Our Sustainability Sustainable management
Message from the Sustainability Committee

Three areas of materiality and initiatives of the Group
Committee manages and evaluates the progress of targets
set by the Board of Directors, while at the same timeoverseeing and monitoring sustainability policies, strategies,
and actions. Its members are made up of the President andManaging Executive Officers of the Company.
The Sustainability Committee has five subcommittees
including Promotion of TCFD, Instilling Management
Philosophy and Strengthening Human Resources,
Creating A Rewarding Workplace, Social Contribution, andStrengthening Governance. It is responsible for proposing
and promoting specific activities for improvement, basedon various themes and perspectives. The members ofeach subcommittee are selected by the Executive Director
from among personnel at related departments. Each
subcommittee sets goals and plans for achieving thesegoals, and undertakes activities through a process of
repeated discussion and verification.

AZN aims to address ESG issues by realizing thestrategies outlined in its Third Medium-Term Management
Plan, which commenced in 2022. As a comprehensive
property consulting company that supports the enduring
development of our clients' valuable assets and businesses,
we are committed to realizing our management objectiveof "Contributing to the happiness of our clients through thesuccession, operation, and management of property" byproviding environmentally friendly products and services toresolve property-related concerns, as well as our efforts to
reduce environmental impact in response to climate change.
As an advocate of 100-year property consulting,
AZN needs to build on the foundation of human resource
development, the source of our consulting services, toensure its own sustainable growth. Led by the Sustainability
Committee, we are committed to company-wide efforts
to realize a more sustainable society. The Sustainability

E
Environment

S

Promoting TCFD

Instilling management philosophy
and strengthening human resources

Creating a company
worth working forContributing to society

Stronger governance

SDGs

Quality of interpersonal skills

Quality of work styles

Quality of social contribution

Quality of protection

Realizing a societythat supports (thesuccess of) diverse
talents

A process of identifying materiality
resource development and corporate governance. In
identifying materialities, we identify social issues likely toexert significant impact on our company and on society,based on the steps shown in the diagram below.

In 2020, the Group identified as high-priority issues
both project-related materialities such as reducing
the environmental impact of buildings, and business
infrastructure-related materialities such as human

Step 2

Step 3

Identify social
challenges

Hold hearings
internally/externally andevaluate importanceAnalyze global social challenges/

Organize social challenges in terms

ESG trends and identify a wideof importance for external parties

range of environmental/social/economic issues(stakeholders) including ESG
investors and impact on AZNAoyama Zaisan Networks ｜ Integrated Report 2024

Future initiatives⚫Promoting water conservation and waste
reduction in conjunction with Advantage Clubtenants⚫Promoting the use of environmentallyfriendly materials, paints, equipment,
etc. by incorporating ESG perspectives
into our analysis of current situations
and recommendations for land use andconstruction support⚫Promoting buildings and urban developmentthat are considerate of water environment
conservation⚫Reducing waste and greenhouse gas
emissions

In addition to reinforcing employees’ own efforts to improve their interpersonal skills throughsocial contribution, the Group is committed to promoting diversity and establishing a pleasantwork environment for women and other diverse human resources, which is crucial to accepting
the diverse values of customers and resolving property issues.

Social28

Current initiatives⚫Switching to environmentally friendly facilities andclean energy-based electricity for Advantage Club⚫Endorsement and disclosure of therecommendations of the Task Force on Climaterelated Financial Disclosures (TCFD)

Current initiatives

Sustainability Committee

Step 1

We recognize that addressing climate change is an important management issue that affects business
continuity. In particular, we view CO2 emissions from real estate-related business activities as a major risk
impacting climate change. To this end, we prioritize environmentally friendly initiatives for their ability tocontribute to enhancing asset value and resolving social issues.

Realizing adecarbonized,
recycling-basedsociety⚫ System for promoting sustainability
Board of Directors

Internal
discussions &approvals

Business activities
with emphasis on
partnerships

Step 4
Identify materiality

Relevance to
the SDGs

2023-2024 Initiatives

G

Discuss and identify (finalize)
important challenges along two

Governancespectrums: importance for theGroup and importance for our
stakeholders

Continuing
improvement ingovernance⚫Instilling our management philosophy throughmorning meetings and corporate philosophy
training conducted by President Hasumi himself⚫Enhancing and expanding consultant training
programs such as ART system training and theConsulting Education Center⚫Promoting the use of parental leave⚫Expanding the contract employee system (eliminating
restrictions) to allow employees to continue working
after the mandatory retirement age of 65⚫Donating a portion of profits to organizations dedicatedto eliminating pet euthanasia completely, promoting
subsidized meals for children, etc., and offering support
through volunteer activities by employees⚫Strengthening management training through theuse of external educational institutions⚫Implementing a health management declarationand 100% health checkup rate
⚫Implementing volunteer activities for clean-ups in
the Minato City area
⚫Cultivating managerial personnel⚫Sharing examples of employees adopting diverse
work styles (promoting understanding)

Future initiatives⚫Expanding support for organizations dedicatedto eliminating pet euthanasia completely,
promoting subsidized meals for children, etc.
⚫Promoting advancement of women (increasing
the percentage of female employees
from approximately 30% to 40%, andthe percentage of female managers fromapproximately 19% to 30%)
⚫Workplace culture reform focusing on
employees' opinions through organization-wide
surveys, etc.
⚫Enhance consultant training by using external
educational institutions⚫Further health management, including
promoting opportunities to exercise andoffering dietary guidance⚫Training to promote active roles for women⚫Setting up holiday pay in hourly units

We regard local communities as a foundation for the life of all people including our clients, their families,
and the companies and employees they value, as well as a foundation for social and economic activities
and for leading happy lives. To ensure that our customers can live happily and that the value of their assets
in local communities continues to increase, we are committed to engaging with local communities.

Current initiatives⚫Contributing to social welfare through use of real estate for nursing care facilities such as hospices andgroup homes, facilities for the disabled, clinics, and other facilities of high public interest, as well as
helping revitalize local communities through use of real estate by attracting commercial facilities, etc.
⚫Creating mechanisms to give back to society by supporting the establishment of foundations⚫Contributing to urban development and regional job creation by collaborating with partners such as
public organizations, financial institutions, and companies on regional development projects
The Group recognizes corporate governance as an important management mechanism to maketransparent, fair, rapid, and decisive decisions. Director candidates are determined by the Nominating
Committee, executive compensation is deliberated upon by the Compensation Council, and theeffectiveness of the Board of Directors is evaluated. We have also established the Compliance Committee
consisting of the President, full-time Directors, Executive Officers/General Managers of the divisions, andexternal legal counsels (attorneys) as a structure to further compliance with laws and corporate ethics.

Current initiatives⚫Establishing appropriate managerial structures for the Group by instituting a Nominating Committee andCompensation Council to determine director candidates, as well as succession planning, etc.
⚫Operating the Compliance Committee and a fair and transparent Compensation Council to advancelegal compliance

Aoyama Zaisan Networks ｜ Integrated Report 2024

29

Our Sustainability Sustainable management
Approach to human resources strategy and investment in human capitalIn our Group, human assets (capital), from which ourconsulting services stem, is an extremely important formof management capital. By improving the interpersonal
skills of our employees and their capabilities to provide
high-quality services, as well as increasing the diversityof our employees, we can respond to the diverse values
and requests of our clients and offer further value-added
property consulting services. Investing in human capitalmeans investing in our business base and its foundationof sustainable management, which is essential for
the Group's ongoing sustainable growth. We monitor
operating profit per employee as an overall measure of
return on investment in human capital. We seek to improve
operating profit per employee by making progress invarious measures related to human capital.

⚫Operating profit per employee (consolidated)
10.96(million yen)
10

9.07

9
8

7.17

6.79

7
6

5.28

5
4
3

Endorsement of TCFD

Indicators and targets

The Group has declared its support for therecommendations of the Task Force on Climate-related
Financial Disclosures (TCFD). The Group is engaged inbusiness activities utilizing energies from land and othernatural resources, and we recognize that addressing
climate change is an important management challengewith a considerable impact on our business continuity. We
prioritize environmentally friendly initiatives for their ability
to contribute to enhancing asset value and resolving social
issues, and we aim to meet the needs of both clients andtenants.

The total CO2 emissions of our Group have been
increasing due to the expansion of our business andincreases in the number of employees. However, byintroducing energy-saving equipment and changing power
contracts to a carbon-free plan, we have been reducing
CO2 emissions per square meter (CO2 emission intensity).
Our CO2 emission reduction targets for 2030 and 2050
are currently under consideration. We will continue toaddress climate change risks by extending and expanding
measures to curb emissions through ongoing TCFD
disclosures.

2⚫Changes in CO2 emissions [tCO2]

1

Scope 1 & 2

0

2019

2020

2021

2022

Scope 3 Emissions related to Advantage Club

2023

Scope 3 Other emissions
CO2 emissions intensity [tCO2/m2]

GovernanceAchieving sustainable growth for the Aoyama Zaisan Networks Group

Initiatives
・Creating a pleasant working
environment for all・Ratio of female employees: 30% /Target 40% (consolidated)・Ratio of female managers: 19% / Target
30% (consolidated)
・Promoting use of parental leave by
male employees
Initiatives
・Philosophy training(Hasumi Juku)・Partial donation of
profits
・Volunteer activities

Diversity

Improvinginterpersonal
skills

Initiatives
・Property consultant training
・Training of management personnel
・Implementing training programs for
employees at different levels

Enhancingand expanding
wealth, body,and mind

Increase inoperating profit per
employee

Education

Hiring

Initiatives
・System of equal pay for men and women・Annual review of the evaluation system
・Maintaining a salary increase rate of 5%
or more for two consecutive years
・Health checkup rate: 100%(consolidated)・Utilization rate of paid leave: 71.8%(non-consolidated)

Risk
management

Initiatives
・Managing working
hours and workers'
compensation
・Health management
・Establishing aharassment line・Performing stresschecks

Initiatives
・Reducing mismatches
・Attracting outstanding human resources
・Increasing numbers of applications
・Improving the hiring rate

Investing in human capital

Investment in human capital

30

Aoyama Zaisan Networks ｜ Integrated Report 2024

For moredetails, pleasesee here

The Group's Board of Directors deliberates and decides
on policies and important issues related to the overall
issue of addressing climate change.

CO2emissions 7,000[tCO2]

0.08460.085

0.0836CO2 emissions
intensity [tCO2/m2]

6,000

5,000

1,666
1,456

0.08

2,090

1,480
0.07754,000

Strategy

0.075
3,000

We conduct analysis of risks and opportunities in thevalue chain in the real estate industry (small-lot real estate
products), taking into account business characteristics
and the surrounding environment, including political,
economic, and social conditions, and we conduct
scenario analysis of the impact of each risk on business.

0.0719
2,000
4,265

4,121

4,294

87

101

101

106

2020

2021

2022

2023

0.07

1,000

0

Risk management

3,952

0.065

⚫ Total CO2 emissions ratio (2023)
Scope 1&2: 106 tCO2

The Sustainability Committee oversees climate changerisks and opportunities from a medium- to long-term
perspective for the entire Group, and performs supervisionand monitoring in cooperation with the Board of Directors,
with the results reflected in management strategy.

2%
Emissions related to
Advantage Club:4,294 tCO2

66%

Total emissions

6,490 tCO2
Endorsement of TCFD
For moredetails, pleasesee here

Scope 3: 6,384 tCO2

98%

Aoyama Zaisan Networks ｜ Integrated Report 202431