Chapter 5

Sustainability
Message from chairperson for each committee
Chairperson of the Audit Committee

Keiichiro Hashimoto

Basic Approach

Corporate GovernanceCorporate Governance Structure
Male

FemaleInternal directors

Chairperson

Women and people with overseas experience are invited to join the Board of Directors as a means of increasing its diversity.

Chairperson of the Nominating Committee

Chairperson of the Compensation Committee

We have been discussing succession plans, taking
into account diversity and anticipating changes
expected to occur in the business environment overthe coming five or 10 years. The plans will be carried out from the next fiscal year. When chairing themeeting, I work to create an open atmosphere thatencourages a frank exchange of opinions. Goingforward, we will ramp up discussions in order to establish governance systems that are fully functional.

We have submitted aggressive compensation design plansthat benchmark leading companies in and outside of Japanand are primarily aimed at fostering a growth-oriented mindset. To achieve our aim, we believe remuneration systems
must be designed to powerfully incentivize the entire workforce to aim for growth. With an eye to improving corporate
value (discounted cash flow, market capitalization), we arecommitted to developing strong remuneration systems that
help secure excellent talents and elevate employee motivation.

Koichi Moriya Outside Director

Atsushi Takagi Outside Director

Supervisory function
Board of Directors: 9 members
Determine basic management policies, etc.
Supervise the execution of duties by directors andexecutive officers

Nominating Committee:
8 membersCompensation Committee:
7 members

Audit Committee:
4 members ominate candidates for company
N
director and executive officer positions
Nominate candidates for president,
director, and executive officer positions atmajor subsidiaries

 etermine the amount of compensationD
to be paid to the company’s directors andexecutive officers
Deliberate on the amount of compensation
to be paid to presidents, directors, andexecutive officers of major subsidiaries

Audit the execution of duties by directors
and executive officers
Audit business reports and financial
statements; prepare audit reports

Board of Executive Officers:
8 membersMarketing Strategy
Meeting

Construction & Engineering
Strategy Meeting

Capital Investment
Strategy Meeting

Risk Management
Committee

Sustainability
Committee

E xecute operations based on basic
management policiesD eliberate and decide on businessstrategies, etc., related to the Group

Formulate and manage
the Group’s overall sales
strategies

Formulate and manage
collaboration strategies related to
the Group’s overall construction
and technology development

Formulate strategies
related to the Group’s
overall assets; manage
procurement/development/
administration policies formaterials and equipment

Conduct the Group’s overallrisk assessments; deliberateand decide on policies andspecific measures for risk
management

Conduct examinations onrisks, opportunities, andissues associated withsustainability, and reflect
results in management plans

Internal Control Committee
Manage matters related to effectiveness assessments of overall internal control functions

On April 1, 2023, the INFRONEER Group established the Anti-Corruption Policy. Both in Japan and abroad, the prevention of corrupt
practices including bribery of public officials or stakeholders, giving and receiving excessive entertainment and gifts, collusive relationships, embezzlement and trespassing is positioned as one of the most important issues in ensuring compliance. In our “Code of
Ethics,” we have committed ourselves not to conduct acts that are illegal or that could be misconstrued by society, and to maintain ahealthy and appropriate relationship with public officials and political organizations. We provide appropriate training for employees.
Also, we have signed the UN Global Compact and we support and affirm the principles related to anti-corruption.
For the Anti-Corruption Policy, visit our website at: https://www.infroneer.com/en/anti-corruption/

Prohibition of Anti-competitive Acts
The company has set forth provisions in the Code of Ethics for compliance with competition law and other related regulations,and business companies have set out a bid rigging prevention policy, in an effort to avoid the practice more effectively. The policies
and provisions have been revised to require employees and officers to abide by highly effective bid rigging prevention rules. For
example, we have clarified the rules governing leaving a meeting that apply when an employee suspects a bid rigging is being
discussed at a meeting with another company in the same industry. We also fully implement compliance training.
For details on compliance training, visit our website at: https://www.infroneer.com/jp/sustainability/social/ (in Japanese)

Sustainability

Representative Executive
Officer

Anti-corruption
Growth Strategy

Executive function

ComplianceBusiness Models

Outside directors

General Meeting of Shareholders

The Audit Committee is composed of four members, all of whom are appointed from among the five outside directors. The
Committee is striving to upgrade organizational audit functions using internal control systems. Toward becoming an integrated
infrastructure services company, INFRONEER will undertake a larger number of group-wide business collaborations, often involving infrastructure-related special purpose companies (SPCs). Anticipating such a situation, we have worked on the structural
alteration of auditors at business companies in conjunction with the shift to the holding company system. The Audit Committee
will promote closer cooperation with auditors of business companies, aiming to boost the Group’s overall governance.

Top Message

The INFRONEER Group is committed to strong governance as an essential mechanism for promoting sound risk-taking and taking
on the challenge of entering new business fields. To realize our vision of becoming an integrated infrastructure service company,
we need to take on an array of challenges to enter new areas related to various upstream and downstream infrastructure
management processes while continuing to pursue the Group’s existing businesses. Venturing into fields unknown to us willpose substantial risks. The company therefore needs to establish systems to enable management to conduct appropriate
risk assessments and promote sound risk-taking. Such advanced governance systems designed to ensure appropriate risk
management will allow business managers to take risks appropriately when making decisions and embrace the challenges
of entering unknown fields. We will commit to taking on these challenges to achieve the objective of becoming an integrated
infrastructure service company. This is the core of our approach to governance. Accordingly, we have adopted the system of acompany with a nominating committee to further enhance governance.

Outside Director / Chairperson of the Board of Directors

Value Creation Story

Governance

System and Policy for Determining Executive Remuneration

For details of executive remuneration, etc., read our securities reports, which are available at: https://www.infroneer.com/jp/ir/security_report/ (in Japanese)

45

Transparency of Taxes
We will respond appropriately to changes in local laws and regulations and provide timely and appropriate tax information toensure transparency. Furthermore, we are working to build trust with the tax authorities in each country and region, such as byresponding honestly to tax investigations and ensuring transparency and reliability in tax-related matters. We use appropriate
and effective measures to reduce our tax burden, and if the tax risk is assumed to be high, we will seek advice and guidance fromtax experts to reduce tax risks when necessary.
We will strengthen the internal restraint mechanism and we will establish an internal audit system to ensure that these are
implemented. Furthermore, we will always clarify the difference between public and private, correct our own attitude, and respondto the trust of society by staying close to our management philosophy.

Corporate Data

Matters related to the remuneration of the company’s directors and executive officers are determined by the Compensation Committee.
The Committee ensures a high degree of fairness and transparency in the decision-making process and verifies compensation levels,
collecting information and providing advice by utilizing external remuneration consultants. In FY2021, the company began to apply its
basic policies for the executive remuneration system as well as the remuneration system itself. From FY2023, the scope of application of thebasic policies and the rollout of the executive remuneration system has been expanded to include major subsidiaries.
Executive remuneration comprises base remuneration, performance-linked remuneration, and non-monetary remuneration. Performance-linked remuneration contains a number of incentives linked to the achievement of company-wide performance goals and targets
laid out in the INFRONEER Medium-term Vision. Non-monetary remuneration consists of stock remuneration for the purpose of ensuring
a shared interest with shareholders. With an eye to improving corporate value, executive remuneration is designed so that the proportion of
performance-linked remuneration increases in accordance with the level of responsibility.

46

Chapter 5 Sustainability

INFRONEER has established procedures for managing major potential risk factors associated with its business development asfollows. First, the risk management committee at each business company collects risk-related information, identifies issues, anddeliberates on the effectiveness of measures. Relevant results of such discussions at each business company and INFRONEER arebrought up at the quarterly INFRONEER Risk Management Committee meeting for a comprehensive review to identify risk factors.
Identified factors are classified in terms of frequency and impact level, and those classified into high risk groups are discussed withregard to specific steps that can be taken to increase the effectiveness of risk reduction measures, and necessary processes are
implemented following the PDCA cycle.
INFRONEER Holdings Risk Map

54

 onflicts and disputes
Cat the national level

Approx.
¥10 million

 hareholder, IR
SFinancial

Communication
Public relations
Human capitalCompetitor

 abor/employment
LInformation systems
Laws and regulations
New businesses sset preservationATrading partners

GovernanceOrganization/
corporate culture

3. Risk management system for the management of risk
We established the risk management regulations and established a Risk Management Committee, the highest-level body related to risk
management, on a quarterly basis to establish risk management regulations and implement cross-cutting risk management across theentire Group.

4. Compliance system

Overseas business

2
1
1

2

3

Roughly once in 10 years

4

Roughly once in 3 years

All documents related to executive officers’ execution of their duties, such as minutes of the Board of Executive Officers meetings andrequests for approval, are appropriately stored and managed by relevant departments in an easily searchable state based on relevantlaws and regulations and relevant internal regulations, and the status of execution of executive officers’ duties is regularly reported to theBoard of Directors.

5
More than once in 1 year

FrequencyFor details, visit our website at: https://www.infroneer.com/jp/sustainability/governance/ (in Japanese)

5. Group management system
To ensure that our subsidiaries carry out their business adequately, we have developed a risk management system, a compliance system, asystem to eliminate anti-social forces and a system to ensure that documents and other information related to financial calculations relating
to Article 24, 4(4) of the Financial Instruments and Exchange Act are kept. These systems receive the approval of the Board of Executive
Officers or executive officers according to the level of importance, based on the rules of affiliated companies prescribed by the Company.

6. Internal audit system
The Company has established a Corporate Audit Department that is responsible for conducting internal audits for the entire Group. During
an audit, we use a risk approach that reviews the reliability of financial reports, effectiveness of operations, and compliance with laws andregulations. We have also established an internal audit department at each of our main subsidiaries that is linked with the Corporate Audit
Department to strengthen the Group’s internal audit function.

Growth Strategy

In FY2023, our assessments identified “governance” and “organization/corporate culture” as critical factors with high risk.
For governance-related risks, we particularly note potential risks arising from inadequacies in the Group’s overall internal control functions
as a result of M&As, and conduct measures to reduce such risks. Specifically, we will ensure the effective monitoring of the implementation
status of initiatives promoted to accomplish targets set for the INFRONEER Vision 2030 (Medium- to Long-term Business Plan) by holding regular discussions with the management teams of business companies and performing ongoing monitoring via the business execution supervision function of INFRONEER’s directors.
For organization/corporate culture, we will take steps to mitigate risks posed by organizational/cultural differences between businesscompanies. Our plan is to foster a shared sense of unity throughout the Group and reduce risks by carrying out corporate culture promotion
activities at town meetings, where the president personally explains management policies to employees, and disseminating VMV statements
and the Group’s common guidepost (action guidelines) INFRONEER^ (“INFRONEER Caret”) (see page 1).

We disseminate our Code of Ethics, which defines the social roles and responsibilities our company must fulfill, to all employees via ourinternal intranet to ensure business ethics and compliance. We have also established an internal reporting system and set up methods ofcontact including a workplace hotline telephone and a compliance hotline. We will work to prevent and detect fraud at an early stage.
We have also established and operate a system that ensures the confidentiality and anonymity of users and related parties to protect
them against adverse treatment. In FY2022, a total of 52 cases were reported across the entire Group.

Business Models

Approx.
¥100 million 3

Natural disasters andaccidents
Customers

ComplianceExisting businesses
Procurement
Safety

The Audit Committee Office, a dedicated organization that assists the Audit Committee in its functions, comprises four employees.
To enhance the effectiveness of the audits carried out by the Audit Committee, we hold regular meetings with outside directors and accounting auditors, as well as the presidents of subsidiaries, auditors and internal audit departments to exchange information and opinions.

2. Information storage and management system

High-risk areas
Environment
Markets
Product and service
defects

1. System required for the execution of the instructions of the Audit Committee

Top Message

Impact level (in terms of monetary value)

Approx.
¥1 billion
or moreINFRONEER has built and operates an internal control system to ensure the execution of appropriate administrative orders in theGroup and efficient business execution, and audit systems to respond to changes in the business environment quickly and flexibly
with good risk management, and compliance.

Value Creation Story

Overview of the Operational Status of the Structure to Ensure Our
Business is Appropriate

Risk Management

Internal Control System

Board of Directors

Board of Directors

Risk Management Committee

Supervise

Chairperson: Representative Executive Officer
and President, and CEO

ReportInstruct

ReportInstruct

Risk Management Committee at business companies

 ollection of risk information
CIdentifying, consolidating, andmanaging risks
Confirming implementation
status and effectiveness ofcountermeasureEvaluation, correction, andimprovement of effectivenessInternal Control Committee
Chairperson: Representative Executive Officer and President, and CEO
ReportReport to
the Board of
Directors

InstructInternal Control Subcommittee
Business Improvement Subcommittee

Financial Reporting Subcommittee

Compliance Subcommittee

IT Governance Subcommittee

Risk Management Subcommittee

Report to
the Audit
Committee

Collaborate
Assist operations

Audit
Committee
OfficeCommission
investigation

Assist operations
Corporate Audit Department
Collaborate
INFRONEER Group Internal Audit Department
Audit

Collaborate

Collaborate

Corporate Data

Each department in INRONEER Holdings

ReportAccounting Auditor

ReportIdentification of risks and reviews
thereofConsideration, development, andmaintenance of countermeasures
Monitoring, evaluation, correction,and improvement
Deliberation on risk-related
disclosure items

Audit Committee

Sustainability

Risk Management System

Group companies

47

48

Chapter 5 Sustainability

Environment
Basic Approach
The INFRONEER Group is moving forward with initiatives from a long-term perspective, focusing on climate change, resource recycling, biodiversity, pollution prevention, and water security, to enable the sustainable use of and symbiosis with natural capital,
which is our business base. In addition, we are promoting activities through INFRONEER’s own “Dividends for the Earth.”

The Group is moving toward “carbon neutral 2050” by enhancing the function to perform embodied carbon* assessments as ameasure to reduce emissions across the entire value chain. Goingforward, in the infrastructure management business, we aim tobuild a one-stop management to reduce environmental impact
by building a mechanism for exchanging and sharing information
to increase the effectiveness of GHG emissions reductions among
our suppliers and stakeholders in the value chain. In FY2022, wereceived third-party assurance for our GHG emissions calculation
reports (INFRONEER Holdings supply chain emissions in FY2021).

307

86

77

313
76
76

0

(13.7%)

309
72

270

72

40

25
[(40%)]
50

200

0

237

230

227

100

237

230

75

187

[(100%)]

2018

2019

(Benchmark)Scope 1

2020
Scope 2

2021

2022

2030

2050

(Target) (Target)

100

[FY]

GHG emissions reduction rate
(benchmark: FY2018) (right axis)

GovernanceSupervision and Guidance

Report

The Group recognizes climate change as one of the key management issues
and a major risk. While we have a strong sense of crisis, we also view it as anopportunity and will implement concrete initiatives to achieve our INFRONEER
Medium- to Long-term Vision. Our basic policies and issues related to climatechange are regularly reviewed by the Sustainability Committee, and we have astructure in place to ensure proper oversight by the Board of Directors.

Scope 1

Direct emissions by fuelcombustions• Capital goods• Fuel and energy related activities notincluded in Scopes 1 and 2• Transport, delivery (upstream)• Processing of waste generated from operation

Scope 2

Indirect emissions by use ofpurchased energy

Scope 3

Instruction
ReportResponsible department in INFRONEER(Corporate Strategy Department, Human Resources Strategy Department, etc.)

Instruction

Report
MAEDA CORP.

MAEDA ROAD

MAEDA SEISAKUSHO

ScopeThis indicates risks, opportunities, and responses related to migration and physical changes based on the assumed climate change scenarios
for 2030.
For details on risk management, visit our website at: https://www.infroneer.com/jp/sustainability/environment/ (in Japanese)
CO2 Reduction Targets(Category 1: Commissioned construction, purchased materials)

Targets (Compared to FY2018)

RE100 in FY2050
RE60 in FY2030
40% reduction by FY2030(Category 11: Emissions associated with the use of our 40% reduction by FY2030
constructions and products)• Leased assets (downstream)• Transport, delivery (downstream)

Scope 1

Streamline work and use leading-edge construction machinery
Reduce emissions by using low-carbon fuels
Promote the above initiatives with the cooperating companies as the main entities
Reduce emissions during asphalt mixture production (promote foamed asphalt technology and sell low-carbon mixtures)

Scope 2

Conserve energy at each business office
Offset with non-fossil fuel certificates and the like
Develop infrastructure for climate change countermeasures through the renewable energy business
Reduce emissions during asphalt mixture production

Scope 3[Category 1: Commissioned construction, purchased materials]
Accelerate technical development with open innovation centered on ICI for resource recycling and decarbonizationA chieve environmentally friendly procurement through the visualization of Scope 3 emissions and resource recycling rates in theinfrastructure management business, and promote DX[Category 2: Capital goods]C ontribute to reducing GHG in the supply chain when procuring asphalt mixtures[Category 11: Emissions from our construction projects and products during use]S
 ubmit customer proposals for added value including for the environment, health, and productivity through W ZEB (double ZEB) for
new construction projects and renovation and promote wooden structures and buildings.
E xpand the use of EV construction machinery in the machinery business

Metrics
Disclose graph of results in emissions
Disclose graph of usage rate of renewable energy (electrical power)
Disclose emissions from commissioned construction and calculable
purchased materials
Disclose emissions* The service period of buildings is calculate with the LCCO2 method with CASBEE* The calculation standard for Group emissions is in accordance with the GHG protocol (obtained third-party assurance in March 2023).

For details on the obtained third-party assurance, visit our website at: https://www.infroneer.com/jp/sustainability/evaluation.html (in Japanese)

Bio Heavy Oil

MAEDA ROAD previously used a large amount of heavy oil to manufacture asphalt mixture. As asolution, the company decided to switch from fossil fuels to an animal and plant oil derived alternativethat can reduce CO2 emissions from burning to net zero, and set up Japan Biofuel Co., Ltd., a bio
heavy oil manufacturer. The company has strong processing techniques to support various types ofraw materials, including a by-product from refining kitchen oil (oil residue), skimmed oil, waste oil,and fat products in addition to waste kitchen oil.
In September 2023, the new company started operations at its factory in Hiroshima, allowing
MAEDA ROAD to take its first step of the emissions reduction plan by addressing its Scope 1 emissions
and Scope 3 emissions from users of the asphalt mixture, then move to the next step to sell the bio
heavy oil to external marketplaces, with an eye to contributing to decarbonizing society at large.

New factory in Hiroshima

For other projects related to GHG emissions reduction, visit our website at: https://www.infroneer.com/jp/sustainability/environment/ (in Japanese)

Sustainability FinanceCorporate Data

Scope 2 emissions
Utilization rate of renewable energy (electrical power)• End-of-life treatment of sold productsContent of initiatives

Related Projects

40% reduction by FY2030

Category 11
Emissions associated withthe use of our constructions
and products

Sustainability

Risk Management

Scope 1 and 2 emissions• Business travel• Employee commuting

Scope 3Growth Strategy

The Group recognizes climate change as a major risk factor that can significantly affect its business. In FY2022, based on the results of
TCFD’s financial analysis, we identified priority issues related to energy cost, effect of low-carbon building materials, and response to newmarkets, and started discussing related action plans and financial evaluation models. As a large energy consumer, we have incorporated
the internal carbon pricing mechanism into investment indices to promote the adoption of scalable renewable energy supply systems. In
the fields of public-private partnerships promoting infrastructure projects for maintenance, management, repair, renewal and new construction, new markets related to carbon neutral initiatives will bring added value to regional economies. We will give the value a tangible
form, looking to enhance stakeholder engagement while expanding the market.

Net zero emissions by FY2050

Scope 3

Downstream

Sustainability Committee

Strategy

Subject

INFRONEER

Business Models

Board of Directors

Upstream
Category 1
Commissioned construction
and purchased materials

Top Message

Disclose Climate-related Information Based on TCFD Recommendations

49

313

(%)

(1.3%)

Main CO2 Emissions in Our Upstream and Downstream Business Activities

The Group recognizes climate change as one of the key management issues. We anticipate that the new market for carbon neutral initiatives will expand rapidly in the maintenance, management, repair, renewal and new construction infrastructure fields
through public-private partnerships. We have set out a target value for CO2 emissions at net zero by 2050. At the same time, weare strengthening our initiatives to tackle climate change while reducing and increasing the efficiency of energy usage.

Scope 3 emissions

300

0.0%

(1.9%)For the chart for Scope 3, visit our website at: https://www.infroneer.com/jp/sustainability/environment/ (in Japanese)

Policies and Philosophy Regarding Climate Change

Scope 3 emissions* Scope 2: market-based

0.0%

400

* Embodied carbon: Total amount of carbon emissions from building structures and materials related to all stages of their life cycle

Climate Change

Targets and Metrics

GHG emissions: Scopes 1 and 2[kt-CO2]

Value Creation Story educe Greenhouse Gas (GHG) Emissions acrossR
the Entire Value Chain

In September 2022, INFRONEER issued its first green bond. In FY2023, we are planning to apply for positive impact finance programs.
We will continue to commit to sustainability finance going forward.

50

Chapter 5 Sustainability

Pollution Prevention

There is a need to respond to international developments, including conversion to a circular business model, the business modelthat results in a circular economy. From a comprehensive perspective as infrastructure operators (ordering parties), emitters,
and processors, the INFRONEER Group is introducing designs for products that are environmentally friendly throughout their life
cycle, thereby diminishing the usage of resources and alleviating and avoiding the negative impact of resource usage, in order tocontribute to a circular economy. Almost all of the recycled asphalt mixture and recycled roadbed materials used in our construction
business use products recycled and processed at our crushing plant in our road civil engineering business. As a one-stop management system for infrastructure operations from upstream to downstream, we aim to centralize resources and by-product logistics(Scope 3) data, improve productivity, and build a social implementation model.

Management of Hazardous Substances
The Group manages operations for building, civil engineering, pavement construction, crushing stone, mixture manufacturing,building machinery manufacturing, and others, appropriately in compliance with applicable laws and regulations. Major issues
under management are related to monitoring the usage of PRTR-listed chemical substances; proper processing of wastewater
to be discharged; and prevention of soil contamination and alleviating and avoiding negative impacts in case of contamination.
Recognizing that inappropriate management poses reputational risks that can result in a lost business opportunity, we will ensure
appropriate management on a constant basis.

Related Projects

Crush and separate

Recycled roadbed
material/recycled
aggregate

MAEDA CORP. has developed a water treatment system to remove organofluorine compounds(PFOS, PFOA) from wastewater. The system, composed of two types of units, each for the clarifier and ion-exchange resin, is suitable for transportation on a general-purpose vehicle. The
clarifier unit removes free-floating substances and the ion-exchange resin unit removes PFOS
and PFOA. Anticipating an increase in the amount of detected PFOS and PFOA nationwide in the
future, we are planning to aggressively market this technology.

Straight asphalt
Virgin crushed stoneand sand
SupplyRecycling-oriented society
formation system

Crushing
plant

Asphalt
mixtureproduction
plant

In FY2022, we reported three cases of violations of environmental laws and regulations.
AcceptConstruction site

Manufacture and sell

For more details, visit our website at: https://www.infroneer.com/jp/sustainability/environment/ (in Japanese)Water Security
Policies and Philosophy Regarding Water Security
The Group recognizes the conservation of water resources as one of the key environmental issues and is committed to reducing
water usage by increasing usage efficiency and promoting recycling as well as securing safe water resources, a factor for ensuringlocal residents’ sense of security. We promote related efforts through our overall businesses, particularly water and sewage
concession projects, exemplified by those for managing industrial water supply systems in Osaka City and a public sewer system
concession in Miura City (for east area treatment).

Dividends for the Earth
Because we are conducting business activities with the benefits provided by the Earth’s resources, we are introducing “Dividends
for the Earth” to return a portion of the business profits to our investor Earth in the same concept as we pay dividends to ourshareholders. Based on this idea, we set the amount of “Dividends for the Earth” at 2% of our consolidated profit.

Eco-Aid

Eco-system

Eco-Angel

Eco-School

SII (Social Impact Investment)
Eco Point System “Me-pon”

Green Commitment
This is mainly a mechanism to support activities designed to solve social issues related to the environment. Each issue is categorized, andthe content is carefully reviewed and supported for each of these activities.
SII (Social Impact Investment)
We provide support through investments in businesses, technologies, and venture companies with ideas that contribute to solving social
issues.
Eco Point System “Me-pon”
This is an eco-point system designed to support employees and their families who proactively engage in environmental activities in their
daily lives. Through our dedicated website, the company awards points to employees and their families for any voluntary environmental
activities they are involved in outside of their work.
Corporate Data

For other projects related to biodiversity, visit our website at: https://www.infroneer.com/jp/sustainability/environment/ (in Japanese)
For timeline of our past biodiversity actions, visit our website at: https://www.infroneer.com/jp/sustainability/environment/biodiversity.html (in Japanese)

Green Commitment
INFRONEER Forest

Sustainability

Content of Dividends for the Earth

Ogasawara Environmental Education Project: Bonin Infrastructure Initiative

In FY2022, MAEDA ROAD launched an environmental education project on the Ogasawara Islands
where its sales office is located. This is an industry-academia collaboration project organized to give
students aspiring to be engineers an opportunity to learn about the “coexistence of biodiversity andinfrastructure,” with a view to building future plans. Participants attended four advanced study sessions
and visited the islands to experience the abundant nature and listen to lectures from local experts on
local environmental conservation activities and infrastructure development. The program was designed
to help students gain an in-depth understanding of a diverse range of topics relating to biodiversity
and the business of MAEDA ROAD. We received comments from participants expressing their stronger
awareness of the importance of developing sincere attitudes toward addressing issues that have a large
impact on the environment as well as aspiration for engaging in environmental conservation throughbuilding careers in the relevant fields. In FY2023 for its second event of the program, the company
offers an upgrade by inviting external experts to give lectures at advance study sessions. MAEDA ROAD
will utilize knowledge gained from this environmental education project in order to enhance its
activities to contribute to society as a “road builder friendly to the environment and people.”

Growth Strategy

The Earth’s environment is an indispensable foundation for achieving “a world where there’s no limit to what can be asked fromand what can be delivered by infrastructure services,” which is one of our goals. The Group is committed to conserving biodiversity
and the sustainable use of resources in all business areas, including procurement, operation and renewal, to increase social andcommunity safety, security, and sustainability. In addition, we are introducing green infrastructure that uses the functions of thenatural environment to solve various issues in society. In the civil engineering, building construction and road civil engineeringbusinesses, we are committed to the use of building materials with low environmental impact and the construction of a resource
circulation model, especially because it requires a great deal of natural capital input. In addition, during development, we conduct
environmental assessments to help preserve ecosystems and the like. We are committed to protecting endangered species andprotecting local ecosystems. In the machinery business, R&D in the forestry and processing machinery sectors contributes to therecycled use of forest resources. In the infrastructure management business, we are promoting the conservation of biodiversity
with the use of sustainable resources.

51

Ion-exchange resin unit

Environmental Laws and Regulations Compliance Status

Biodiversity

Related Projects

Clarifier unit

Business Models

MAEDA ROAD accepts debris, mainly asphalt
clumps and concrete clumps, that are wastematerial from our construction sites, andrecycles about 8 million tons of that per year
(recycling rate is around 100%). Recycled
aggregate is used as a material for recycledasphalt mixture, and is sold as a recycled
roadbed construction material. At the sametime, we are promoting initiatives to diminish
the usage of natural resources and develop
petroleum substitutes.

Development of Aquatic PFOS/PFOA
Adsorption Treatment System

Top Message

Recycling Construction By-products andLong-term Resource Cycling Initiatives

Industrial Waste (Construction) Recycling Diagram

Value Creation Story

Resource Recycling

For details on “Dividends for the Earth,” visit our website at: https://www.infroneer.com/jp/sustainability/environment/ (in Japanese)52Chapter 5 Sustainability

Approach to Health and Safety

Basic Approach

Human Rights and Labor

Certified as a Health & Productivity Management Outstanding Organization
MAEDA CORP. was certified as a Health & Productivity Management Outstanding Organization 2023 (large
enterprise) under a Japanese government program to recognize large enterprises and SMEs for the outstanding
practice of health and productivity management to deal with health issues effectively and engage in healthpromoting activities recommended by the Nippon Kenko Kaigi.
◎ Previous certification: MAEDA CORP., MAEDA SEISAKUSHO (2020)

All Employees to Have an Interview with a Public Health Nurse (MAEDA ROAD)

Human Rights Policy

For details of the Human Rights Policy, visit our website at: https://www.infroneer.com/jp/blog_assets/attachments/314/HumanRightsPolicy.pdf (in Japanese)

MAEDA ROAD runs a program to allow all its employees to have an interview with a public health nurse once a
year for the management of their physical and mental health. The interviews are held at the head office and 11
branch offices across Japan according to the annual schedule set for each office. Individual employees make an
appointment from the dedicated website according to their own schedule and have an online interview with oneof the six nurses. The nurses are qualified for privacy management and provide guidance and advice on various
health topics, including recommendations for re-examination, health promotion, self-care for mental health, andsmoking cessation, using the employee’s latest health check-up results.
◎ Program use rate in FY2022: 98%

Basic Approach toward Labor Standards

Kazuhiko Miyazaki
Chairperson of MAEDA SEISAKUSHO Labor Union

Activities and initiatives carried out in FY2022
April–June

Spring headquarters union organizing campaign (32 sessions)

SeptemberLabor-management consultations regarding reduction ofinternal documentation work

September–
November

Autumn headquarters union organizing campaign(23 sessions)

October–November

Branch labor-management consultations (11 branches)

NovemberMembership satisfaction survey

Activities and initiatives carried out in FY2022
June

Collective bargaining (summer bonus)

September

Annual conference, collective bargaining(autumn wage negotiation)

NovemberCollective bargaining (year-end bonus)

March

Collective bargaining (spring wage negotiation)

Support for securing and training human resources
Securing and training skilled construction workers will make the construction industry more attractive and lead to the development of a more developed social infrastructure. As part of efforts to assist the recruiting activities of cooperating companies,
MAEDA CORP. makes budgets for enhancing the brand image of TEAM-Z, the recruitment website of Zenyu-kai, the network of
MAEDA CORP.’s cooperating companies, principally by employing services for content creation and branding item development.
The company also prepares budgets for providing extensive personnel training programs for cooperating companies, such as
rank-based upskilling and training courses for employees, managers, engineers and candidates for management team members.
For details of TEAM-Z, visit our website at: https://team-z.jp/ (in Japanese)

Support for technical capabilities development in consideration of needs of cooperating companies
Improvement of cooperating companies’ technical capabilities is a crucial issue not only for the purpose of increasing theirprofitability but also for adequately securing and developing human resources, a challenge that requires more focused
attention in the future. MAEDA CORP. sets aside budgets for development projects based on suggestions submitted by cooperating companies to deal with their needs in order to maintain and improve their construction capabilities.

INFRONEER is an SDGs partner to the professional basketball team LEVANGA HOKKAIDO
based on the partnership agreement signed in October 2022. The company sponsors theteam’s SDGs project LEVANGA ACTION, specifically for donating basketballs to local elementary schools, in a bid to contribute to community revitalization through promoting
sports activities. Going forward, we will engage in communication with regional communities
through social contribution activities.

Corporate Data

Labor-management consultations regarding wages and systems

Local contribution
activities

53

April

We will work to resolve social issues and promote regional revitalization by participating in public-private partnership projects suchas concession projects and others, and we will introduce initiatives that will contribute to improving the stability and productivity ofthe management of cooperating companies, who are our partners nationwide and who are indispensable in sustaining growth in ourcompany. From FY2023, MAEDA CORP. has started to budget for supporting cooperating companies, chiefly in areas related to humanresources development, establishment of construction structures, and development of technical capabilities for improving productivity,
to accelerate efforts for these purposes. Also, as steps to provide support with cash management, the company has abolished the useof electronically recorded monetary claims and begun to make all-cash payments.

Sustainability

Yoshihito Ryuo
Chairperson of Central Executive Committee
MAEDA ROAD CONSTRUCTION Labor Union

Despite its small size with 30 members, our labor union
promotes activities to improve working conditions, including bonus negotiations as well as spring and autumn wage
negotiations. Our other important activities include preparing a summary of the concerns and fears of employees
about the introduction of new systems and submitting thesummary to the company, looking tobuild a better labor-management relationship and contribute to the sustained
development of society.

Revitalize the Community and Support Partners

Major activities to support cooperatingcompanies

We have 1,840 members, representing a majority of theentire applicable workforce. We conduct an annual survey
to monitor chronological changes in membership satisfaction and use the survey results to plan activities to raise
the motivation of members. Also, we hold constructive
labor-management consultation sessions several times a
year, seeking to improve working conditions and the employment environment.

Japan Metal, Manufacturing, Information andTelecommunication Workers’ Union (JMITU)
MAEDA SEISAKUSHO Branch

Local Communities

Growth Strategy

The INFRONEER Group respects the freedom of association and rights to collective bargaining protected by laws and regulations applicable in each country and region where we conduct business, as stated in our Human Rights Policy. Also, the policy describes that in countries
and regions where the freedom of association and rights to collective bargaining are restricted by local laws and regulations that do notmeet international human rights standards, we will pursue appropriate ways to respect these rights by establishing alternative means forhaving a dialogue with local employees.
In the INFRONEER Group, labor unions are promoting activities to improve working conditions, such as wages and working hours, withthe aim of maintaining and improving the employment conditions and increasing the economic status of workers. Some details of suchactivities are provided below.

Business Models

We take the impact that risks and opportunities related to human rights have on companies seriously. We have implemented the
INFRONEER Group Human Rights Policy (hereinafter referred to as the “Human Rights Policy”). We recognize that our business activities
may directly and indirectly affect human rights. We will provide all our officers and employees with appropriate training and education
to ensure that our Human Rights Policy permeates INFRONEER and the Group and is implemented effectively across all of our corporate
activities. Furthermore, we will regularly disclose our commitment to respect human rights on our website and in our integrated reports.

MAEDA ROAD CONSTRUCTION Labor Union

Top Message

The INFRONEER Group recognizes that investments in human capital are the starting point for improving corporate value, because our human resources are the driving force for maximizing added value. To realize our vision of becoming an integrated infrastructure service company, we are proactively promoting investments so that we can not only continuously produce value-creating human capital that will embrace challenges and engage in co-creation with a sense of ownership but also improve corporate
value. In addition, aiming to take on the challenge of building future infrastructure together with all our partners, we have beenpromoting initiatives throughout the entire supply chain by establishing a human rights policy, a bedrock for solid business operations, while pursuing diversity and ensuring occupational health and safety.

At the INFRONEER Group, officers, employees, and other related parties act together according to health and safety management systems,
following not only laws and regulations but also relevant rules and standards. Each person carries out disaster prevention measureseffectively and works to ensure health, safety, and security when engaging in business activities. The Group’s workplace accident reportfor FY2022 (workers employed by INFRONEER only) presents 14 accidents accompanied by lost work time, out of which eight cases
involved four or more days of absence and no case was fatal.
Also, based on the recognition that the physical and mental health of employees serves as a basis of business activities and a driver ofthe development of the Group, we implement various measures to support employees’ health.

Value Creation Story

Health and Safety

Society54

Chapter 5 Sustainability

Strengthening Competitiveness in Acquiring Human Resources

Policies and Approach to Human Resources
The INFRONEER Group has formulated an INFRONEER Vision 2030 (Medium- to Long-term Business Plan) and an INFRONEER
Medium-term Vision policy to increase added value and improve our corporate value through continuous production of valuecreating human capital. Based on this, we formulated a Group human capital strategy based on social conditions, how people work,changes to how to value our work, and the current status of human capital management in the Group.

To create value through a diverse and productive workforce, the INFRONEER Group promotes recruitment activities to raise the recognition
and understanding of the Group in the labor market. For this purpose, we run “talentbook,” a website to present stories of INFRONEER
believers performing their work, as well as our official Instagram account that focuses on the talent of people involved in infrastructureservices and attention-grabbing situations occurring in day-to-day operations. Using these tools, we aim to raise awareness and arouse theinterest and empathy of more people in the company, seeking to attract many new members to join our Group.

Future INFRONEER believers

Overall View of the Group’s Human Capital Strategy

Instagram

JOIN

Corporate value

Communication

Maximized added value cycle

Empathy
Interest

Top Message

Awareness

Value Creation Story

Human Capital Strategy

Communication

Added value
Allocate

Existing and potential job seekers

InvestValue-creating human capital(conceptual view of the Group’s human capital plans)“talentbook,” the Group’s recruitment andpromotion website, carries articles introducing
INFRONEER’s magnetic personalities.

Training

INFRONEER’s Instagram account is its internal andexternal communication tool, posting photos of a diversity
of INFRONEER believers engaged in day-to-day work.
For more details, visit our website at: https://www.talent-book.jp/infroneer (in Japanese)Pursue Ease of Work and Value of WorkGroup’s human capital management to produce value-creating human capital

Human capital strategy
Awareness of internal environment

Vision
INFRONEER Vision 2030
INFRONEER Medium-term Vision

Gap
Solve issues

Current status of human capitalmanagement in the Group

Awareness of external environment
External environment and social situation of our human resources

To prioritize issues that are important in managing the Group’s human capital to continuously create value, we will formulate key measuresand invest through the four pillars of our medium- to long-term human capital strategy.
Conceptual view ofrequired human capital

Co-creation

Strategy pillar

Specific measures

Recruitment

Strengthen competitiveness in acquiring
human resources

Ensure diversity in recruitment branding

Training

Invest in strategic training of humanresources

Train managers and executives
systematically
Improve basic skills of entire Group

Assignment

Assign human resources optimally

Group talent management

Evaluations andremuneration

Pursue ease of work and value of work

Improve engagement
Establish Group human resources system** Talent management: A management method that manages information such as employee abilities, qualities, and experience values centrally; it is useful for the strategic development
and allocation of human resources

55[Status to achieve]
DE&I is an essential part of
conducting business.

Blooming
Planting seeds/Watering
Preparing flowerbeds

Change in mindset brings
about change in action.
Understanding of theimportance of DE&I isshared across the Group.

 ive training for change in mindset to make the understanding of the importance of DE&I shared across the Group.
GBring the change in mindset to the phase of change in action by implementing appropriate personnel exchange and personnel systems.
Achieve results from the change in action (practice DE&I policy)

Human capitalmanagement

Sense ofownership

Diversity, Equity & Inclusion (DE&I) Roadmap

For details of the Policy, visit our website at: https://www.infroneer.com/jp/blog_assets/attachments/583/20230622.pdf (in Japanese)

Philosophy Dissemination Workshop
In FY2022, we started holding workshops for disseminating the Group’s common philosophical guidepost INFRONEER^ (INFRONEER Caret) for realizing the Vision, Mission, and Value. The workshops wereattended by a total of roughly 900 employees in managerial positions. In FY2023, they are organized atbusiness sites across Japan in sequence, targeting a total of 5,000 non-managerial employees. Throughteamwork activities transcending companies and departments, the workshops are designed to foster
mutual understanding and a sense of unity while increasing an understanding of the Group’s vision anddirection as well as actions to take to approach them, with an eye to increasing employee engagement.
For details of the philosophy, see page 1.

Corporate Data

Value-creating human capital

Challenges

To continue providing infrastructure services toan increasingly diverse society, it is important toensure that each employee with diverse values,
attributes, skills, and other background factors
fully demonstrates their abilities to generate newvalue. Based on this recognition, we have formulated our Diversity, Equity & Inclusion Policy. Goingforward, we will implement all the initiatives
according to the related roadmap and strive toachieve sustained growth and improvement of ourcorporate value over the medium to long term.

SustainabilityGroup Human Capital Strategy

Formulating Diversity, Equity & Inclusion Policy

Growth Strategy

Achieve management plan

We build a system and corporate culture in which diverse human resources can work together productively with a sense of unity andfulfillment, by implementing a performance-based remuneration system, proactively investing in employee engagement improvement
measures, promoting health & productivity management, supporting work-life balance, and introducing flexible working styles. Since
FY2022, we have been promoting activities at each business site of Group companies to instill the Group’s management philosophy andthe common philosophical guidepost (action guidelines). We will continue with these activities with unabated eagerness, with a focus on
improving employee engagement in and motivation for group-wide activities and increasing productivity.

Business Models

Remuneration

Problem-solving teamwork activity at a philosophy
dissemination workshop

56