strict screenings upon receiving orders, and assign personnel topriority areas. Finally, we will continue persistent negotiations to pass on to prices in response to thesurging costs, and endeavor to restore profits.

Towards Enhancement of Corporate Value andSustainable GrowthOver the years, the Taisei Group has faced numerous challenges. Each time, our executives andemployees have overcome the difficulties together and taken those experiences in further growth. In ourcurrent challenging situation, it is crucial to draw upon the resilience and adaptability—the DNA we haveinherited from our predecessors—and transform these challenges into opportunities, and embracechallenges, using our past failure as stepping stones to future growth. I will lead myself and foster anenvironment where our executives and employees can confidently address new challenges.
For the Taisei Group’s construction business, we firmly believe in the pillars of quality, process, andsafety, and that the key issues are “to build a business foundation for sustainable growth” and “toenhance human capital.” The details are explained as follows.

TA I SE I A N N UA L R E P O R T 2 0 2 3 10

About the Taisei GroupM e s s a g e from t h e Pres iden t

1. Quality, Process, and Safety: To Work with Integrity and Pride as an Engineer
For the Taisei Group, which plays a pivotal role in constructing social infrastructure through its core
construction business, quality, process, and safety are fundamental themes, and serve as a foundation
for growth.
The Taisei Group’s projects are important social infrastructure that supports peoples’ lives, and ourbusiness can only thrive when it garners the trust of the public. As engineers dedicated to societal contributions, while upholding the legacy of craftsmanship, all executives and employees involved in construction work must reaffirm the importance of the basics and work with pride and integrity. By consistently and diligently making these efforts, we hope to secure the trust among our clients and society,and build a stronger foundation for growth.
As to quality, the entire company is currently working to re-enforce compliance and strengthen thesystem to ensure the quality control process functions. All executives and employees will return to theirroots of TAISEI QUALITY—Quality is our pride—again, and implement appropriate quality control.
As to process, progress and problems of each construction project are to be shared among the head
office, branch offices, and worksites, and we will ensure a robust backup system for worksites to ensure
reliable process management.
As to safety, based on our policy “Safety first,” our Medium-Term Business Plan (2021-2023) emphasizes the objectives of “Zero fatal accidents and zero serious accidents.” We are working to improvesafety and health management, in order to create a working environment where everyone involved in the
Taisei Group’s business can work with peace of mind. In 2022, the accident frequency rate of theCompany alone (a number that indicates the frequency of injuries) was 0.31, representing an improvement of over 50% in the past decade. We will continue to carry out our safety and health managementwith diligence and sincerity, ensuring safety first.

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

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

2. To Build a Business Foundation for Sustainable Growth:
For Exceeding Clients’ Expectations and Imaginations

1 To Promote Businesses That Contribute to Building a Resilient Society
The Taisei Group’s path to further growth is to invest resources from a medium- to long-term vision ineach of the CDE3(cubed) (Construction, Development, Engineering, Energy, Environment) areas, to refine
its technologies and businesses, to continue to provide value, satisfaction, and excitement that exceeds
clients’ expectations and imaginations, and to contribute to society by supporting growth of the wellbeing of even more stakeholders. We believe that our continued efforts to pursue these goals will lead toan enhancement of the Group’s corporate value and sustainable growth.
With regard to the building construction business and the civil engineering business that form the coreof CDE3(cubed) in the Taisei Group, it is important to work with a passionate sense of mission to contributeto society as well as to satisfy and impress clients in any construction projects. While observing thebasic principles of quality, process, and safety, we will promote the transformation of our production
system through DX (Digital Transformation), as well as the development of innovative technologies tosolve environmental and social issues, thereby enhancing our competitive advantage. At the same time,
we will work to enhance our capabilities to design and make proposals that exceed our clients’ expectations and imaginations. With regard to the overseas construction business, we are working to establish
a system that ensures profits in priority countries and regions based on local interests.
The development business and the engineering business are positioned as a growth engine for the
Taisei Group. In the development business, we are building a stable profit base by optimizing our realestate portfolio and pursuing investment efficiency. In the engineering business, we are making efforts to
expand our business areas by taking advantage of the strengths we have cultivated in the pharmaceutical and food products sectors. In both fields, we hope to accelerate growth by maximizing the TaiseiGroup’s comprehensive capabilities.
Regarding the area of energy and environment, we aim to be a frontrunner in the environmental field.
We have made organizational change for initiatives such as “Carbon Neutrality,” “Circular Economy,”“Nature Positive” and “Renewable Energy,” and are working on them.
In all fields, the key concept of contributing to the development of a resilient society is to solve social
issues through CSV (Creating Shared Value), namely through corporate activities. In terms of striking abalance between social and corporate values, the Taisei Group can substantially contribute to society
through the construction of social infrastructure. The social infrastructure we provide is designed to last,enduring for decades—50, 100 years or even longer. Looking ahead, we will implement CSV by adding
social value to the structures we create and by commercializing them.
2 To Realize Sustainable and Environmentally Friendly Society and Promote Regional Cooperation
We believe that “To realize a sustainable and environmentally friendly society” and “To Promote ofregional cooperation” are particularly important areas in contributing to the resolution of social issues.
In March of this year, the Taisei Group revised its Environmental Policy and the Group’s long-term
Environmental Targets. Towards the Realization of a Sustainable and Environmentally Friendly Society,
we are deepening our commitment to three key areas: “Carbon Neutrality,” “Circular Economy,” and“Nature Positive.” Through these initiatives, we endeavor to contribute to society by conducting ourbusinesses.
Regarding carbon neutrality, our specific goal is to achieve a 2050 target of “virtually net-zero” CO2emissions from business activities, not only the emissions of Scope 1 and 2, but also those of Scope 3(which includes the supply chain). We will pursue further development and dissemination of a wide rangeof Net Zero Energy Building (ZEB) technologies such as Newly constructed ZEB, Green Renewal ZEB,

P.65 Sustainability Section

Realization of a sustainable and environmentally friendly society

TA I SE I A N N UA L R E P O R T 2 0 2 3 12

About the Taisei GroupM e s s a g e from t h e Pres iden t

Net Zero Energy Factory (ZEF), Net Zero Energy Houses (ZEH), and Net Zero Energy House Apartment
Buildings (ZEH-M), as well as environmentally friendly concrete “T-e Concrete®” and steel materials with
reduced CO2 emissions. We have also begun to verify the results of the “T-ZCB (Zero Carbon Building)”,
which aims to achieve “virtually net-zero” CO2 emissions in the life cycle of buildings. We will hone ourdecarbonization technologies in each phase: “Zero Carbon Design” in the procurement phase, “ZeroCarbon Construction” in the construction phase, and “Zero Carbon Operation” in the operation phase.
Regarding the regional cooperation, being faced with the challenges of a declining population and theadvent of a super-aging society, the national and local governments are making various efforts to enableeach local community to take advantage of its unique characteristics to create an autonomous andsustainable society. We, as a company, carry an important responsibility to cooperate with local communities to solve problems and contribute to the revitalization of local communities. Taking the construction
business as a foundation, we hope to utilize the Taisei Group’s comprehensive capabilities in engineering
technology and environment-related technologies, and work together to resolve issues from a mediumto long-term perspective.
Achieving profitability while making significant societal contributions is challenging. Yet, overcoming
this challenge provides us with a unique advantage, strengthening the Taisei Group's competitive edge.
However, if it can be realized despite its difficulties, it will be an advantage that cannot be easily copied,thereby leading to a competitive advantage of the Taisei Group. This April, we initiated a new internalframework to bolster regional collaboration, and we are dedicated to building partnerships acrossvarious industries.
3 To Accelerate Open Innovation
The source of the Taisei Group’s competitive advantage is its technological expertise. Technologicalprogress in the world is becoming faster and changing more discontinuously than we imagined. Relying
solely on traditional practices and an in-house mindset would not allow us to keep up with this rapid
pace of change. Innovation arises not just within our industry or adjacent sectors, but also from merging
our expertise with insights from diverse industries.
We constantly brush up the wide range of technologies and know-how related to construction andproduction processes, facility management, and decarbonization. These have been cultivated over theyears in the tradition of manufacturing. We are proud of the mindset of the Taisei Group employees being
the best in the industry, as they never stop aiming for even better results. Equipped with advanced technology and a fervent commitment as two main wheels, we aim to identify latent societal needs that manymight overlook. By collaborating with partners from various industries who share our vision, we seek toaccelerate open innovation, and to create unparalleled value that satisfies and delights our clients.
4 To Take Initiatives across the Supply Chain
For the Taisei Group, our subcontractors and suppliers are not just crucial partners in delivering workthat exceeds our clients’ expectations and imaginations; they are allies in our mutual endeavors toaddress societal challenges through business endeavors. We aim to fortify our collaboration with the
Soyukai, a collective of key cooperative companies, and the Taisei Corporation Safety, Health, andEnvironment Cooperation Association, which encompasses all partner firms. This collaborative effort
seeks to enhance a shared commitment to our Group’s mission of “to contribute to the development ofa resilient society where people can live affluent and cultural lives,” and to advance initiatives throughout
the supply chain.
At this moment, the construction industry is grappling with significant hurdles, including “the shortageof construction workers due to the shrinking working population and aging society,” and “the legal upper
limit on overtime working hours from April 2024, with penalties for infringements.” As a member of theJapan Confederation of Construction Industry, we are actively championing measures across theindustry. Collaboratively with Soyukai and the Taisei Corporation Safety, Health, and Environment
Cooperation Association, we will pool our insights to prevent extensive work hours and remain worksites
closed during holidays. Beyond that, our focus extends to enhancing the compensation and working
conditions for skilled construction workers, all in our pursuit of providing an attractive work environment.

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

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

3. To Enhance Human Capital: To Invest in the Group’s Future
1 To Improve Employees’ Job Satisfaction and Engagement
To fulfill the Taisei Group’s mission, it is paramount that our employees and their families feel high levelof well-being. For this well-being to be realized, it is vital that the Company understands every individual
employee, offering each of them opportunities to maximize his/her unique strengths and talents. This
ensures that each member of our team places trust in the Company and is motivated to contributeproactively and independently towards our shared goals.
When the Company and its employees are tied each other with the mind of strong engagement, we
can truly harness our collective potential to deliver exceptional value, surpassing our clients’ expectations and imaginations. In this regard, our employees can be rightly termed as our “human capital.” Thedriving force enhancing the Taisei Group’s corporate value resides in each employee’s sense of purpose
and fulfillment in their work. As President, one of my top priorities is to create an attractive working
environment that is good for all our employees to work in.
Last fiscal year, we started engagement survey, administered by an external consultant, which targeted employees across all the companies within the Group. We have taken the results of this survey toheart, pinpointing areas of discrepancy between our current state and our ideal one. From these
insights, we are rolling out initiatives tailored to boost job satisfaction, taking into account factors suchas age, position, and organizational affiliation.
Moving forward, we will periodically evaluate the level of employee engagement, striving relentlessly
for improvement. Our goal is to amplify the psychological safety within our workplaces, fostering anenvironment where every employee can take pride in both the company and their individual roles. In
such an atmosphere, they can, with genuine enthusiasm, make meaningful societal contributions
through their exceptional work.

P.51 Taisei Group’s Growth Strategy

Management of Human Capital

TA I SE I A N N UA L R E P O R T 2 0 2 3 14

About the Taisei GroupM e s s a g e from t h e Pres iden t

2 To Promote Women’s Active Participation and Advancement, and Ensure Diversity in Human Capital
For a long time, the Taisei Group has instituted a specialized section in Human Resources Department
to foster an attractive working environment that is good for a variety of employees to work in, especially
focusing on enhancement of women’s active participation. We have been steadily increasing the numberof female engineers and female employees in managerial positions, yet when compared to other industries, there is still significant potential for improvement. In a society that is rapidly changing, becoming
complicated, and where values are diversifying, maintaining a workforce predominantly of “new graduate Japanese men with no job change experience” can be a latent risk. In order to adapt to thesesocietal shifts, grasp business opportunities, and achieve sustainable development, we are committed
to further bolstering the roles of our female employees, refining our career hiring processes, and actively
recruiting foreign national employees.
Moreover, as part of our strategy to create an environment conducive to women’s active participation,
we have placed great emphasis on encouraging male employees to take childcare leave. Due to ourconcerted efforts, the percentage of male employees taking childcare leave has consistently reached100% since the fiscal year of 2017, with the average number of days for childcare leave reaching 11.6
days (as of the end of March 2023). Moving forward, we aim to maintain this 100% uptake and increase
the average number of days for childcare leave taken.
My vision is to establish a “company where employees can confidently choose to marry, have children, and raise their families without any hesitation.” Towards this end, we are dedicated to creating an
attractive workplace where a variety of employees actively work in, comprehending the evolving needsof society and our clients through varied lenses, and consistently delivering superior quality work.
3 To Enhance Human Capital Development
We regard human capital development as a crucial investment in the future of the Taisei Group. In nurturing our employees, our approach transcends mere technical proficiency; we are committed to personal development considering the whole personality of each employee. In this era of rapid change,
increasing uncertainties, and compounded complexities where predicting the future is challenging,succeeding in business requires not just logic but also a rich sensibility, visionary thinking, and creativity.
Improving these qualities is contingent upon mastering the liberal arts.
Moreover, in a world where there are no right answers, the essence of “Fair Play,” which underpins thevery foundation of business, assumes even greater significance. We aim to support our employees notjust in their immediate roles but also in personal growth by broadening their knowledge base and familiarizing themselves with liberal arts. This approach ensures they can deliver work of superior quality withutmost integrity and, concurrently, lead a fulfilling life.
We have an enduring tradition of recognizing and rewarding exceptional business achievements
through our internal award system. In addition, we founded the “TAISEI VISION 2030 Award” two years
ago to provide timely accolades for remarkable endeavors that resonate with our corporate aspirations.
This includes businesses that make substantial contributions, even if they don’t always receive thespotlight; proactive risk-taking and innovative efforts; and societal contributions that enhance the Company’s credibility. We anticipate that this recognition system will spur heightened engagement and motivation among our employees, leading to a constructive cycle where they consistently challenge themselves to produce better results while also striving for personal growth.
Last year, we introduced the “TAISEI Next-Generation VISION Proposal Working Group,” primarily led
by our younger and mid-tier employees. This group was entrusted with offering recommendations on
initiatives imperative for the realization of the “TAISEI VISION 2030.” Besides leveraging the fresh perspectives and candid feedback of the younger generation in management strategies, we aspire to consistently channel our efforts towards the professional development and enhancement of awarenessamong our upcoming talent. This includes involving them in activities like revising our Materiality anddrafting our forthcoming Medium-Term Business Plan.
Regarding the training of our future managerial candidates, some potential employees were chosen toparticipate in the Management Committee as observers. This enabled them to gain firsthand insights
into intricate managerial decision-making processes and partake in the meeting to exchange opinionswith External Members of the Board, enriching their understanding of our business operations, strategic
direction, and overarching corporate governance. Furthermore, we expect these chosen individuals toardently pursue liberal arts education and cultivate a deep-seated appreciation for the principles of truth,
virtue, and aesthetics. Our unwavering commitment is to systematically develop the managerial leadersof tomorrow, ensuring the Taisei Group’s enduring prosperity.
15 T A I S E I ANNUA L R EPORT 2023

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section.
Closing
Remarks－Marking Our 150th Anniversary as a
Launchpad for Future Leaps
The Taisei Group celebrates 150th anniversary of its foundation this year. This momentous occasion has
been made possible due to the tireless efforts of our predecessors and the trust and recognition from ourclients and stakeholders. We owe them our deepest gratitude. As we move forward, our commitment tosustainable development remains unwavering, emphasizing open dialogue with all our stakeholders.
Our founder, Kihachiro OKURA, was characterized by his “insight to read the changing times,” “courageous spirit of adventure underpinned by thoughtful consideration,” and “innate pioneering spirit toembrace unprecedented challenges.” Navigating through the turbulent transitions from the Meiji to theShowa era, he ventured boldly into uncharted business territories. He played instrumental roles in establishing and managing a variety of companies including the Taisei Group, leaving an indelible mark on themodernization and growth of Japan. Today, we inherit and honor his legacy, cherishing the Taisei Spiritof “Active and Transparent Culture,” “Value Creation,” and “Evolution of Tradition.”
At a time when the Taisei Group faces a variety of challenges, it is imperative for us to reinforce theTaisei Spirit. We are poised to seize this milestone year, our 150th anniversary, as a springboard towards
a prosperous future that spans another 50 or even 100 years. Recognizing the inherent risks and challenges of our current situation, all our executives and employees work together to actualize the TaiseiGroup Philosophy: “To create a vibrant environment for all members of society,” while upholding our
mission to “contributing to the development of a resilient society where people can live affluent andcultural lives.”
We are grateful to all our stakeholders for the continued and invaluable cooperation and support.

TA I SE I A N N UA L R E P O R T 2 0 2 3 16

About the Taisei Group

Tales of Past and Present of the Taisei GroupThe Taisei Groupcelebrates the 150th
anniversary of its
foundation in 2023
The history of the Company began in 1873, when our founder, Kihachiro
OKURA, established Okura Gumi Shokai. Ever since, we have earnestly
embraced the mission of the construction industry and have contributed tosocietal advancement through our operations. We reflect on the Group’s
150-year journey, dedicated to building a society where people can live
affluent and cultural lives.

Pioneer Spirit Handed Down through Generations
Founder Kihachiro OKURA
In 1873, Kihachiro OKURA established the “Okura Gumi Shokai,” laying the foundation of theCompany. He led the construction of projects like the Rokumeikan. Then, in 1887, he went on
to establish the Nippon Doboku Co., Ltd., marking it as the first incorporated construction
company in Japan. With a focus on rational management, this company attracted the era’s
brightest engineers. Over the years, they achieved significant successes with projects such as
the Tokaido Line and the Lake Biwa Canal, playing a pivotal role in the modernization efforts
during the Meiji period Japan.

1873~
F ou nd ation

Construction Projects That Paved
the Way for Japan’s Modernization

Evolution of Management

1873

Kihachiro OKURA Established Okura Gumi Shokai.

1873

1883

Rokumeikan.

Our founder, Kihachiro OKURA
established the “Okura Gumi
Shokai” in Ginza. He led a broad
spectrum of endeavors
encompassing trade, commerce,building construction, and civilengineering, successfully executing
one groundbreaking project after
another.

1887

Established the Nippon Doboku Co., Ltd. (a first in the construction industry)

1890

Lake Biwa Canal Sluice Gate (Lock Gate).

1917

Established Okura Civil Engineering Co., Ltd. (a first in the construction industry)

1927

Underground Railway Tokyo (Ginza line’s original enterprise)[Ueno - Asakusa segment].

1933

Nagoya City Hall.

Lake Biwa Canal Sluice Gate

Rokumeikan

Underground Railway Tokyo[Ueno - Asakusa segment]

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

Nagoya City Hall

About the Taisei Group

1946~
Challenge
Evolution of Management

1956

Taisei Group’s Growth Strategy

Driven by the necessity to secure
funding for large-scale projects andincreased mechanization amidst the
postwar economic boom, we
pioneered the constructionindustry’s debut in public offerings.

Governance Section

Data Section

From Postwar Reconstruction to
Rapid Economic Growth
1946
1947
1949

Renamed as Taisei Corporation.
President Takeo FUJITA and directors elected by employee vote.
Implemented the employee shareholder system, becoming a non-familyowned company.
Restoration of the Attorney General’s Office (Homu-cho) Building.
Shares listed on the Tokyo over-the-counter market(a first in the construction industry).
Completion of the Ginza Taisei Building; head office relocated.
National Stadium.
Opened the Technology ResearchInstitute in Toyosu, Koto-ku.
Kansai Electric Power Co., Inc.,
Kurobegawa No.4
Hydropower Plant [5th segment].
Hotel Indonesia Kempinski.
Hotel New Otani Tokyo The Main.
Mt. Fuji Summit Radar Site.
Mt. Fuji Summit Radar Site

First Construction Company to List on
the Tokyo Over-the-Counter Market

Sustainability Section

1956
1958
1960
1961
1962
1964

Attorney General’s Office (Homu-cho)
Building

Hotel Indonesia Kempinski
National Stadium

Hotel New Otani Tokyo The Main

Kansai Electric Power
Co., Inc., Kurobegawa
No.4 Hydropower Plant[5th segment]

1973G~
row ing
Evolution of Management

1990
Establishment of Management
Philosophy, Action Guidelines,
and Symbol Marks
Introduced the group’s management
philosophy “To create a vibrantenvironment for all members ofsociety.” We were committed tobuilding a global society filled withdreams and hopes by creating value
through our business endeavors.

Technological Innovation andExecution of National Projects
1978
1979

1985
1987
1988

Joetsu Sinkansen Line Daishimizu Tunnel.
Completion of the Shinjuku Center Building.
Relocated the Head Office.
Moved the Technology Research Instituteto Totsuka-ku, Yokohama.
Minami & Kita Bisan-Seto Bridges[substructure, North segment].
Seikan Tunnel [Yoshioka section].
Cirata Hydroelectric Power Plant,
Indonesia.

Cirata Hydroelectric Power Plant,
Indonesia

Joetsu Sinkansen Line
Daishimizu Tunnel
Minami & Kita Bisan-Seto Bridges

Seikan Tunnel[substructure, North segment][Yoshioka section]

Shinjuku Center Building

TA I SE I A N N UA L R E P O R T 2 0 2 3 18

About the Taisei Group1991~
Fly i ng
Evolution of Management

1997
Established a dedicatedenvironmental department, a firstin Japan’s construction industry,enhancing the structure toaddress environmental
challenges.

Tales of Past and Present of the Taisei Group

Challenging Construction Spaces toCreate New Value
1991

Tokyo Metropolitan Government No.1 Bldg.

1992

Kobe Awaji Naruto Expressway Akashi Kaikyo Bridge 3P [substructure part 2]

1996

Tokyo International Forum Hall Complex

1997

Tokyo Bay Aqua-line [Kaze no Tou]

2000

Saitama Super Arena

2005

CHUBU Centrair International Airport
CHUBU Centrair International Airport© Courtesy of Central Japan International Airport Co., Ltd.

Tokyo Metropolitan
Government No.1
Bldg.

Kobe Awaji Naruto
Expressway Akashi
Kaikyo Bridge 3P[substructure part 2]

2010Evolving~

Tokyo International Forum Hall
ComplexTokyo Bay Aqua-line[Kaze no Tou]

Saitama Super Arena

Towards Realizing a Sustainable Society

Evolution of Management

2010Tokyo International Airport Runway D

2015

2012

JP Tower

Establishment of a Corporate
Governance System

2013

Bosphorus Tube Crossing Railway Tunnels and Station, Istanbul, Turkey

2014

Noibai International Airport 2nd Passenger Terminal, Hanoi, S.R. Vietnam

2019

The Okura Tokyo

We have put in place a system thataims for sustainable growth andenhancement of corporate value,achieved through the formulation of theFundamental Corporate Governance
Policy, among other initiatives.

2021

Japan National Stadium
2021

National Highway 325, Shin-Aso
Ohashi Bridge

Formulation of TAISEI VISION 2030
As the Ever-Evolving CDE3 (cubed)
Company, we are striving to be “apioneering corporate groupcontributing to the development of a
resilient society where people can live
affluent and cultural lives.”

Tokyo International Airport
Runway D

2022
Establishment of the Sustainability
Division (Integrated)
By unifying the organizational structure
and clarifying the strategic andbusiness advancement functions, weare accelerating the Group’s efforts insustainability management.

The Okura Tokyo

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

JP Tower
Bosphorus Tube Crossing Railway
Tunnels and Station, Istanbul

Japan National Stadium

Noibai International Airport 2nd
Passenger Terminal, Hanoi, S.R. Vietnam

National Highway 325,
Shin-Aso Ohashi Bridge

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

The Taisei Group’s Now / Present

24.9%

Construction of tunnels,
bridges, dams, railways,
expressways, etc.

t
So

.2
No

ad

ad

ne
Li

Ro

u

s
et

Ro

Kamihoshikawa Station

hin¥408.5 billion

op

Kei

Sales

Nishiya Station

New Building Construction Work for Nishi-Shinjuku
5-chome Kita Project (Shinjuku-ku, Tokyo)
Owner: Business Association of Nishi-Shinjuku
5-chome North Block Disaster Prevention
Improvement Project

Yokohama
City

Hoshikawa IC
Shinhodogaya IC

Major projects completed

Net sales composition

Major new orders received

Group Domestic Civil Engineering BusinessFukuoka Airport International Terminal Buildings,
Extension and Renovation Work (Fukuoka-shi,
Fukuoka)
Owner: Fukuoka International Airport Co., Ltd.

isanConstruction of offices,
commercial facilities,
factories, schools, hospitals, etc.

Da¥991.8 billion

Lo

60.4%

Sales

Major projects completed

Net sales composition

Major new orders received

Group Domestic Building Construction Business

Construction for Nishiya Water Puriﬁcation Plant
Redevelopment Project(Sludge Treatment Facilities in Puriﬁcation Plant)(Yokohama-shi, Kanagawa)
Owner: Yokohama Waterworks Bureau

5.0%

Sales

¥82 billion

Civil engineering andconstruction work in
Taiwan, Vietnam,
Singapore, thePhilippines and otheroverseas countries

7.0%

Sales

¥115.3 billion

Redevelopment, publicprivate partnership/
private finance initiative(PPP/PFI), property
management, andin-house development,
condominium sales
projects

2.4%

Sales

¥39.4 billion

Development facilities in
the pharmaceutical andlogistics fields andEngineering of production facilities(Tentative name) Honmachi 4-Chome Project(Osaka-shi, Osaka)
Owner: Taisei Corporation and Soai Gakuen＊Joint development project

Major projects completed

Net sales composition

Construction for Todoroki Green Space
Redevelopment, Operation, Etc. Project(Kawasaki-shi, Kanagawa)
Owner: Kawasaki Todoroki Park Co., Ltd.

Major new orders received

Group Engineering Business

Hamad International Airport Expansion Project:
Passenger Terminal Expansion Works—Central
Concourse Building and Early Works (State of Qatar)
Owner: Qatar Company for Airports Operation andManagement (MATAR)

Major projects under construction

Net sales composition

CONTRACT P103 DESIGN AND CONSTRUCTION
OF RIVIERA INTERCHANGE STATION AND
TUNNELS FOR CAR-PUNGGOL EXTENSION(Republic of Singapore)
Owner: Land Transport Authority (LTA)

Major new orders received

Group Real Estate Development Business

Major projects completed

Net sales composition

Major new orders received

Group Overseas Construction Business

Taketoyo Thermal Power Station Unit 5, Civil
Engineering & Building Construction Work
(Chita-gun, Aichi)
Owner: JERA Power TAKETOYO LLC.

Tokyo Electron Miyagi Ltd. 3rd Development Building(Taiwa-Town, Kurokawa-gun, Miyagi Prefecture)
Owner: Tokyo Electron Miyagi Ltd.

Construction of Takasago Chemical iFactory(Kakegawa-shi, Shizuoka)
Owner: Takasago Chemical Corporation

Note: Net sales from other businesses (incidental businesses, etc.) other than the above were ¥5.7 billion(0.3% of total net sales)

TA I SE I A N N UA L R E P O R T 2 0 2 3 20

About the Taisei Group

Financial and Non-Financial Highlights

Financial Highlights
Net Sales

Operating Income(Billions of Yen)

(Billions of Yen)

2,000

200

1,500

150

1,000

100

1,650.8

1,751.3

1,480.1

1,543.2

1,642.7

153.3

500

167.7
130.5

50

96.0

54.7
0

0

2018

2019

2020

2021

2022

2018

(FY)

2019

2020

Net Income Attributable to Owners of Parent

Return on Equity (ROE)(Billions of Yen)

(%)

2021

2022

(FY)

20

200

16.2

16.6

15

150

11.6
10

100

50

112.5

8.4

5.6

122.0
92.5

5

71.4

47.1
0

0

2018

2019

2020

2021

2022

2018

(FY)

2019

2020

2021

2022

(FY)

Dividend per Share / Dividend Payout Ratio

Interest-Bearing Debt / Debt-to-Equity Ratio■ Dividend per share■ Interest-bearing debt

Dividend payout ratio

Debt-to-equity ratio

(Yen)

(%)

(Billions of Yen)

(%)

200

60

250

0.5

200

0.4

53.9

150

45

37.0
150
100

50

25.4
130

29.4
22.7
130

100

130

0.3

0.3

0.3

0.3

219.0

224.3

0.3

30

130

130

217.4

15

208.1

0.2

50

0

0

2018

2019

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

2020

2021

2022

(FY)

0.2

201.7
0.1

0

0

2018

2019

2020

2021

2022

(FY)

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

Non-Financial Highlights
KPI

KPI

Number of Orders Received for Net Zero
Energy Buildings (ZEBs)

Number of Patent Applications Filed(Cases)(Cases)

12

300

9

200

6

10

3

100

283

2020

2021

2022

0

2022

2021

2020

(FY)

KPI

■ Number of female managers
400

9.9

(%)
12

10.6

9

300

■ Average number of days of childcare leave taken by males(Days)
15

100

Rate of taking childcare leave by males

100

(%)

100

100
75

10

50

6

200

236

100

277

314

5

3

0

0

2020

2021

2022

1.50

1.30

2.09

9.7

25

0

0

2020

2022

2021

(FY)

■ Total training hours for capacity development

Training hours per person(Hours)2.06(Hours)800,000

1.39

80

65.0

1.47

60

600,000

1.00
0.50

11.6

Total Training Hours for Capacity Development /Training Hours per Person

Accident frequency rate
Accident frequency rate for all industries
Accident frequency rate for construction industory

1.95

7.1

(FY)

Accident Frequency Rate /Accident Frequency Rate for All Industries /Accident Frequency Rate for Construction Industory
(%)
2.00

400,000

0.35

0.44

2020

2021

0.31
2022

6,000

1.8

4,500

1.2

3,000

291

0.6

1,500

0

0

2022

(FY)

200

318

325

2020

2021

0

2020

2021

0

2022

(FY)

(103t-CO₂)

2.4

1.84

231,706

Scope 3 Total CO2 Emissions(Taisei Group)(t-CO₂/¥ Billion)

300

233,143

20*Through FY2020, data from training programs hosted by the head office were collected.
* From FY2021 onwards, data also includes results from branch-hosted training and company-wide e-learning.

Scope 1+2 CO2 emissions per sales(Taisei Group)

2.20

566,4240(FY)

Scope 1+2 Total CO2 Emissions /Scope 1+2 CO2 Emissions per Sales (Taisei Group)(103t-CO2)

26.7

200,000

Accident frequency rate: The number of deaths and injuries due to industrial accidents per 1 million man-hours
of work represents the frequency of accidents.
*Figures for all industries and construction industory are based on one or more days off (calendar year),while those for the Company are based on four or more days off (fiscal year).

2.21

40

27.0

0

■ Scope 1+2 total CO2 emissions(FY)

Average Number of Days of Childcare Leave Taken by Males /Rate of Taking Childcare Leave by Males
Female engineers ratio

10.2

KPI
KPI

Number of Female Managers /Female Engineers Ratio

100

272

6

5

0

400

266

5,625

2020

4,632

5,284

2021

2022

(FY)

TA I SE I A N N UA L R E P O R T 2 0 2 3 22

Taisei Group’s Growth Strategy

Message from the Chief Financial Officer

To Promote Financial Strategies in
Response to Medium- to Long-Term
External Environment andStructural Changes, and to
Maintain and Improve a Strong
Financial Foundation
Masahiko OKADA
Representative Director,
Senior Managing Executive Officer;
Chief of Business Administration Division;
In Charge of New Business Planning▍ Looking Back on FY2022
I assumed the role of Chief of Business Administration in
April 2023.
As Chief Financial Officer, I will consistently strive tosupport the initiatives of the Taisei Group in its contribution
to the development of a resilient society where people canlive affluent and cultural lives.
To all our stakeholders, we sincerely look forward to yourcontinued support and guidance.
Although the Japanese economy has generally maintained a moderate recovery trend thanks to the progress inthe normalization of socioeconomic activities, uncertainty is
growing induced by the reinforcement of monetary tightening in developed countries, associated with the worldwide inflation and concerns of slowdowns in overseas
economies triggered by financial instability originated fromthe United States.
In the domestic construction market, private construction investment has been restored and public investment is
expected to remain robust. The business environment
surrounding our Group, however, is extremely challenging,as the costs of construction materials across a wide rangeof products remained high, severely affecting construction
profits and losses in consequence.

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

Under these circumstances, the Group’s net sales of
FY2022 (the fiscal year ended March 31, 2023), the second
year of our Medium-Term Business Plan (2021-2023),
surpassed the results from the previous fiscal year. Thisoutcome is primarily attributed to an increase in thebalance of ongoing construction projects at the beginningof the fiscal year and a boost in revenue in the domestic
building construction business, where projects progressed
as planned.
However, with regard to profit and loss, the operating
profit and other profits at each stage turned out to belower than the results from the previous year. This downturn is mainly due to the cost increase associated with theworks required for correcting our failure to satisfy steel
erection accuracy requirements for the (Tentative Name)
Sapporo Kita 1 Nishi 5 Project currently undertaken by our
Sapporo Branch, and the price escalation of construction
materials adversely affecting the profit margins in theconstruction business.
Although the ROE came out to be 5.6%, dropped by
2.8% from that of the previous year with decline in earnings, our financial position is in good standing. We haveupheld our status of being “substantively debt-free,” with aAboutAbout thethe Taisei
Taisei GroupGroup

Sustainability Section

Taisei Group’s Growth Strategy

robust equity ratio of 41.1% (a 3.3% decrease from theprior fiscal year).
Regarding operating cash flow, the decline in income
before income taxes and an uptick in advance payments forthe construction projects accompanied by business expansion, have led this year's figures fell short of last year’s.
Nevertheless, even amidst these challenges, the robust
financial foundation we have established over the years
continues to serve us well. In addition to implementing
investments outlined in the Medium-Term Business Plan,
we have acquired ¥50 billion of treasury stocks, the scaleof which is larger than ever before.
Moving forward, while ensuring ample liquidity for sustained business operations, our focus remains on investingin areas that enhance our corporate value and providing
continuous returns to our shareholders.
Our primary sources for funding investments andGovernance Section

Data Section

shareholder returns are operating cash flow and available
cash reserves. However, for significant undertakings suchas mergers and acquisitions, external financing fromfinancial and capital markets may also be considered as a
viable option.
Regarding the current Medium-Term Business Plan
(2021-2023), we, with our great regret, anticipate that it will
fall short of our numerical targets for the concluding year,
FY2023, owing to delays in organizing our production
systems and external environmental changes.
In FY2023, we will undertake a comprehensive analysis on our failure to accomplish current Medium-TermBusiness Plan. Based on this analysis, we will strategize
for the forthcoming Medium-Term Business Plan initiatedfrom FY2024 considering both capital costs and capitalprofitability in order to respond to the expectations of
our stakeholders.

Transitions of Net Sales / Operating Income and Operating Cash Flow
■ Consolidated net
sales (Billions of yen)

1,416.4

1,533.4 1,573.2 1,545.8 1,487.2

Consolidated operating
income (Billions of yen)
1,585.4

1,650.8

1,480.1

181.8
117.4
35.6

53.7

70.4

140.8

1,751.3

153.3

1,543.2■ Operating cash flow (Billions of yen)

1,642.7
218.1 207.0

167.7

138.7

130.5
96.0

54.7

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

95.3

73.0

77.4

67.4

80.5

30.1

24.0

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

-71.0

▍ Investment Plan and Progress in the Medium-Term Business Plan
The Group has positioned the Medium-Term Business
Plan (2021-2023) as the initial phase towards the realization of the TAISEI VISION 2030. Within this framework,
we have developed an investment plan, based on thepriority issues to be addressed intensively over the next
three years.
As per our original projections, the accumulated
investment in these three years is expected to reach¥250 billion, and as of the end of FY2022, we haveachieved approximately 50% of this numerical target.
Primary areas of investment include: investments indevelopment projects, predominantly focused on theacquisition of office buildings and other real estate bothin Japan and overseas; investments aimed to adapt to
new business sectors, which encompass the renewal
and transformation of the Group-owned facilities to Zero
Energy Building (ZEB) standards, the establishment of agroup next-generation technology research institutes,
and the development of construction technologies
related to offshore wind power generation; andinvestments that further enhance productivity, such as
the advancement of construction automation and laborsaving technologies and the increased utilization of
Building Information Modeling (BIM).
Pertaining to environment-related investments contained in each investment category, we aim to channel¥63 billion in the three years (an uptick of ¥3 billion frominitial plans). By the end of FY2022, we had allocatedaround ¥38 billion. Beyond technical development investment in environment field, we are also shifting resources
to procuring renewable energy sources to fulfill our power
consumption needs.
Along with overseeing the progress of our investments,
we consistently monitor the return status for each project
within business-related investments, as well as anticipate
outcomes from both technical development and investment in information. In case any issues arise, we
promptly implement necessary measures.

TA I SE I A N N UA L R E P O R T 2 0 2 3 24

Taisei Group’s Growth Strategy



Message from the Chief Financial Officer

Investment Plan

(Billions of Yen)FY2021 Results

Field

FY2022 Results

FY2023Three-Year Implementation Plan
Implementation Plan

Medium-Term Biz
Plan Target

1. Investment in technical development

20.4

25.6

26.0

72.0

60.0

2. Investment in information

15.1

18.2

25.7

59.0

60.0

3. Capital and personnel-related investment

4.7

4.7

5.6

15.0

15.0

4. Business-related investments

23.2

16.8

70.0

110.0

125.0

(1.8)

(2.5)

(1.7)

(6.0)

(10.0)

61.6

62.8

125.6

250.0

250.0

Technical development contributing to industrial sectors expected to grow from the virtuous
circle of the economy and environment

12.3

22.3

19.4

54.0

42.0

Investments in renewable energy business

0.9

2.4

5.8

9.0

18.0

Total investments

13.2

24.7

25.2

63.0

60.0

Overlap of investment in technical development
and investment in information

Total investments
Of the above, environment-related investments:

Investment Results and Plans
FY2022 Investment in technicaldevelopment:
Investment in information:
Business-related investment:

FY2023 Investment in technical		development:
Investment in information:
Business-related investment:

Green Renewal ZEB (including T-Green Multi Solar) of Yokohama
Branch, Kansai Branch, TAISEI U-LEC Co., LTD.
Development of a data integration platform.
Acquisition of trust beneficiary rights in a large office building incentral Tokyo [(tentative name) Mita Building, etc.]

FY2021¥61.6 billion
FY2023¥125.6 billion

25%

50%

FY2022¥62.8 billion

Establishment of the Group new next-generation technology
research institute.
Development and implementation of a procurement management system.
Investment in large office buildings in central Tokyo and continuous
investment in overseas projects.

Progress
rate: 50%25%

▍ Shareholder Return Policy
Our guiding principle emphasizes long-term stable dividends. While enriching retained earnings to support
anticipated business expansion, we remain committed to
distributing profits to our shareholders in line with ouroperational results.
For the current fiscal year, considering both our recent
performance and anticipated business conditions, wehave set the annual dividend at ¥130 per share, maintaining consistency with the previous fiscal year’s payout(consolidated dividend payout ratio: 53.9%).
From May 15, 2023, through March 31, 2024, we haveexecuted a share buyback program, repurchasing up to 6

million shares, equivalent to ¥20 billion or 3.19% of thetotal issued shares.
Since FY2016, we have consistently undertaken theacquisition and cancellation of shares amounting toroughly ¥200 billion annually, while demonstrating ourcommitment to enhancing shareholder value and optimizing capital efficiency.
From now onward, we pledge to uphold our shareholders’ expectations by not only elevating our operational
performance but also by boosting our dividend yields andoverall share value.

Acquisition Amount of Treasury Share*2

Dividend per Share*1(Yen)

Dividend per share

130

130

(Billions of yen)

Total return ratio (%)

50.0
125

130

130

130

130

106.7
36.0

53.9 53.7

100
37.0
25.5

22.3

25.4

28.0

25.0
20.0

29.4
22.7
Forecast

2016 2017 2018 2019 2020 2021 2022 2023

50.3

52.9

95.4

50.5

50.1

20.0
38.9

20.0
50.6

20.0
Forecast

2016 2017 2018 2019 2020 2021 2022 2023

*1 The dividends per share for FY2016 and FY2017 have been adjusted to reflect the consolidation of shares conducted on October 1, 2017, where five shares of theCompany’s stock were consolidated into one share.
*2 The listed total return ratio corresponds to the profit of the previous fiscal year.

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

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section▍ Policy on Cross-Shareholdings
We maintain cross-shareholdings to establish andstrengthen enduring and stable relationships of mutual
cooperation with important business partners and improve
our competitiveness and profitability.
For all listed securities and those unlisted which we
consider continuous assessment is required, the Board
meticulously evaluates whether or not to keep on holding
each individual stock through comparison of the acquisition cost against the business return, using the capital cost
as a yardstick.
In addition to quantitative evaluation, qualitative factors
such as anticipated future construction orders, are also
considered when making decisions.

As a result, if any shares are determined not to beconsistent with the objectives to have cross-shareholding
because it is not economically reasonable and promising in
the medium to long run to maintain them, we have a policy
to sell them in a timely and appropriate manner.
In FY2022, we divested 11 listed securities amounting to¥3.6 billion and 9 unlisted securities in total of ¥100 million(including partial sales).
Looking ahead, with the aim to specify our divestment
targets, we intend to methodically reduce our cross-shareholdings: aiming for them to be less than 30% of ourconsolidated net assets by the end of FY2026 and under
20% by the end of FY2030.

▍ For Future Growth
The Group has consistently advanced financial strategies, primarily in the aim to improve and strengthen thefinancial foundation that suffered significantly from thecollapse of the bubble economy and the collapse of
Lehman Brothers.
As an outcome of these efforts, we have maintained asubstantively debt-free status since FY2013, and ourequity ratio has been around 40% since FY2018. We
believe that this marks a certain degree of attainment inmilestone, with indication of financial robustness.
The current enlargement tendency in project size is inducing
extreme cash flow fluctuation trend, which can typically beseen in the construction business, has been intensified.
In addition, the current business environment is facing
increasing uncertainties, marked by the manifestation of

global inflation effects, the situation in Ukraine, and a
deceleration in overseas economies due to the monetary
tightening in developed countries.
Nevertheless, amidst these challenges, we remaincommitted to our vision with a strong financial foundation
as the backdrop. In the aim to embody “The ever-evolving
CDE3 (Cubed) Company,” stipulated in TAISEI VISION 2030
as an ideal figure to be achieved through the Group’s
medium- to long-term aspiration, we will appropriately
allocate resources generated from our core construction
business to ensure sustainable, steady corporate management, increase our corporate value in the medium-to
long-term, and further enhance both our financial foundation and capital efficiency.

Equity Ratio (Full-Year)
(%)

44.9

28.2

Balance Sheets

22.1

31.2

32.3

34.9

39.0

44.4

39.7

41.1

23.9

(Billions of Yen)Cash
and time
deposits:¥499.1

Interest-bearing
debt: ¥224.3
Otherliabilities:¥859.1

Other
assets:¥1,457.1

Cashand time
deposits:¥416.0
Other
assets:¥1,600.7

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Interest-bearing
debt: ¥201.7
Otherliabilities:¥981.1

ROE (Full-Year)
(%)

20.5
Equity:¥868.9(Retained
earnings:¥591.4Equity:¥829.1(Retained
earnings:¥562.8Non-controlling
Total assets interests: ¥3.9

Non-controlling
Total assets interests: ¥4.8

15.3

8.9
¥1,956.2 billion
As of March 31, 2022

¥2,016.7 billion
As of March 31, 2023

6.3

16.6
16.7

16.2

11.6
8.4

8.8

5.6

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

TA I SE I A N N UA L R E P O R T 2 0 2 3 26

Taisei Group’s Growth Strategy

Medium- to Long-Term Recognition of External Environment

Medium- to Long-Term Recognition of External Environment▎ Current External Environment Insights
The Taisei Group has identified the challenges highlighted by the COVID-19 crisis as “Three Xs” (where ‘X’ stands
for transformation). We recognize that the intertwining of these challenges will lead to a significant wave of change.
For each of these transformations, we have set up specialized departments to undertake cross-departmental initiatives and investments.

Increasing Pressure for Construction Industry Restructuring

IX
Industry
Transformation

SX
Sustainability
Transformation

DX
Digital Transformation

The industry lacks vitality due to a fierce competitive environment, because
the construction market is expected to shrink over the medium-to-long-term.
■ The issue of securing labor will become apparent in the construction industry,as Japan’s population ages and the birthrate falls over the medium-to-long-term.
■ There is business scope for expansion of both the Group’s growth sectors andthe sectors where we lag behind competitors, as the market share among thefive major construction companies including the Company is relatively small
compared with other industries.
■

Moving to solve Environmental and Social Issues throughOur BusinessNew growth industries and sectors will be established through a “virtuous cycle forthe economy and environment,” following the Japanese government’s declaration ofcarbon neutrality by 2050.
■ Revolutionary technical development through open innovation will be required toachieve this goal.
■ Transformations will be required for several types of employment tailored to theneeds of a new generation such as diversity.
■

Towards an Era Where Digital Transformation Determines
Competitiveness
Digital technologies are evolving in the production process, including BIM/CIM
and unmanned construction.
■ For the Company and in the construction industry as a whole, digital technology
and the utilization of data are still at a developing stage.
■ The application of these technologies to the whole construction business would
offer opportunities for drastically increasing the productivity of the production
process, speeding up management decision-making, and creating new services.
■

Share of Orders Received by Major Construction
Companies in Construction Investment
Construction investment(Trillion of yen)

Share of orders for the top five
construction companies (%)

65.3 66.6 66.9
61.3 61.8 62.3
58.7
56.6
48.2

47.4

11.5

12.6

10.6 10.8
10.0 10.5

9.3

9.2

9.2

9.8

Aging of Construction Industry Workers
All industries (29 years
old or younger)

All industries (55 years old or older)

Construction industry
workers (29 years oldor younger)

Construction industry
workers (55 years old
or older) (%)

(%)

35.9
31.5
16.4
11.7

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
*Sources: “Current Survey of Orders Received for Construction” by The Ministry of Land,
Infrastructure, Transport and Tourism, and “Survey of Order Performance” by theJapan Federation of Construction Contractors.

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

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
*Source: “Labour Force Survey” by The Ministry of Internal Affairs and Communications

Construction, Development, Engineering, Energy, Environment
About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

TAISEI VISION 2030
Based on the “Three Xs,” we have formulated the TAISEI VISION 2030, our vision for the medium- to long-term based on
the Group’s philosophy and Taisei Spirit, and all officers and employees are working as one.

The Ever-Evolving The CDE3

(cubed)Company

A pioneering corporate group contributing to the development ofa resilient society where people can live affluent and cultural lives
Achieving safety and security
Optimal utilization of “Human Capital,” “Technology” and “Intelligence”

Basic stance
Rough indicators ofGroup net sales

Group net income

ROE

numerical performance

About ¥2.5 trillion

About ¥150.0 billion

About 10%

Customers, suppliers, andsociety
Returns to stakeholders

Proactive
response to
major waves oftransformations
as a pioneer

Shareholders

Dividend payout ratio 25-30%

Employees

To promote further diversity and inclusion, establishing a
comfortable working environment, personnel systems, andsalary plans that enable employees to leverage their diverse
range of skills to the maximum possible extent

IX

Increasing pressure
for constructionindustry restructuring

SX

Moving to solve
environmental andsocial issues
through ourbusinessDX

Returns through CDE3

Towards an era where
digital transformation
determines
competitiveness● To expand our business scope through M&A and other means● To target the front-runner status in the environmental sector, accelerating our

initiatives towards carbon neutrality● To promote further diversity and inclusion, establishing a comfortable working

environment, personnel systems, and salary plans that enable employees toleverage their diverse range of skills to the maximum possible extent● To establish our competitive superiority by enhancing productivity, speeding up

decision-making, and creating new services

Group net sales

Group net sales¥2.5 trillion

2 trillion

Group net income¥1,480.1 billion

Group net income

Group net income¥100.0 billion¥150.0 billion¥
Group net sales¥92.5 billion

2020

2023

2030

Previous Medium-TermBusiness Plan (2018-2020)

Medium-Term Business Plan
(2021-2023)

TAISEI VISION 2030

TA I SE I A N N UA L R E P O R T 2 0 2 3 28

Taisei Group’s Growth Strategy

Medium-Term Business Plan (2021–2023)

Medium-Term Business Plan (2021–2023)
Medium-Term Business Plan (2021–2023) | Key Issues▎ Key Issues⃝	Key issues to be focused on over the next three years are identified in order to achieve TAISEI VISION 2030,

considering the current business environment.
⃝	In addition to the initiatives targeting our existing business, the initiatives expanding our business scope throughM&A will be implemented

Group Domestic Building
Construction BusinessC
Construction

Group Domestic Civil

グループ国内土木事業
Engineering BusinessGroup Overseas Construction
Business

Business-related

To establish our superiority in a fierce competitive environmentP.35-

To develop the systems to establish solid business foundations

P.37-

To build the systems to ensure our profits for establishing the stable

P.39-

business foundations

D

Development

E

EngineeringGroup Real Estate
Development BusinessGroup Engineering BusinessTo build the stable income foundations in the Group development
business by optimizing the portfolio of our real estate and pursuinginvestment efficiency

P.41-

To leverage our strengths to expand the scope of our business

P.43-

To target the front-runner status in the environmental sector,
accelerating our initiatives towards carbon neutrality
Scope 1 and 2

Energy andEnvironment

Sustainability-relatedFoundation
Development

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

Scope 3

To achieve our target of “virtually zero” CO2 emissions from business activities(carbon neutrality)

P.65-

To enhance the performance of our Zero Energy Buildings (ZEBs),and expand green procurement

To build the foundation based on sustainability
SafetyTo achieve zero fatal accidents and zero serious accidents

Technical development

To promote the technical development to solve environmental and social issues
through open innovationDX

To innovate the production systems, and reform the workstyles through digitaltransformation (DX)Workstyle reform

To promote the measures that emphasize an attractive working environment
as well as diversity and inclusion

Corporate governanceTo maximize synergies by rebuilding the Group governance system

P.45P.49P.77-

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

Numerical Targets and Progress of Medium-Term Business Plan (2021 -2023)▎ Numerical targets for FY2023
ROE

About

10%

Group net sales: ¥2 trillion

Dividend
payout
ratio

About

Net interestMaintaining state ofbearing
substantively
debt
debt-free management

25%

Group operating income: ¥140.0 billion

Group net income: ¥100.0 billion▎ FY2022 results
Dividend
payout
ratio

5.6 %

ROE

Group net sales: ¥1.64 trillion

Net interestbearing
debt*

53.9%

Group operating income: ¥54.7 billion

P.23 Taisei Group‘s Growth Strategy-¥214.3 billion

Group net income: ¥47.1 billion* Net interest-bearing debt = Interest-bearing debt - Cashand deposits (End of FY2022: -¥214.3 billion = ¥201.7
billion - ¥416.0 billion)

Message from the Chief Financial Officer

While it was anticipated that construction investments might decrease in the medium-to-long-term due to the spread of
COVID-19, the decline has not been as drastic. The industry is showing signs of recovery, surpassing pre-pandemic
levels, thanks to strong public investments and buoyant private capital expenditures, especially in the manufacturingsector, looking ahead to the post-COVID era.
Nevertheless, the considerable surge in construction material prices across a broad spectrum has had a profound
impact on the profitability of projects. This has rendered the operational environment for the Group exceptionallychallenging.
Amidst these circumstances, we are undertaking the Medium-Term Business Plan (2021-2023), set to conclude in
FY2023. However, due to delays in establishing a production structure aimed at business expansion, an inability totransfer the increased costs of construction materials, and the acceptance of several large-scale construction projects at
reduced profit margins amidst stiff competition, we anticipate our performance for FY2023 to fall short of the numericaltargets set for the final year of the Medium-Term Business Plan.
In FY2023, we will analyze the causes of the shortfall in the achievement of the Medium-Term Business Plan and formulate the next Medium-Term Business Plan starting in FY2024.

Numerical Targets for the Final Year (FY2023) of the Medium-Term Business Plan (2021-2023)(Consolidated)

Medium-Term Business Plan (2021-2023) Final Year (FY2023) (Consolidated)

Group net sales

Numerical target

Performance forecast

Variance in amount

2,000 billion

1,760 billion-240 billion

Group operating income

140 billion

64 billion-76 billion

Group net income attributableto owners of parent

100 billion

45 billion-55 billion

ROE

About 10%

5.4 %

―

About 25%

53.7 %―

Substantively debt-free――

Dividend payout ratio
Net interest-bearing debt

We will implement the following measures for this fiscal year and for the upcoming Medium-Term Business Plan:
1 Securing appropriate business volume and rebuilding the production systems
2 Re-enforcing the “profit-oriented approach”
3 Continuation of company-wide negotiations for price pass-throughTA I SE I A N N UA L R E P O R T 2 0 2 3 30

Taisei Group’s Growth Strategy

Materiality (Issues to Be Dealt with)

Materiality (Issues to Be Dealt with)▎ Taisei Group’s Materiality
In alignment with TAISEI VISION 2030 and our Medium-Term Business Plan for 2021–2023, which outline our
medium to long-term objectives, Taisei Group has identified its materiality. We take into consideration theimpact on our management while recognizing the importance of societal concerns, stakeholder interests, andchallenges facing society. These material issues have been selected based on their alignment with the Groupphilosophy and various policies.
As we prepare for the next Medium-Term Business Plan, set to commence in FY2024, we are currently
reviewing the Group’s materiality.

▎ Process of Identifying Materiality
When pinpointing key issues, we considered a range of sustainability challenges, integrating diverse perspectives from both within and outside the Company. Discussions and deliberations took place at the managementlevel. Within the context of the Medium-Term Business Plan (2021–2023), we have established focused initiatives linked to the identified materialities and have been advancing our sustainability initiatives. The progress
of KPIs associated with each materiality is monitored and discussed by the Sustainability Committee,
enhancing the effectiveness of initiatives.

Extracting Sustainability Issues
Step 1

Key sustainability issues are identified from the SDGs, GRI, United Nations Global
Compact, ISO 26000, SASB, ESG external evaluation criteria, and the Group’s
medium- to long-term management strategies.

Step 2

Conducting Internal and External Interviews
Based on feedback from internal and external interviews, the Corporate Planning
Office and the Sustainability Division collaboratively draft a plan.

Internal Discussion
Using the draft as a foundation, alongside formulating a medium- to long-term

Step 3management strategy and a Medium-Term Business Plan, deliberations are held at
the Management Committee and the CSR Committee (now known as theSustainability Committee). Decisions are then finalized by the Board.

Rolling Out InternallyWithin the Medium-Term Business Plan, priority measures associated with materiality

Step 4are established, and KPIs and action plans are designed.
The Sustainability Management Promotion Division periodically summarizes the
progress of the KPIs and presents their findings to the Sustainability Committee.
Continuous improvement is pursued through the rotation of the PDCA cycle.

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

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section▎ Materiality and Direction of Initiatives

Materiality

E

Realization of a sustainable
and environmentallyfriendly society

Understanding fully the environmental implications of our businessactivities, as well as the influence the environment has on them, we aim toachieve the three visions outlined in the TAISEI Green Target 2050: the“Decarbonized Society,” the “Recycling-Oriented Society,” and the “Nature
Co-Existing Society.” Furthermore, we are committed to addressing two
specific issues: “Forest Resources/Forest Environment” and “Water
Resources/Water Environment.”②

Ensuring quality andimproving technology

We advance research and development of cutting-edge technologies that
anticipate societal needs. Through enhancing our quality management
systems, we are dedicated to consistently and efficiently delivering highquality construction products and associated services to both our clientsand society at large.

③

Technical development forrealizing a sustainable
society

We consistently develop technologies that address societal challenges froma sustainability standpoint, generate new businesses and markets throughinnovation, and bolster quality, productivity, and safety. Through these
efforts, we contribute to the realization of a sustainable society.

④

Promotion of supply chain
management

Viewing all our business partners as crucial, we promote efforts throughout the
supply chain to tackle environmental and societal issues. By doing so, we
aspire to foster mutual growth with our business partners, contribute positively
to society, and establish our reputation as a trustworthy corporate group.

⑤

Thorough management ofoccupational health andsafetyGuided by a “Safety First” principle, we leverage the managerial expertise andsafety-focused enthusiasm nurtured within the Group and among our business
partners. Our goal is to enhance and maintain a safe working environment,
striving to be a corporate group that earns societal trust and empathy.

⑥

Cultivation of technicalstaff and securing humanresources

We view human resources as our paramount management asset. Our goal
is to harness the potential and foster the growth of professionals acrossvarious fields by recruiting a diverse workforce and nurturing and positioning
them strategically. Additionally, by enhancing the working conditions andbenefits for our business partners, and amplifying our support, we aim tocultivate and retain skilled construction workers vital for the future of theconstruction industry.

⑦

Realization of an attractive
working environment thatis good to work in

In our pursuit of diversity management, we are committed to fostering awork environment where diverse talents can fully unleash their potential. By
respecting various work styles and enhancing productivity, we strive torealize true work-life harmony.

⑧

Thorough compliance andrestructuring of the Group
governance system

We uphold our social responsibilities by adhering to laws and regulations
and conducting ourselves with social integrity. In our pursuit of realizing the
TAISEI VISION 2030, we are establishing a unified group approach, aiming
to maximize synergies, elevate the corporate value of the entire Group, andachieve sustainable growth.

①

S

G

Direction of Initiatives

TA I SE I A N N UA L R E P O R T 2 0 2 3 32

Taisei Group’s Growth Strategy

Materiality (Issues to Be Dealt with)▎ Materiality and Medium-Term Business Plan Initiatives
Risks and opportunities related to each materiality are described separately in the Sustainability Section | Materiality(P.65-81). We will prevent and reduce risks and create business opportunities through the following key measures in
our Medium-Term Business Plan.

Materiality (Related ISO 26000)

E① Realization of a sustainable
and environmentally friendly
society (Environment)

Relationship
withSDGs, etc.

Key measures under the Medium-Term Business Plan

⃝To achieve our target of “virtually zero” CO2 emissions from businessactivities (carbon neutrality) (Scope 1 + 2)

Environment⃝To enhance the performance of our Zero Energy Buildings (ZEBs), andexpand green procurement (Scope 3)

Environment⃝To establish a system to manage the Group’s environmental targets

Environment⃝To conduct environmental patrols and education to eliminate environmental accidents

SafetyEnergyClimate change② Ensuring quality and improving
technology (Consumer issues)③Technical development forrealizing a sustainable society(Environment / Consumer issues /Community)④ Promotion of supply chain
management (Fair operating
practices / Human rights)⃝Technical development where the Company has a competitive edge
⃝To establish Digital Twin based on coordination with the BIM/CIM
design and construction cloud⃝To establish the production process in a visualized and efficient way
through state-of-the-art digital technology⃝To develop and commercialize next-generation high-performance
ZEBs and develop and use the carbon-recycle concrete⃝Technical development contributing to industrial sectors expected togrow, through a virtuous cycle for the economy and environment⃝To establish a business in the operations and maintenance (O&M) area
⃝To shift to a style of data-based sales by making proposals at the
optimal timing⃝To promote supply chain management aimed at solving environmental andsocial issues, etc.

⑤ Thorough management ofoccupational health and safety(Labor practices)⑥ Cultivation of technical staff
and securing human resources(Human rights / Labor practices /Consumer issues)⑦ Realization of an attractive
working environment that isgood to work in (Human rights /Labor practices)⃝To enhance patrols by the Company and officers of the Safety, Health,and Environment Cooperation Association, etc., ensuring thorougheducation in order to prevent designated disasters, etc.
⃝To promote the health and safety and environmental management
through the utilization of digital technologies, etc.
⃝To promote roadmap to FY2024 for “addressing long working hours”⃝To enhance the support for all member companies of SoyukaiG

restructuring of the Group
governance system (Organiza-tion governance / Fair operating
practices)⃝To establish the workstyles and the working environments that enable adiverse range of human resources to fully perform their abilities

Technical Development

Infrastructure

Technical Development

DX
DX

Sustainable city

SafetyDX
SafetySafetyWork Style Reform

SafetyWork Style Reform•To expand mid-career recruitment, studying and implementing the plans fortheir compensation and other benefits•To study and implement the plans to establish the workstyles where female
employees, elderly employees, and others can fully perform their abilities⃝To clarify the functions of the Group Head Office⃝To establish effective systems to manage Group companies, etc.
⃝To build an integrated platform* For Soyukai and the Safety, Health, and Environment Cooperation Association, see the glossary on page 118.

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

DX

•To enhance and maintain the training for Soyukai members at the Konosu
Training Center•To support the registration and use of the Construction Career Up System(CCUS)⃝To secure digital human resources, and establish a rotation system⑧ Thorough compliance andDX•To promote the procurement complying with the “Sustainable Procurement
Guidelines” across the supply chain as a whole•To coordinate with suppliers in a way complying with the “Declaration ofPartnership Building”⃝To improve the systems for providing procurement-related information

S

Technical Development

Employment
Compliance with
the Revised
Labor Standards
Act (FY2024)
Achievement of
the targets of
the General
Employers
ActionPlan based on
the Act on
Promotion of
Women’sParticipation andAdvancementin the Workplace(FY2025)

DX

Governance
GovernanceDX

7 8
9 11 13

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section▎ Materiality and KPIs
For KPIs, the Board regularly monitors the progress and achievement of KPIs, following prior deliberations by the
Sustainability Committee, and takes measures as necessary. The progress and achievements of KPIs are also usedin dialogue with shareholders and investors.
Materiality

KPI
FY2022

Indicators

FY2023Page

TargetResults

TargetReduction rate of CO2 emissions per sales*1—-13.8%-15%

Reduction rate of total CO2 emissions*1—-20.9%-6%-38%-47.5%-41%-51%-60.5%-46%-42%-49.8%-43%

Customer satisfaction (Civil Engineering)*3

100%

95.8%

100%

Customer satisfaction (Building Construction)*3

100%

85.9%

100%

Productivity (Net sales/number of employees)¥77 million¥67 million¥83 million

Number of patent applications filed*3

280 cases

283 cases

280 cases

Number of orders received for net Zero Energy Buildings(ZEBs)*3

5 projects/year

10 projects/yea

8 projects/
year

100%

91.3%

100%

P.78

0 cases

0 cases

0 cases

P.79

100%

100%

100%

Scope 1+2

E

①

2,3

Reduction rate of CO2 emissions per sales*At
construction
stage:
2,3
Reduction rate of total CO2 emissions*

At building
Reduction rate of design-build estimated CO2
operation stage: emissions*2,3

②

③

S

④

Supplier’s conformity rates with the Taisei Group
Sustainable Procurement Standards⑤

Number of fatal accidents
Worksite registration rate of Construction Career Up
System (CCUS)*3
Health management overtime hours*3⑥

720 hours/year(No exceedance)

720 hours/year(18.2% employees
exceed)

52.2%

100%

Worksite implementation rate of a five-day work week
(closed eight days in four weeks) (Building Construction)*3

100%

27.8%

100%

310 persons

314 persons

330 persons

100%

100%

100%

Number of major information security accidents

0 cases

0 cases

0 cases

Attendance rate at compliance training including
anti-corruption*3

100%

⑦

G

⑧

P.77

P.80

100%

Rate of taking childcare leave by males*3

P.75

720 hours/year(No exceedance)

Worksite implementation rate of a five-day work week
(closed eight days in four weeks) (Civil Engineering)*3

Number of female managers*3

P.65

P.51-54,
P.81

P.81,
100%

100%

P.93-98*1 Compared to FY2019 (a base year for emissions targets)*2 Compared to FY1990 (a base year for emissions targets)*3 Non-consolidated

TA I SE I A N N UA L R E P O R T 2 0 2 3 34

Taisei Group’s Growth Strategy

Business-RelatedGroup Domestic

Building Construction Business
Member of the Board
Managing Executive Officer
Chief of Architecture & Engineering
Division (Integrated);
Chief of Building Construction Division

Mayuki YAMAURA

Major Group Companies in Charge:
TAISEI U-LEC Co., LTD.
TAISEI SETSUBI CO., LTD.
TAISEI HOUSING CORPORATION

Decarbonization Provides Significant Business Opportunities
The increasing demand for Zero Energy Buildings (ZEBs) in line with society’s trend towards decarbonization provides excellent opportunities for our Group’s building construction business to grow further. Especially, we foresee a significant market in retrofitting existingbuildings into ZEBs in the coming years. In addition, there is a growing demand for real estate development projects and for theconstruction of buildings like data centers and semiconductor-related facilities, which are pivotal in the digitization of society. We
perceive these trends as significant business opportunities.
On the other side, we acknowledge the severe shortage of skilled construction workers as a considerable risk, due to the declining
birthrate and aging society, and the subsequent reduction in the working-age population as a considerable risk. Furthermore, as the legal
ceiling on overtime hours will be enforced in the construction industry starting in 2024, it is crucial to improve productivity and decrease theworkload at worksites. This can be achieved through the introduction and use of mechanized construction technologies such as welding
robots, precast concrete methods, and digital solutions and technologies. It is imperative to systematically achieve and maintain optimum
productivity for both our employees and on-site workers.
To Enhance Our Competitive Advantage by Technological and Comprehensive Capabilities
One of the featuring competitiveness in the Company’s building construction business is our state-of-the-art ZEB related technologies. In
addition to introducing ZEB technologies onto new buildings, as we renovated three existing buildings owned by the Group and converted
them into ZEBs last year, we have established a system to provide the additional value through converting existing buildings into ZEBs,
while offering our clients an opportunity to observe the actual ZEBs. We will pursue our competitive advantage in the urban redevelopment
projects and large-scale logistics facilities with our comprehensive capabilities, where we offer business proposals based on our in-house
expertise and know-how in collaboration with various internal specialized sections that exceed the clients’ expectations and imaginations.
To Ensure Clients’ Trust through Utilizing Human CapitalFirst and foremost, we must make our best effort to restore the clients’ trust that has once been lost due to the recent incidents of the
failure to satisfy steel erection accuracy requirements and the delay in our construction project. Without the trust of our clients, theGroup’s businesses would not last. The most essential management resource for restoring clients’ trust is our “human capital”. It is our
employees in charge of the construction works at site, who conduct the careful work, provide value that exceeds the clients’ expectations, and eventually gain the clients’ trust. We will proceed for restructuring our production system trustworthy for our clients, by
maintaining a working environment in which our employees can best perform with no constraint, including appropriate personnel
allocation in consideration of work load and strengthening systematic functions to ensure implementation of our quality control process.
It is also an urgent issue to secure proper profits. As a result of the prolonged COVID-19 pandemic and the increase in energy andconstruction material prices due to the emergence of geopolitical risks, which we could not foresee when the current Medium-Term Business
Plan was formulated, we continue to face severe business circumstances where the clients’ budget frequently fall short compared to ourconstruction costs. As our key measures of “expansion of building renovation business through organizational restructuring” and “improvement of productivity through the use of digital technology and the consolidation of operations” have come near the accomplishment, we willfurther accelerate the implementation of the said measures and enhance the business foundation to secure appropriate profits.

Segment Overview

Medium-Term Business Plan (2021–2023) Key Initiatives

Net sales reached ¥991.8 billion, an increase of 10.3% from theprevious period, due to the growth of both the Company and its
consolidated subsidiaries.

⃝To establish a framework to enhance the competitiveness of
new construction orders.

Group Net Sales(Billions of Yen)

(FY)

2018

899.4

2019

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

2020

2021

1,049.4
991.8

2022

2023

(Target)⃝To expand the renewal sector through organizational restructuring.
⃝To boost productivity by leveraging digital technologies andconsolidating operations.
⃝To broaden business domains by utilizing M&As.

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

TOPICS

Complete image provided by:
The Ministry of Land, Infrastructure,
Transport and Tourism Osaka Civil
Aviation Bureau/Azusa Design Co., Ltd.

Reusable solar panel installed on
roof surface of temporary officeCompleted Construction of New Buildings and Other
Facilities Related to the New Building Construction
Work for Nishi-Shinjuku 5-Chome Kita ProjectStart of Efforts to Achieve Net-Zero CO2 Emissions
in Construction of the New Fukuoka Airport Office
Building and New Control Tower

This redevelopment project began in 2006, with the establishment of the NishiShinjuku 5-Chome Kita Area Town Development Study Group by the local
volunteers. The old city blocks with high fire risk were redeveloped to be incombustible, and secured vacant land by building skyscrapers. We have created awater park that takes advantage of the scenery of the Kanda River, as well as awell-watered and green excursion space. The Company has demonstrated its
comprehensive capabilities, such as with the ingenuity of our worksites, backup
work of the building construction division, and support work of the civilengineering division in seawall construction. We have overcome the shortage of
personnel, materials, and equipment, caused by the COVID-19 pandemic, andthe long dream has come true for the local community.

Acquired “Nearly ZEB” certification for the temporary office. We also aim torealize a recycling-oriented society by utilizing reusable solar panels. We will use
tracking non-fossil certificates derived from our own power plants to convert
electricity into real renewable energy, and use credits including the Fukuoka City
Forest Offset Credit for fuel to reduce CO2 emissions from construction to
virtually zero. We also use environmentally friendly concrete developed by ourcompany for the foundation of the building to reduce CO2 emissions at thematerial procurement stage.

Start of Construction of a Next-Generation TechnicalLaboratory towards the Realization of Zero-Carbon
Buildings

Green Renewal® of the Group-Owned Facilities ZEB
Construction Completed to Realize a DecarbonizedSociety

The Company and Taisei Rotech Corporation have begun construction of theGroup’s Next-Generation Technology Laboratory in Satte City, Saitama Prefecture,for various technological developments and demonstration tests that will contributeto the realization of carbon neutrality. We will complete the construction of eachfacility by the end of October 2024, and start operating them one after another,with the aim of becoming the first zero-carbon building in Japan as a new research
and management facility.

The green renewal® ZEB construction has been completed for the Company’s
Kansai Branch Building, Yokohama Branch Building (above), and TAISEI U-LEC
Co., LTD. Kawagoe Plant.
Please refer to this section for details of the initiatives such as the Renewal ZEB.

Group’s ZEB
P.69-70 Taisei
Sustainability Section

Progress and Achievements for FY2022

Future Measures⃝Strengthened the support systems of the Digital Product Centerand Construction Sitework Promotion Center established at theDivision, enhancing the division of labor and efficiency inworksite operations.

⃝Enhance collaboration with the design department to better
address customer demands and further enrich proposal contents.

⃝Centralized the estimation tasks for renewal construction to the
Building Renovation Dept. in branch offices. (consolidation rateincreased from 36.7% at the start of FY2022 to 65.3% at the endof the fiscal year).
⃝Implemented operational improvements by fundamentally
reviewing the workflow and content, including redesigning
standard drawings and introducing a facial recognition system atworksite entrances.
⃝Advanced the development of the BIM standard model.

⃝Advanced the transformation into back-offices for the
Mechanical & Electrical Division and branch Mechanical &Electrical Department.

⃝Added showroom function to the Kansai Branch, Yokohama
Branch, and the Kawagoe Plant of TAISEI U-LEC Co., LTD.,aiming for active utilization and increasing orders for Green
Renewal® ZEB construction projects.
⃝In view of the upcoming 2024 overtime regulations, the Company
seeks to balance workload and staffing while concurrently
improving productivity.
⃝Initiated the pilot phase for the “DX Start Model,” a BIM modelthat integrates “Design, Structure, and Equipment,” aiming toaugment front-loading*.
* Front-loading: The process that can be brought forward in the process is carriedout at the initial stage.

TA I SE I A N N UA L R E P O R T 2 0 2 3 36

Taisei Group’s Growth Strategy

Business-RelatedGroup Domestic

Civil Engineering Business
Major Group Companies in Charge:
Managing Executive Officer
Chief of Civil Engineering Division

Kenji SHIRAKAWA

Taisei Rotech Corporation
SEIWA RENEWAL WORKS CO., LTD.
J-FAST Co., Ltd.

Growth Opportunities through Building National Resilience and Carbon Neutrality
It is an urgent issue in Japan to deal with severely escalating natural disasters due to climate change, large-scale earthquakes, andthe aging infrastructure facilities. Building national resilience initiatives and the trend towards carbon neutrality are anticipated to
expand demand for civil engineering projects including highway renovation projects and renewable energy-related facilities and to
generate momentum for medium- to long-term business growth.
On the other hand, as for the labor shortage issue due to the declining birthrate and aging society, business environment
including that of suppliers and subcontractors continues to worsen. As the legal ceiling on overtime hours will be enforced in theconstruction industry to adhere to overtime regulations starting in 2024, it is a crucial challenge for us to achieve both preventing
excessive overtime hours and maintaining operational capacity simultaneously. Furthermore, it is imperative to proactively adapt tothe enhanced environmental regulations for the purpose of the decarbonization in future.
To Utilize Our Technologies for Environmental Sustainability and Enhancing Resilience
Our strengths are rooted in our vast project accomplishments, brand reputation, technical innovation & development, and our capability to design and execute projects tailored to our clients’ various needs. Particularly in the realm of technology, we distinguishourselves from competitors by developing and adopting our state-of-the-art technologies onto respective construction methods.
These include automated and mechanized construction for tunnels, optimized and automated shield tunneling technologies, andICT-driven construction methods for bridge projects. Moreover, we are proactively introducing newly developed technologies forenvironmental sustainability and enhancing infrastructure resilience. These encompass T-eConcrete®, our solution to reduce a
remarkable volume of CO2 emissions; CCS, a technology to capture and store discharged CO2; and Floor Slab Replacement
Machines (Semi-sectional works) and Head-bar Joints to improve work efficiency of floor slab replacement works for expressways.
To Strengthen Our Systems to Receive Orders for the Future
In our current Medium-Term Business Plan, we concentrate our resources on “developing the systems to enhance the Group’s
competitiveness in receiving orders,” and thereby intend to identify more ECI projects (ECI: Early Contractor Involvement; A method
where the contractor participates from the design stage), etc. where we can utilize our strengths as a Group, and in addition,
develop the organization to win bids thereof increasing employees in respective sections. In the realm of wind power generation
projects, we have proactively initiated research and development, particularly with the foresight of the potential expansion of floating
offshore wind power generation facilities in future. As we move forward, it is imperative to further enhance our competitiveness inreceiving orders, improve our productivity, and further develop an efficient organization for better work implementation.
To Thoroughly Maintain Top-Priority on Worksites as Principle and Aim for Sustainable Growth
In TAISEI VISION 2030, our domestic civil engineering business stands as a cornerstone functioning for generating profits and maintaining sustainable growth, and civil engineering worksites are the source for them. We consistently uphold the principle ofmaintaining top-priority on works at project sites, ensure quality and safety well controlled with our pride and responsibility, andmaximize the profits by overcoming various constraints with our efforts to pursue operational efficiency and enhance productivity.
As we build a robust business foundation, we will also actively engage ourselves in new business areas in order to achieve asustainable and resilient society.

Segment Overview

Medium-Term Business Plan (2021–2023) Key Initiatives

Net sales increased 1.6% year on year to ¥408.5 billion, despite
the impact of rising raw material prices at Group company Taisei
Rotech Corporation.

⃝To develop the systems to enhance the Group’s competitivenessin receiving orders

Group Net Sales(Billions of Yen)
(FY)

2018

402.0 408.5

459.6• Identify more ECI* projects, etc. where we can utilize our strengths
as a group, and develop the organization to win bids thereof• Develop company-wide backup systems to win discretionary
contracts and design changes* ECI: Early Contractor Involvement; A method where the contractor participatesfrom the design stage⃝To enhance the teams to win bids in the sectors where growth isexpected, etc.
2019

2020

2021

2022

2023

(Target)•E nhance the teams and personnel to win bids for the projects
related to dams, wind power generation facilities, andexpressway renewal⃝To expand our business areas through M&A• Strengthen expertise in core areas and address weaker sectors• Leverage the Group’s capabilities in PPP projects

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

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

TOPICS

Overall view of newly constructed sediment control dam

Taketoyo Thermal Power Station

Two Years Post the Atami Debris Flow—Completionof Emergency Measures for the Aizome River System

Completion of the Taketoyo Thermal Power Station
Upgrade: Contributing to a Stable and EfficientElectricity Supply in the Region

Following the heavy rainfall in July 2021, debris flows were triggered in the affectedareas of Atami-shi, Shizuoka Prefecture. The emergency sediment control
construction, aimed at preventing secondary disasters and enabling swift restoration, has now been successfully completed.
To forestall further disasters, facilitate search operations downstream, andensure the safety of local inhabitants, we embraced the use of ICT and DX technologies, employed helicopters for sediment removal, integrated unmanned
construction methods, and erected temporary dam barriers. Through proactiveplanning and expedited construction efforts targeting the rapid rehabilitation andrejuvenation of the afflicted areas, we managed to successfully finalize the new
sediment control dam constructions.

Nagoya Central Rainwater Regulation Reservoir

Completion of the Nagoya Central Rainwater
Regulation Reservoir: Aiding in Flood Prevention
around Nagoya Station
Beneath the primary arterial road running north-south to the east of Nagoya
Station, a rainwater retention pipe has been constructed. This pipe boasts aninternal diameter of 5.75 meters, delves approximately 50 meters deep, andstretches around 5,000 meters in length. Given the past flood damages resulting
from heavy rainfalls, Nagoya City has been proactive in implementing measuresagainst rainwater. The aim is to substantially mitigate the effects of inundation when
faced with rainfall intensities nearing 100 millimeters per hour. The Nagoya Central
Rainwater Regulation Reservoir was built overcoming challenging conditions suchas its significant depth, high water pressure, and extended length. Utilizing
innovative technologies, the project was not only expedited but also completed
without any accidents or incidents.

The Taketoyo Thermal Power Station, located in Chita County, Aichi Prefecture, hascompleted its upgrade to transform into an environmentally conscious coal-fired
power station by co-firing with wood biomass.
In the wake of the increased electricity demand and surging electricity costs
following the Great East Japan Earthquake, there was a pressing need for thestation to promptly resume its operations to ensure a reliable and efficient power
supply to the region. Through this project, by proactively adopting precast
construction methods for both offshore and onshore components, we were able toachieve various benefits, including a notably shortened construction timeline.

Example of construction of pavements made from wood (lignin)

Initiatives of Taisei Rotech Corporation
Taisei Rotech Corporation is actively pursuing the creation of pavements made fromwood as part of its efforts towards a decarbonized society. Lignin, which comprises
30% of wood’s composition, has a significant history of being utilized as a fuel forbiomass power generation. By incorporating it into pavement production, it ispossible to decrease the consumption of petroleum-based asphalt. This results ina reduction of CO2 emissions by 20% to 30% during the manufacture of thecomposite materials.

Progress and Achievements for FY2022

Future Measures⃝Strengthened our order acquisition capabilities• Handled more projects due to an enhanced bidding organizational
structure• Secured substantial orders for NEXCO’s highway-related projects⃝Improved production capabilities• Evolution and broader application of T-iDigital Field (aconstruction management support system utilizing digital data)enhanced productivity• Undertook trials and validation for unmanned and labor-saving
technologies on-site• Continued efforts to consolidate and streamline worksite
operations⃝Expanded bid-related organizations in promising growth sectors• Increased staffing for teams focused on dams, wind energy
projects, and related areas• Using the Group’s distinct technologies, secured numerous orders
for floor slab replacements and seismic reinforcement projects⃝Expand the scope of Group company ventures• Continue collaborative technological development with Group
entities to establish unique and differentiated technologies• Enhance the bid organization structure to target and secure
more government contracts⃝Promote initiatives in anticipated growth areas• Engage proactively with the government’s new “Hybrid Dam(tentative name)” project, an initiative spurred by recent
frequent and severe flood events• Accelerate efforts to secure fixed-bed wind power generation
projects, and speed up technical development for floating
offshore wind energy project design and construction⃝Broaden business domains
in PPP/PFI ventures and concessions, leveraging the• EngageGroup’s collective strengths• Expand orders in renewable energy to support infrastructure
initiatives aimed at a decarbonized society. Also, fast-track
ventures into the Carbon Capture and Storage (CCS) sector
TA I SE I A N N UA L R E P O R T 2 0 2 3 38

Taisei Group’s Growth Strategy

Business-RelatedGroup

Overseas Construction Business

Managing Executive Officer
Chief of International Operations Headquarters

Tatsuya SUGAWARA
To Seize Opportunities from Development and Infrastructure Needs in Emerging Countries While Mitigating Risks
For the Taisei Group, the economic upswing in emerging Asian countries represents significant opportunities for our businessexpansion, which is further propelled by increased demands for infrastructure. The increase in capital investments among the countries enjoying the growth of the middle-class income population or proactively seeking foreign direct investments is also contributing
to our potential business growth.
However, it is crucial in the international market to generate profits while managing business risks. It is imperative to properly
analyze, assess, and respond to a variety of risk elements and situations, including the financial catastrophe in Official Development
Assistance (ODA) recipient countries with economic instability; the geopolitical risks as exemplified by the crisis situation in Ukraine;and the financial risks associated with abnormal volatility in currency exchange rates.
To Earn Recognition for Our Superiority in Technical Capabilities, Quality and Safety Control
In many cases, our competitors in the overseas markets are local contractors. Whereas we have traditionally faced fierce pricecompetition in the international construction market, the importance of not only the price but also technical proposal is increasing
especially in the countries and regions experiencing economic growth. We have well-recognized as our business competitiveness ourstrengths in advanced technological capability, quality control, process and safety management, all of which we acquired through both
domestic and international projects, while we have accomplished various projects including airports and shield tunneling projects. We
see challenges for our business in future so as to increase our construction capacity and to train our engineers and further improvetheir capabilities. In addition to assigning our employees from the head office abroad, it is essential to find and employ well talented
personnel locally, and to increase their retention rate through training. We are committed to fostering a working environment where all
employees can appreciate the value and attractiveness of being part of the Group, thereby nurturing a strong sense of belonging.
To Establish a System for Ensuring a Balanced Mix of Different Project Sizes by Promoting Localization and Operations
at Overseas Offices
Previously, our international operations were influenced by the fluctuation of work volume in domestic construction market so that
we continuously managed to run unstable operations. Therefore, under the current Medium-Term Business Plan, we are focusing on
establishing stable business foundations, while promoting localization and operations at overseas offices and cooperation with alliancepartners by utilizing their resources and supply chains.
While two years have passed since the Medium-Term Business Plan was initiated, we are not yet satisfied with our businessoutcome during those years because our business has been affected by the impact of the COVID-19 pandemic and the emergenceof geopolitical risks in Myanmar and Ukraine. We will continue to improve our price competitiveness and construction capacity tosecure orders, through the development of human capital and enhanced collaboration with our alliance partners.
To Share the Attractiveness and Joy of Achievement in Our Business, and Further Create Significant Value
Although overseas construction business can be challenging, it is a compelling endeavor that contributes to national development byimproving social and living infrastructures. Moreover, it holds the potential to become a core component of Taisei Group’s future business,creating significant value. We aim to share our vision and values with younger employees as we strive for new heights in the next era.

Segment Overview

Medium-Term Business Plan (2021–2023) Key Initiatives

Net sales increased by 5.7% year on year to ¥82 billion, primarily
due to the steady completion of ongoing construction projects.

Common⃝To shift from the systems focusing on large-scale projects tothe systems striving to ensure an optimal mix of different
project sizes, by promoting both localization and operations atoverseas offices, and collaborating with alliance partners

Group Net Sales(Billions of Yen)

(FY)

2018

2019

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

2020

77.6

82.0

2021

2022

76.0
2023

(Target)Building⃝To build local networks by placing more and younger local sales staff⃝To focus on allocating human resources to the airport sector,
where the Group is internationally competitive

Civil engineering⃝To cut the costs by utilizing the resources of alliance partners
and our supply chain New businessAbout the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

TOPICS
Completion of the Qatar Hamad International Airport Expansion Project to Make a Bridge to the World as a Hub Airport in the Middle East

Construction Overview
Location

Qatar

Owner

Qatar Company for Airports Operation and Management(MATAR)

Constructor

Midmac, TAV, Taisei JVConstruction From November 2019 to December 2022
periodConstruction Extension of the central concourse: Total floor area 122,135 m2
Pavement of apron, renovation of existing concourse, utility
overview
equipment, etc.

Adjacent to the Hamad International
Airport Passenger Terminal Building,which was completed in 2013, thisconstruction will extend the central
concourse to accommodate passengers increasing year by year. The offer
for use began in October 2022 inconjunction with the FIFA World Cup
Qatar held in the same year.
This facility has a huge greenhousegarden called Orchard, which is a lush
green facility. Hamad International
Airport, which officially opened in 2014,is expected to contribute significantly
to Qatar’s economic development byconsolidating its position as a hub
airport in the Middle East through the
expansion of its central concourse toaccommodate 58 million passengers
per year, compared with existing 38
million passengers.

Qatar Hamad International Airport

Singapore Subway Cross Island Line—Punggol
Branch Line: Order Received for Construction
Related to Riviera Station on Contract P103
In September last year, in collaboration with China State Construction
Engineering Corporation Limited, we received an order for construction
related to Riviera Station on Contract P103 Punggol Extension of the
Cross Island MRT Line, a metropolitan railway (station building and tunnel
construction, about 4.3 km long).
In the tunnel construction, a large-section earth pressure balanced(EPB) shield excavator with a diameter of about 12 m is used to construct a tunnel with a total length of 4.3 km, in which two tracks are laid.
Since the Riviera Station at which the construction will be carried out
will be installed along Punggol East and Punggol Central districts, it isexpected to improve traffic access for suburb residents. The Cross IslandLine Punggol Extension is a 7.3 km section with four stations: Punggol,
Riviera, Elias, and Pasir Ris. After its completion, the railway will be moreconvenient to use for more than 40,000 families living nearby.

CSR activities at IID (PT. INDOTAISEI INDAH DEVELOPMENT)
IID, an equity method affiliate inIndonesia, installed a water
purification tank in the Kamojang
district jointly with partnercompanies and tenant companies (August 2022).

In the Cianjur district, we
collaborated with IID’s tenantcompanies for support activities,
including provision of schoolbags, stationery, drinking water,milk, and bedding mats toearthquake victims (December2022).

Future Measures
Non-contracting⃝To commit human capital towards the establishment of businessmodels beyond traditional construction, drawing inspiration fromthe operational frameworks of global contractors in Europe andthe United States.

Progress and Achievements for FY2022⃝Secured construction contracts for the CONTRACT P103
DESIGN AND CONSTRUCTION OF RIVIERA INTERCHANGESTATION AND TUNNELS FOR CAR-PUNGGOL EXTENSION in
Singapore, in collaboration with global partners.

Beyond the primary strategies outlined in our Medium-TermBusiness Plan, we are prioritizing the following initiatives:⃝Recruitment and training of talent to bolster construction
capabilities.
⃝Strengthening partnerships to enhance both our construction
capacity and price competitiveness.
⃝Seeking greater business opportunities by expanding into new
sectors and targeting a broader clientele.

⃝Deployed staff to pioneering companies within the non-contractual
sector.
TA I SE I A N N UA L R E P O R T 2 0 2 3 40

Taisei Group’s Growth Strategy

Business-RelatedGroup

Real Estate Development Business

Executive Officer
Chief of Urban Development Division

Major Group Companies in Charge:

Takashi YAMAZAKI

Taisei-Yuraku Real Estate Co., Ltd.

To Catch up with the Rapidly Changing Market Environment
In recent years, we have seen a surge in large-scale real estate investment opportunities in the Tokyo metropolitan area, driven by
growing demands for urban redevelopment and new development projects. This is a response to aging facilities and buildings, aswell as functional mismatches resulting from a change in environments surrounding urban areas. Meanwhile, our business environment is becoming increasingly challenging in terms of profitability because fierce competition for rare and valuable projects is
intensifying, particularly in the core regions of the Tokyo metropolitan area where there is strong demand from foreign investors,
while the level of market rent for residences and offices has not risen as much as that of project costs such as construction costs.
To Demonstrate Our Strengths by Utilizing the Business Platform as the General Contractor for Real Estate Development
Our business as the real estate developer can enjoy an advantage of utilizing our business platform as a general contractor including a
multitude of advanced technologies possessed by Taisei Group in areas such as design, building, engineering, and decarbonization.
Our business advantage can be further enhanced because Taisei Group can provide a total coordination throughout the life cycle of the
project from design and building services to maintenance and operation services after delivery of the building. Furthermore, by participating in real estate development projects as a joint developer, we are acquiring a series of premium development projects with ouradvantageous capability to push forward the projects while being involved throughout the project cycle from the proposal to the implementation in addition to an involvement with our business platform of the general contractor in initial stages. In domestic andinternational investments and development projects, we offer a range of services from technical assistance to design and building
services thereby making optimal use of our business platform in order to meet our business partners’ expectations.
To Optimize Our Real Estate Portfolio by Increasing Investment Balance
Based on the key measures of our Medium-Term Business Plan, we aim to optimize our real estate portfolio and secure stabledevelopment profits while acquiring premium real estate and increasing our investment balance through earlier-stage businessinvolvement in urban redevelopment and major development projects. We plan to optimize our portfolio as swiftly as possible bybalancing our flow business, which involves the sale of properties, with our stock business that generates ongoing revenue, such as
rental offices and logistics facilities, and by considering the area, usage, and business structure.
In addition, in order to diversify our sources of revenue, we plan to intensify our efforts in areas like PPP projects and operationoriented businesses, which we expect to expand in the future as new business fields. By establishing such expertise promptly, we aim
to offer more differentiated asset utilization proposals to our clients in the building construction and the civil engineering businesses. We
will also strengthen cooperation among our Group companies and share project information to expand investment opportunities.
To Become a Group in Charge of “D” in CDE3 (Cubed) for Realizing Our Dreams
We are the division in charge of “D = Development” in “The Ever-Evolving CDE3 (cubed) Company” as stated in “TAISEI VISION 2030.” We
will take the lead in realizing a mechanism to develop urban infrastructure, facilities and buildings that support a prosperous future throughour civil engineering and building construction businesses, and continue to create value that leads to sustainable growth of society.

Segment Overview

Medium-Term Business Plan (2021–2023) Key Initiatives

Net sales decreased 13.2% year on year to ¥115.3 billion as areaction to the sale of large properties in the Company in theprevious fiscal year.

⃝Real estate: To build the optimal portfolio based on real estatemarket conditions, and develop the systems to ensure stableprofits from development•A cquire premium real estate through project control from the
upstream stages of urban redevelopment projects and major
development projects•O ptimize our real estate portfolio based on a balance of area,
application, asset efficiency, and stable revenues•E nhance the brand recognition and brand strength of “OBER”
condominiums and “TERRACE” rental condominiums⃝Facility management: To secure the properties for facility
management with planning and proposals tailored to customers’
needs•Establish an integrated customer support system that covers
everything from building construction to facility management⃝PPP, etc.: To participate in the PPP business, etc. in order todiversify sources of revenue•E stablish the operational systems for airport concession
projects, and tackle new infrastructure operation businessGroup Net Sales(Billions of Yen)

(FY)

2018

132.9 115.3 120.0

2019

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

2020

2021

2022

2023

(Target)About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

TOPICSCENTARA GRAND HOTEL OSAKAHOTEL KEIHAN NAMBA GRANDE
Hakata East Terrace

Grand Opening of CENTARA GRAND HOTEL OSAKA
and HOTEL KEIHAN NAMBA GRANDE in Conjunction with the Development of Namba Parks SouthIn the Osaka Namba area, the Company promoted the development of
new city block Namba Parks South, which partially opened in March2023 and had its grand opening in July. The Company also invested in
the development of the following two properties.
●CENTARA GRAND HOTEL OSAKA

Main use: Hotel Location: Osaka City, Osaka
This property is a hotel operated by Centara Hotels & Resorts based in
Bangkok, Thailand, which is making its debut in Japan. Based on theconcept “the fusion of Thai and Japanese beauty and culture,” the hotel
offers 515 guest rooms, an authentic Thai spa, and a rooftop restauranton the top floor with a spectacular view of Osaka. The Company
invested in the development of this property through investment in a
special-purpose company established jointly with other companies.
●HOTEL KEIHAN NAMBA GRANDE
Main use: Hotel Location: Osaka City, Osaka
This property is a hotel operated by Hotel Keihan Co., Ltd. Based on
the design concept “a garden standing on a green hill,” it has 227 guest
rooms as well as restaurants. The Company invested in the developmentof this property jointly with other companies.

(Tentative Name) Mita Building

Completion of Hakata East Terrace
Main use: Office Location: Fukuoka City, Fukuoka PrefectureThis property is located in the Hakata Station Chikushi-guchi area,
which is close to Hakata Station, the gateway for ground transportation
to Kyushu, and highly convenient for transportation. This has been a
new base for business and crowds with a plaza space abundant withnature that serves as a place for crowds and daily relaxation, as well as
one of the largest office floors in the Hakata area and work spaces
equipped with support functions for diversified workstyles. The
Company promoted and invested in the development of this property
jointly with other companies.

Acquisition of Office Building, (Tentative Name) Mita Building
Main use: Office Location: Minato-ku, Tokyo
This property is located a three-minute walk from Sengakuji Station on
the Toei Asakusa Line, highly convenient for transportation, along
Daiichi Keihin with excellent visibility. It has a large common-use space
and a multi-story parking lot in the building, making it a highly competitive
office building in the area. The Company invested in the development of
this property through investment in a special-purpose company
established jointly with other companies.
In the future, we will further improve the value of this property byrenovating it to further enhance its leasing capacity.

Initiatives of Taisei-Yuraku Real Estate Co., Ltd.

Terrace Kamishakujii West

●Terrace Kamishakujii West
Main use: Apartment house Location: Nerima-ku, Tokyo
This property is a new rental condominium development project for which Taisei-Yuraku
Real Estate Co., Ltd. acquired ZEH-M Oriented for the first time, and is a group collaboration project with TAISEI U-LEC Co., LTD. (design and construction). It is located nine
minutes on foot from Kamishakujii Station on the Seibu Shinjuku Line, which has goodaccess to central Tokyo. The area is convenient for living with supermarkets and restaurants around the station. Although it is located within the 23 wards of Tokyo, it has a quiet
living environment rich in nature. All 49 rooms are occupied, as their spacious floor planand energy-saving performance have been recognized. (As of April 2023)

Progress and Achievements for FY2022

Future Measures⃝Target Investment of ¥59 billion in prime properties in good
locations such as CENTARA GRAND HOTEL OSAKA, HOTELKEIHAN NAMBA GRANDE, Hakata East Terrace and (tentativename) Mita Building to build a portfolio. At the same time,
participate in new investment areas such as value-up investment
and set up offices

As in FY2022, we will continue to focus on the following measuresin addition to the key measures in the Medium-Term Business Plan.

⃝Participated in a rental housing development project to convert
part of an existing office building into rental housing in Los
Angeles, California, USA⃝Established Taisei Real Estate Asset Management Co., Ltd., anasset management company, to prepare for the start of private
REIT operations in FY2023⃝Started participating in the development, operation, maintenanceand management of public and private facilities in the Todoroki
Green Space Redevelopment, Operation, Etc. Project⃝Continue investments in line with the Medium-Term Business
Plan to build a stable earnings base for the Group’s development
business (planned investment of ¥118 billion in FY2023)⃝Overseas investments are made mainly in the United States,
where the real estate market is highly stable, and Vietnam andTaiwan, where growth is high.
⃝FY2023 start of private REIT management (Initial asset size
expected to be approximately ¥15 billion)⃝In the PFI and PPP fields, we will promote the development andoperation of facilities under the Todoroki Green Space
Redevelopment, Operation, Etc. Project.
⃝In the facilities management business, in addition to involvementfrom the design stage, the Group maximizes its capabilities byadopting AI/IoT technologies and expanding its O&M business.
TA I SE I A N N UA L R E P O R T 2 0 2 3 42

Taisei Group’s Growth Strategy

Business-RelatedGroup

Engineering Business

Managing Executive Officer
Chief of Engineering Division

Major Group Companies in Charge:

Shinichiro TAKAHAMA

Network Alliance Corporation

As a Pioneering General Contractor in Engineering
We established the engineering division in 1968, ahead of other general contractors. Our core business model focuses on comprehending manufacturing processes and plant operations at manufacturing facilities, with the aim of optimizing entire facilities,
beginning with the selection of production equipment.
For the manufacturing facilities we specialize in, our goal is to secure orders for the whole manufacturing facilities including buildings. This is achieved by merging our construction capabilities, with which we provide the manufacturing space and environment,
and our technical expertise in production, logistics, and information technology.
Moving forward, we intend to adapt to the ever-changing market conditions. Leveraging our extensive technical knowledge andexpertise, we will target a broad range of industries and sectors. We aim to continuously and stably meet the demand for capital
investment, thereby realizing our business growth.
To Expand Orders Received by Catching Favorable Trends towards Our BusinessIn recent years, with rapid changes in the society and the market, accelerated by the COVID-19 pandemic and advancements indigitalization, we have seen favorable conditions for our engineering business. Investments have actually grown in several businessfields: biopharmaceutical production facilities such as vaccine production lines in the pharmaceutical sector; manufacturing facilities
for primary products of electronic devices related to semiconductor production; and labor-saving and automated facilities aimed atenhancing productivity in the food industry.
We strive to expand our business opportunities across various sectors by offering our unique technologies and problem-solution
capabilities, which we have acquired through our extensive experience in designing and construction, as well as optimal solutions to
the latent challenges and needs of our clients for manufacturing facilities.
To Achieve JPY 100 Billion in Received Orders and Net Sales
Looking beyond the current Medium-Term Business Plan, we aim for the numerical target that the amount of orders received and net
sales should reach ¥100 billion by FY2030. This is double the orders received and quadruple the net sales compared to those of
FY2021 results, aligning us with the business performance levels of our competitors specialized in the engineering field. One of ourcritical challenges is to establish the systems to achieve these increased orders and sales.
Firstly, in line with our employment plan aimed at the expansion of our business, we will enhance our team’s strength bycontinuing to recruit new graduates as well as mid-career professionals and by strengthening our training methodologies.
Particularly, we will concentrate on urgently training project leaders who possess in-depth understanding of our clients’ manufacturing processes and specialized expertise in plant operations, and facilitating the transfer of this technical know-how to the next
generation. Further, by enhancing alliances with external partners, we aim to develop collaborative systems and expand ourcapacity to manage increased business volume.
By creating and offering new value beyond the traditional confines of the construction industry, our Engineering Division aims toestablish itself as a new pillar of Taisei Group, alongside the building construction business and the civil engineering business. This
will enable us to produce unique significance not found in other general contractors in the market.

Segment Overview

Medium-Term Business Plan (2021–2023) Key Initiatives

Net sales increased 43.3% year on year to ¥39.4 billion, despite
cancellations and postponements of planned projects due to thecorona crisis.

⃝To strengthen the existing sectors• Pharmaceuticals sector: Utilize our strengths in terms oftechnology and expertise to enter the next-generation medical
sector, including biopharmaceuticals and regenerative medicine• Food products sector: Enhance upstream consulting functions,and utilize technical expertise related to automation and laborsaving technology developed in the pharmaceutical sector⃝To take on new growth sectors• Fine chemicals sector: Utilize the technology from the pharmaceuticals sector to enter markets in areas such as semiconductor
and electronic device materials manufacturing facilities• Logistics sector: Secure competitive superiority in the logistics
facility sector, and expand sales channels in the pharmaceuticals
transportation and delivery business, by making use of ourexpertise related to proposals based on feasibility studies (FS)and the Guidelines on Good Distribution Practice (GDP)⃝To develop the systems for expanding the scope of our businesses•U tilize external human capital to expand our production
capabilities

Group Net Sales(Billions of Yen)

(FY)

2018

27.5

2019

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

2020

2021

39.4

2022

53.0

2023

(Target)About the Taisei Group

Sustainability Section

Taisei Group’s Growth Strategy

Governance Section

Data Section

TOPICS

Solid Dosage form Facility at the 2nd Kyushu Factory, Sawai Pharmaceutical Co., Ltd.

3rd development building, Tokyo Electron Miyagi Ltd.

New Solid Dosage Form Facility at the 2nd Kyushu
Factory, Sawai Pharmaceutical Co., Ltd.

Receipt of the order for the 3rd development building of Tokyo Electron Miyagi Ltd.

Start of construction of a new solid dosage form facility at the 2nd Kyushu
Factory, a large generic drug factory of Sawai Pharmaceutical Co., Ltd.
The construction of a new solid dosage form facility started on thepremises of the 2nd Kyushu Factory of Sawai Pharmaceutical Co., Ltd.
This facility will be very important for achieving stable supply of genericdrugs by securing space for the production of up to three billion tabletsin advance, initially launching the production of two billion tablets, andplanning to proceed with implementation according to market conditions and in-house development. This facility is large in size including
production equipment, and the construction period must be short. We
are, therefore, working on it by joining forces.

We received an order for a new development building at the head officeplant of Tokyo Electron Miyagi Ltd. (Miyagi Prefecture), and started its
construction. In the semiconductor market, which is expanding due tothe digitalization of society, the semiconductor manufacturing equipment
developed and manufactured by this company is expected to continue
growing significantly in the future. This new building is attracting major
expectations and attention, as it is constructed for the purpose ofproviding products equipped with features demanded by clients in atimely manner, with an eye to further reinforcement of technologicaldevelopment capabilities and expansion and diversification of technological needs. The Company will continue to make every effort to provide
high-quality buildings that meet clients’ needs.
Anothercompany’s plant

Joint collection

Raw material
suppliers⃝Coping with GDP (Securing logistics quality)⃝CN compliance (Promotion of ESG management)⃝BCP measures (Ensuring business continuity)⃝Year 2024 Problem (Transportation security andlogistics cost control)⃝Support for DX solutions

Anothercompany’s plantRaw material
supplier

Joint collection

Manufacturer C

Manufacturer C
Manufacturer C

Joint transportation

Kansai C

Kanto C

Joint trunk flights between manufacturers

Joint delivery

Tru
nk
flig
hts

Exclusive contract service

hts
flig
nk
Tru

Joint delivery
Exclusive contract
servicePickup service
Large wholesaler

Plant
Business partner

iFactory® Continuous Drug Substance Production System

Large wholesaler

Local/remotetrading partner

Kinki and Tokai
regions

Routeconsolidation

iFactory® Continuous Drug Substance Production System
Completion of a demonstration plant for the iFactory® continuous drug
substance production system. We participated in the development ofiFactory®, a pharmaceutical manufacturing facility that adopts acontinuous production system instead of the current batch system.
iFactory® enables continuous production of high-performancechemicals by modularizing unit operations. Depending on the item, it
can change the type and arrangement of modules and produce theonly necessary amount of product only when they are needed.
The past verification revealed that the developed system can significantly
reduce energy and waste compared to the conventional system.
In the future, we aim to commercialize production facilities that
contribute to energy conservation and the creation of a sustainable
society in Japan.
*This project is subsidized by the New Energy and Industrial Technology
Development Organization (NEDO).

Production plant

Shipper

Kanto region Business partner

Routeconsolidation

Local/remotetrading partner

NAC
NAC Cooperative Delivery Model

Initiatives of Network Alliance Corporation (NAC)
Network Alliance Corporation (NAC) is a 3PL* business company
established in 2003 to provide joint distribution services to pharmaceutical manufacturers.
Pharmaceutical distribution requires strict temperature control andother logistics quality in accordance with the Good Distribution Practice(GDP) Guideline (the Ministry of Health, Labour and Welfare), resulting inincreased outsourcing from pharmaceutical manufacturers.
NAC is working to resolve a variety of issues through joint delivery.
*3PL (third-party logistics): A service in which a third party other than the
shipper and transportation companies is comprehensively entrusted with theshipper’s distribution operations, or companies that provide such a service.

Progress and Achievements for FY2022

Future Measures⃝Deepening of Traditional Sectors:•P harmaceuticals: Expanded orders leveraging our strong trackrecord in biopharmaceutical manufacturing facilities, combinedwith differentiation strategies that include automation andlabor-saving technologies.
•F ood Industry: Expanded order activity starting from the earlyphases, including feasibility study (FS*) operations.
•M anufacturing Facilities: Consistent performance, especially inthe electronic devices sector.
⃝Pursuits in Growth Sectors:•Fine Chemicals: Expansion in orders for manufacturing facilities
focused on fine chemicals, including pharmaceutical active
ingredients and electronic materials.
•Logistics: Secured orders for logistics facilities linked with
manufacturing plants.
⃝Structural Preparations for Business Expansion:•Broadened collaborative structures with external companies,
inclusive of alliances.

Continuing from the core strategies of our Medium-Term Business
Plan, we will emphasize the following:* FS (Feasibility Study): Involves promoting consulting and evaluating the feasibility
during the business planning phase.

⃝Broad application of our distinctive technologies and expertise.
⃝Intensified focus on feasibility studies and consulting services.

⃝Agile and timely proposals in line with shifts in societal contexts
and market trends.
⃝Assurance of hiring and nurturing employees according to afuture-oriented personnel strategy and cultivating project leaders
swiftly to establish a foundational support for business expansion.

TA I SE I A N N UA L R E P O R T 2 0 2 3 44

Taisei Group’s Growth Strategy

Sustainability-Related

Technological Development
The Taisei Group has identified “Promoting the technical development to solve environmental and social issues throughopen innovation” as a key initiative in its Medium-Term Business Plan (2021–2023). As part of its strategic priorities, theGroup is strategically allocating resources to “technological development that contributes to industries anticipated to
grow from a harmonious balance between the economy and the environment” and “technological development thatoffers a competitive edge.”

P.49 Society

P.77 Realizing a Sustainable Society

Solving Sustainability Issues inTechnical Development for

Taisei Group’s Growth Strategy

Sustainability Section

Securities report[Research and development]DX
1. Vision (How We Want to Be in 2030):
By 2030, we aspire to realize high-quality and efficient construction by bolstering and broadening our internal andexternal ties. Furthermore, we aim to manifest new value that positively impacts society at large, such as managing
smart city projects on both city and urban scales.

How we want to
be in 2030
Cooperation
with external
parties

City/town

Q&M, Renewal work

Construction platform

Planning/proposal

Digital humanresources
Data utilization

Data collection

Link withvarious apps

DesignConstruction

Construction platform

Integrated
platform
1. Construction plan
2. Estimation
3. Procurement

Building/
civil engineering
structureillustration by Hideki Tanaka

The Taisei Group’s DX endeavors to enhance corporate value and make a societal contribution byaddressing the challenges faced by society, clients, and employees.
SocialClients

Employees

Achieving sustainable and optimal cities
and buildings, considering various
aspects such as the natural environment
and lifestyles.

Offering consistent support to ensure
the safety and security of buildings andcivil structures.

Providing an attractive work environment
where diverse talents can thrive in“manufacturing” roles.

✓ Implementation of environmentallyfriendly construction and operations
management.

✓ Delivering extensive value tobuilding owners, tenants, and users
even post-handover.

✓ Collaborating with local governments to address sustainability
challenges and develop new projects.

✓ Establishing a continuous sales
and support framework thatmaintains a connection with clients.

✓ Utilizing “remote inspections” tosupport on-site QCDSE (Quality,
Cost, Delivery Time, Safety, andEnvironment).

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

✓ Enhancing management efficiency
by centralizing information acrossthe head offices, branches, andworksites through an integrated
platform.

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

2. Promotion Structure
In 2020, the Taisei Group established its Digital
Transformation (DX) Policy and DX Strategy in line with
the Ministry of Economy, Trade and Industry’s Digital
Governance Code. It then set up the cross-functional“Digital Transformation (DX) Promotion Committee”
and took a pioneering step in the constructionindustry by appointing a Chief Digital Officer (CDO).
The Digital Transformation (DX) Promotion
Committee is responsible for developing and planning DX promotion measures and monitoring their
execution. Subcommittees under the committee,
composed of IT managers from various departments
and external experts, work on addressing challenges.
From FY2022 onwards, the “Digital Transformation
Strategy Planning & Acceleration Section” wasinaugurated within the Corporate Planning Office
to enhance the promotional framework. This step
was aimed at bolstering the acceleration andmonitoring of various DX initiatives, facilitating
collaboration across departments, and amplifying
support for the CDO.

Board
Management Committee
Digital Transformation (DX) Promotion Committee
Chairperson: CDO
Secretariat: Information Planning Department, Corporate Planning Office,Digital Transformation Strategy Planning & Acceleration Section

Executive Committee

Production Process
Subcommittee (Civil
engineering,
Building constructionand Safety)

Management
Foundation
Subcommittee

Service Solutions
Subcommittee

3. Initiatives and Progress
Key Initiative: Realize a transformation in the production system and work style through DX

DX in Services &Solutions

DX in Management Foundation

DX in Production
Process

Core DX-Related Initiatives
1B
 uilding digital twins via BIM/CIM
design and construction cloud
integration.
2E
 nhancement of the procurementrelated information system.
3 Streamlining and making the
production processes transparent
using advanced digital technologies.

Progress

Incremental roll-out of digital solutions to enhance productivity, safety(with methods for efficiency and manpower reduction), and quality.
⃝Also pushing forward initiatives like monitoring CO2 emissions.

Progression in sophisticated management and business operations using
data, facilitated by an “integrated platform” system that allows various
departments and worksites to extract and utilize data as required.
4 Establishment of an integrated
platform.
5 Securing digital talents and introducing a rotation system.

⃝Launched the integrated platform, allowing effective use of data stored acrossdifferent in-house systems.
⃝Accelerating data usage in managerial decision-making processes with the deploymentof business intelligence tools tailored for managerial metrics overview.
⃝Full-scale roll-out of DX Academia: Initiated digital literacy training tailored forexperts skilled in both digital realms and the DX operations of each division.
Plans to introduce training for all employees are also in the pipeline.
⃝Proposals to introduce digital mechanisms that bolster autonomous learning arealso on the table.

6 Monetizing the O&M domain.
7 Transitioning to a sales approachbased on timely proposals, informedby data analytics.

Launching the digital facility management (DFM) initiative, embodying theconcept of a “go-to doctor for buildings,” offering continued support
through the building’s life cycle.
⃝Developed “LifecycleOS,” a platform optimized for data utilization in smart buildings.
⃝Continual development, execution, and maintenance of digital service solutions
tailored to cater to the diverse needs of all stakeholders in the building domain.

TA I SE I A N N UA L R E P O R T 2 0 2 3 46

Taisei Group’s Growth Strategy

Sustainability-Related

4. Details of the Initiative
Examples of DX Items in the Construction Production Process
For the Entire Construction Site:⃝Construction Management: T-Basis X, T-iDigital® Field

Under Construction⃝CO2 Emissions Measurement and Tabulation System⃝T-CIM®/Tunnel

Under Construction⃝T-CIM®/DAM⃝T-iMonitor® Tunnel⃝Construction Machine Automatic Control: T-iCraft®

After Construction⃝Robot Integrated Control Plat-⃝T-CIM®/Earthform: RoboHUB⃝T-iROBO®

⃝Smart Building Data Utilization

Platform: LifeCycleOS⃝T-CIM®/Bridge

Under Construction⃝T-iROBO®
⃝T-iRemote Inspection⃝T-CIM®/Marine⃝T-Pile Recorder⃝T-iAlert® River⃝BIM Utilization

Building
Construction

The T-BasisX is a DX standard platform
integrating the Wi-Fi environment with AI &IoT. It seeks to transform production
processes by enhancing collaborations withvarious DX systems.

DX in Production Process⃝T-Tsunami Viewer

Data collection and analysis from the commencement ofconstruction to its completion within the site have been madeeasier, with the deployment of remote-controlled robots.
Collaboration with
DX at construction sites
systems like theTracking
GNSS
progresssatellite
T-iRemote Inspection
Remotemonitoring positioning
is expected to further
Monitoring of vital signs
optimize construction
Safety monitoring
progress andAutonomous Inspection
Environmental
enhance manageData
Autonomous
xR-basedment efficiency.
transportation of
construction
management

materials andequipment

Use of CCUS data

Initiated the development of a CO2 emission
measurement and management service forconstruction sites, aiming for widespread
adoption in the construction industry.
A dedicated CO2 emission measurement and collection
system has been developed for construction sites. Leveraging
image recognition and other technologies, this system automates the tracking of CO2 emissions. Moving forward, ourobjective is to minimize user inconvenience, ensuring thesystem is user-friendly and aiming for its widespread adoption
within the construction industry.

System for measuring andtallying CO2 emissions)

RVSTA“T-CARBON Watch”

Electronic Manifest Service“e-reverse.com”
Construction Site Management
Service “Buildee”

Prokno vision
w-h ofow

Wi-Fi environment

Collaboration
Construction Site Digital

Location tracking Transformation Standard Platform

T-BasisX

Visible systems
leveraging IoT

Verification in new
development services atconstruction sites

Value Proposition✓ Effortless and comprehensive deployment of internet
infrastructure, fundamental for digital technology
applications in the field.
✓ Operational automation and labor saving on-site via realtime data collection sensor and robot deployment.

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

Service
introduction

Use of on-site dataservice know-how

Development of a newservice for measuring andmanaging CO2 emissions)

Evaluation

External sales ofthis system

Value Proposition✓ Significantly reduces manual data entry by automating thecapture of various metrics like construction machinery andvehicle numbers, fuel consumption, etc.

DX in Production Process

Civil
Engineering

About the Taisei Group

Sustainability Section

Taisei Group’s Growth Strategy

Governance Section

Data Section

Ensure quality and enhance productivity andsafety with applications that feature the
T-iDigital® Field, a worksite management
system that utilizes data.

T-iCraft®: A Coordinated Control System forConstruction Machinery. Introduced at dam
construction sites, it emphasizes the expansionof unmanned and labor-saving operations.

As a platform for civil engineering DX, it’s deployed in approximately 30 different
construction projects.

The T-iCraft system controls the coordinated operation of various
types and models of construction machinery, integrating different
control systems and multiple units of autonomous construction
equipment. By coordinating operations with the T-iROBO seriesof construction machinery, a notable enhancement in productivity has been achieved. In 2022, it was utilized during theconstruction of the Namma Dam’s primary structure.
T-iROBO® Breaker

T-iROBO® Excavator

T-iROBO® Crawler Carrier

T-iROBO® Rigid Dump

T-iROBO® Roller

Platform Coordinated Automatic
Construction Machines

T-iROBO® Bulldozer
HOG System

Autonomous Vibratory Roller● Controls the coordinatedoperation of various
types of automaticconstruction machines.

Value Proposition✓ Assist in the quality, cost, delivery time, safety, and environment(QCDSE) management of construction, enhancing productivity
and safety while contributing to CO2 reduction.
✓B y collecting and formalizing data from various types of construction,
we aim to preserve technical expertise and further the automation of
construction management and processes through AI.

● Achieving PF with a highdegree of freedom inapplicable construction
equipment.

● The HOG system can beused to coordinate withmanned construction
equipment.

Value Proposition✓ Boosting productivity and quality via the collaborative efforts ofhumans, construction machinery, and robots.
✓ Amplifying on-site safety through unmanned construction
methodologies

DX in the Service Solution

LifeCycleOS: A data utilization platform for smart buildings.
Supporting the transition to advanced facility management grounded in data.
LifeCycleOS aggregates data from facilities, users, energy, and more, enabling data utilization and analysis. As of July 2023, thesystem is implemented at Taisei Advanced Center of Technology, Kansai Branch, Yokohama Branch, and Kawagoe Factory of
Taisei U-LEC Co., Ltd. In conjunction with solution services tailored for each application, we aim to deliver digital facility
management “DFM” that aspires to be an “ever-evolving smart building.”
BM Business Digitization App

Energy infrastructure

Building data platform as abasis for building data
CamerasRobots

Display & Smartphones
Notifications

BEMS

Data
Building Digital Twin

②S
 ustainably

Accumulation ofenvironmental,
energy and humanflow data

Controlevolving

Various lighting and otherequipment and sensors

Building life cycle

Building users

Doorsconnectableuser-friendly

Robot Integrated Control

APIcoordination① Flexibly and easily③ Human-centric andEnergy Management/Visualization

PC

Instruction

Building owners

Environmental analysis,Autonomous instruction
Building/City

Building managers

One-stop support for
design, construction,
operation andimprovement

Maintaining asset value,
Consultation and proposals
for realizing the SDGs

TAISEI

Value Proposition✓ Delivering diverse value to all stakeholders during the facility’s operational phase:・For clients: Enhancing facility asset value
・For managers: Cutting down on maintenance expenses and energy usage, aiding in the transition to carbon neutrality
・For users: Ensuring safety and comfort, boosting convenience

TA I SE I A N N UA L R E P O R T 2 0 2 3 48

Taisei Group’s Growth Strategy Topic 1 Solving Sustainability Issues inSociety

Taisei Group’s Solution Technology
The Taisei Group has developed numerous solution technologies over the years that have contributed toaddressing various societal challenges.

Decarbonized Society

ZEB and Supporting Technologies⃝T-ZCB (Zero Carbon Building): Launching the construction of the next-generation technology research center aiming for the
first zero carbon building in Japan.
⃝Green Renewal® ZEB transformation for three facilities owned by the Group.
⃝ZEF: Evaluate energy balance across the entire plant (excluding production facilities).
⃝Acquisition of ZEB Oriented Certification for large commercial establishments.
⃝Demonstration project for a Renewed ZEB model aimed at constructing a “Regional Circular and Ecological Sphere”: Selected for the Ministryof Environment’s “FY2022 Regional Co-creation and Sector-crossing Carbon Neutral Technology Development and Demonstration Project.”⃝T-Green® Multi Solar: Multi-functional solar power system integrated with glass railings for balconies.
⃝Efforts for a model project showcasing renewable energy visibility at Tokyo Metropolitan Government-owned facilities using
T-Green® Multi Solar.

Promotion of Clean Energy⃝Solar power plant: Began commercial operations in Watarai-cho, Mie.
⃝Biomass power plant exclusively using wood: Initiation of development in Ishikari, Hokkaido.
⃝Demonstration project initiated for building a hydrogen supply chain in Muroran, Hokkaido.
⃝Basic agreement concluded on decarbonizing construction material plants using P2G (Power-to-Gas) system in Yamanashi.
⃝Development and demonstration of a power supply system capable of storing and utilizing renewable energy.
⃝Achieved to create microalgae that produce “oil,” a fuel substance, outside the cells, contributing to the broader
adoption of algae-based biofuels.
⃝T-iPower Road: A wireless power transmission road that can be installed on highways.

CO2 Reduction in Material and Construction Phases⃝T-CARBON® Navios: CO2 emission prediction system during material manufacturing and construction stages.
⃝Efforts towards Zero Carbon Construction, aiming for near-zero CO2 emissions during construction.
⃝T-CARBON® E-Site: Real-time monitoring and recording of CO2 emissions derived from electricity.
⃝T-CARBON® SoilReme: A method to compute and display CO2 emissions based on soil purification
techniques.
⃝T-Carbon® Mixing: Technique to spray and bind CO2 during concrete mixing.
⃝Application of “T-eConcrete®/Carbon-Recycle” to client structures.
⃝Collaboration with ITOCHU Corporation and Mineral Carbonation International for the implementation of T-eConcrete®.
⃝Technical certification secured for the “T-EAGLE® Piling Method” that utilizes T-eConcrete®.
⃝Worksite demonstration of “Carbon-Recycled Concrete Reinforcement Blocks.”⃝Development of environmentally friendly concrete suitable for 3D printing in construction.
⃝Utilization of the Green Innovation Fund: Production of synthetic limestone
for cement through carbonation techniques.

S

Recycling-Oriented
Society

Promoting the Circular Economy⃝Zero-Water Building: Technology demonstration in the Human and Space Lab (ZEB Demonstration Building).
⃝Construction byproduct patrol and collection system⃝Zero Carbon Steel Initiative: Efforts towards decarbonizing steel and recycling resources.

Promoting Sustainable Timber Use⃝Saitama Forest Creation Agreement: Afforestation in areas where timber for building is sourced.
⃝Semi-fire-resistant steel column members that are fire-resistant coated only with wood⃝Wood-related technologies: T-WOOD® TAIKA, Flame-Resistant Wood Coating, T-WOOD® Silent Wall.

Environmental Regeneration Technology⃝T-SoilReme HeatBio: Ground heating microbial purification
technology.
⃝T-Quick Dorai: Material that rapidly absorbs soil moisture.

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

⃝T-SoilReme-Biobarrier: Prevention of VOC-contaminatedgroundwater spread.
⃝High activity photocatalyst: Rapid decomposition and removalof airborne chemicals.

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

This page provides an overview of some of these technologies. In the PDF version, each item links to a release on our company website for more details. (Japanese only)

Productivity & Comfort

Digitizing Facility Management⃝LifeCycleOS: Integrated management of BIM and building operation data.
⃝LCMC: Building lifecycle management service via subscription.

Enhancing Production Efficiency⃝RoboHUB: Integrated platform connecting robots to building facilities.
⃝T-GreenVegeunit: Radiant plant cultivation unit enhancing indoor plant quality and efficiency.
⃝SLAM autonomous driving for lunar conditions: Chosen for the “Unmanned Space Construction Innovative Technology Development Project” by the Ministry of Land, Infrastructure,
Transport, and Tourism.

Pursuit of Comfort & Emotional Enrichment⃝T-Optimus® Noise: AI-driven optimal noise reduction system for machinery.
⃝T-Optimus® TMD: AI-driven floor vibration-damping device design system.
⃝T-Optimus® Control System: Optimal HVAC control for clean rooms.
⃝T-Clean Skylight: Blue sky lighting solution for clean rooms.
⃝T-Silent® Wind Noise: Component to reduce wind-induced vibrations.
⃝T-Silent® CFRP Frame: Vibration-dampening and soundproofing structural frame.
⃝Indoor positioning system: Uses building’s magnetic field distribution to enhance user convenience and safety.

Safety and Disaster
Prevention

Improving Construction Safety

X⃝Remote Safety Management Application KIZUKIAI: Monitor, verify, and enhance safety atconstruction sites from distant locations.
⃝T-iSafety® Truck: An AI-driven system to prevent collisions between vehicles and workers.
⃝Tunnel face-related technology: T-KIRIHA VR, TN-Monitor®, T-Quick Shot, T-iROBO®
Remote Shotcreting.
⃝T-iAlert® River: Enhancement of the flood warning system for river construction projects.
Uses AI to predict river levels 24 hours in advance.

Improving Safety for Building Users⃝TASS Rack®-Pallet: A simplified earthquake isolation system designed specificallyfor flat pallets.
⃝T-Flexible Cleanroom Membrane: Cleanroom system using fabric ducts.
⃝Hot exhaust gas diffusion prediction technology.

⃝Comprehensive collaboration for boosting tourism and strengthening disaster resilience(Unzen-shi, Nagasaki).
⃝Comprehensive partnership agreement to promote the creation of attractive communities(Okazaki-shi, Aichi).
⃝Vortex City: A town designed for innovative resource recycling (Kamakura-shi, Kanagawa).
⃝Comprehensive collaboration towards achieving carbon neutrality (Muroran-shi, Hokkaido).

Enhancing Biodiversity⃝T-GI Rain Garden: A technology that utilizes planting base materials that both absorb andretain rainwater, facilitating the landscaping creation.
⃝Monitoring the aquatic presence of rare amphibians using environmental DNA analysis
technology.
⃝Development of a new conservation method for the rare Kinran orchid.
⃝Mizube Concierge: A conservation planning tool for rare flora and fauna.
⃝Ikimono Concierge: A simplified tool for assessing biodiversity.
⃝Mori Concierge: A planning tool for designing green spaces with consideration to local character.

P.69 Sustainability Section

Taisei Group’s ZEB

Learn more about Green Renewal ZEB andZEF initiatives here.

Technology & Solutions(Japanese only)
The solution technology of the TaiseiGroup is described in detail on thewebsite “Technology & Solutions.”

Regional
NatureCooperation Co-ExistingSociety

Co-creation and Coexistence of Eco and Community

TAISEI Green Target (Japanese only)
We have created the TAISEI Green Target (FY2023 edition)
environmental pamphlet, which summarizes our various
initiatives aimed at solving our client’s environmental problems.

TA I SE I A N N UA L R E P O R T 2 0 2 3 50

Taisei Group’s Growth Strategy Topic 2 Management of Human Capital

Approach to Human Resources and Human Capital
In line with the TAISEI VISION 2030, which represents the Taisei Group’s medium- to long-term vision, one of our key priorities is topromote diversity and inclusion to create an attractive working environment. By fully leveraging the abilities of our diverse workforce
and by establishing working styles and environments where every employee can excel while experiencing job satisfaction andease of work, we aim to improve productivity and, thereby, enhance corporate value.

Realization of a Working Environment Emphasizing Job
Satisfaction and Ease of WorkTAISEI VISION
2030

The most valuable management asset of theTaisei Group is its “people.”
We aim to recruit and develop diverse human capital,
and to establish comfortable working environments, HR
systems, and compensation plans that are responsive tothe evolving needs of the times and enable employees
to fully utilize their abilities.

Until 2023
The Medium-TermBusiness Plan

To realize the envisioned
goals: To achieve a working
environment that prioritizes
job satisfaction and easeof work

Until 2026

To increase
corporate value
To enhance
productivity

To intensively address HR
challenges to achieve
TAISEI VISION 2030
To expand the mid-career recruitmentof talents in digital transformation (DX)and other diverse fields, while evaluating and implementing plans for theircompensation and benefits.

To Promote initiatives thatemphasize an attractive
working environment, as
well as diversity andinclusion

To evaluate and implement compensationand HR systems that are aligned withroles, responsibilities, and performance.

[Personnel policy]
Basic policy Personnel Policy that Contributes to the Creation of Corporate Value and Sustainable GrowthConcept of the organization to be aimed atConcept of human capital to be aimed at

Organization with high engagement focusing on
job satisfaction and ease of work

Professionals with cheerfulness, enthusiasm, integrity,and discipline as a business person[Medium- to long-term external environmentand structural changes]
IX
IX

Growing pressure for industry
restructuring

SX
SX

Moving towards addressing
environmental and social
challenges through businessDX
DX

Entering an era where DX
dictates competitiveness[Medium- to long-term personnel issues]
Recruitment and devel- ▪To strengthen the recruitment of talent in civil engineering and building construction▪To recruit human capital and build new HR systems to facilitate expansion
opment of human
into new business areas
capital▪To enhance development of human capital
Diversity, equity, andinclusion▪To create an environment where talent with diverse perspectives
can thrive

Workstyle reform▪To promote flexible work arrangements tailored to the uniqueconstraints on work location and hours in the constructionindustry

Job Satisfaction

Ease of Work▍To Strengthen Recruitment of Diverse Human Capital• To enhance the recruitment of professionals and talents in new
domains, in addition to maintaining a stable workforce in existing areas(Year-round recruitment, promotion of reemployment for early
retirees through “Job Return”)▍To Embed Diversity, Equity & Inclusion• To develop flexible work environments that allow diverse humancapital like female, elderly employees and non-Japanese employees
to excel as they navigate through different life stages.
▍Realization of Workstyle Reform• To implement flexible workstyles tailored to the unique needs ofthe construction industry (staggered work hours, flextime forchildcare, visibility of work hours through a monitoring system).
▍Advancement of Health Management• To continue to offer preventive measures and information to
improve both mental and physical well-being. This includes thepromotion of Femtech, subsidizing gynecological cancer
screening costs, expanding infertility treatment support, preconception care, and mental health initiatives.
▍Support for Life Planning• To continue to offer seminars on asset building and planning for asecond life phase.

▍Development and Strategic Placement of Talent• To maximize abilities and growth through the establishment ofcomprehensive training programs and strategic placement▍To Enhance Personnel Assessments to Increase Motivation
and Job Satisfaction• To clarify individual employee goals based on the TAISEI VISION 2030,
and strengthen reward mechanisms for high-performing employees• To award recognition to employees and business locations within
the Taisei Group that have contributed to the realization of the
TAISEI VISION 2030.

51 T A I S E I ANNUA L R EPORT 2023+

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

Initiatives to Develop Human Capital▍Enhancement of “Human Skills” and “Specialization”
We are advancing training programs focused on “human skills” tohelp individuals develop a well-rounded set of capabilities—encompassing mind, skill, and body—in a balanced manner.
Through these programs, we aim to instill a broad perspective
and cultivate individuals who are not just technically proficient but
also socially and culturally informed.

▍“Wellness-Oriented” Training Centers

We have integrated biophilic design elements into our training
spaces to create an environment that not only lowers stress but
also enhances focus and well-being through interaction withnatural elements.

▍To Boost Productivity through Online and On-Demand Training
We have implemented online and on-demand training modules
that can be accessed at the convenience of the employees.

▍Promotion of Action Learning

We are focused on translating classroom learning into actionableinsights in the workplace. Through a cycle of experiential learningthat includes experience, introspection, conceptualization, andapplication, we aim to convert acquired knowledge into meaningful
behavioral changes.
Training

Workplace

Training

Workplace

Classroom: “T-Light Blinds” for natural indoor lighting
Common conversation space: Designed with wood and plants

Training▍Support for Professional Certification
Awareness andaction plans

Practice

Review andlearning

Practice

Review andlearning

Practice

Introspection

Practice

Introspection

Experience

Conceptualization

Experience

Conceptualization▍Development of Digital Human Capital through DX
Academia
DX Academia is a systematized form of digital education thataims to develop human capital who uses digital technologies anddata to improve productivity and create new value. We will
provide a comprehensive learning environment for purposes
ranging from improving the literacy of all employees to developing
human capital who promotes DX.

P.45 Taisei Group’s Growth Strategy

To cultivate employees with high levels of expertise, we support
the acquisition of various professional certifications, such asFirst-Class Architect and First-Class Civil Engineering Construction Management Engineer. We provide financial assistance forthe necessary costs of these certifications and offer additional
incentives to encourage skill enhancement.

▍Executive-Employee Interviews

To ensure the well-being of employees stationed at remote
worksites, promote interactions between employees and executives,and boost employee morale, our executives engage in one-on-one
interviews with team members.

▍Meister System

Aimed at preserving and passing down technical know-how, wehave instituted a “Meister System.” Under this system, individuals
with robust experience and demonstrable technical aptitude areappointed as “Meisters,” who then provide hands-on coaching atworksites.

DX

Column 1

Human Resources Development of the Next
Generation of Engineers and Woman Engineers

Column 2

Promotion of Understanding of SDGs

Improvement of Sustainability Literacy

In June 2023, we held a workshop for employees of Taisei

We published the TAISEI Sustainability Handbook in August2022 to share the awareness of sustainability as a fundamental
part of our corporate activities among all Group officers andemployees and lead it to their own action. Based on that, executives from the Sustainability Division (Integrated) visited more than
30 divisions, branches, and group companies individually, andheld the Sustainability Management Briefing twice.
The first briefing session (September and October 2022)
focused on basic approaches to sustainability and social trends,
and the second briefing session (February and March 2023)
provided explanations and opinion exchanges focusing on
specific initiatives implemented by executives and employees.
The TAISEI Sustainability Handbook will be revised
accordingly and will continue to be used for induction training
after this fiscal year.

Corporation to experience “The Action!— SDGs Card
Game”—developed by SOMPO JAPAN Insurance Inc. It is agame in which all participants are divided into teams to start,
in a setting where they live in the same area, use cards(time, money, projects) they receive, and work together toachieve SDGs that theteams set.
They deepened theirunderstanding of SDGs
and learned that it was
important for eachindividual to take action.

TA I SE I A N N UA L R E P O R T 2 0 2 3 52

Taisei Group’s Growth Strategy Topic 2 Management of Human Capital

Advancing Diversity, Equity, and Inclusion
To fulfill the Taisei Group Philosophy of “to create a vibrant environment for all members of society,” it is essential to first establish awork environment where every employee can flourish. In 2006, ahead of other companies, we initiated diversity promotion measures with an eye towards the challenges of a declining population and the need for new value creation. Through ongoing evaluation and adaptation of these initiatives, our focus on diversity has evolved into a broader commitment to diversity, equity, andinclusion, with an enhanced emphasis on “job satisfaction” and “ease of work.” Moreover, recognizing the male-dominated natureof the construction industry, we are placing special emphasis on strategies that actively “engage men” in these efforts.
▍“100% Male Childcare Leave Adoption”—

A Continuous Effort since FY2017

Medium- to Long-Term Goals

To ensure that everyone feels secure in taking leave, we havemade the days off paid, sent encouraging emails to target
employees and their supervisors, and showcased examples of
those who have taken leave. As of March 2023, more than 1,550
employees have benefited from this, translating to one in five male
employees. We are committed to enhancing this environment
further to allow leaves of over 14 days for all.

[Recruitment]
01	Percentage of female employees in the recruitment of
new graduates: At least 25% by 2024 and at least
30% by 2030
22% in FY2023 (21% in FY2022).

[Women’s participation and advancement in theworkplace]▍“Leadership Training for Male Managers”—

Transitioning from D&I to DEIB

02	More than 10 times more female managers by FY2025
than the level in FY2015
The number increased eight times from 39 in FY2015 to
314 in FY2022. (The target for FY2023 is 330)03	Percentage of female engineers: At least 15% by 2030
809 employees or 10.6% in FY2022 (767 or 10.2% in
FY2021) Of these, the number of female employees
working at our worksites increased from 110 in FY2015 to
170 in FY2022.

For everyone to fully utilize their unique attributes (D: Diversity)and thrive, it is essential to establish a psychologically safe
workplace that embodies fairness (E: Equity), acceptance andrespect (I: Inclusion), and a sense of belonging (B: Belonging).
Primarily aimed at male managers, our training focuses onbuilding awareness and introducing management practices that
contribute to such an environment.
▍“Support for Balancing Childcare with Career”—Creatinga Space for Couples to Strategically Plan Together[Childcare support for males]

Mutual understanding and cooperation are essential for bothpartners to be able to raise children and have fulfilling careers. In
order to achieve this, we conduct "Seminars Joined by Both
Partners for Achieving Work and Life Balance" to support thecreation of a support system that avoids losing opportunities for
growth at work, such as reviewing the division of daily childcare
and housework, and sharing a medium- to long-term career
vision, including the meaning of work.

04 Rate of taking childcare leave by males: 100%
We have achieved 100% continuously since FY2017.
05 The average number of childcare leave days taken bymales: At least 14 days
11.6 days in FY2022

Taisei Corporation’s initiatives for DE&I
● Initiatives involving males● Numerical targets

Decision on
promotion ofdiversity

Establishmentof dedicatedorganizations

2006

2007

2008

● Other measures

2009

Measures to prevent
retirement due tonursing care

Work-Life
Balance
SupportSeminar for
Couples

2010

2012

A survey is conducted on the attitudes of males and females towards thepromotion of women’s participation and advancement in the workplace
We recognize that “nursing care” initiatives are
effective in raising awareness of work-lifebalance among males as well as females

Initiating specific measures

2

In order to promote women’s participation andadvancement in the workplace, organizations
where male employees account for 80% must
establish accessible systems and environments,
as well as change males themselves.

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

8

Setting targetsof the number
Male manager
of femaletraining
managers

2013

2014

To increase people in leadershiproles❶ To increase female employees in
key positions❷ To expand the scope of work❸T
 o support for capacity development❹T o support for continued
employment❺ To reform corporate culture(awareness)

To focus on
initiatives
involving males

About the Taisei Group

Sustainability Section

Taisei Group’s Growth Strategy

Governance Section

Data Section

Promotion of Health and Productivity Management
Taisei Corporation acknowledges that the well-being of its employees is not only essential for cultivating a vibrant work environment but also for ensuring the happiness and welfare of both the employees and their families. With this understanding, we
provide comprehensive support for the physical and mental health of our staff. Specifically, we emphasize post-health checkup
interventions and personalized consultations based on the levels of physical and mental fatigue, with the aim of reducing
health-related issues. Moreover, we have introduced an educational pension benefit system that provides educational support
for families in the event that an employee becomes unable to work due to death, injury, or illness and has to retire.
For mental well-being, we have established an Employee Assistance Program (EAP) consultation room, where employees
can easily seek advice. We offer consultation services, including face-to-face meetings with external counselors as well asphone and email consultations that are available to both employees and their families. Especially for our younger staff, weregularly administer health awareness surveys and encourage consultations with counselors if they are experiencing stress oranxiety. Moving forward, we will continue to advance our health management initiatives, focusing on engaging with younger
employees, raising awareness of mental health, and providing support to balance medical treatments with work commitments.

Improvement of Employee Engagement
To achieve the goals of TAISEI VISION 2030, further enhancement in productivity is essential. We believe that it is crucial for eachindividual employee to maintain high levels of engagement, built upon a foundation of psychological safety in the workplace.
In FY2022, we conducted an engagement survey using Motivation Cloud, a service provided by Link and Motivation Inc., targeting
employees of Taisei Corporation and its major Group companies. Based on the issues
identified, we have been implementing incremental improvements. We have alsoestablished the TAISEI Next-Generation VISION Proposal Working Group to consider
immediate challenges, their solutions, and strategic actions for the medium–to–long-term.
Starting from FY2023, we plan to increase the frequency of engagement surveys
to twice a year. We will periodically monitor improvements and integrate the findings
into various management initiatives, aiming for a continuous improvement in engagement scores.

TAISEI Next-Generation VISION Proposal
Working GroupA scene in a meeting
Materiality⑦

P.81 Realization of an attractive working

environment that is good to work in

Setting targetsof the numberof femaleengineers

2015

Keeping a 100% rate of taking childcare
since FY2017
Setting targets leave* Total number of male employees taking childcare leave:of takingchildcareleave bymales

Over 1,550(20%, one in five males)* The average number of days taken increased as
employees taking leave increased (FY2022): 11.6 days

Sustainability Section

Filling the gender
gap
Equity (fairness,equality)

Females’ healthchallenges
Settingtargets of Infertility treatfemale hires ment support

2021

2022

2016

① Supervisor (male manager)
training• To address unconscious bias
• To learn how to build anorganization to ensure
psychological safety② Outreach to families• To gain the understanding andcooperation of spouses for worklife balance• To support the creation of a system
for sharing roles within thehousehold③ Childcare support for males• To gain the understanding andcooperation for employees
balancing work with life
• To promote male employees’ 100%rate of taking childcare leave④ Prevention of retirement due tonursing care
• To gain the understanding andcooperation for employees
balancing work with life
• To establish systems and environments where employees can use
easily with a wide variety of options

TA I SE I A N N UA L R E P O R T 2 0 2 3 54

Taisei Group’s Growth Strategy Topic 3 Human Rights Due Diligence

Initiatives

Approach to Respecting Human Rights
The Taisei Group’s fundamental attitude towards respecting human rights is to contribute to the realization of an inclusive society
by fulfilling our corporate responsibilities voluntarily, positively, and proactively so as not to cause adverse impacts on human rights
in relation to our business activities.
Based on the recognition that respecting human rights is fundamental to sustainability management, which seeks to achieveboth social and corporate sustainability, we will play our role as a good corporate citizen by promoting human rights due diligence
initiatives and other measures to respect human rights.

Human Rights Due Diligence Initiatives
In order to prevent and mitigate the adverse impact of our business activities on human rights, we have established and continue
to implement a human rights due diligence system based on the United Nations Guiding Principles on Business and Human
Rights (the Guiding Principles) and other principles. When operating the system, we review and improve it as necessary to
deepen our efforts to respect human rights.

Flow of Conducting Human Rights Due Diligence
5

1

2
6

2

1

4

3

Dialogue with stakeholders

1
2

Guiding Principle 16

Maintain a commitment to meet the responsibility to respecthuman rights
Guiding Principle 18

Identify and assess adverse impacts on human rights
Guiding Principle 19

3

3

4

4

5

5

Guiding Principle 21

6

6

Guiding Principle 22

Prevent and mitigate adverse impacts
Guiding Principle 20

Assess the effectiveness of activities

Provide explanations and disclose information

Remediation❶ Maintain a Commitment to Meet the Responsibility to Respect Human Rights
In April 2022, we revised our Human Rights Policy to internally and externally clarify the Group’scommitment to fulfilling our responsibility to respect human rights, and launched human rights
due diligence initiatives.

Human Rights
Policy❷ Identify and Assess Adverse Impacts on Human Rights
Under the guidance and advice of SOMPO Risk Management Inc., an external expert, we
extracted human rights risks related to the Group’s business based on international guidance onhuman rights (the Human Rights Guidance Tool of the United Nations Environment Programme
Finance Initiative). The human rights risks identified were quantitatively analyzed and evaluatedwith respect to two aspects: “Impact on human rights (severity, number of people affected, possibility of remedy, and likelihood of occurrence)” and “connection with the Company.” Based onthem, we identified human rights issues to be addressed as priority after deliberation by the
Sustainability Committee and the Board.

Human Rights
Risk Map❸ Prevent and Mitigate Adverse Impacts
With regard to the identified human rights issues to be addressed as priority, the Divisions incharge of each issue take the lead in implementing various measures to prevent and mitigate
adverse impacts.

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

Prevention andmitigation ofadverse impacts

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section❹ Assess the Effectiveness of Activities
We regularly assess the effectiveness of activities to prevent and mitigate adverse impacts andimprove them as necessary. In particular, we are focusing on the following activities for respecting
human rights in the supply chain.

Human rights issues to be addressed as priority and key responses(specialized contractors and suppliers)🅟 Priority human rights issues                  

🅓M ajor prevention and🅒 A ssessment of the effectiveness

Health and safety (occupational accidents)● Thorough safety management● Statistical violation analysis

 Specialized
contractor
workers

mitigation activities

Working conditions (wages / long working hours)
Discrimination and harassment
Migrant labor (foreign workers)
Forced labor (overseas)
Working conditions (wages / long working hours)
Migrant labor (foreign workers)

construction period, andright delivery time
Sustainable Procurement
Guidelines

questionnaire surveys
and interviews● Questionnaires of

employers of foreigntechnical interns● Interviews with foreigntechnical interns● Provision of various educa-tion and training

Forced labor (overseas)of major activities● Sustainable procurement● Order at the right price, right● Embed the Taisei GroupChild labor (overseas)

Supplier
workers

Management andAssessment ofSupply Chain
management
Risks● Visit surveys of overseas

subcontractors and suppliersChild labor (overseas)❺ Provide Explanations and Disclose Information
The status of human rights due diligence is regularly reported to the Management Committee, theSustainability Committee, and the Board, and disclosed in a timely and appropriate manner on the
Company's website.

Human rights
due diligence❻ Remediation
We have established various consultation contacts regarding violation of human rights, andaccept consultation from all internal and external stakeholders, including foreign workers. In theunlikely event that the Taisei Group is found to have caused or facilitated an adverse impact onhuman rights, we will promptly remedy and correct it by appropriate means in accordance with
our Human Rights Policy.

List of humanrights due
diligence remedy
consultation
contacts▍ Dialogue with Stakeholders
Based on the understanding that dialogue with stakeholders is crucial for advancing our efforts to respect human rights, we
actively engage in dialogues and discussions with stakeholders as appropriate. In FY2022, we conducted dialogues withexternal experts and our Chief Sustainability Officer (CSO), as well as discussions with specialized contractors and suppliersboth in Japan and overseas, and interviews with foreign technical interns, among other activities. We will utilize the insights
gained from these dialogues and discussions in our future activities to respect human rights.

Discussion by CSO (left) and outside expert(lawyer OMURA) (right) regarding SDGs
and human rights

Briefing for business partners on thePhilippines North-South Commuter Railway
Project

Interview with foreign technical interns

TA I SE I A N N UA L R E P O R T 2 0 2 3 56

Sustainability 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
Dialogue

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

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

About the Taisei Group

Taisei Group’s Growth Strategy

change 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
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

Sustainability Section

Governance Section

Data Section

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.

TA I SE I A N N UA L R E P O R T 2 0 2 3 58

Sustainability 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

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

About the Taisei Group

Taisei Group’s Growth Strategy

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

Sustainability Section

Governance Section

Data Section

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.

TA I SE I A N N UA L R E P O R T 2 0 2 3 60

Sustainability Section

Message from the External Members of the Board

To Expect Development by Solving Environmental andSocial Issues

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

Norio OTSUKA
Elected since 201961 T A I S E I ANNUA L R EPORT 2023

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.

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

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

TA I SE I A N N UA L R E P O R T 2 0 2 3 62

Sustainability Section

Sustainability Management

Sustainability Management▎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

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

Overall
Principles ofConduct

OverallManagement
Perspective

Individual Policies and Standards on Sustainability● Environmental Policy

Environment

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)❶ Realization of a sustainable andenvironmentally friendly society❷ Ensuring quality and improving

technology❸ Technical development for realizing asustainable society❹ Promotion of supply chain management❺ Thorough management of occupational

health and safety❻ Cultivation of technical staff andsecuring human resources❼ Realization of an attractive working

environment that is good to work in❽ Thorough 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

Individual Policies

About the Taisei Group

Taisei Group’s Growth Strategy

ustainability Management Promotion▎ SSystem

Governance Section

Sustainability Section

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.
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

TA I SE I A N N UA L R E P O R T 2 0 2 3 64

Sustainability Section

Materiality Environment

Materiality 1

Realization of a Sustainable and Environmentally
Friendly Society

Related

SDGs

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.

▎ Responsibilities and Contributions through BusinessWe 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.
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

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

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

Specific targets to be achieved under the Environmental Policy

TAISEI Sustainable Action® (TSA)(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

▎ 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.

▎ Environmental Due Diligence
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.”
Supply Chain (Environment)

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

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

Realization of a Sustainable and Environmentally Friendly Society

TAISEI Green Target 2050
▎ Taisei Group’s Long-Term Environmental Targets
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

DecarbonizedSociety

FY2050Target

FY2030TargetRecycling-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%

• Scope 3: Zero CO2 emissions of the
supply chain• Final 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%

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

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

• 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

Forest Resources &Forest Environment• To minimize negative impact on forest resources and forest
environment through wood procurement based on zerodeforestation concept• To 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.
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.

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

Activities to Reduce Environmental Impact

TA I SE I A N N UA L R E P O R T 2 0 2 3 66

Sustainability Section

Materiality Environment

Realization of a Sustainable and Environmentally Friendly Society

For Realization of a Decarbonized Society▎ 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
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
Sustainability Section

Policy / Commitment

Initiatives● Action Guidelines for Taisei: Promoting environmental conservation and creation● TCFD ● SBT● Environmental Policy●GX League● TAISEI Green Target 2050: Realization of a decarbonized society●United Nations Global Compact “Environment”● Promise of Eco-First ● Taisei Group Sustainable Procurement Guidelines● Challenge Zero (Japan Business Federation)● Green Procurement Guidelines● 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)

sector, accelerating our initiatives towards carbon neutrality

Performance

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.
○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.

Scope 1 + 2: CO2 emission reduction rate per sales
Group target-15% (Compared to FY2019)

Scope 1 + 2: Reduction rate of total CO2 emission
Group target-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-46% (Compared to FY1990)

At building operation stage: Reduction rate of designbuild estimated CO2 emissions
Non-consolidated target-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.

⃝

Hybrid construction machinery, energy-efficient construction machinery,

Possession of renewable energy power sources (RE)⃝

Possession of power sources

Zero Carbon footprint Buildings (T-ZCB)⃝

Development and demonstration of T-ZCB

New energy (hydrogen/ammonia)

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*

⃝

⃝

Scope 3

AvoidedemissionsRegional cooperation

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

About the Taisei Group

Taisei Group’s Growth Strategy

Governance Section

Sustainability Section

Data Section▎ Decarbonization Technologies for Each Phase of Construction
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
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

Procurement

Construction

Operation

Repair

Demolition

Ⅰ. Zero Carbon Design: Reducing CO2 in the Procurement Phase● T-e Concrete® environmentally friendly concrete that dramatically reduces CO2 emissions

Prolonged
carbon fixation

P.77 T-eConcrete
Sustainability Section®

● Use of Wood Materials That Fix CO2

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.

Ⅱ. Zero Carbon Construction: Reducing CO2 in the Construction Phase● TSA：TAISEI Sustainable Action®, Environmental Impact Reduction Activities● System to Measure and Aggregate Worksite CO2 Emission Data

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.

CO2 Emissions Data Aggregation System
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 Phase● 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.

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

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

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

Introduction

⃝

Use

⃝

Possession of RE to cover Group power consumption needs⃝

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

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

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

Development and dissemination of CCUS⃝⃝

Permeation throughout society of construction materials that contributeto decarbonization

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

Roadmap

Decarbonized Society

TA I SE I A N N UA L R E P O R T 2 0 2 3 68

Sustainability Section

Materiality Environment

Realization of a decarbonized society

ZEB of Taisei GroupNew Construction ZEB

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

Green Renewal ZEB

LIFE Toyosu

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

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.

Kansai Branch

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
Achieving both comfort and energy-saving

T-Green® Radiant Duct

(ZEB Ready)BEI=
0.93⇒0.37

Yokohama Branch

T-Green® DI Window

Practicing General-Purpose ZEB Technology in Medium Stock Offices
ZEB facade

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

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

Wellness

Wooden interior andbiophilic design① 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

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

* 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.

Low carbon interior materials

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

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data 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.

New Construction ZEB

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

ZEH

OKI Honjo Plant, Building H1

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

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
EnergyPromotion 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.

ZEH-M-Ready: SHINRYO CORPORATION’s employee dormitory

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

ZEH-M Oriented: Terrace Kamishakujii West

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

TA I SE I A N N UA L R E P O R T 2 0 2 3 70

Sustainability Section

Materiality Environment

Realization of a Sustainable and Environmentally Friendly Society

For Realization of a Recycling-Oriented Society▎ 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.

▎ 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.

▎ 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.

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● Plastic Smart (Ministry of the Environment)● Promise of Eco-First ● Taisei Group Sustainable Procurement Guidelines● Water project (Ministry of the Environment)● Green Procurement Guidelines  ● Green Procurement Standard Guidelines● Japan Partnership for Circular Economy: J4CE (Ministry of theEnvironment, Ministry of Economy, Trade and Industry, Japan
Business Federation)● Construction byproduct processing manual

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

Patrol collection(common carrier)

3PL* Provider
Reload order

Construction
scrap sorting

Reload baseSecondarytransportation(Individual carrier)Recycled asmaterials

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

Shipment

Construction
Resource
circulation
loop
Operation

ColumnTo each plan Receiving plants

To eachworksite Collection
order

Circular
EconomyDismantling

Product

CarbonNeutralRolling

Decarbonization
loop
Electric
furnaceRawmaterial

Collection

Outflow

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

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

Roadmap

Recycling-Oriented SocietyAbout the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

Realization of a Sustainable and Environmentally Friendly Society

For Realization of a Nature Co-Existing Society▎ 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 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
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
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● Action Guidelines for Taisei: Promoting environmental conservation and creation● United Nations Global Compact “Environment”● Environmental Policy ● TAISEI Green Target 2050: Realization of a nature co-existing society● Promise of Eco-First ● Declaration of Biodiversity Preservation by Taisei Group● Initiative based on the Declaration of Biodiversity by Keidanren(Japan Business Federation, Keidanren Committee on Nature
Conservation)● Guidelines for Conservation of Biodiversity● Japan Business Initiative for Biodiversity (JBIB)● Taisei Group Sustainable Procurement Guidelines ● Green Procurement Guidelines● 30 by 30 Alliance for Biodiversity (Ministry of the Environment)● TNFD Forum● Green Procurement Standard Guidelines

Performance● Technology to Conserve High-Quality Natural Environments

Creating a forest inspired by natural woods from seedlings
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.

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

Development
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

TA I SE I A N N UA L R E P O R T 2 0 2 3 72

Sustainability Section

Materiality Environment

Realization of a Sustainable and Environmentally Friendly Society

For Resolving Issues Related to the Forest Resources andthe Forest Environment
Sustainable wood use
Appropriate woodprocurement

Restoration of forest resources● Wood procurement statussurveySustainable 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● Promotion of wooden

structioncon-● Support for sustainable for-est management

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

conservation 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
forests into natural forests

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

Reuse*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

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●森林の保全活動の実施*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

5/14

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

Information Disclosure Based on the
TCFD Recommendations
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.”
Information Disclosure Based on the TCFD Recommendations▎ Governance

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

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.

▎ Risks and Opportunities
Type

Transitions

Risks/Opportunities
Market shrinkage andincrease in construction cost
due to the introduction ofcarbon pricing and tightened
CO2 emission regulations

Impactlevel

Descriptions⃝Decrease 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.
⃝Increase in procurement costs and process delays due to damage to suppliers

Physical Rise in severity andfrequency of natural disasters

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

Risk Management /Indicators and Targets

TA I SE I A N N UA L R E P O R T 2 0 2 3 74

Sustainability Section

Materiality S o cial

Materiality 2

Ensuring Quality and Improving Technology

Related

SDGs

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.

ISO14001/ISO9001/ISO45001▎ Risks and Opportunities
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.

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

About the Taisei Group

Taisei Group’s Growth Strategy

Governance Section

Sustainability Section

Data Section▎ Towards an Effective System
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.
● 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.

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

● 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.

TA I SE I A N N UA L R E P O R T 2 0 2 3 76

Sustainability Section

Materiality S o cial

Materiality 3

RelatedTechnical Development for Realizing a Sustainable Society SDGs
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● 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● Number of orders received for net Zero

Energy Buildings (ZEBs)

P.69 Sustainability Section
Taisei Group’s ZEB

Technology Topics

T-iROBO Bulldozer®

8 projects

Non-consolidated target

Zero Energy Buildings (ZEBs) in FY2022.

Autonomous Construction
Machine280 cases

Non-consolidated target

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
Cement Zero Type

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

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

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

About the Taisei Group

Taisei Group’s Growth Strategy

Governance Section

Sustainability Section

Materiality 4

Data Section

Related

Promotion of Supply Chain Management

SDGs

Policies and Basic Approach
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 / Commitment

Initiatives

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

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

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

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

TA I SE I A N N UA L R E P O R T 2 0 2 3 78

Sustainability Section

Materiality S o cial

Materiality 5

Thorough Management of Occupational
Health and Safety

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.

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.

Initiatives● United Nations Global Compact, “Human

Rights” and “Labor”● ISO45001

2023 KPI● Number of fatal accidents

Frequency Rate
P.21-22 Accident
Financial and Non-Financial
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.
● 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

0 cases

Taisei Group target(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

About the Taisei Group

Taisei Group’s Growth Strategy

Governance Section

Sustainability Section

Data Section

Materiality 6

Cultivation of Technical Staff and Securingof Human Resources

Related

SDGs

Policies and Basic Approach
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● Medium-Term Business Plan (2021–2023): To enhance support for Soyukai member

companies

Performance

2023 KPI● In May 2021, in line with the new targets set by Nikkenren, we established the“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.

● 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

TA I SE I A N N UA L R E P O R T 2 0 2 3 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Governance Section

Message from the Chairman of the Board

I Will Contribute to Increasing theGroup’s Corporate Value by Enhancing
Trust between the Execution Side andthe Supervision Side.

Shigeyoshi TANAKA
Chairman of the Board,
Representative Director

On the Occasion of Assuming the Chair
Starting in April 2023, I succeeded Mr. YAMAUCHI as
Emeritus Counselor and assumed the role of Chairman of
the Board. I feel quite honored and humbled since I take on
this crucial role at the milestone of our 150th anniversary.
In April 2020, the Company undertook a review ofgovernance, which is aiming at strengthening the Board’s
supervisory function, enhancing deliberation, and accelerating decision-making in business execution, in order tofortify governance. I see my role as continuing along thispath, striving to further refine the governance structure of
the Group.
I will deepen communication between External
Members of the Board and Internal Members of theBoard. Leveraging my practical understanding of theGroup’s business and operations specifically at the worksite, I will work to enhance the effectiveness of our Board
as its Chairman and aim to increase corporate value.

Role of the Chairman of the Board
The Company’s Board currently comprises twelve (12)Members of the Board, four (4) of whom are External
ones. Internal Members of the Board and Executive
Officers are responsible for explaining agenda items. We
carry out highly objective and transparent deliberations byrespecting the opinions of External Members of the Board
and External Audit & Supervisory Board Members whobring specialized expertise and experience to the Board.
In this context, my role as Chairman is to select appropriate agenda items and facilitate discussions to ensurethat they serve as a forum for constructive debate andexchange of diverse opinions, thereby enhancing thequality of the discussions.
Concerning the agenda brought to the Board, weare delegating authority to the executive side based on
annual analysis of the Board’s topics. However, there isroom for improvement. The Board primarily focuses on

its supervisory function, and we will continue to review
the agenda to further enrich discussions on the broader
strategic direction of the Company, including its “desired
state” and “medium- to long-term value increase.”
Moreover, for the purpose of fostering deeper mutual
understanding between External and Internal Members of
the Board, we regularly hold board opinion-exchange meetings and open discussions. We plan to further rejuvenate
these board discussions by increasing such opportunities.
In addition, another important aspect of my role isto secure diverse human capital with the knowledge,
specialized skills, and experience that will contribute toour medium- to long-term vision for the Company, whichis to be a “pioneering corporate group contributing to
the development of a resilient society where people canlive affluent and cultured lives.” We will review the composition of the Board, considering diversity in terms ofinternal and external candidates, gender, etc., in anticipation of our future vision for the Company.

Initiatives for This Fiscal Year
This fiscal year is crucial for the Group to restore thetrust and credibility we have with our stakeholders. We
will work towards increasing the corporate value of theGroup by implementing effective monitoring measures forbusiness execution. This will allow us to surpass clients’
expectations in the value we deliver. In addition, we will
focus on building stronger trust between the execution
side and the supervision side, while also providing thenecessary support for our executives and employees
in the execution side to take appropriate risks aimed atdriving growth. Through implementation of all those measures, I will contribute to increasing the corporate value of
the Group.

TA I SE I A N N UA L R E P O R T 2 0 2 3 82

Governance Section

Message form the External Audit & Supervisory Board Members

To Support the Company’s Growth from an Auditing
Perspective

Yasuhiro SATO
External Audit & Supervisory
Board Member
Elected since 2020

The roles of Audit & Supervisory Board Members have significantly
expanded compared to the past. Now, it is not only about traditional
auditing of the duties executed by Members of the Board but also providing
insights into the Company’s overall management. In other words, a new
aspect of the roles is to support the Company’s prospective growth froman auditing perspective. Based upon this understanding, I actually engage
in discussions about each project, offering candid opinions while keeping
Taisei Corporation’s leading position in the construction industry in mind.
So far, the governance reforms at Taisei Corporation have positively
impacted the Board’s operations and invigorated its discussions, showing that we are moving in the right direction. However, it seems that theexecution side is not yet accustomed to incorporating the perspectives
and concerns of External Members of the Board. I feel that there is an
opportunity here to more actively integrate the external viewpoints of theseExternal Members into our management strategies.
Governance and growth strategies are inextricably linked, and I aim tocontribute to shaping the new governance framework that will support theCompany’s future.
.

To Enhance the Effectiveness of Audits from anExternal Perspective

Seishi TASHIRO
External Audit & Supervisory
Board Memberr
Elected since 2020

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

The Audit & Supervisory Board Members and the Audit & Supervisory Board
have a duty to audit the performance of Members of the Board, taking into
account their fiduciary duties to shareholders. This is fulfilled to respond tosocietal trust through actions that contribute to both the integrity of corporate management and the enhancement of corporate value. In this context,
External Audit & Supervisory Board Members play a crucial role in enhancing
the effectiveness of these audits. They do this by offering perspectives andinsights from an external viewpoint, while collaborating with full-time Audit& Supervisory Board Members, the internal audit department, and theaccounting auditors.
It has been three years since I took on the role of an External Audit &Supervisory Board Member. I have noticed significant improvements in theselection of topics discussed during Board meetings and the amount of time
allocated for meaningful deliberation, compared to when I first assumed thisposition. These more dynamic discussions have contributed to enhanced
governance. Within the Audit & Supervisory Board, we scrutinize the agenda
items prior to meetings at the Board and engage in post-meeting discussions to assess the adequacy of the deliberations.
Moving forward, as an External Audit & Supervisory Board Member, I am
committed to making contributions that bring joy to all stakeholders such as
clients, shareholders, employees and society at large.

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

To Expect Greater Diversity as the Key to Future
Success
There are two elements I particularly pay attention to in my role as an Audit &Supervisory Board Member. The first is the concept of individual accountability
among Audit & Supervisory Board Members. This implies that we should constantly question how well we are fulfilling our responsibilities, not just towards
the executive management but also towards our fellow Audit & Supervisory
Board Members. The second is to be fully familiar with Taisei Corporation. By
comprehending not just the business operations but also the company culture,
we can better promote governance mechanisms that are truly suitable for ourorganization. In this context, the synergy between Internal and External Audit &Supervisory Board Members is paramount.
At the Board meetings, Audit & Supervisory Board Members often have
many opportunities to opine and are seen as proactive contributors to thecollective decision-making process. I also notice that various committees aim
to bolster governance by actively involving both Internal and External Audit& Supervisory Board Members as observers. However, I feel that there is stillroom for improvement in terms of diversity, especially concerning the genderand international background of Members of the Board and Executive Officers.
I anticipate that enhancing the diversity of human capital across the organization and fostering a wide range of skills and perspectives will be crucial for the
future growth and success of the Taisei Group.

Keiko OHARA
External Audit & Supervisory
Board Member
Elected since 2020

To Pursue Right Decisions from an Impartial Standpoint
External Audit & Supervisory Board Members are highly expected tomaintain an impartial and independent position in relation to the company.
While auditing the Members of the Board’s execution of duties, we remain
acutely aware of this impartiality. We meticulously evaluate whether theinternal control system is functioning as it should. Should any irregularities arise, we engage in comprehensive discussions with the Company toboth address the issue at hand and devise preventive measures for the
future. In addition, I believe it is crucial to continually ensure that the Audit& Supervisory Board receives timely and appropriate reports, enabling us
to make informed decisions.
At the Board meetings, I look forward to increasingly meaningful discussions informed by the hands-on experience of Internal Members of theBoard and the broader perspectives of External Members of the Board. The
synergy from these discussions, I believe, will further enhance the Company’s corporate value.
Currently, we are facing with challenges such as optimizing and streamlining work processes in compliance with labor hour regulations, and properly allocating human resources. I am committed to contributing, in whateverway I can, to providing employees with an organizational environment where
they can find satisfaction and fully dedicate themselves to their work.

Masamitsu MIURA
External Audit & Supervisory
Board Member
Elected since 2021

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Governance Section

C o rp o ra t e G o v er n an ce

Corporate Governance▎ Our Fundamental Approach
The Taisei Group’s fundamental approach to corporate governance is to ensure the swiftness, appropriateness, fairness, and transparency in management decision-making in order to earn the trust of society whilepursuing sustained development as a business.
Corporate Governance / Internal Controls
Fundamental Corporate Governance Polity

Evolution of the Company’s Governance1999● Jun. 1999

Aug.

Introduced the executive officer system
Established the Ethics Committee (now Sustainability Committee)● Nov. 2000

Established the Executive Personnel Committee● Jun. 2003

Elected an External Member of the Board for the first time

● May 2006

Formulated the Fundamental Policy to Enhance Operational Compliance Systems		

2006Jun.		

Established the Remuneration Committee
Abolished the executives’ retirement benefits system

2015● Jun. 2010

Elected an Independent External Audit & Supervisory Board Member● Apr. 2014

Elected an Independent External Member of the Board● Nov. 2015

Formulated the Fundamental Corporate Governance Policy● Jan. 2020

Established the Governance System Review Committee

Apr.

Established the Management Committee

Introduced a performance-based compensation (stock compensation) system▎ Overview of Corporate Governance System
Taisei Corporation has chosen a company structure with an Audit & Supervisory Board. The board of directors (the “Board”) focuseson the Company’s sustainable growth and the enhancement of corporate value in the medium-to-long-term. Its primary roles are: (i)to indicate the future directions from wide viewpoints in respect of the corporate strategy, (ii) to establish an environment that supports appropriate risk-taking by the senior management, and (iii) to effectively oversee the management and Members of the Board
from the independent and objective viewpoints. The board comprises twelve (12) members: eight (8) from within the Company andfour (4) external members. These external members of the Board, consisting of three (3) men and one (1) woman, provide an objective perspective, enriching board deliberations with diverse views and strengthening management oversight.
To invigorate its operations, the Board has established several internal committees: the Governance System Review Committee, the Executive Personnel Committee, the Remuneration Committee, and the Sustainability Committee.
The Management Committee, serving as the highest decision-making body on the execution side, deliberates and resolves
business execution matters delegated by the Board. Chaired by the President, the Committee includes eleven (11) members
chosen by the Board.

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

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Data Section

Governance Section

Furthermore, the Company has set up the Sustainability Promotion Committee and the Risk Management Committee. These
operational committees deliberate on matters concerning consultations with the Management Committee and the President.
To ensure thorough compliance, the Compliance Committee, chaired by an external expert, has been established as a special
committee to address consultations with the President.
The Audit & Supervisory Board receives reports from each member about the status and outcomes of their audits. They
discuss and decide on statutory issues and those related to the performance of Audit & Supervisory Board members’ duties.
Periodic reports on audit plans and results are also received from both the internal Auditing Department and the external
Accounting Auditor. This board includes six (6) members: two (2) internal and four (4) external, ensuring a neutral and objective
oversight mechanism with the help of External Audit & Supervisory Board Members who possess specialized knowledge andmaintain a high level of independence.

Corporate Governance Structure（As of July 1, 2023)
Shareholders / General Meeting of Shareholders
Election/Dismissal

Election/Dismissal

Election/Dismissal

Committees within the Board
Accounting Auditor

Cooperation

Members of the Board/
the Board

Audit & Supervisory
Board Members/
Audit
Audit & Supervisory Board

Prior
Consultation
and Report● Governance System Review

Committee● Executive Personnel Committee● Remuneration Committee● Sustainability Committee

Cooperation

Appointment/
Dismissal/Supervision

Executive Officers
Management Committee

Report/Recommendation

President andChief Executive Officer

Cooperation

Report/Recommendation

Audit

Group Companies● Sustainability Promotion Committee● Risk Management Committee, etc.

Special Committee

Auditing Department

Internal audits

Operations Committees

Internal audits● Compliance Committee

Direction/Supervision

Operating Divisions

Support/Guidance/
Cooperation

Committees within the Board （As of July 1, 2023)
Name

Terms of reference

Governance System
Review Committee

Consideration of the development andoperation of governance systems

Executive Personnel
Committee

Consideration of personnel of Members of
the Board and Executive Officers, etc.

Remuneration
Committee

Consideration of remuneration for
Members of the Board and Executive
Officers

Sustainability
Committee

Consideration of strengthening the sustainability management of the entire Group,
including the Company

Members

Observers

Explanatory
notes

Chairperson

EMB*1

Chairperson

EASBM*2

Chairperson

IMB*3

Chairperson

FASBM*4*1 External Member of the Board *2 External Audit & Supervisory Board Member *3 Internal Member of the Board*4 Full-Time Audit & Supervisory Board Member

TA I SE I A N N UA L R E P O R T 2 0 2 3 86

Governance Section

C o rp o ra t e G o v er n an ce▎ Skill Matrix⃝ Expertise and experience expected from Members of the Board and Audit & Supervisory Board Members
Business
Management

Legal Affairs andRisk Management

Finance andAccounting

Global Experience

Sustainability

Sales/MarketingTechnologies

●

●

●

●

Members of the Board

Shigeyoshi TANAKA●

Yoshiro AIKAWA

●

●

●

●

Hiroshi TSUCHIYA

●

●

●

●

Masahiko OKADA●

Hiroshi KIMURA

●

●

●

●

Mayuki YAMAURA

●

●

●

Yuichiro YOSHINO

●

●

●

Toshiyuki TSUJI

●

●

●

●

External members●

Atsuko NISHIMURA

●

●

●

●

●

●

●

Fumiya KOKUBU

●

●

●

Tsutomu KAMIJO

●

●

●

Takashi HAYASHI●

Shuichi OKUDA
External members

Audit & Supervisory Board Members

Norio OTSUKA

Yasuhiro SATO

●

●

●

●

●

●

●

●

Seishi TASHIRO●●

Keiko OHARA

●

●

●

Masamitsu MIURA

●

●

●

●

Note: The above matrix indicates skills particularly expected for Members of the Board and Audit & Supervisory Board Members and does not list all skills that Members of theBoard and Audit & Supervisory Board Members currently have.

⃝ Concepts behind the above “Expertise and Experience”●B usiness Management

Skills for management in General

Experience as a top executive of a company or corporation, or practical insights related to our business operations.
●L egal Affairs and Risk Management

Expertise in legal affairs and risk management, or possessing attorney qualifications.
●Finance and Accounting

Expertise in finance and accounting, management experience in a financial institution, or credentials as a certified public
accountant or tax accountant.
●G lobal Experience

Experience in overseas business or insights into global management, or a comprehensive understanding of international affairs.
●Sustainability

Knowledge and experience in renewable energy, environmental sectors, human resource development, diversity, social
contributions, corporate governance, and other related fields.
Skills for theCompany’s
business●S ales/Marketing

Insights and experience in sales and marketing pertaining to our business operations.
●Technologies

Knowledge and experience regarding technologies relevant to our business operations.

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

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section▎ Analysis and Evaluation of the Overall Effectiveness of the Board
The Board of the Company analyzes and evaluates effectiveness of the Board and discloses the results annually.

１．FY2022 initiatives based on FY2021 evaluation

In order to strengthen supervisory functions and invigorate the deliberations at the Board, and to accelerate decision-making
on business execution, the Company reviewed its governance system in March 2020, which includes a review of agenda items
to be resolved by the Board, and further delegation of its authority to executives accordingly.
Taking account of the review, since FY2020, we have strived to enhance the effectiveness of the Board, and we have been
also trying to address the issues found in the effectiveness review in FY2021 as follows:ａ）
	Enhancing discussions on the appropriate governance system, including the size and composition of theBoard from a medium- to long-term perspective	As an ongoing issue, the Executive Personnel Committee deliberated on the topics to be considered, including
the composition of the members of the Board.
ｂ） To the appropriate extent, further delegation of authority to executives and the implementation of deeper
deliberations on important management issues
	Based on the analysis of the agenda items, the Board secured enough time for deliberations by narrowing
down the number of agenda items, reviewing the matters to be reported, making documents and briefings in
a concise manner.
ｃ） Improving the effectiveness of deliberations at the Committees within the Board
In accordance with the topics to be deliberated, we made efforts to deepen deliberations on important issues
by ensuring sufficient deliberation time.
ｄ） Discussing specific measures to strengthen the effectiveness of group governance	In order to restructure its group governance, the Company implemented measures such as establishing thesystem to exchange personnel between the Company and the Group companies and setting up a management committee at each of the major Group companies.

２．Overview of the FY2022 evaluation
The method used to evaluate effectiveness in FY2022, and the results of the evaluation are as outlined below.
(1) Evaluation Method and Process⃝T he secretariat prepared a self-evaluation questionnaire (evaluation sheet for the Board) and obtained approval thereof from the Board, and all Members of the Board and Audit & Supervisory Board conducted theself-evaluations.
⃝T he evaluation items in the questionnaire are as listed below. Items 1-5 consisted of five-grade assessments
and free descriptions, and Item 6 comprised free descriptions.
《Evaluation items》
		1. Self-evaluation as a Member of the Board; 2. Structure and operation of the Board; 3. Effectiveness of the Board;
4. Support system; 5. Deliberation and monitoring regarding the medium- to long-term vision and the Medium-TermBusiness Plan; 6. General Evaluation of the Board⃝ The External Members of the Board conducted an overall assessment towards the result of the self-evaluations collated by the secretariat.
⃝A t the same time, a lawyer prepared a third-party’s opinion towards the result of self-evaluations.
⃝T hen the Board deliberated on the effectiveness based on the overall assessment and the third-party’s
opinion.
(2) Overview of the Evaluation Results⃝S ince the Board was able to secure a considerable deliberation time towards medium- and long-term management issues, it was assessed that the functions of the Board were improving, while there were somematters which needed to improve from the standpoint of the roles and responsibilities of the Board. In orderto further enhance the effectiveness of the Board, the Board will continuously work on the followings:ａ）
To enhance discussions on the size and composition of the Board and other aspects of the governance systemｂ）
To delegate further authority to executives to the appropriate extentｃ）
To invigorate deliberations furthermore based on the roles and responsibilities of the Board from a medium		 to long-term perspective

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Governance Section

C o rp o ra t e G o v er n an ce▎ Ensuring the Credibility of Financial 		

ReportingInternal controls on financial reporting based on the
Financial Instruments and Exchange Act are recognized as
one of the most important issues for a corporation. We have
set up the internal systems including daily monitoring toensure the credibility of the financial reporting disclosed tothe public. The effectiveness of the system is evaluated by
the Auditing Department and audited by KPMG AZSA LLC.
The results are disclosed in the Internal Control Report andin the Audit Report of Internal Controls. We will fulfill oursocial responsibility as a corporation by continuing to ensure
the effectiveness of these internal controls.
In order to continue to operate the internal control
systems relating to financial reporting in a sound manner, we
are also publishing messages from the President, implementing e-learning, and other campaigns to raise awarenessamong executives and employees.

▎ Promotion of Internal Controls
At Taisei Corporation, in May 2006, the Board established
the Fundamental Policy to Enhance Operational
Compliance Systems, which was revised in July 2022. This
policy is designed to ensure that as a Group, we conduct
operations both appropriately and efficiently and maintainthe reliability of financial reporting. To further enhancecompliance and risk management, the Company undertakes various measures. This includes providing training on
compliance with the Antimonopoly Act, conducted byexternal lawyers, primarily targeting executives and staff inthe sales division.

Fundamental Policy to Enhance Operational Compliance Systems▎ Election, Dismissal, and Development 		

Plan of Executives

When nominating the Member of the Board candidates andappointing executive officers, we consider qualifications
and overall balance based on individual backgrounds,
achievements, personalities, knowledge, experience, andabilities. Additionally, we take into account diversity
aspects, including gender, international exposure, career
history, and age. Our aim is to select individuals who cancontribute to the sustainable growth of the Company andenhance its value in the medium-to-long-term.
Furthermore, the Board identifies skills essential forachieving medium- to long-term objectives and theMedium-Term Business Plan. Nominations for Board
membership are based on these identified skills. If thequalifications expected at the time of election are notrecognized, the possibility of dismissal is considered.
Regarding the development plan for executives, we
identify and nurture management candidates to ensure
their retention and commitment. Our training programs
focus on equipping them with a broad understanding of theexternal business environment and proficiency in corporate
governance and management strategies.
In the program, we offer opportunities to gain insightsfrom the management perspective from the early stages,
such as participating as observers in important meetings
including Management Committee, and organizing
sessions to exchange opinions with external Members of
the Board. By attending externally organized training
sessions, our management candidates get the opportunity
to interact with leaders from various industries, aiming tobroaden their knowledge and network. We are actively
working to develop this approach systematically.

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

▎ Top Management Seminar
Top management convenes for keynote lectures byexternal speakers and to engage in discussions about
management challenges, applying insights to organizational operations.

▎ Support System for External Executives
The Secretarial Department supports our External Membersof the Board, while the Audit & Supervisory Board
Members’ Department aids our External Audit &Supervisory Board Members. Before each monthly the
Board meeting, relevant materials are distributed andpre-meeting briefings are held. These sessions allow for
explanations by internal Members of the Board on agenda
items. Regular opinion-exchange sessions and site visits
further foster information sharing and collaboration among
the Members of the Board. This support structure ensuresthorough and lively discussions during Board meetings.

▎ Dialogue with Shareholders and Investors
Taisei Corporation is committed to fostering constructive
dialogues with shareholders and investors as we strive forsustainable growth and enhanced corporate value in themedium-to-long-term. Our timely and appropriate information disclosures lay the foundation for these dialogues.
In alignment with our Information Disclosure Policy andthe Fundamental Corporate Governance Policy, we ensurecompliance with legal and stock exchange regulations
when revealing financial results, management strategies,
risk factors, governance structures, human capital management, intellectual property, and sustainability initiatives.
We also strive to share up-to-date insights about ourbusiness activities with stakeholders through our website
and annual reports.
For dialogue with shareholders and investors, our actions
are grounded in our IR Policy. We promote constructive
dialogue with our stakeholders through interviews, IR
briefings, and general meetings of shareholders.
Specifically, we conduct semiannual financial results
briefings, hold individual meetings for both domestic andforeign institutional investors, and engage in overseas IR
activities. Our Taisei Circle newsletter serves as a communication tool, offering shareholders insights into our
focused business activities and ESG initiatives.
Internally, we document these dialogues and interactions. Reports capturing these engagements are sharedmonthly with senior management and presented in detail to
the Members of the Board at least twice a year, ensuringthat our investor relations activities contribute to enhancing
our management capabilities.

Taisei Circle(Shareholder Newsletter)

Shareholder newsletter / Status of dialogue with shareholders,investors and othersAbout the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section▎ Remuneration, Etc.
① Matters Concerning Policies on Determination of theRemuneration, Etc. for Each Member of the Board
Based on the deliberation by the Remuneration Committee,
the Board decided on a policy on determination of the content of compensation, etc. for each Member of the Board at
the Board meeting held on February 25, 2021. The details
are as follows:

When determining the details of remuneration, etc. for each
Member of the Board, the Board will decide the details of
remuneration for each Member of the Board, taking account of
the responsibilities and positions of each Member of the Board(including the concurrent positions as an Executive Officer, if
applicable; the same applies hereafter), based on deliberation
at the Remuneration Committee, which is authorized to deliberate the details of remuneration, etc. before the Board’s
decision. The Remuneration Committee shall comprise of
Members of the Board (internal) and the same numbers ofExternal Members of the Board as those of Internal Members
and shall be chaired by an External Member of the Board.
Furthermore, an External Audit & Supervisory Board Member
shall be added as a member of the Committee from theviewpoint of securing adequateness of the deliberations at
the Committee. Thus, the Remuneration Committee establishes the system to properly consider the details of remuneration, etc. for each Member of the Board.

1．Fundamental policy on the determination of the detailsof remuneration, etc. for each Member of the Board
The remuneration, etc. for Members of the Board of the Company consists of fixed compensation and performance-based
compensation, both of which are monetary compensation, as
well as non-monetary performance-based compensation (stockcompensation). The above policy of remuneration was decided
comprehensively considering the matters such as the businessscale, content, and performance of both the Company and theTaisei Group, as well as the duties and responsibilities of each
Member of the Board.

Schematic diagram of remuneration of Members of the Board of the Company
Maximum

60.0%

Current
Business Year

82.3%

Minimum

100.0%

31.3%

17.7%

8.7%

■ Fixed compensation (Monetary compensation)■ Performance-based compensation(Monetary compensation)■ Performance-based compensation(Stock compensation)

Notes: 1.The above ratio is the remuneration for President and Chief Executive Officer, Representative Director calculated as an example.
2.Remuneration for External Members of the Board is the Fixed Compensation only, and the Performance-based Compensations
are not applicable to the remuneration.

Composition of the Remuneration Committee
Members of Board(Internal Members)

External Members of Board

3

Number ofMembers

2．Policy on determination of the amount and the 				 calculation methods of fixed Compensation
The fixed compensation shall be paid to each Member of theBoard on a fixed date every month during his or her term ofoffice, and shall be determined according to the responsibilities of each Member of the Board, comprehensively taking
account of the Company’s business scale, content, and theduties and responsibilities of each Member of the Board, andthe fixed compensation to each Member of the Board otherthan External Members of the Board, shall be progressively
increased according to his or her position.
3．Policy on determination of the contents, and thecalculation methods of the amount or the number of
performance indicators for performance-based
compensation; and policy on determination of thecontents and the amount, or the number and thecalculation methods for non-monetary compensation
The performance-based compensation is established
for the purpose of raising the awareness of each
Member of the Board to contribute to business performance improvement and enhancement of corporate

4Note: One observer is included.

value. However, External Members of the Board are noteligible for the performance-based compensation.
(a) Performance-based compensation (monetary 		
compensation)
The performance-based compensation (monetarycompensation) shall be paid to each Member of theBoard on a fixed date every month during his or her
term of office and the contents and the amount of thecompensation shall be determined based on our
Company’s short-term performance.
Net income attributable to owners of parent in the
consolidated statement of income for the most recent
consolidated fiscal year is used as a performanceindicator because it is an indicator that shows the final
results of Taisei Group’s business activities, and provides the system so that the amount paid to each
Member of the Board will be progressively increased
according to his or her positional ranks.
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Governance Section

C o rp o ra t e G o v er n an ce(b) Performance-based compensation (stock compensation)
The performance-based compensation (stock compensation) is designed to raise the awareness of Members of theBoard to contribute to improving medium- to long-termbusiness results and enhancing corporate value by clarifying linkage between the remuneration of Members of theBoard with Taisei Group’s business results and the value ofshare, and by sharing with shareholders not only the benefits of a rise in share prices but also the risk of a decline inshare prices.
The stock benefit trust (= Board Benefit Trust) method isadopted, and the date of the Annual General Meeting of
Shareholders is the grant date. In accordance with the“Officers’ Share Benefit Regulations” established by the
Board, each year during his or her term of office, points are
granted and accumulated to one (1) share per point. In theevent that a Member of the Board retires and satisfies thebeneficiary requirements specified in the “Officers’ Share
Benefit Regulations,” the Company’s shares equivalent tothe cumulative number of points will be distributed after
retirement through prescribed procedures to determine thebeneficiary. A part of the payment may be made in cash
equivalent to the market value of the Company’s shares
instead of the Company’s shares.
As well as the performance-based compensation (monetary compensation), net income attributable to owners ofparent in the consolidated statements of income for themost recent consolidated fiscal year is used as a performance indicator because it is an indicator that shows the
final results of Taisei Group’s business activities.

The points to be granted to each Member of the Board
are determined separately for Representative Directors andother Members of the Board respectively considering thestatus of achievement of business performance, duties andresponsibilities.

4．Policy on determination of the ratio of each type ofcompensation to be applied to the amount of
remuneration, etc.
With respect to performance-based compensation, theCompany has set performance values that serve as criteria
for monetary compensation and stock compensation andhas established a rule that the ratio of performance-based
compensation will increase when performance is favorable
compared to the criteria.
From a medium- to long-term perspective, the Company
has a plan to review for reducing the proportion of fixedcompensation and increasing the proportion of performance-based compensation.
However, the compensation for External Members of theBoard shall be fixed compensation only.
②M atters Related to the Policy on Determination of theAmount and the Calculation Methods of Remuneration, Etc. for Audit & Supervisory Board Members
The remuneration, etc. for Audit & Supervisory Board
Members consists only of fixed remuneration, and the amountfor each Audit & Supervisory Board Member is determined by
the Audit & Supervisory Board through consultation.

③ Matters concerning the resolution of the General Meeting of Shareholders on the remuneration, etc. for Members of theBoard and Audit & Supervisory Board Members
Type of remuneration,
etc.

Category

Compensation limit

Date of resolution at
the General Meeting of
Shareholders

Up to ¥70 million per month

June 27, 2006
(The 146th General Meeting of
Shareholders)

Fixed compensation

Members of the
Board

Performance-based
compensation(Monetary compensation)

Audit & Supervisory
Board Members

Number of the Members
applicable for payment at
the time of resolution
14(including two External Membersof the Board)
12

Performance-based
compensation(Stock compensation)

Up to ¥100 million, 35,000 points
per fiscal year
(1 point = 1 share of stock)June 24, 2020
(The 160th General Meeting of
Shareholders)8

Fixed compensation

Up to ¥12 million per month

June 29, 1994
(The 134th General Meeting of
Shareholders)5(including two External Audit &Supervisory Board Members)④ The total amount of remuneration for Members of the Board and Audit & Supervisory Board Members, etc.
Total amount of remuneration in kind (Millions of yen)
Category

Total Amount of remuneration, etc.
(Millions of yen)Non-monetary compensation

Monetary compensation
Fixed compensation

Performance-based
compensation

Stock compensation

Numbers of eligible
recipients(Persons)

Members of the Board(External Members)

669
(54)

564
(54)

105
(0)

0
(0)

12
(4)

Audit & Supervisory
Board Members(External Members)

124
(57)

124
(57)

—
—

—
—

6
(4)

Notes:
1. Among the types of monetary compensation, the performance indicator of the performance-based compensation should be an indicator that shows the final results of our Group’s businessactivities. Thus, the Company adopts the net income attributable to owners of parent in the consolidated statements of income for the most recent consolidated fiscal year. The total sum of
the net income attributable to owners of parent in the consolidated statements of income for the most recent consolidated fiscal year is ¥47,124 million.
2. Stock compensation (non-monetary compensation) adopts the method of the Board Benefit Trust (=BBT), and the date of the Annual General Meeting of Shareholders is the grant date. In
accordance with the “Officers’ Share Benefit Regulations” established by the Board, each year during his or her term of office, points are granted and accumulated to one (1) share per point.
In the event that a Member of the Board retires and satisfies the beneficiary requirements specified in the “Officers’ Share Benefit Regulations,” the Company’s shares equivalent to the cumulative number of points will be distributed after retirement through prescribed procedures to determine the beneficiary. A part of the payment may be made in cash equivalent to the market valueof the Company’s shares instead of the Company’s shares.
		 The stock compensation is also categorized as performance-based compensation. Therefore, net income attributable to owners of parent in the consolidated statements of income” for themost recent consolidated fiscal year is adopted as the performance indicator of the stock compensation because it is an indicator that shows the final results of Taisei Group’s businessactivities. The net income attributable to owners of parent in the consolidated statements of income for the current consolidated fiscal year is ¥47,124 million.
3. We judge that the contents of remuneration paid to Members of the Board during this fiscal year are within the maximum amount approved at the General Meeting of Shareholders subject tothe basic policy determined by the Board on the determination of the details of remuneration, etc. for each Member of the Board, and also judge that the contents of remuneration determinedby the Board are also in accordance with the determination policy, because the contents of remuneration were determined at the Board based on deliberations at the Remuneration
Committee, which is authorized to deliberate the details of remuneration, etc. before the Board’s decision.

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

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Data Section

Governance Section⃝ Activities of the FY2022 Board and Audit & Supervisory Board by External Members
Category

Name

Major activities

Atsuko NISHIMURA

Based on her perspective and broad insight as a diplomat, she oversaw the management of the Company andprovided advice on the execution of business at the Board from an objective and neutral standpoint as an External Member of the Board. Additionally, as chairperson of the Governance System Review Committee, which is a
pre-deliberative body of the Board, she led discussions on how the Group’s governance system should adapt tochanges in the business environment.

Takao MURAKAMI*

During his tenure, based on his perspective and broad insight as a manager, he supervised the Company’s
management and provided advice on business operations at the Board from a neutral and objective standpoint
as an External Member of the Board. Furthermore, until his resignation on September 30, 2022, as the chairmanof the Executive Personnel Committee, a preliminary deliberation body of the Board, he spearheaded discussions on the skills Board members should possess and the plans for developing managerial personnel.

Norio OTSUKA

From a managerial perspective and with extensive knowledge, he supervised the management of the Company
and provided advice on business operations at the Board from an objective and neutral standpoint as an External Member of the Board. Moreover, as the chairman of the Remuneration Committee, a preliminary deliberationbody of the Board, he led discussions on how executive remuneration should adapt to changes in the businessenvironment. After his appointment in October 2022, he also chaired the Executive Personnel Committee, where
he directed discussions on the required skills of Board members and managerial development plans.

Fumiya KOKUBUWith his managerial viewpoint and vast knowledge, he supervised the Company’s management and gave advice
on business operations from an objective and neutral position as an External Member of the Board at Board meetings. Additionally, as the chairman of the Sustainability Committee, a pre-discussion entity of the Board, he led thediscourse on the direction of sustainability management, among other topics.

Yasuhiro SATO

Drawing from his vast experience and comprehensive insight as a financial institution manager and his extensive
knowledge of finance and accounting, he provides opinions as necessary.

Seishi TASHIRO

Given his rich experience and wide-ranging expertise from the Board of Audit of Japan, along with his deep
understanding of finance, accounting, and auditing, he voices his opinions as needed.

Keiko OHARA

She provides her viewpoints when required, based on her specialized and advanced knowledge as an attorney,
coupled with her extensive international experience and understanding of diversity.

Members of
the Board

Audit &
Supervisory
Board Members

his comprehensive experience and profound insight into police administration, including international
Masamitsu MIURA Utilizing
investigations, he offers his perspectives when necessary.
* Member of the Board Mr. Takao MURAKAMI resigned from his position as an External Member of the Board on September 30, 2022.
Note: In the ongoing “(Tentative Name) Sapporo Kita 1 Nishi 5 Project undertaken by our Sapporo branch, we failed to satisfy steel erection accuracy requirements. External
Members of the Board Ms. Atsuko NISHIMURA, Mr. Norio OTSUKA, and Mr. Fumiya KOKUBU, as well as External Audit & Supervisory Board Members Mr. Yasuhiro
SATO, Mr. Seishi TASHIRO, Ms. Keiko OHARA, and Mr. Masamitsu MIURA, did not recognize the fact until it was turned out, but had been drawing attention to theCompany since early stage from the viewpoint of compliance and corporate governance. In addition, since the incident was found out, each of them has appropriately
fulfilled their responsibility by offering suggestions to prevent the Company from repeating similar failures and expressing each view with respect to the necessity ofenhancing internal controls and other matters.

⃝ Attendance Situation of Board Meetings and Audit & Supervisory Board Meetings
Holding record and attendance situation
Category

Representative
Directors

Members of
the Board

Audit &
Supervisory
Board
Members

Board

Audit & Supervisory Board

Governance System Executive Personnel
Review Committee
Committee

Remuneration
Committee

Sustainability
Committee

13 meetins in total

15 meetins in total

4 meetins in total

4 meetins in total

2 meetins in total

2 meetins in total

Takashi YAMAUCHI

12/13 ( 92%)—－

3 / 4 ( 75%)

2 / 2 (100%)—

Yoshiro AIKAWA

13/13 (100%)—

4 / 4 (100%)

4 / 4 (100%)

2 / 2 (100%)

2 / 2 (100%)

Name

Shigeyuki SAKURAI

13/13 (100%)—

4 / 4 (100%)

4 / 4 (100%)

2 / 2 (100%)

2 / 2 (100%)

Shigeyoshi TANAKA

12/13 ( 92%)—

3 / 4 ( 75%)

3 / 4 ( 75%)

1 / 2 ( 50%)

1 / 2 ( 50%)

Norihiko YAGUCHI

13/13 (100%)—

4 / 4 (100%)

—

—

—

Hiroshi KIMURA

13/13 (100%)

—

—

—

—

—

Atsushi YAMAMOTO

13/13 (100%)

—

—

—

—

—

Yoshihiro TERAMOTO

12/13 ( 92%)

—

—

—

—

2 / 2 (100%)

Atsuko NISHIMURA

13/13 (100%)—

4 / 4 (100%)

4 / 4 (100%)

2 / 2 (100%)

2 / 2 (100%)

Takao MURAKAMI*1

5 / 7 ( 71%)—

1 / 2 ( 50%)

1 / 2 ( 50%)

2 / 2 (100%)0/1(

Norio OTSUKA

13/13 (100%)—

4 / 4 (100%)

4 / 4 (100%)

2 / 2 (100%)

2 / 2 (100%)0%)

Fumiya KOKUBU

13/13 (100%)—

4 / 4 (100%)

3 / 4 ( 75%)

2 / 2 (100%)

2 / 2 (100%)

Takashi HAYASHI*2—

15/15 (100%)

4 / 4 (100%)

—

—

—

2

Akihiko NOMA*—

15/15 (100%)

—

—

—

—

Yasuhiro SATO—

14/15 ( 93%)—4 / 4 (100%)——

Seishi TASHIRO—

15/15 (100%)——

2 / 2 (100%)—

Keiko OHARA—

15/15 (100%)

—

—

—

2 / 2 (100%)

Masamitsu MIURA—

15/15 (100%)

4 / 4 (100%)

—

—

—

*1 Member of the Board, Mr. Takao MURAKAMI resign from his position as an External Member of the Board on September 30, 2022.
*2 Mr. Takashi HAYASHI and Mr. Akihiko NOMA* are the Full-Time Audit & Supervisory Board Members.

TA I SE I A N N UA L R E P O R T 2 0 2 3 92

Governance Section

Compliance

Compliance
The Taisei Group has established the Action Guidelines for Taisei Personnel and the Taisei Group as a Whole as
the basic principles of organizational behavior and standards of behavior and judgment that should be actively
practiced or strictly observed by executives and employees. These Action Guidelines are the Group’s code ofcompliance. In the Fundamental Policy to Enhance Operational Compliance Systems, they state that “Membersof the Board shall recognize that compliance is at the core of good management and shall faithfully comply
with all compliance-related regulations, including the Action Guidelines for Taisei Personnel and the TaiseiGroup as a Whole.” This is applied to all Group companies, including those in Japan and overseas.

Action Guidelines for Taisei Personnel and theTaisei Group as a Whole▎ Compliance Promotion System

As shown in the diagram below, the Company has appointed managers, promoters and implementers in each division, and has
established an internal compliance promotion system. In addition, the Compliance Committee, chaired by an external expert(lawyer), has been established as the Special Committee that responds to consultations with the President. We are working toheighten the awareness among all executives and employees and further ensure compliance by establishing a system to set
stricter disciplinary actions, etc., against any legal and other violations committed by executives and employees and to call forcompliance with the Antimonopoly Act, implementing a range of measures based on the recommendations by the Compliance
Committee and compliance training in each division, and taking other steps.

Chart of Compliance Promotion System
President
Administrative Structure

Compliance Committee
Head Office Business Administration Division

Compliance General Manager (Chief of Business Administration Division)
Compliance General Promoter (General Manager of General Affairs Department)

Secretariat
Compliance Promotion Section*1

Implementation Structure
Division Compliance Managers (Chiefs of Division (Integrated), Chiefs of Division)
Division Compliance Promoters (General Managers in Charge of Administration)
Head OfficeCompliance Implementers (All Department General Managers)＊2
All Executives and Employees*1*2Division Compliance Managers (Chiefs of Branch)
Division Compliance Promoters (Administrative Managers)
BranchesCompliance Implementers (All Department General Managers)＊2
All Executives and Employees

Promotes and embeds compliance awareness among executives and employees. Also functions as a secretariat for the Compliance Committee.
All general managers of departments are appointed compliance implementers. The general managers of each department educate and inform all executives and employees in theirown departments about compliance.

▎ System and Framework⃝ Compliance Education and Training
At Taisei Corporation, we conduct annual compliancetraining for all executives and employees to raise compliance awareness. In addition, to strengthen complianceacross the entire Group, we regularly hold meetings for legal
affairs managers to share information and opinions on legal
affairs issues with the Group companies in Japan. We also
hold group compliance hearings to confirm the status ofcompliance promotion and exchange opinions and strive toensure thorough compliance and promote communication.
Furthermore, compliance training is conducted annuallyfor business partners (specialized contractors) and new
employees of the Soyukai* (Taisei Corporation’s proprietary

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

organization for core subcontractors) to ensure thoroughcompliance throughout the supply chain.

■ Conduct Compliance Questionnaire (Annually)
The Taisei Group conducts the Compliance Questionnaire for all executives
and employees with the aim of understanding the current status and issues
related to compliance and further promoting compliance.
The results of the questionnaire are analyzed, measures are considered,reported to top management, and disclosed to all executives andemployees through the Compliance Newsletter, and necessary
measures are taken in cooperation with related departments topromote compliance.
* For more about Soyukai, see the glossary on page 118.

About the Taisei Group

Taisei Group’s Growth Strategy

Education / training

Sustainability Section

Data Section

Governance Section

Themes covered in recent years● For advancing compliance ● Regarding the increased penalties for defamation

Issuing of Compliance Newsletter(Once a month)● Licensing in the construction industry and supervisory dispositions based on the Construction Business Act● About bribery ● Regarding the results of Compliance Questionnaire● Handling of trade secrets, among others

Compliance training via e-learning(Twice a year)● Regarding power harassment ● Concerning embezzlement, bribery, and harassment● Measures for contacts with competitors and internal leniency program● Regarding the Corporate Ethics Helpline (internal whistleblowing system) and more

▎ Whistleblowing and Consultation System
Based on the Whistleblower Protection Act, at the TaiseiGroup, we have established an internal whistleblowing
system (the Corporate Ethics Helpline / Group Helpline /Whistleblowing System) in which executives and employees
as well as external parties (staff of partner companies[primary suppliers] that have a direct contractual relationshipwith the Company) can report and consult on illegal acts
including bribery and other corruption committed byexecutives and employees and acts that violate (or an act
intended to violate) the Action Guidelines for Taisei
Personnel and the Taisei Group as a Whole, and we haveestablished consultation desks in-house and at an externalorganization (a law firm). The system also allows anonymous
reporting to obtain information clues on a wide range of
violations. In addition, to enhance the effectiveness of thesystem, we actively conduct educational activities such as
distributing the Help Line Cards summarizing the outline of

the system to all executives and employees and introducing
the contents and operational results of the system throughe-learning and Compliance Newsletter.
In response to reports received, we will investigate thefacts of the report received and take corrective action as
required. In doing so, we ensure that the whistleblower’s
information is kept confidential and strictly follows internal
regulations to ensure that the whistleblowers are not treateddisadvantageously for reporting.
For external stakeholders who do not have a direct contractual
relationship with the Company, our website provides inquiries onhuman rights, environmental issues and other issues.

Internal whistleblowing system /Operational results

FY202028 cases

FY202130 cases

FY202273 cases

Flow of Internal Whistleblowing Based on the Helpline System
Audit & Supervisory
Board Members /Audit & Supervisory Board

Audit

Board
ReportSustainability Committee
ReportPresident
Whistleblower (anonymous whistleblower accepted)
通報者
（匿名可）
Taisei Corporation and its Group companies
大成建設及びグループ会社
Executives

役員

Employees

社員

Temporary
Dispatched
派遣社員
workers
temporarystaff 臨時従業員

Employees on
secondment
出向社員
Retired退職者
personnel

Primary
suppliers that have a direct contractual
当社と直接契約関係がある協力会社
relationship with Taisei Corporation
従業員
Staff

Corrective action

Chief Risk Management Officer (CRO):
Chief of Business Administration Division
ReportWhistleblowing/Consultation

Response/
ReportConsultation Desk
Person in charge of implementation:
General Manager of General Affairs Dept.

Investigation instruction
ReportDepartmentsin charge

In-house
consultation desk:
コンプライアンス推進室長
Manager of Compliance Promotion Officeconsultation desk:
弁護士事務所
社外窓口 External
Law firm

Taisei Corporation: Contact

TA I SE I A N N UA L R E P O R T 2 0 2 3 94

Governance Section

C o m p l i a n c e a nd Ris k Man ag emen t▎ Anti-Corruption Policy
Taisei Corporation supports Principle 10,
Anti-Corruption, of the United Nations
Global Compact, which we joined in 2018.
The “Action Guidelines for Taisei Personnel and the Taisei Group as a Whole,” isdesigned to prevent all forms of corruption, including extortion, bribery, money
laundering, and obstruction of justice. The
policy emphasizes “ensuring fair transactions,” “maintaining
sound relationships with politics and the administration,” and“dealing with antisocial forces and organizations.” This code
explicitly states that the Group shall not provide illegal moneyor goods to the clients or any of its individual officers or
employees. We shall also refrain from engaging in actions that
violate criminal laws, such as bribery, or cause misunderstandings in our relationships with politicians and public
officials, including those from foreign countries. Moreover, weshall not acquiesce to unreasonable demands from antisocialgroups. Furthermore, we have established a code of conduct
to comply with the Antimonopoly Act. We require our executives and employees to act responsibly, ensuring they do not
violate criminal laws related to practices like bid rigging or
breach the provisions of the Antimonopoly Act. We arecommitted to preventing any form of corruption.
To raise awareness and provide education about antibribery measures for politicians and public officials (including
those from foreign countries), we have prepared a booklet
titled “Quick Guide to Compliance.” This booklet covers
topics like bribery and corruption in depth, aiming to prevent
actions like collusion that undermine fair competition. Throughe-learning and other methods, we aim to reinforce our executives’ and employees’ knowledge and consciousness aboutanti-corruption measures.
In relationships requiring special attention with foreign
public officials and the like, we have introduced a pre-checksystem from the FY2020 to prevent bribery involving foreign
public officials, and are working diligently to thoroughly
prevent corrupt practices.

▎ Verification and Guidance on 			Compliance with Laws and Regulations
At Taisei Corporation, to ensure the propriety of bidding
operations, branch managers are tasked with confirmingthat no inappropriate actions have occurred during thebidding process. They then create and preserve theserecords within an established internal system.
Furthermore, on an annual basis, the Legal Department
reviews the propriety of the bidding operations and checks
for adherence to the Construction Business Act, the Antimonopoly Act, and the Subcontractors Protection Act.

▎ Fair and Equitable Transactions
Taisei Corporation has outlined in its Group’s Action Guidelines the “promoting partnerships with subcontractors andsuppliers,” emphasizing the need to establish transparent
and trusting relationships with our partners and to conductbusiness on an equal footing.
In August 2020, we introduced and publicly disclosed
our Declaration of Partnership Building. This declaration
promotes mutual growth throughout the entire supply chain
and encourages new collaborations beyond distinctions ofsize or affiliation. It also emphasizes adherence to the “Promotion Standards” set by the Act on the Promotion of Subcontracting Small and Medium-sized Enterprises. To guard
against antisocial forces, we have outlined in our BasicContract for Specialist Construction Work that our partners
should neither be antisocial entities nor engage in transactions with such entities. In case of any breach, stipulations
permit the termination of the contract without prior notice.
Moreover, the Taisei Group Sustainable Procurement
Guidelines specifically emphasize fair and equitable transactions, upholding legal and societal norms, and thereverence for human rights. By annually carrying out
supplier self-assessments regarding these principles, weare diligent in our efforts to understand and mitigate therisk of involvement in transactions with antisocial elements,
corruption, and organizations that partake in inhumane
labor practices.

United Nations Global Compact▎ Review of Adherence to the Group’s

Action Guidelines and Response to
Violations

At Taisei Group, the “Rules on Enforcement of the Compliance System for the Action Guidelines for Taisei Personnel
and the Taisei Group as a Whole (“Action Guidelines”)”
explicitly specify that if an executive or employee breaches
the Group’s Action Guidelines, the facts will be thoroughly
and rigorously reviewed by the Board or the Management
Committee, and appropriate disciplinary actions will be
imposed in accordance with internal regulations.
In instances of significant compliance breaches, such as
violations of the Group Action Guidelines, the Group
implements comprehensive measures to prevent any
reoccurrence. The Group conducts investigations tounderstand the context, the involved parties, the natureand details of the violation, the damage incurred, and theimpact on stakeholders. Based on an accurate grasp of thefacts, reports are filed with the pertinent governmental
bodies when necessary. The violators are subjected tonecessary disciplinary actions, which may include termination of employment.
Review of Adherence to the Group’s Action Guidelines andResponse to Violations

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

Corporate Governance / Internal Control▎ Specific Initiatives for Compliance with

the Antimonopoly Act
In light of the antimonopoly allegations the Company faced
in 2018 related to the Linear Chuo Shinkansen construction
project, we have undertaken initiatives below based on the
deliberations of the Compliance Committee, led by an
external attorney, and resolutions by the Board.
1. Revision and tightening of internal rules relating to contracts withcompetitors (September 2018)
2. Reinforcement of procedures to confirm the appropriateness ofthe bidding process (September 2018)
3. Implementation of e-learning for all executives and employees 		
(implemented every fiscal year since FY2018)
4. Implementation of training by an external lawyer for executives andemployees in the sales departments and the technical departmentsthat engage in operations related to taking orders (implemented
every fiscal year since FY2018)

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

Risk Management
Under the guidance of our Risk Management Policy and the Basic Risk Management Regulations, the TaiseiGroup has instituted a risk management system that is systematically implemented across the entire Company. Additionally, we have set up a robust management framework that addresses major ESG-related risks,
including quality, compliance, information, safety, and environmental concerns.
To ensure the effectiveness of our company-wide risk management and maintain the integrity of our operations, we adhere to preventative risk measures outlined in internal policies and manuals. Should a risk manifest unexpectedly, we promptly take appropriate actions to minimize any losses, striving to ensure both thecontinuity of our business and the sustained trust of the community.

▎ Risk Management System⃝ Promotion of Company-Wide Risk Management System

and identifies all risks associated with their business activities
and selects the “Head Office-governed risks.” The “Head
Office-governed risks” are then narrowed down to risks
that can possibly have a material impact especially on
corporate management. Such risks are selected as “keycompany-wide risks” and are subject to risk management
across the entire company. The “key company-wide risks”
are determined by the CRO after deliberation by the Risk
Management Committee headed by the CRO. The President and the Board receive reports on the risks andconfirm the operating status of the risk management
system and maintain the effectiveness of the system.

At Taisei Corporation, we work to continuously operate therisk management system to appropriately identify and manage risks associated with business operations. Under the risk
management system, the President serves as Chief Executive
Officer of Risk Management, and Chief of the Business
Administration Division serves as the Chief Risk Management
Officer (CRO). Each year, we take into account the risks that
became apparent during the current fiscal year to review therisk management for the following fiscal year through the
PDCA cycle and verify the effectiveness of the risk management system.
Based on the Basic Risk Management Rules, each divisionof the Head Office, in cooperation with the branches, reviews

Advancement of Company-Wide Risk Management
Audit & Supervisory Board Members/
Audit & Supervisory Board

Board

Audit
ReportSupervision

President
Chief Executive Officer of Risk Management
ReportIncident / Accident Response

Instruction

Countermeasures and Prevention of Reoccurrence

Chief Risk Management Officer (CRO): Chief of Business Administration Division
Supervision of risk management

Risk Management Committee
CRO Secretariat

Risk Management Council

Head Office Risk Management Promotion Committee
Head Office

Branch Offices

Group Companies

Branch Offices Risk Management Promotion Committee

Fundamental Policy to Enhance Operational Compliance Systems / Risk Management Policy

TA I SE I A N N UA L R E P O R T 2 0 2 3 96

Governance Section

Ri s k M a n a g e m en t

⃝ Business and Other Risks
Risks that may significantly impact corporate management are reported to the Management Committee and the Board. Theycollectively review and decide upon a comprehensive strategy to address such risks. These risks are documented in theBusiness and Other Risks section of the annual securities report.

(1) Market Risks① Trend of the construction market② Fluctuations in prices of materials③ Asset holding risk
④ Retirement benefit obligations⑤ Fluctuations in interest rates⑥ Risks of related or incidental businesses(2) Risks of violation of legal controls over thecivil engineering business and the building
construction business① Risk of violation of the Construction
Business Act and related laws andregulations② Risk of violation of the Antimonopoly Act(3) Risk of infringement of intellectual property rights(4) Risk of inappropriate financial reporting(5) Risk related to antisocial forces(6) Risk associated with quality due to construction
failure(7) Risk of design flaw(8) Risk of process delays(9) Risk of accidents(10) Risk of information leakage and system trouble

Below is an excerpt of risks updated in the 2022 release.
(14) Risk associated with environmental issues including climate change
There is growing expectation for companies to engage in the resolution ofenvironmental issues including climate change through their business
operations. Inadequate efforts and information disclosure risk lowering ourcorporate competitiveness and our reputation among our stakeholders.
In order to deal with such risk, the Group has established a long-term
environmental target, “TAISEI Green Target 2050” based on the concept of
the “Realization of a sustainable and environmentally friendly society,” as set
out in the Environmental Policy and aims to achieve the three types of society(decarbonized society, recycling-oriented society, and nature co-existingsociety) and resolve two individual issues (forest resources/forest environment and water resources/water environment). The Group also conducts
environmental due diligence based on the Environmental Policy to preventand mitigate the negative impact of the Group’s business activities on theenvironment as well as the negative impact of the environment on thebusiness activities of the Group, including the impact on the supply chain.
To achieve carbon neutrality, which is our biggest challenge, we areengaged in TAISEI Sustainable Action® (TSA), a Group-wide environmental
impact reduction initiative aimed at curbing our CO2 emissions in Scope 1
and 2. We will strive to reduce CO2 emissions in Scope 3 by pursuing green
procurement, using environmentally friendly concrete, and developing andpromoting ZEB technology as a means to contribute to realizing a decarbonized society.
The Group appropriately discloses its initiatives towards these environmental issues in its Annual Reports and website. Also, regarding climatechange, in accordance with the recommendations of the Task Force on
Climate-related Financial Disclosures (TCFD), the Group discloses the impactof the risks and opportunities associated with climate change on businessactivities, based on scenario analysis.

P.74 Sustainability Section

Information Disclosure Based on the TCFD Recommendations(11) Risk of large-scale disasters(15) Risk associated with human rights issues(12) Risk associated with the working environment

Companies are expected to engage in initiatives to respect the human rights of
their stakeholders. Inadequate efforts and disclosure may risk violation of thehuman rights of stakeholders as well as a decline in the Company’s competitiveness and reputation among stakeholders.
In order to deal with such risk, we carry out human rights due diligence basedon the Human Rights Policy and continuously conduct initiatives for the respectof human rights including those of the supply chain by working to prevent andmitigate the negative impact of the Group’s business activities on human rights,
assessing the effectiveness of the measures, developing a grievance mechanismand disclosing information on these initiatives, among others.

(13) Risk of violation of environmental laws andregulations(14) Risk associated with environmental issues
including climate change(15) Risk associated with human rights issues(16）Credit risk(17）Contract risk
(18 ) Risk of the spread of infectious diseases(19）Country risk(20) Geopolitical risk

P.55 Taisei Group’s Growth Strategy

Human Rights Due Diligence Initiatives(20) Geopolitical risk
Due to the increasing political, military, and social tensions in certain
overseas regions, delivery may be delayed as a result of the risk ofsoaring material prices and logistics disruption.
In order to deal with such risk, we tackle the soaring prices of materials
by monitoring pricing trends from an early stage by interviewing manufacturers and conducting market research, among other means, and takemeasures, as necessary, such as early procurement and switching toalternative products. To combat delivery delays due to logistics disruptions, we confirm production sites and transportation routes, consider
natural, social, and legal risks, and manage the progress of procurement
operations to prevent delays in delivery.

Business and Other Risks in FY2022
Annual Securities Report

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

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section▎ Information Security Measure▎ Business Continuity Plan (BCP) Initiatives

In the construction industry, it is imperative to share
information with numerous stakeholders, including clients andcollaborative entities like specialized contractors, during theconstruction process. Recognizing this, the Taisei Group has
articulated the “Management of Information and Intellectual
Property Rights” in its Action Guidelines for Taisei Personnel
and the Taisei Group as a Whole. We have taken various
steps towards information security and have formulated boththe Policy on the Protection of Personal Information and theCode of Conduct for the Use of Social Media.
At Taisei Corporation, we have consolidated a set of corerules for managing electronic information into a booklet. This
serves as a foundation for the education and guidance weprovide to all our executives, employees, and business
partners. In addition, we are actively enhancing theinformation security measures at our overseas branches andproject sites, and we are particularly focused on bolstering
safeguards against potential information leaks that could
arise from telecommuting (working from home).
Moreover, to proactively prevent and lessen intellectual
property risks—like rights infringements or technology
outflows that could profoundly impact our business
operations—we rigorously enforce risk management acrossall our business activities.
In light of the escalating threat of cyber-attacks, we remain
vigilant. Central to this effort is our Taisei-Security Incident
Response Team (SIRT), established in 2013. Collaboratingwith external agencies through the Nippon CSIRT Association, we continuously gather the most recent intelligence on
cyber threats. Armed with this information, we strategize andimplement advanced defensive measures, aiming to preemptively ward off potential attacks.

To uphold our duty as a comprehensive construction company that underpins the foundation of socioeconomic activities, it is essential that we ensure the safety and well-beingof our executives, employees, and their families, even in theface of significant disasters or accidents. To this end, we laidout our Policy on Business Continuity in Times of Disaster in2005. In alignment with this policy, we have structured abusiness continuity plan for times of disaster. All the Company’s executives, employees, and those of the Group
companies participate in disaster preparedness training
sessions. This training is held at least annually, and based on
the outcomes, we periodically review and enhance theentirety of our business continuity plan.
Our persistent and routine endeavors towards bolsteringbusiness continuity have earned us the Resilience Certification.
Moreover, since 2015, we have annually collaborated withorganizations like the Japan Federation of Construction
Contractors in joint training exercises. This collaboration has
enabled us to craft a company-wide recovery support
structure that can swiftly address requests for aid.

Policy on the Protection of Personal Information /Code of Conduct on the Use of Social Media▎Risk Management for Infectious Diseases

and Pandemics

In response to infectious diseases like COVID-19, the CRO
Secretariat spearheads efforts, centralizing information on
infection statuses across both domestic and international
business locations. This ensures that our entire Company can
respond to crises both swiftly and cohesively.
Moreover, in November 2020, we revised and establishedthe “Business Continuity Plan for Infectious Disease
Outbreaks.” This new plan integrates the previously separate“Novel Influenza Response Guidelines” to ensure adaptability
not only to COVID-19 but also to any potential future
infectious diseases.
In practice, this involves educating our executives,
employees, and specialized contractors about actions totake during an outbreak or if an infection occurs in theworkplace. We are also actively stockpiling supplies
essential for infection prevention.
Currently, COVID-19 has been reclassified as a Class 5
infectious disease under the Infectious Diseases Act.
Nonetheless, we remain equipped to rapidly enact infection
prevention measures should there be a resurgence.

Policy on Business Continuity in Times of Disaster

Column Proactive Approaches to Business Continuity
Forming Disaster Prevention Agreements withThree Entities Possessing Advanced Drone
Operation Skills
From a perspective of strengthening resilience during times ofdisaster, Taisei Corporation has entered into disaster prevention agreements with three bodies, each boasting specialized
and advanced drone operation capabilities: 1) the DPCA,
2) the Regional Revitalization & Disaster Prevention UsefulDrone Promoters Association, and 3) the Japan Unmanned
Aerial Vehicle Application Council (JUAVAC).
Natural disasters in Japan have been intensifying in recent
years. To swiftly ascertain disaster situations and draft
responsive recovery plans, the deployment of technologies
with superior immediacy and maneuverability is essential.
With this agreement in place, we will utilize drones on disasterrecovery sites to rapidly understand the conditions anddevise appropriate recovery strategies.
Moving forward, by actively incorporating digital technologies during disasterrecovery efforts andbeyond, we aim to further
enhance our resilience. In
doing so, we are fulfilling
our duty as a comprehensive construction firm that
upholds the bedrock ofsocioeconomic endeavors.
Drone Operations

TA I SE I A N N UA L R E P O R T 2 0 2 3 98

Governance Section

M a n a g e m e n t M ember sManagement Members(As of July 1, 2023)▎ Members of the Board / Audit & Supervisory Board Members
Shigeyoshi TANAKA

Yoshiro AIKAWA

Chairman, Representative
Director

President andChief Executive Officer,
Representative Director

Elected since June 2015

Elected since June 2019

Hiroshi TSUCHIYA

Hiroshi KIMURA

Mayuki YAMAURA

Representative Director

Representative Director

Member of the Board

Member of the Board

Elected since June 2023
Chief of Marketing & Sales Division(Integrated); In charge of Safety

Elected since June 2023
Chief of Business Administration Division;
In charge of New Business PlanningElected since June 2019
Deputy Chief of Marketing & Sales Division(Integrated), Supervising Marketing & Sales(Civil Engineering); Chief of Marketing & Sales(Civil Engineering) Division

Elected since June 2023
Chief of Architecture & Engineering Division(Integrated); Chief of Building Construction Division

Toshiyuki TSUJI

Yuichiro YOSHINONew

Masahiko OKADA

New

New

Atsuko NISHIMURA

Norio OTSUKA

Member of the Board

Member of the Board

Member of the Board*1, 3

Member of the Board*1, 3Elected since June 2023
In charge of Building Construction Business
Strategy; Deputy Chief of Corporate Planning
OfficeElected since June 2023
Chief of Marketing & Sales Promotion Division

Elected since June 2017▎Concurrent Position:

Elected since June 2019▎Concurrent Position:
Outside Director of Sojitz Corporation;
Outside Director of WORLD TRADE 		
CENTER BUILDING, INC.

Fumiya KOKUBU

Tsutomu KAMIJO

Member of the Board*1, 3

Member of the Board*1, 3Elected since June 2019▎Concurrent Position:
Chairman of the Board of Marubeni 		Corporation;
Outside Director of Honda Motor Co., Ltd.

Elected since June 2023
▎Concurrent Position:
External Member of the Board of Tohoku 		Electric Power Co., Inc.;
External Member of the Board of Okamura
Corporation

Yasuhiro SATO
Audit & Supervisory Board
Member*2, 3Elected since June 2020

New

New

Outside Director of INPEX CORPORATION

Takashi HAYASHI

Shuichi OKUDA

Audit & Supervisory Board
Member (Full-Time)

Audit & Supervisory Board
Member (Full-Time)

Elected since June 2019

Elected since June 2023

Seishi TASHIRO

Keiko OHARA

Masamitsu MIURA

Audit & Supervisory Board
Member*2, 3

Audit & Supervisory Board
Member*2, 3

Audit & Supervisory Board
Member*2, 3Elected since June 2020

Elected since June 2020▎Concurrent Position:
Founding Partner, Kamiyacho International
Law Office Director;
Member of the board (Independent) of 		Financial Products Group Co., Ltd.;
Outside Director of FUJI KYUKO CO., LTD.

Elected since June 2021

New

*1 External Member of the Board as defined by the Companies Act, Article 2-XV.
*2 External Audit & Supervisory Board Member as defined by the Companies Act, Article 2-XVI.
*3 Independent officers in accordance with the rules of the Tokyo Stock Exchange and the Nagoya Stock Exchange.

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

New

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section▎ Executive Officers (AS of July 1, 2023)
Title
Business in Charge

Name

President and Chief Executive Officer

Yoshiro AIKAWA

Executive Vice President
Chief of Marketing & Sales Division (Integrated); In Charge of Safety

Hiroshi TSUCHIYA

Senior Managing Executive Officer
Chief of Sustainability Division (Integrated);
Chief of Clean Energy & Environment Business Promotion Division
Senior Managing Executive Officer
Deputy Chief of Marketing & Sales Division (Integrated),
Supervising Marketing & Sales (Civil Engineering) Division;
Chief of Marketing & Sales (Civil Engineering) Division

Jiro TANIYAMA

Hiroshi KIMURA

Senior Managing Executive Officer
Chief of Kansai BranchTakeshi KAGATA

Senior Managing Executive Officer
Chief of Safety Administration Division

Shun KITANO

Senior Managing Executive Officer
Chief of Marketing & Sales (West Japan) Division

Shimpei OGUCHI

Senior Managing Executive Officer
In Charge of Marketing & Sales (Building Construction),
Marketing & Sales Division (Integrated)

Masao YOSHIKAWA

Senior Managing Executive Officer
Chief of Sapporo Branch

Noriaki KON

Senior Managing Executive Officer
Chief of Business Administration Division;
In Charge of New Business PlanningManaging Executive Officer
Chief of Marketing & Sales (Building Construction) Division III

Masahiko OKADA
Yuichi KITAGUCHIManaging Executive Officer
Chief of Chubu Branch

Atsushi SUZUKIManaging Executive Officer
Chief of Tohoku Branch

Iwao NISHIOKAManaging Executive Officer
Chief of Chugoku Branch

Akira NAKAYAManaging Executive Officer
Deputy Chief of Marketing & Sales (Civil Engineering) Division

Yoshio ABEManaging Executive Officer
Chief of Yokohama Branch

Akira EJIMAManaging Executive Officer
General Manager of Design Department, Civil Engineering Division

Yasushi KAMEZAWAManaging Executive Officer
Deputy Chief of Marketing & Sales (Building Construction) Division I

Shinsaburo SAWAManaging Executive Officer
Deputy Chief of Marketing & Sales (Civil Engineering) Division

Yoshihiko IKEUCHIManaging Executive Officer
Chief of Taisei Advanced Center of Technology

Ichiro NAGASHIMAManaging Executive Officer
Chief of Civil Engineering Division

Kenji SHIRAKAWAManaging Executive Officer
Chief of Engineering Division

Shinichiro TAKAHAMAManaging Executive Officer
Deputy Chief Marketing & Sales (West Japan) Division,
In Charge of Building Construction

Koichiro OKUHATAManaging Executive Officer
In Charge of Technology

Shigeo OCHIManaging Executive Officer
Deputy Chief of Clean Energy & Environment Business
Promotion Division

Miyoshi KATO

TA I SE I A N N UA L R E P O R T 2 0 2 3 100

Governance Section

M a n a g e m e n t M ember s

Title
Business in Charge

NameManaging Executive Officer
Chief of Building Renovation Division

Tohru UEMATSUManaging Executive Officer
Chief of Mechanical & Electrical Division

Yuji TANIGAWA

Managing Executive Officer
In Charge of Technology

Kazuhiro SAWADA

Managing Executive Officer
In Charge of Technology

Akio TAKASEManaging Executive Officer
Chief of Marketing & Sales (Building Construction) Division I;
In Charge of Community Design Project

Masaru KAMATAManaging Executive Officer
Chief of Nuclear Facilities Division

Yuji IJIRIManaging Executive Officer
Chief of International Operations Headquarters

Tatsuya SUGAWARAManaging Executive Officer
Deputy Chief of Business Administration Division

Junichi KASAHARAManaging Executive Officer
Chief of Design Division

Masato MATSUMURAManaging Executive Officer
Chief of Corporate Planning Office

Hiroki FUKASAWA

Managing Executive Officer
Chief of Architecture & Engineering Division (Integrated);
Chief of Building Construction Division
Managing Executive Officer
In Charge of Building Construction Business Strategy
Deputy Chief of Corporate Planning Office
Managing Executive Officer
Chief of Marketing & Sales Promotion Division
Managing Executive Officer
Deputy Chief of International Operations Headquarters (Building Construction);
General Manager of Building Construction Department
Managing Executive Officer
Chief of Tokyo BranchManaging Executive Officer
In Charge of Marketing & Sales (Building Construction),
Marketing & Sales Division (Integrated)
Executive Officer
In Charge of Marketing & Sales (Building Construction),
Marketing & Sales Division (Integrated)
Executive Officer
In Charge of Technology
Executive Officer
Deputy Chief of Civil Engineering Division;
General Manager of Civil Engineering Department
Executive Officer
Chief of Urban Development Division
Executive Officer
Deputy Chief of Corporate Planning Office;General Manager of Corporate Planning Department;
General Manager of New Business Planning Department
Executive Officer
In Charge of Marketing & Sales, Marketing & Sales Division (Integrated)
Executive Officer
In Charge of Technology;
In Charge of Energy & Environment
Executive Officer
Deputy Chief of Design Division (Structure)
Executive Officer
In Charge of Technology;
General Manager of Construction Engineering Department,
Civil Engineering Division

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

Mayuki YAMAURA
Yuichiro YOSHINO
Toshiyuki TSUJI
Masamichi BABA
Yuko NAKAMURA
Shinya MATAKE
Katsuhiko KITAGAWA
Yasuji YAMAUCHI
Hideki NISHIYAMA
Takashi YAMAZAKI
Yukio HABA
Masahiro YOSHIDA
Yoji UEDA
Yozo SHINOZAKI
Masami SHIMIZU

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Executive Officer
Chief of Proposal & Solutions Division

Yusuke HATAE

Executive Officer
Chief of Kanto Branch

Yoshiyuki ASADA

Executive Officer
Chief of Marketing & Sales (Building Construction) Division II

Shin SUZUKI

Executive Officer
Deputy Chief of Tokyo Branch;
In Charge of Shinjuku Station West Exit Development Project

Yoichi TAKASE

Executive Officer
Chief of Chiba Branch
Executive Officer
Deputy Chief of Kansai Branch;
General Manager of Marketing & Sales Department (Construction Building),
Kansai Branch
Executive Officer
General Manager of Secretarial Department

Data Section

Junichi HIROSE
Kenji ADACHI
Motoyuki MAKITA

Executive Officer
Chief of Kyusyu Branch

Makoto NISHIKAWA

Executive Officer
Chief of Procurement Division

Kozo MORITA

Executive Officer
Deputy Chief of Marketing & Sales (Building Construction) Division II

Masaki ADO

Executive Officer
Deputy Chief of Marketing & Sales (Building Construction) Division III

Shigehisa KOYAMA

Executive Officer
Chief of Quality Control Division; General Manager of Quality Control
Department

Kunihiko KAWAI▎ E xecutive Fellows

Governance Section(As of July 1, 2023)

Title
Business in Charge
Executive Fellow
Deputy Chief of Taisei Advanced Center of Technology;
General Manager of Infrastructure Technology Research Department
Executive Fellow
Deputy Chief of Urban Development Division
Executive Fellow
General Manager of Construction Sitework Promotion Center,
Building Construction Division
Executive Fellow
General Manager of Digital Product Center,
Building Construction Division

Name

Tsuyoshi MARUYA
Akehiko TOMITA
Fujio FUNAMIZU
Jun HIROSE

Executive Fellow
Deputy Chief of Design Division (Mechanical & Electrical Construction)

Akihiko DENO

Executive Fellow
General Manager of Machinery Department, Civil Engineering Division

Hidetoshi SAKAMOTO

Executive Fellow
Deputy Chief of Design Division (Building Construction);
General Manager of Design Department in Kansai Branch

Hiroyuki HIRAITA I SE I A N N UA L R E P O R T 2 0 2 3 102

Data Section

Key Financial Data and Performance History▎ Key Financial Data (Consolidated)
(FY)

2012

2013

2014

2015

Order received(Millions of Yen)

1,404,406

1,645,895

1,765,743

1,671,061

Net sales(Millions of Yen)

1,416,495

1,533,473

1,573,270

1,545,889

Operating income(Millions of Yen)

35,606

53,77370,417

117,468

Ordinary income(Millions of Yen)

35,06356,756

74,467

117,703

Net income attributable to owners of parent(Millions of Yen)

20,05032,08938,17777,045Comprehensive income(Millions of Yen)

56,50046,612

101,21437,665

Net assets(Millions of Yen)

343,300

384,166

492,114521,277

Total assets(Millions of Yen)

1,543,094

1,599,065

1,735,248

1,660,821

Net assets per share*(Yen)

299.84335.42418.61442.67

Net income per share*

(Yen)

17.60

28.17

33.52

65.85

Equity ratio

(%)

22.1

23.9

28.2

31.2

ROE

(%)

6.3

8.9

8.8

15.3

Cash flows from operating activities(Millions of Yen)

73,081

138,749

24,07895,360Cash flows from investing activities(Millions of Yen)

(4,703)16,028(13,975)(25,070)

Cash flows from financing activities(Millions of Yen)

(46,551)(68,826)(30,470)(35,171)

Cash and cash equivalents at end of year

(Millions of Yen)

265,772

354,372

337,166

371,730

Interest-bearing debt

(Millions of Yen)

379,072

316,493273,289

254,695*A s a consolidation of share was implemented at the ratio of 1 share for 5 shares of the Company stock effective October 1, 2017, net assets per share andnet income per share are calculated assuming that the consolidation of share was implemented at the beginning of FY2016.

▎ Performance History (Consolidated)(Billion of Yen)
2,000

1,500

1,000

500

0

2002

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

2003

2004

2005

2006

2007

2008

2009

2010

2011

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

2016

2017

2018

2019

2020

2021

2022

1,655,035

1,743,497

1,693,859

1,680,051

1,650,627

1,589,745

1,810,445

1,487,252

1,585,497

1,650,877

1,751,330

1,480,141

1,543,240

1,642,712

140,822

181,859

153,323

167,755

130,516

96,07754,740144,591

185,349

157,936

173,347

135,937

103,247

63,12590,566

126,788

112,571

122,087

92,55471,43647,124

92,788

148,657

119,290

86,343

138,303

74,76536,600570,813669,019722,390753,915

844,420872,835

833,944

1,760,078

1,910,597

1,846,176

1,889,995

1,870,622

1,956,200

2,016,717

2,483.01

2,975.02

3,302.86

3,550.03

4,084.81

4,335.78

4,402.01

392.87561.36511.90573.14442.66350.88241.24

32.3

34.9

39.0

39.7

44.9

44.4

41.1

16.7

20.5

16.2

16.6

11.6

8.4

5.6

218,158

207,020(71,028)

77,47567,49480,50730,101

6,296(11,852)(82,288)

33,260(18,683)(37,680)(14,058)(60,061)(41,682)(96,197)(66,647)(37,342)(41,863)(98,668)

534,787

687,346437,584

482,655494,274

496,760

415,863

238,145

247,379

217,423

208,146

219,017

224,323

201,700(Billion of Yen)
200

150

100

50

0

2012

2013

2014

2015

2016

2017

2018

Net sales (Left scale)

2019

2020

2021

2022

Net income attributable to owners of parent (Rightscale)-500

TA I SE I A N N UA L R E P O R T 2 0 2 3 104

Data Section

Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSTAISEI CORPORATION AND CONSOLIDATED SUBSIDIARIESYEARS ENDED MARCH 31, 2022 AND 2023
(Note) Excluding the reversal of revaluation reserve for land.

Millions of Yen

Retainedearnings

Total
shareholders’equityCommonstock

Capital surplus

Balance as of April 1, 2021 ������������������������������������������������
Cumulative effects of changes in accounting policies ��������

¥ 122,742¥ 60,198¥ 621,568
178¥(85,916)¥ 718,593
178

Restated balance at beginning of year ����������������������������������

122,742

60,198621,747(85,916)

718,772(20,007)6
105,018(26,598)
71,436(20,007)6——0Treasury stock

Changes during the period ���������������������������������������������������
Dividends ��������������������������������������������������������������������������
Profit attributable to owners of parent �������������������������������
Acquisition of treasury stock ���������������������������������������������
Disposal of treasury stock �������������������������������������������������
Cancellation of treasury stock �������������������������������������������
Transfer from retained earnings to capital surplus ��������������
Reversal of revaluation reserve for land �����������������������������
Changes other than shareholders’ equity, net (Note) ���������
Total changes during the period ����������������������������������������

—(29,816)(30,364)

85,017

24,837

Balance as of March 31, 2022 �������������������������������������������

¥ 122,742¥ 30,382¥ 591,383¥(898)¥ 743,609

Balance as of April 1, 2022 ������������������������������������������������
Cumulative effects of changes in accounting policies ��������
Restated balance at beginning of year ����������������������������������
Changes during the period ���������������������������������������������������
Dividends ��������������������������������������������������������������������������
Profit attributable to owners of parent �������������������������������
Acquisition of treasury stock ���������������������������������������������

¥ 122,742¥ 30,382¥ 591,383¥(898)¥ 743,609

122,742

30,382591,383(898)

743,609(50,007)(25,722)47,124(50,007)(26,598)
71,436(105,018)
75,202(75,202)
0(25,722)47,124

Disposal of treasury stock �������������������������������������������������
Cancellation of treasury stock �������������������������������������������
Transfer from retained earnings to capital surplus ��������������
Reversal of revaluation reserve for land �����������������������������
Changes other than shareholders’ equity, net (Note) ���������
Total changes during the period ����������������������������������������

0(49,999)
49,999——Balance as of March 31, 2023 �������������������������������������������

¥ 122,742¥ 30,382

049,9990——(11)(28,609)(7)(28,616)¥ 562,774¥(906)¥ 714,992(49,999)(11)

Thousands of U.S. Dollars

Commonstock

Capital surplus

Retainedearnings

Treasury stock

Total
shareholders’equityBalance as of April 1, 2022�������������������������������������������������
Cumulative effects of changes in accounting policies ��������
Restated balance at beginning of year ����������������������������������
Changes during the period ���������������������������������������������������
Dividends���������������������������������������������������������������������������
Profit attributable to owners of parent��������������������������������
Acquisition of treasury stock����������������������������������������������
Disposal of treasury stock��������������������������������������������������
Cancellation of treasury stock��������������������������������������������
Transfer from retained earnings to capital surplus���������������
Reversal of revaluation reserve for land������������������������������
Changes other than shareholders’ equity, net (Note) ���������
Total changes during the period ����������������������������������������

$ 919,210$ 227,534$ 4,428,844$   (6,731)$ 5,568,857

919,210

227,534

4,428,844(6,731)

5,568,857(374,501)2
374,444(192,634)
352,914(374,501)
2
—
—
(89)

—

—

(214,254)(54)(214,308)

Balance as of March 31, 2023��������������������������������������������

$ 919,210$ 227,534$ 4,214,590$   (6,786)$ 5,354,548

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

(192,634)
352,9140(374,444)
374,444(374,444)(89)About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

Millions of Yen
Unrealized gains(losses) on
hedging
derivatives,
net of taxes

Revaluation
reserve for land

Foreign currencytranslation
adjustments¥ 103,215¥ (15)¥ 1,223¥ (3,847)

103,215

(15)

1,223

(3,847)

Unrealized gains
on available-forsale securities,
net of taxes

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests¥ 21,675¥ 122,251¥ 3,575¥ 844,420
178

21,675

122,251

3,575

844,599

Remeasurements of defined
benefit plans

Total net
assets

(0)

1,944
1,944

6,754
6,754

(0)
3,026
3,026

372
372

(26,598)
71,436(20,007)
6
—
—
—
3,398
28,236¥ (8)¥ 1,223¥ (1,903)¥ 28,429¥ 125,277¥ 3,948¥ 872,835¥ 97,535¥ (8)¥ 1,223¥ (1,903)¥ 28,429¥ 125,277¥ 3,948

97,535(8)

1,223(1,903)28,429125,277

3,948¥ 872,835—
872,835(0)(5,679)(5,679)7
7¥ 97,535(25,722)47,124(50,007)

11

2,140
2,140

(12,791)(12,791)

11(11,094)(11,082)

807
807

0
—
—
—
(10,286)(38,890)¥ 1,235¥237¥ 15,638¥ 114,194¥ 4,756¥ 833,944

Remeasurements of defined
benefit plans

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests

11
(445)
(445)

1
1

¥ 97,090¥ (6)Thousands of U.S. Dollars
Unrealized gains(losses) on
hedging
derivatives,
net of taxes

Revaluation
reserve for land

Foreign currencytranslation
adjustments$ 730,440$ (62)$ 9,164$ (14,256)$ 212,909$ 938,194$ 29,570

730,440

(62)

9,164

(14,256)

212,909938,194

29,570$ 6,536,622—
6,536,622

Unrealized gains
on available-forsale securities,
net of taxes

89

16,032
16,032(95,792)(95,792)89(83,083)(82,993)

6,049
6,049

(192,634)
352,914(374,501)
2———(77,033)(291,252)$ 9,253$1,775$ 117,116$ 855,200$ 35,620$ 6,245,369

89(3,335)(3,335)1212$ 727,104$ (49)

Total net
assetsTA I SE I A N N UA L R E P O R T 2 0 2 3 106

Data Section

Consolidated Financial Statements

CONSOLIDATED BALANCE SHEETSTAISEI CORPORATION AND CONSOLIDATED SUBSIDIARIESAS OF MARCH 31, 2022 AND 2023

Thousands of
U.S. Dollars

Millions of Yen
Assets2022

2023

Cash and time deposits�������������������������������������������������������������

¥ 499,113¥ 415,950$ 3,115,033

Notes and accounts receivable trade�����������������������������������������

575,600

688,768

5,158,154

Cost on uncompleted contracts ������������������������������������������������

47,44367,658506,691

Real estate for sale and development projects in progress ��������

117,831

131,439984,347

Other inventories �����������������������������������������������������������������������

3,389

4,003

29,985

Other current assets �����������������������������������������������������������������

53,07945,847343,348

Allowance for doubtful accounts �����������������������������������������������

(100)

(182)

(1,369)Total current assets ������������������������������������������������

1,296,356

1,353,485

10,136,191

Buildings and structures ��������������������������������������������������������

153,961

161,554

1,209,871

Machinery, vehicles and equipment ����������������������������������������������

64,86868,273

511,294

Land ��������������������������������������������������������������������������������������

120,914

120,488902,330

Construction in progress �������������������������������������������������������

4,068

5,354

40,102

Accumulated depreciation �����������������������������������������������������

(136,376)(142,320)(1,065,831)

Total tangible fixed assets ��������������������������������������

207,435

213,349

1,597,767

Intangible fixed assets ���������������������������������������������������������������

16,016

17,581

131,667

Investment securities �������������������������������������������������������������

380,271386,906

2,897,521

Net defined benefit asset �������������������������������������������������������

23,23010,87581,447

Deferred income tax assets ���������������������������������������������������

3,543

5,918

44,320

Other fixed assets �����������������������������������������������������������������

31,21530,570228,944

Allowance for doubtful accounts ��������������������������������������������

(1,869)(1,969)(14,753)

Total investments and other assets �������������������������

436,391

432,300

3,237,480

Total fixed assets ��������������������������������������

659,844663,232

4,966,914

Total assets �����������������������������������������������

¥ 1,956,200¥ 2,016,717$ 15,103,106

2023

Current assets

Fixed assets
Tangible fixed assets

Investments and other assets

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

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Thousands of
U.S. Dollars

Millions of Yen
Liabilities

Data Section

2022

2023

Notes and accounts payable trade ��������������������������������������������

¥ 423,349¥ 476,115$ 3,565,605

2023

Current liabilities
Short-term borrowings ��������������������������������������������������������������

97,901

81,965613,835

Short-term non-recourse loans payable ������������������������������������

15

11

84

Straight bonds due within one year �������������������������������������������

20,000——

Lease obligations ����������������������������������������������������������������������

318

347

2,600

Advances received and progress billings on uncompleted contracts ��������

160,733

181,226

1,357,197

Deposit received �����������������������������������������������������������������������

156,315

170,995

1,280,579

Provision for warranties on completed contracts �����������������������

3,250

3,325

24,907

Provision for losses on construction contracts ��������������������������

14,16347,897358,705

Other current liabilities ���������������������������������������������������������������

50,31760,767455,083

926,363

1,022,652

7,658,600

Total current liabilities �����������������������������������
Long-term liabilities
Straight bonds ��������������������������������������������������������������������������

40,00040,000299,558

Long-term borrowings ��������������������������������������������������������������

66,27979,606596,169

Long-term non-recourse loans payable �������������������������������������

128

117

876

Lease obligations ����������������������������������������������������������������������

592

716

5,364

Deferred income tax liabilities�����������������������������������������������������

12,824

1,711

12,814

Deferred income tax liabilities for revaluation of land ������������������

3,274

3,274

24,523Retirement benefits for directors and corporate auditors �����������

435

508

3,806

Provision for share-based remuneration for directors ������������������������

48

48

363

Provision for environmental measures ���������������������������������������

1

—

—

Net defined benefit liability ���������������������������������������������������������

15,05415,037

112,615

Other long-term liabilities �����������������������������������������������������������

18,363

19,100143,044

Total long-term liabilities ������������������������������������������������������������

157,002160,120

1,199,137

Total liabilities �����������������������������������������������

1,083,365

1,182,773

8,857,737

Net assets
Shareholders’ equity
Common stock �������������������������������������������������������������������������

122,742

122,742919,210

Capital surplus ��������������������������������������������������������������������������

30,38230,382

227,534

Retained earnings ���������������������������������������������������������������������

591,383

562,774

4,214,590

Treasury stock����������������������������������������������������������������������������

(898)

(906)

(6,786)

Total shareholders’ equity ����������������������������

743,609714,992

5,354,548

Unrealized gains on available-for-sale securities, net of taxes ���������

97,53597,090727,104

Unrealized losses on hedging derivatives, net of taxes ��������������

(8)

(6)

(49)

Revaluation reserve for land ������������������������������������������������������

1,223

1,235

9,253

Foreign currency translation adjustments ����������������������������������

(1,903)

237

1,775

Accumulated other comprehensive income

Remeasurements of defined benefit plans ���������������������������������

28,42915,638117,116

Total accumulated other comprehensive income �������

125,277

114,194855,200

Non-controlling interests ���������������������������������������������������������������

3,948

4,756

35,620Total net assets ��������������������������������������������

872,835

833,944

6,245,369

Total liabilities and net assets �����������������������

¥ 1,956,200¥ 2,016,717$ 15,103,106

TA I SE I A N N UA L R E P O R T 2 0 2 3 108

Data Section

Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF INCOME
TAISEI CORPORATION AND CONSOLIDATED SUBSIDIARIESYEARS ENDED MARCH 31, 2022 AND 2023

Thousands of
U.S. Dollars

Millions of Yen
2022

2023

¥ 1,385,516¥ 1,499,803

2023

Net sales
Construction business ��������������������������������������������������������������

$ 11,231,956

Development projects ���������������������������������������������������������������

157,723

142,9091,070,244

Total net sales ���������������������������������������������������������������������������

1,543,240

1,642,712

12,302,200

Construction business ��������������������������������������������������������������

1,224,426

1,378,637

10,324,554

Development projects ���������������������������������������������������������������

131,077

116,301

870,979

Total cost of sales ���������������������������������������������������������������������

1,355,503

1,494,939

11,195,534

Cost of sales

Gross profit
Construction business ��������������������������������������������������������������

161,090

121,165

907,401

Development projects ���������������������������������������������������������������

26,646

26,607

199,264

Total gross profit �����������������������������������������������������������������������

187,736

147,773

1,106,665

Selling, general and administrative expenses
Selling expenses �����������������������������������������������������������������������

41,666

40,698

304,786

General and administrative expenses ����������������������������������������

49,99352,333391,926

Total selling, general and administrative expenses ���������������������

91,65993,032696,713

Operating income �������������������������������������������������������������������������

96,07754,740409,952

Non-operating income
Interest income �������������������������������������������������������������������������

1,680

543

4,069

Dividend income �����������������������������������������������������������������������

4,701

5,366

40,187

Foreign exchange gains ������������������������������������������������������������

428

1,024

7,669

Investment gain on equity method ��������������������������������������������

893

2,054

15,385

Other non-operating income �����������������������������������������������������

719

721

5,402

Total non-operating income �������������������������������������������������������

8,423

9,709

72,714

Interest expenses ����������������������������������������������������������������������

910

861

6,449

Taxes and dues �������������������������������������������������������������������������

120

154

1,160
2,315

Non-operating expenses

Other non-operating expenses ��������������������������������������������������

222

309

Total non-operating expenses ���������������������������������������������������

1,253

1,325

9,924

Ordinary income ���������������������������������������������������������������������������

103,247

63,125472,741

1,760

2,405

18,012

Gains on sales of investments in capital of subsidiaries and associates �����

—

3,925

29,400

Other extraordinary gains ����������������������������������������������������������

17

236

1,772

Total extraordinary gains �����������������������������������������������������������

1,778

6,567

49,184

Loss on sales of fixed assets �����������������������������������������������������

128

485

3,639

Impairment losses on fixed assets ���������������������������������������������

843

295

2,214

Loss on disposal of fixed assets ������������������������������������������������

130

246

1,843

Loss on valuation of investment securities ���������������������������������

52

198

1,487

Settlement payments ����������������������������������������������������������������

—

203

1,521

Other extraordinary losses ��������������������������������������������������������

366

168

1,259

Total extraordinary losses ����������������������������������������������������������

1,522

1,597

11,965

Income before income taxes ���������������������������������������������������������

103,503

68,094509,960

Income taxes - current ������������������������������������������������������������������

34,211

28,369212,455

Extraordinary gains
Gains on sales of investment securities �������������������������������������

Extraordinary losses

Income taxes - deferred ����������������������������������������������������������������

(2,276)(7,630)(57,143)

Total income taxes ������������������������������������������������������������������������

31,935

20,738155,312354,647

Net income �����������������������������������������������������������������������������������

71,56747,356

Net income attributable to non-controlling interests ����������������������

131

231

1,733

Net income attributable to owners of parent ���������������������������������

¥     71,436¥     47,124$    352,914

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

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
TAISEI CORPORATION AND CONSOLIDATED SUBSIDIARIESYEARS ENDED MARCH 31, 2022 AND 2023

Thousands of
U.S. Dollars

Millions of Yen
2022

Net income �����������������������������������������������������������������������������������

2023

2023

¥ 71,567¥ 47,356$ 354,647

Unrealized gains on available-for-sale securities, net of taxes������

(5,681)(447)(3,350)

Unrealized gains (losses) on hedges derivatives, net of taxes������

(7)

(4)

(35)

Foreign currency translation adjustments ����������������������������������

1,581

2,136

16,002Remeasurements of defined benefit plans ���������������������������������

6,729(12,776)(95,686)

Share of other comprehensive income of entities accounted for using equity method ��������

575

337

2,524

Total other comprehensive income ��������������������������������������������

3,197(10,755)(80,544)

Comprehensive income ���������������������������������������������������������������

¥ 74,765¥ 36,600$ 274,102

Owners of parent ����������������������������������������������������������������������

¥ 74,462¥ 36,030$ 269,831

Non-controlling interests �����������������������������������������������������������

302

570

4,271

Other comprehensive income

Comprehensive income attribute to

TA I SE I A N N UA L R E P O R T 2 0 2 3 110

Data Section

Consolidated Financial Statements / ESG DataCONSOLIDATED STATEMENTS OF CASH FLOWSTAISEI CORPORATION AND CONSOLIDATED SUBSIDIARIESYEARS ENDED MARCH 31, 2022 AND 2023

Thousands of
U.S. Dollars

Millions of Yen
2022

2023

2023

Cash flows from operating activities
Income before income taxes �����������������������������������������������������
Depreciation and amortization ���������������������������������������������������
Impairment losses on fixed assets ���������������������������������������������
Increase (decrease) in allowance for doubtful accounts �������������
Increase (decrease) in provision for losses on construction contracts ���Increase (decrease) in net defined benefit liability �����������������������
Decrease (increase) in net defined benefit asset ������������������������
Interest and dividend income ����������������������������������������������������
Interest expenses ����������������������������������������������������������������������
Foreign exchange losses (gains) ������������������������������������������������
Losses (gains) on valuation of investment securities ������������������
Losses (gains) on sales of investment securities ������������������������
Losses (gains) on sales of investments in capital of subsidiaries and associates ��
Losses (gains) on sales of fixed assets ��������������������������������������
Losses on disposal of fixed assets ��������������������������������������������
Investment losses (gains) on equity method ������������������������������
Decrease (increase) in trade receivables ������������������������������������
Decrease (increase) in cost on uncompleted contracts ��������������
Decrease (increase) in real estate for sale and development projects in progress ���Decrease (increase) in accounts receivables - other ������������������
Increase (decrease) in trade payables ����������������������������������������
Increase (decrease) in advances received and progress billings on uncompleted contracts Increase (decrease) in deposit received �������������������������������������
Other, net ����������������������������������������������������������������������������������
Subtotal ������������������������������������������������������������������������������������
Interest and dividend received ���������������������������������������������������
Interest paid ������������������������������������������������������������������������������
Income taxes paid ���������������������������������������������������������������������
Net cash provided by (used in) operating activities �������������

¥ 103,503
10,907843
146
12,055(2,847)(11,559)(6,382)
910
(428)
52
(1,662)
—
117
130
(893)
(35,560)
3,833
2,060
(19,229)
46,737(12,784)
14,453
6,798
111,203
7,248(915)(37,030)
80,507¥ 68,094
11,478295
183
33,734(24)
12,354(5,909)861(1,024)198(2,300)(3,925)329
246(2,054)(112,919)(20,206)(13,761)
8,562
52,384
20,312
14,639(7,058)54,491
8,123(879)(31,632)
30,101$   509,960
85,965
2,214
1,372
252,637(184)
92,524(44,256)
6,449(7,669)1,487(17,230)(29,400)
2,464
1,843
(15,385)(845,650)(151,328)(103,062)
64,127392,308
152,121
109,636(52,861)
408,084
60,833(6,590)(236,895)
225,432

Cash flows from investing activities
Decrease (increase) in time deposits �����������������������������������������
Purchase of tangible and intangible assets ��������������������������������
Proceeds from sales of tangible and intangible assets �����������������
Purchase of investment securities ���������������������������������������������
Proceeds from sales and redemption of investment securities ���Other, net ����������������������������������������������������������������������������������
Net cash provided by (used in) investing activities ��������������

(2,319)(13,230)
263(25,934)3,525
15(37,680)

2,539(16,163)759(13,593)
12,30099(14,058)

19,021(121,050)
5,688(101,803)
92,114
747(105,281)

Cash flows from financing activities
Net increase (decrease) in short-term borrowings ����������������������
Proceeds from long-term borrowings ����������������������������������������
Repayment of long-term borrowings �����������������������������������������
Repayment of long-term non-recourse loans payable ���������������
Proceeds from issuance of bonds ���������������������������������������������
Redemption of bonds ���������������������������������������������������������������
Acquisition of treasury stock �����������������������������������������������������
Dividends paid���������������������������������������������������������������������������
Other, net ����������������������������������������������������������������������������������
Net cash provided by (used in) financing activities ��������������

(3,462)
24,200(25,417)
(15)
9,942
—
(20,007)(26,598)(505)(41,863)584
34,350(37,542)(15)—(20,000)(50,007)(25,722)(315)(98,668)

4,373
257,245(281,150)(112)—(149,779)(374,501)(192,634)(2,361)(738,920)

Effect of exchange rate changes on cash and cash equivalents ����
Net increase (decrease) in cash and cash equivalents �������������������Cash and cash equivalents at beginning of year ���������������������������Cash and cash equivalents at end of year �������������������������������������

1,523
2,485
494,274¥ 496,760

1,728(80,896)496,760¥ 415,863

12,940(605,827)
3,720,212$ 3,114,384

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

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section▎ Data on Environmental Contribution
Environment (FY)

Indicators

KPI
ET

2018

2019

2020

2021

Scope 1+2 reduction rate of CO2 emissions per sales*1 (Taisei Group)*4

—

—

—

3.3

Scope 1+2 reduction rate of CO2 emissions*1 (Taisei Group)*4

—

—

—

(11.8)(20.9)(28.9)(32.0)(30.3)(30.1)(47.5)

At construction stage: Reduction rate of total CO2 emissions*2(44.7)(43.7)(54.5)(52.7)(60.5)

At building operation stage: Reduction rate of estimated CO2 emissions*2, 3(40.2)(39.5)(41.4)(44.6)(49.8)

—

2.13

2.21

2.20

1.84

361

368

318

325

291

—

—

5,625

4,632

5,284

Item/PJ

9.7

10.0

11.7

11.7

12.8

%

3.4

3.9

2.7

2.8

2.8

Projects

—

52

44

72

50

At construction stage: Reduction rate of CO2 emissions per sales*2

Scope 1+2 CO2 emissions per sales*1 (Taisei Group)*4
Scope 1+2 total CO2 Emissions (Taisei Group)*4
Scope 3 total CO2 Emissions (Taisei Group)*4
Number of green procurement items adapted at building construction design stage
ET

Unit

%

t-CO2/¥billion
10³tCO2

Final disposal rate of construction wastes
Number of projects contributing to biodiversity improvement*1 Compared to FY2019; *2 Compared to FY1990;*3 Estimated CO2 emissions from design and construction projects (including promotion of ZEB);*4 The scope of coverage: Taisei Corporation and seven major Group companies.
Notes: 1. KPI = Key Performance Indicator (2021 - 2023)
2. ET= Annual Environmental Targets

For calculation standards and third-party warranties forenvironmental data and indicators such as annual
environmental targets (ET), material flows, and CO2
emissions, please visit our website.

2022(13.8)

Environmental
Data▎ Data on Social Contribution
Human Capital Data Indicators

(FY)

Unit

Number of employees (consolidated / full-time employees)

2018

2019

2020

2021

2022

14,433

14,562

14,62014,518

14,466

Civil Engineering business (consolidated)

4,108

4,161

4,257

4,263

4,268

Building Construction business (consolidated)

8,123

8,163

8,160

8,103

8,133

Real Estate Development business (consolidated)

2,056

2,074

2,044

1,979

1,898

Other businesses (consolidated)
Male (consolidated)

146

164

159

173

167

11,906

11,971

11,95911,822

11,722

Female (consolidated)

2,527

2,591

2,661

2,696

2,744

Japanese employees (consolidated)

13,615

13,72013,747

13,645

13,611

Non-Japanese employees (consolidated)

Persons

818

842

873

873

855

8,490

8,507

8,572

8,579

8,613

Civil Engineering business

2,298

2,273

2,323

2,324

2,333

Building Construction business

6,040

6,072

6,084

6,084

6,109

Real Estate Development business

152

162

165

171

171

Male

6,949

6,937

6,970

6,955

6,939

Female

1,541

1,570

1,602

1,624

1,674

Japanese employees

8,439

8,456

8,512

8,514

8,538

51

51

60

65

75

16.5

17.1

18.0

18.5

18.6

19.0

19.2

19.7

20.4

21.3

30.1

26.3

22.9

21.0

19.7

34.4

37.4

39.4

40.1

40.4

1,134

1,173

1,217

1,173

1,284

Number of employees (full-time employees)

Non-Japanese employees*1
Twenties
Thirties
Forties*2%

Fifties or more
Number of non-regular employees*3

Persons*1 Figures for FY2018 to FY2021 have been retroactively adjusted. Consequently, the counts for non-Japanese employees (consolidated) and Japanese employees (bothNon-consolidated and consolidated) have also been adjusted retroactively.
*2 Figures for FY2020 have been adjusted retroactively.
*3 Figures for both FY2020 and FY2021 have been adjusted retroactively.

Data on Recruitment, Annual Salary, Length of Service, and Average Age 
Indicators

Unit

(FY)

2018

2019

2020

2021

2022

251

264

329

302

276

Male

207

215

270

253

218

Female

44

49

59

49

58

30

27

11

28

69

Male

29

22

11

23

60

Female

1

5

0

5

9

10,512

10,103

9,850

9,635

9,929

Number of hires (new graduates)

Number of mid-career hires

Average annual salary

Persons

Thousand yen

TA I SE I A N N UA L R E P O R T 2 0 2 3 112

Data Section

ESG Data

Data on Recruitment, Annual Salary, Length of Service, and Average Age 
Indicators

Unit

Average age
MaleYears old

FemaleAverage length of service
Male

Years

Female

2018

2019

2020

2021

2022

43.0

43.0

43.0

43.0

43.0

43.3

43.3

43.3

43.3

43.4

41.8

41.8

41.6

41.5

41.2

18.3

18.3

18.3

18.2

18.1

18.6

18.7

18.8

18.8

18.7

16.6

16.5

16.2

15.9

15.6

—

—

—

2.1

2.3

1.1

1.2

1.2

1.5

1.6

5.4

7.4

7.6

8.3

10.0

Turnover rate (Taisei Group)*1
Turnover rate*2

(FY)

%

Turnover rate of employees within three years of hiring*2*1 The scope of coverage: Taisei Corporation and seven major Group companies *2 Voluntary turnover rate

Diversity and Inclusion Data Indicators

(FY)

2018

2019

2020

2021

2022

KPI

Number of female managers*1, 2

Persons

167

197

236

277

314

AC

Female managers ratio*2

%

3.2

3.8

4.5

5.1

5.9

Number of female engineers

Persons

663

698

738

767

809

Female engineers ratio

%

9.1

9.5

9.9

10.2

10.6

—

—

—

2.10

2.15

2.33

2.35

2.20

2.27

2.35

739

800

862

878

905

2

3

3

4

4

AC

Rate of employment of persons with disabilities (Taisei Group*3)
Rate of employment of persons with disabilities
Number of employees reemployed after leave retirement
Number of former employees who took advantage of the Job Return*4

Unit%
Persons*1 Figures for FY2021 have been retroactively adjusted *2 Figures are aggregated as of July 1 *3 The scope of coverage: Taisei Corporation and seven major Group companies*4 For “Job Return,” see the glossary on page 118.
Notes: 1. KPI = Key Performance Indicator (2021-2023) 2. AC=Action plan based on the Act on the Promotion of Women’s Active Engagement in Professional Life (Cabinet Office)Childcare and Nursing Care Data Indicators

(FY)

Unit

2018

2019

2020

2021

2022

285

290

299

281

290

244

241

253

232

248

41

49

46

49

42

%

94.9

100

100

100

99.6

%

94.2

100

100

100

119

Days

—

—

7.1

9.7

11.6

Number of employees taking leave for childcare
Male

Persons

FemaleRate of taking childcare leave
KPI
AC

Rate of taking childcare leave by males*1
Average number of days of childcare leave taken by males
Rate of taking childcare leave by females%

Rate of return to work after childcare leave
Male%

Female

100

100

100

100

97.6

97.7

99.7

100

99.7

96.6

100

100

100

100

100

97.5

97.9

100

97.9

95.6
58

Number of employees who use flextime for childcare (cumulative)

Persons

12

27

35

45

Number of employees taking nursing care leave

Persons

0

2

1

1

1

Number of employees taking paid nursing care leave*2

Persons

—

—

—

175

179

*1 For the period from FY2018 to FY2021, calculations are based on an internal system that considers the percentage of male employees who have taken childcare leave during theirentitlement period when their child was born. For FY2022, the calculations are based on the Act on Childcare Leave/Caregiver Leave, using a denominator of employees who had
children during FY2022 and a numerator of employees who took parental leave for child-rearing purposes during FY2022. The rate keeps at 100% for male employees whose children
were born in or after FY2017.
*2 Figures for FY2021 have been retroactively adjusted.
Notes: 1. KPI = Key Performance Indicator (2021-2023) 2. AC=Action plan based on the Act on the Promotion of Women’s Active Engagement in Professional Life (Cabinet Office)Data on Working Hours and Holidays
Indicators

2018

2019

2020

2021

2022

Total hours worked per month

Hours

192.8

193.9

194.1

190.9

187.5

Average overtime hours per month

Hours

37.8

39.0

39.8

38.5

36.6

%

—

—

25.8

23.5

18.2

%

—

—

—

26.6

27.8

%

—

—

—

49.5

52.2

%

47.5

46.2

46.5

49.3

54.5

Health management overtime hours(Rate of employees who worked exceeded 720 overtime hours per year)*
KPI

(FY)

Unit

Worksite implementation rate of a five-day work week (closed eight days infour weeks) (Building Construction)Worksite implementation rate of a five-day work week (closed eight days infour weeks) (Civil Engineering)
Rate of paid leave utilization* Figures for FY2020, FY2021 and FY2022 have been retroactively adjusted.
Note: KPI = Key Performance Indicator (2021-2023)

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

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

Data on Training and Career in Capacity Development

(FY)

Indicators

Unit

Total training hours for capacity development

Hours

2018

2019

2020

2021

2022

—

261,059

233,143

231,706

566,424*

36.6

30.5

27.0

26.7

65.0*

Total training budget

Thousand yen

—

—

—

298,937

406,078*

Total number of training attendees (annual cumulative count)

Persons

—

—

—

4,360

76,585*

Number of regular employees promoted from non-regular employees

Persons

45

28

20

38

30

%

87.7

86.5

88.0

89.0

88.2

Training hours per person

Implementation rate of career development review* Up to FY2021, data from training programs sponsored by the head office were collected. From FY2022, the results of training programs sponsored by branches and companywide e-Learning are also included in the data.

Data on Health and Safety Relations

(FY)

Indicators

Unit

2018
0.58

0.64

0.37

0.56

0.38

—

0.43

0.62

0.35

0.44

0.31

Accident frequency rate (Taisei Group)*1, 2
Accident frequency rate*2

2020

2021

2022

0.14

0.26

0.34

0.08

0.01

Number of occupational accident leaves (excluding fatal accidents)*2

Cases

50

74

35

45

35

Number of fatal accidents (Taisei Group)*1, 2

Cases

—

—

5

1

0

Number of fatal accidents*2

Cases

2

4

5

1

0

0

0

0

0

0

2

4

5

1

0

1,025

1,049

1,063

1,200

1,298

89.8

90.2

91.6

91.0

92.0

Accident severity rate*2

KPI

2019

Number of work-related employee fatalities*2
Persons

Number of work-related contractor fatalities*2
Number of employees receiving safety and health training%

Implementation rate of stress checks*1 The scope of coverage: Taisei Corporation and six major Group companies
Note: KPI = Key Performance Indicator (2021 - 2023)*2 Aggregated from January to December

Data on Technical Development and Intellectual Property

(FY)

Indicators
Research and development expenditure (consolidation)

Unit

2018

2019

2020

2021

2022

Billion yen

12.4

13.5

14.2

15.2

16.8

Cases

250

169

202

209

232

219

188

266

272

283

—

—

5

6

10

Number of patents registered

KPI

Number of patent applications filed

Cases

Number of orders received for net Zero Energy Buildings (ZEBs)

Note: KPI = Key Performance Indicator (2021 - 2023)

Quality and Productivity Data (FY)

Indicators
KPI
KPI

Unit

2018

2019

2020

2021

92

88

90.0

90.0

85.9

96

98

98.6

97.6

95.8

%

—

75

100

100

100

Million yen

—

—

67

65

67

Customer satisfaction (Building Construction)%

Customer satisfaction (Civil Engineering)Worksite registration rate of Construction Career Up System (CCUS*1)
Productivity (net sales/number of employees) (Taisei Group)*2

2022*1 For “CCUS,” see the glossary on page 118. *2 The scope of coverage: Taisei Corporation and 19 Group companies.
Note: KPI = Key Performance Indicator (2021 - 2023)

Data on Community Activities and Volunteering Investment Costs
Indicators

(FY)

Unit

2018

2019

2020

2021

2022

Million yen

700

838

492

787

673

Indicators

Unit

2018

2019

2020

2021

2022

Supplier’s conformity rates with the Taisei Group Sustainability Procurement Standards (Taisei Group)*1%

74.2*2

—

92.1

—

91.3

Human rights training precipitation rate

%

97.9

97.4

99.5

95.3

96.0

Cases

—

—

—

0

0

Community activities and volunteering investment costs

Data on Procurement Practices and Human Rights
KPI

Cases of violation of the rights of indigenous peoples(FY)*1 The scope of coverage: Taisei Corporation and seven major Group companies.
*2 Figures for FY2018 are the average implementation rate of sustainability activities.
Note: KPI = Key Performance Indicator (2021 - 2023)

TA I SE I A N N UA L R E P O R T 2 0 2 3 114

Data Section

ESG Data / Corporate Data / Stock Information

Data on Stakeholder EngagementIndicators

(FY)

Unit

2018

2019

2020

2021

2022

—

90.6

90.8

90.1

89.8

100

100

100

100

100

—

80.8

—

77.6

—

2018

2019

2020

2021

2022

All employees (full-time employees)

—

—

—

58.2

59.2

Regular employees

—

—

—

57.4

59.4

—

—

—

66.0

68.7

—

—

—

72.1

69.5

—

—

—

83.3

78.8

—

—

—

58.3

58.3

Percentage of all employees covered by collective bargaining agreements
Labor union participation rate％

Employees satisfaction rate** The survey was conducted every other year by union members in Taisei Corporation.

Ratio of Female Wages to Male Wages* 
Indicators

Career-track positions
Professional-grade positions

(FY)

Unit

%

Minor career-track positions
Non-regular employees*The wage gap between men and women is due to differences in average age,etc., but not to the system.

For information on the female managers ratio, thepercentage of male workers taking childcare leave, andthe difference in wages between male and female
workers, please visit our Company website.

ESG Data▎ Governance Data
Number of Members of the Board, Audit & Supervisory Board Members, and Executive Officers
Indicators

Unit

2018

2019

(FY)

2020

2021

2022

12

12

12

12

12

Male

11

11

11

11

11

Female

1

1

1

1

1

4

4

4

4

4

Male

3

3

3

3

3

Female

1

1

1

1

1

6

6

6

6

6

Male

6

6

5

5

5

Female

0

0

1

1

1

4

4

4

4

4

Male

4

4

3

3

3

Female

0

0

1

1

1

58

59

58

63

64

58

59

58

63

64

0

0

0

0

0

Number of Members of the Board

Number of External Members of the Board

Persons

Number of Audit & Supervisory Board Members

Number of External Audit & Supervisory Board Members

Persons

Number of Executive Officers
Male

Persons

FemaleData on Officer Remuneration
Indicators
Members of the Board
External Members of the Board

(FY)

Unit
Million yen

2018

2019

2020

2021

2022

755

741

814

738

669

46

58

62

62

54

Data on Ethics, Political Donations, and Information Security
Indicators

Unit

2018

2019

2020

2021

Participation rate of e-learning for the Group’s Structure of Values and Policies

%

97

94

94

95

97

Response rate of Corporate Ethics Helpline and Group Helpline (Taisei Group)*1

%

100

100

100

100

100
73

Cases

—

24

28

30

—

18

18

18

18

%

100

100

100

100

100

Number of dismissals due to corruption and bribery

Persons

—

0

0

0

0

Number of major information security accidents (Taisei Group)*2

Cases

0

0

1

0

0

Number of information security education sessions

Times

19

5

4

3

6

Political donations

KPI

2022

Million yen

Operational results of the whistleblowing and consultation system*1
KPI

(FY)

Rate of participation in compliance training, including anti-corruption training*1 The scope of coverage: Taisei Corporation and 21 Group companies. *2 The scope of coverage: Taisei Corporation and eight major Group companies.
Note: KPI = Key Performance Indicator (2021 - 2023)

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

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section▎Corporate Data (As of March 31, 2023)▎Stock Information (As of March 31, 2023)

Name
TAISEI CORPORATION

Number of Shares Authorized
440,000,000

Established
December 28, 1917

Number of Shares Issued
188,771,572 (including 301,634 treasury shares)

Paid-In Capital¥122,742,158,842

Number of Shareholders
57,413

Number of Employees
8,613 persons (non-consolidated/full-time employees)

Ownership Distribution⃝ Shareholder Composition

Representative
Yoshiro AIKAWA,
President and Chief Executive Officer

Government and Local Public Entities
2 thousand shares(0.00%)

Major Offices (As of April 1, 2023)⃝ Head Office25-1, Nishi-Shinjuku 1-chome, Shinjuku-ku, Tokyo,
Japan
TEL. 81-3-3348-1111 (main number)

Individuals and Others
44,878 thousand shares(23.77%)⃝ Branches
Tokyo Branch (Shinjuku-ku, Tokyo)
Kansai Branch (Osaka City)
Chubu Branch (Nagoya City)
Kyushu Branch (Fukuoka City)
Sapporo Branch
Tohoku Branch (Sendai City)
Chugoku Branch (Hiroshima City)
Yokohama Branch
Hokushinetsu Branch (Niigata City)
Shikoku Branch (Takamatsu City)
Chiba Branch
Kanto Branch (Saitama City)
Kobe Branch
Kyoto BranchInternational Operations Headquarters(Shinjuku-ku, Tokyo)⃝ Overseas Offices
Taipei Office
Philippine Office (Manila)
Singapore Office
Kuala Lumpur Office
Jakarta Office
India Office (Gurugram)
Middle East Office (Doha)
North Africa Office (Cairo)
Bangladesh Office (Dhaka)⃝ Taisei Advanced Center of Technology(Yokohama City)
Major Subsidiaries⃝ Domestic subsidiaries
Taisei Rotech Corporation (Shinjuku-ku, Tokyo)
Taisei-Yuraku Real Estate Co., Ltd. (Chuo-ku, Tokyo)
TAISEI U-LEC Co., LTD. (Minato-ku, Tokyo)
TAISEI SETSUBI CO., LTD. (Shinjuku-ku, Tokyo)
TAISEI HOUSING CORPORATION (Shinjuku-ku, Tokyo)
SEIWA RENEWAL WORKS CO., LTD. (Minato-ku, Tokyo)⃝ Overseas subsidiaries
VINATA INTERNATIONAL CO., LTD. (Vietnam)
TAISEI PHILIPPINE CONSTRUCTION INCORPORATEDTAISEI (THAILAND) CO., LTD.
PT. TAISEI PULAUINTAN CONSTRUCTION
INRERNATIONALTAISEI MYANMAR CO., LTD.

Data Section

Financial Institutions
60,793 thousand shares(32.21%)

Shareholder
Composition

Foreign Corporations etc.

57,907 thousand shares(30.68%)

Securities Companies

9,591 thousand shares(5.08%)

Other Japanese Corporations
15,599 thousand shares(8.26%)⃝ Stock Listings
Tokyo, Nagoya⃝ Code1801⃝ Transfer Agent
Mizuho Trust & Banking Co., Ltd.
Major Shareholders (Top 10)
Name of Shareholder

Number of Shares Held
(Unit: Thousand Shares)

Ratio of Shares Held(%)

The Master Trust Bank of Japan, Ltd.
(Trust Account)

31,31016.61

Custody Bank of Japan, Ltd. (Trust Account)

11,502

6.1

NORTHERN TRUST CO. (AVFC) RE SILCHESTER INTERNATIONAL INVESTORS INTERNATIONAL VALUE EQUITY TRUST

6,123

3.25

Taisei Associates’ Shareholding Plan

6,049

3.21

Retirement Benefit Trust in Mizuho Trust (Mizuho
Bank, Ltd. Account)

5,857

3.11

Taisei Employees’ Shareholding Plan

3,757

1.99

State Street Bank West Client-Treaty 505234

3,051

1.62

Meiji Yasuda Life Insurance Company

2,847

1.51

NORTHERN TRUST CO.(AVFC) RE U.S. TAXEXEMPTED PENSION FUNDS

2,836

1.51

STATE STREET BANK AND TRUST COMPANY
505103

2,427

1.29

Note: The Company’s own shares (301,634) are excluded in calculating the Ratio of Shares
Held. The Company’s own shares of 301,634 exclude 104,300 shares of the Company held by the Board Benefit Trust (BBT).

⃝ Green Bonds / Sustainability Link Loans
Taisei Corporation issued green bonds and signed a sustainability-linked
loans agreement with the aim of raising awareness among a wide range ofstakeholders about its environmental initiatives and contributing to therealization of a decarbonized society.
Sustainable FinanceTA I SE I A N N UA L R E P O R T 2 0 2 3 116

Data Section

Overseas Network / Glossary▎ Overseas Network (As of September 1, 2023)
China

TaiwanCSCEC-TAISEI CONSTRUCTION, LTD. (Head Office)TAIPEI OFFICE

No.8 Yard, Zhonghe Road, Fengtai District,
Beijing, P.R.C.100070
TEL 86-10-6845-1268 FAX 86-10-6845-1266

Zone B, 6F, No. 16, Sec. 4, Nan-Jing E. Road, Taipei,
Taiwan R.O.C.
TEL 886-2-2578-5656 FAX 886-2-2578-3300

Philippines

Vietnam

PHILIPPINE OFFICEVIETNAM OFFICE (Hanoi)

9th Floor, BDO Equitable Tower, Paseo de Roxas, Salcedo Village,
Makati City, Philippines
TEL 63-2-8403-9105 FAX 63-2-8478-9542

2nd Floor, Block A, Song Da Building Pham Hung Road,My Dinh1, Nam Tu Liem District Hanoi,
S.R. Vietnam
TEL 84-24-3553-5033 FAX 84-24-3553-5002

TAISEI PHILIPPINE CONSTRUCTION INCORPORATED
23rd Floor, BDO Equitable Tower, Paseo de Roxas,
Salcedo Village, Makati City, Philippines
TEL 63-2-8886-0670 FAX 63-2-8886-0663

Indonesia
JAKARTA OFFICE
L’Avenue Office Tower, 28th Floor, Jl. Raya Pasar Minggu Kav. 16,
Pancoran Jakarta Selatan, 12780, Indonesia
TEL 62-21-8066-7320 FAX 62-21-8066-7312

PT. TAISEI PULAUINTAN CONSTRUCTION INTERNATIONAL
L’Avenue Office Tower, 28th Floor, Jl. Raya Pasar Minggu Kav. 16,
Pancoran Jakarta Selatan, 12780, Indonesia
TEL 62-21-8066-7321 FAX 62-21-8066-7312

PT. INDOTAISEI INDAH DEVELOPMENT
Kawasan Industri Indotaisei Sektor 1A, Blok B, Kota Bukit Indah, Desa
Kalihurip, Kecamatan Cikampek 41373, Kabupaten Karawang, Jawa
Barat, Indonesia
TEL 62-264-351-003 FAX 62-264-351-026

Singapore

VIETNAM OFFICE (Ho Chi Minh City)
7th FL, VIETNAM CHAMBER OF COMMERCE AND INDUSTRY
TOWER, 171 Vo Thi Sau St., Vo Thi Sau Ward District 3,
Ho Chi Minh City, S.R. Vietnam
TEL 84-28-3932-1759 FAX 84-28-3932-1758

VINATA INTERNATIONAL CO., LTD. (Head Office)3rd Floor, Block C, Song Da Building Pham Hung Road,My Dinh1, Nam Tu Liem District Hanoi, S.R. Vietnam
TEL 84-24-3553-3839, -3840 FAX 84-24-3553-3788(Ho Chi Minh City Branch Office)7th FL, VIETNAM CHAMBER OF COMMERCE AND INDUSTRY
TOWER, 171 Vo Thi Sau St., Vo Thi Sau Ward District 3,
Ho Chi Minh City, S.R. Vietnam
TEL 84-28-3932-1765 FAX 84-28-3932-1764

Malaysia
KUALA LUMPUR OFFICE
9-3, 9th Floor, Faber Imperial Court, Jalan Sultan Ismail,50250 Kuala Lumpur, Malaysia
TEL 60-3-2070-6155 FAX 60-3-2070-6010

SINGAPORE OFFICE
60 Paya Lebar Road, #04-57 Paya Lebar Square,
Singapore 409051
TEL 65-6280-0833 FAX 65-6280-0869

MyanmarThailandTAISEI (THAILAND) CO., LTD.

2nd Floor, Tokyo Enterprise Building, No.32, Pyay Road, 6 1/2 miles,
Hlaing Township,Yangon, Myanmar
TEL 95-1-654-838 FAX 95-1-654-838

1550, 9th Floor, Thanapoom Tower, New Phetchaburi Road,
Makkasan, Ratchathewi, Bangkok 10400, Thailand
TEL 66-2-207-0330 FAX 66-2-207-0332

Bangladesh

THAILAND OFFICE
1550, 19th Floor, Thanapoom Tower, New Phetchaburi Road,
Makkasan, Ratchathewi, Bangkok 10400, Thailand
TEL 66-2-207-0331

India
INDIA OFFICE (Delhi)
Office Number GRA133 WeWork - Platina tower, Mehrauli-Gurgaon
Road, A Block, DLF Phase 1, Sector 28, Gurugram, Haryana, 122001.
India

INDIA OFFICE (Mumbai)
A-802, Crescenzo, G Block BKC, Bandra Kurla Complex, Bandra
East, Mumbai - 400051, India.
TEL 91-22-6260-6800

Qatar
MIDDLE EAST OFFICE (Doha)Corner Abdullah Bin Jassim St. United Bank Bldg. 4th Floor,
Facing QNB Bldg, Doha - Qatar, PO BOX 47366
TEL 974-4443-4174 FAX 974-4443-7176

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

MYANMAR OFFICEBANGLADESH OFFICE
Catharsis Tower, 10th Floor, House No.133, Road No.12, Block-E,
Banani, Dhaka-1213, Bangladesh
TEL 880-9606119911

Sri Lanka
SRI LANKA OFFICE
No.177, 3rd Floor, Galle Road, Colombo 03.
Sri Lanka
TEL 94-11-2446194 FAX 94-11-2446198

Pakistan
PAKISTAN OFFICE
Office-A, 5th Floor, Block-A, Saudi Pak Tower, 61-A,
Jinnah Ave., Islamabad, Pakistan
TEL 92-51-8316620 FAX 92-51-8316629

Egypt
NORTH AFRICA OFFICE
25th, Rd. No.10, Station Sqr, Maadi, Cairo, Egypt
TEL 20-2-2380-1362

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section▎ Glossary
This glossary briefly introduces the Taisei Group’s policies, unique terms related to technology and services, and initiativesof the construction industry.
BIM

Building Information Modeling (BIM) is a construction information database that links a 3D building model
created with a computer and attributes information including the specification, layout, and cost of building
components and equipment.

CIM/T-CIM®

CIM stands for Construction Information Modeling, which involves using information and communication
technology in construction. T-CIM® is our proprietary system that integrates CIM-based construction
methods with attribute information related to the 3D models of each construction project.

Construction Career Up System(CCUS)

This system aims to strengthen cooperation with partner organizations in the construction industry. It allows
for the registration and visualization of individual construction workers’ skills, experience, and qualifications,as well as their enrollment status in social insurance programs, all under a set of uniform industry rules.

DX Academia

An educational institution focused on leveraging digital technology and data to develop human capital capableof leading digital transformation (DX) in business, operations, and corporate culture. It gathers human capitalfrom across the company and nurtures their DX skills and mindset through project-based, hands-on education.

Health management overtime
hours

These are the overtime hours used to determine whether preventive measures against health issues, such as
one-on-one consultations with physicians, should be implemented. This total includes both statutory
overtime hours and working hours on legal holidays.

Job Return

A system that offers reemployment opportunities by providing job listings from the Company and its Group
companies to employees who have voluntarily retired and wish to return to work due to a change or improvement in their original reasons for retirement.

Scope 1, 2, 3

These categories break down all CO2 emissions related to business activities at each stage.
Scope 1: Emissions from the use of fossil fuels like light oil during construction.
Scope 2: Emissions from electricity usage at the head office, branch offices, and worksites.
Scope 3: Emissions arising from the manufacturing of construction materials, the building’s use by 		
customers post-delivery, and emissions generated during the building’s demolition.

Soyukai / Safety, Health, andEnvironment Cooperation
Association

The Soyukai is an association formed between the Company and its key partner firms, aimed at strengthening
cooperation. As of the end of March 2023, it has 617 member companies.
The Safety, Health, and Environment Cooperation Association is a collaborative organization aimed at preventing worksite accidents and preserving the environment. It includes all specialized contractors who arecontracted to perform construction work with the Company. As of March 1, 2023, the association has 7,930
member companies.

Green Procurement Guidelines

These guidelines are aimed at promoting the use of materials, equipment, and construction methods that
reduce environmental impact during the design, construction, operation, and demolition of buildings and structures. Selection criteria include:
1. Low life-cycle CO2 (LCCO2*) 2. Energy and resource conservation.
3. Minimized generation of construction waste during construction and demolition.
4. Consideration for the use of recycled and recyclable materials. 5. Absence of harmful substances.
6. Consideration for biodiversity and the local environment.
* LCCO2：Total CO2 emissions from construction to disposal throughout the entire period of use.

TAISEI Green Target 2050

These are the long-term environmental goals established by the Group for the year 2050. The objectives focus
on achieving “three types of societies”: Decarbonized society, Recycling-oriented society, and Nature coexisting society, as well as addressing “two individual issues” related to Forest Resources / Forest Environment
and Water Resources / Water Environment. The Group commits to:•Carbon Neutrality: Reducing net emissions of CO2 and other greenhouse gases to substantively zero byaccounting for absorption from afforestation and forest management.
•Circular Economy: Beyond the traditional 3Rs (Reduce, Reuse, Recycle), this involves economic activities thatcreate added value while efficiently utilizing and preserving resources, thereby reducing both resource input
and consumption.
•Nature Positive: Aims to halt and reverse the loss of biodiversity to put nature back on a path of recovery.

Taisei Group Sustainable Procurement Guidelines

A set of guidelines on what the Group, its subcontractors and suppliers should do together. They can besummarized as (1) compliance with laws, regulations, and social norms, (2) fair and impartial businessdealings, (3) respect for human rights, (4) promotion of safety and health, (5) commitment to environmental
conservation, (6) ensuring and improving safety and quality, (7) information disclosure, (8) commitment to
information security, (9) activities contributing to society, (10) business continuity in times of disaster, and (11)promotion of sustainable procurement.

TAISEI OHSMS

Taisei Corporation’s proprietary occupational health and safety management system developed withreference to guidelines from the International Labour Organization (ILO) and the Ministry of Health, Labourand Welfare.

TAISEI QUALITY®

A slogan that expresses in a few words the quality promotion activities of the Taisei Group as a whole. The
Group aims to earn the trust of clients and society by ensuring quality with pride.

TA I SE I A N N UA L R E P O R T 2 0 2 3 118

TAISEI CORPORATION
Sustainability Management Promotion Division,
Sustainability Planning Department
URL : https://www.taisei.co.jp/english/
23.11.1900.S.E