Table of Contents
3. Initiatives .................................................................................................................. 23-1. E (Environmental) Initiatives ................................................................................ 2
Details of initiatives to reduce water consumption ....................................................... 2
Climate change awareness ............................................................................................ 2
Climate-related risks and opportunities ........................................................................ 4Long-term (> 5 years) reduction target for GHG emissions ........................................ 5
Oversight of climate change risks by the Board of Directors ........................................ 6
Waste reduction and prevention targets ....................................................................... 6
Amount of nitrogen oxides (NOx), waste, and recycling for the past 3 years (tons) .... 6
Amount of environment-related fines and penalties ..................................................... 6
Factory and site wastewater data for the past 3 years.................................................... 6
Total GHG emissions (Scope 1 and 2) for the past 3 years .......................................... 71

3. Initiatives
3-1. E (Environmental) Initiatives
Details of initiatives to reduce water consumption
Initiatives to reduce water consumption
We conduct awareness-raising activities throughout the Group to prevent water use beyond what isnecessary. By making all employees aware that water is a limited resource, we are working to raise awarenessof water conservation and the need to reduce water consumption.
We believe that the direct environmental impact of water use by the Group’s businesses is limited.
However, throughout the value chain, we check whether there are any business processes that have a negative
impact on water resources or that involve the use of large amounts of water. If such processes are found, wetake appropriate measures to improve them.

Climate change awareness
Examples of the risks and opportunities posed by climate change that the Group recognizes are as follows:
Impact on
financialperformance

Timeframe

Item

Details

Transition
opportunities

Advancement of renovation
technologies with smaller
environmental impact

The introduction of low
environmental impact
building materials andwater fixtures such as inkitchens, will makerenovated condominiums
more energy efficient.
This creates anopportunity for the Groupto expand its businessthrough new products.

MediumMedium tolong term

Transition
opportunities

Increased awareness of thesmaller environmental
impact of renovatedcondominiums compared to
new construction

As the supply of new
condominiums continues
to decline, customers will
become more aware of thesmaller environmental
impact of a renovatedcondominiums compared
to a newly constructed
one. This will increase theopportunity for customers
to consider renovatedcondominiums as apurchase option. This isalso an opportunity for theGroup to expand its
market share.

MediumMedium tolong term

2

Item

Details

Impact on
financialperformance

Timeframe

Transition
risks

Introduction of carbon tax

The introduction of socalled carbon taxes, aform of taxation based on
greenhouse gas emissions,is expected to result inhigher costs such as
procurement costs ofrenovation materials, etc.,
company vehicle fuelprices, and electricity
prices.

Large

Medium tolong term

Transition
risks

Increased procurement costs
due to improved
environmental performanceof renovation materials

Advances in thedevelopment of materials
with a smaller
environmental impact anda broader uptake of thesetechnologies can beexpected to be passed on
to each material price.
While the spread ofmaterials with improved
environmental
performance is a greattransition opportunity, it
can put pressure on
profitability due toincreased renovation
costs.

Large

Medium tolong term

Physical risks

Increase in frequency andseverity of natural disasters

Extreme weather events
such as heavy rains or
typhoons are expected toresult in delays to businessactivities. This could leadto a decrease in thenumber of real estate units
purchased, an increase inrunning costs due to alonger renovation
construction period andlonger sales periods.
Indirectly, revisions oflaws and regulations
related to disastercountermeasures or theMedium

Medium tolong term

3

Item

Details

Impact on
financialperformance

Timeframe

expansion of hazard map
regulations could also
result in decreases ofappraisal value of theCompany-owned
properties.
Physical risks Increase in health hazards
caused by extreme heat (heatstroke, etc.)

Reduced operational
efficiency of employees
and the occurrence ofoccupational accidents areexpected to put pressure
on profitability.

MediumMedium tolong term

Physical risks Higher utility costs due tocold winters

Higher utility costs areexpected due to the use ofheating in offices, etc.
Indirectly, the increase inelectricity use andgreenhouse gas emissions
from heating use could bea cost-increasing factor
due to so-called carbon
taxes.

MediumMedium tolong term

Climate-related risks and opportunities
Of the climate change-related risks that the Group recognizes, the risks that it deems to have the potential
for significant impact on finance or strategy, and the details of these risks, are as follows. The Group has apolicy of regularly reviewing climate-related risks, including responses to the TCFD (Task Force on Climaterelated Financial Disclosures). Through this process, we periodically review the abovementioned risks andopportunities.
Type of specific risk: Introduction of carbon tax
With global warming, increases in maximum daytime temperatures and extreme weather events have beenreported around the world. The goal of society is to reduce greenhouse gas emissions to virtually zero by2050 and limit the rise in global temperature to less than 1.5 °C above pre-industrial levels. As one meansof achieving these goals, the introduction of a carbon tax is being discussed internationally. The Group has
also conducted a risk analysis of climate change and the various initiatives to combat it, considering them tohave both strategic and financial impact. The IEA World Energy Outlook 2023 projects a carbon tax of atleast 350,000 JPY/tCO2 by 2050. Currently, as of year 2023, the Group’s emissions are 158.1tCO2. If
estimated by the same amount of emissions, our tax burden is expected to increase by JPY55.3 mn. We haveidentified this as a significant financial risk for the Group.
While avoiding these risks, the Group will promote initiatives to reduce emissions with the aim of realizing
a decarbonized society. For Scope 2, which accounts for most of the Group’s emissions, we will promote4energy conservation in our offices and the use of renewable energy during renovation work. For Scope 1 as
well, we will strive to achieve the reduction target by reducing our fleet of company vehicles and promoting
the switch to EVs.
Type of specific risk: Soaring material procurement costs
Recent unforeseen events, such as global climate change, have caused raw material prices to soar andenergy prices to rise, seriously impacting corporate procurement activities. Fluctuations in the availabilityof important physical resources (such as lumber and stainless steel) could cause the cost of sales to increase,which could adversely affect the Group’s business results and financial position. On the other hand, events
caused by climate change also have the potential to accelerate the development of environmentally friendly
products and contribute to the spread of materials and technologies that have a smaller environmental impact.
Therefore, while the spread of materials with high environmental performance is a transition opportunity, itcould at the same time put pressure on profitability if prices are passed on to each material, resulting inhigher renovation costs. Fluctuations in oil prices and high labor costs associated with the renovation
operations that are closely tied to our business activities could adversely affect the Group’s business results
and financial position.

Long-term (> 5 years) reduction target for GHG emissions
Greenhouse gas emissions reduction targets
To reduce the risks associated with climate change, the Group has set medium to long term targets for
reducing greenhouse gas emissions. In addition to taking early action to achieve the targets for Scope 1 and2 emissions, we will continue to examine ways of achieving the targets for Scope 3 emissions as well.
<Greenhouse gas emissions reduction targets>
2030: Scope 1 and 2: 40% reduction (intensity, compared to FY22)*Concept of Scope 1, 2, and 3
In accordance with the GHG Protocol Initiative, each refers to the following types of emissions.
- Scope 1: Direct greenhouse gas emissions by businesses themselves (fuel combustion, industrialprocesses)- Scope 2: Indirect emissions from the use of electricity, heat, and steam supplied by other companies- Scope 3: Indirect emissions other than Scope 1 and Scope 2 (emissions from other companies related tothe activities of the business)

5Oversight of climate change risks by the Board of Directors
The President’s Office formulates the basic policy for responding to climate change risks and reports on
this periodically to the Board of Directors. In this way, our response to climate change is overseen by theBoard of Directors. Although the Company does not currently have a position dedicated to managing ESG,
the CEO is responsible for managing and overseeing climate change risk.

Waste reduction and prevention targets
TopicDetails

Japan/OverseasTargets

Compared toFY22▲20.0% (Emission
intensity per unit ofrevenue)*1. The waste to be aggregated is limited to waste discharged directly by the Group and waste discharged
by the Group as the main contractor for the renovation work.
Waste reduction

Japan

Reduction of waste*1
generation intensity

Amount of nitrogen oxides (NOx), waste, and recycling for the past 3 years (tons)Overview of environmental impact*1(Unit:)

FY21

FY22

FY23

NOx emissions

0.3kg

0.3kg

0.3 kgIndustrial waste

100t

118t

11t

Recycled waste---*1. The waste to be aggregated is limited to waste discharged directly by the Group and waste discharged
by the Group as the main contractor for the renovation work.

Amount of environment-related fines and penalties
Number of environment-related accidents and lawsuits
During FY23, the Group had no violations of laws or regulations, fines, penalties, or lawsuits related to theenvironment. There were no accidents affecting external parties or serious complaints.

Factory and site wastewater data for the past 3 years
Water consumption
(m3)

FY21

FY22

FY23

Total

2,363.4

3,102.2

4,278.6

Amount used in theCompany-owned
properties (renovationwork, etc.)

1,667.8

2,389.5

2,270.9

695.5

712.8

2,007.6

Other (companyhousing, etc.)6Total GHG emissions (Scope 1 and 2) for the past 3 years
Greenhouse gas emissions (total volume, by scope)
FY21

FY22

FY23

Total(t-CO2)

154.8

192.6

158.1

Scope 1(t-CO2)

9.1

8.35.7

Scope 2(t-CO2)

145.7

184.4

152.4

Emission intensity perunit of revenue

0.41

0.39

0.32

368.9

482.1

488.7

(t-CO2/JPY mn)
Revenue(JPY mn)*Scope 1 and 2 aggregate target- Scope 1: Emissions from company vehicle fuel (direct emissions)- Scope 2: Emissions from the use of electricity in offices and the renovation work of theCompany-owned properties (indirect emissions)7