INTEGRATEDREPORT
2022
FYE Mar. 2022

Corporate Communication Group, Corporate Planning Department,
Corporate Strategy Division
1-16-14 Shibuya, Shibuya-ku, Tokyo 150-8340, Japan
TEL: +81-3-5466-5008 FAX: +81-3-5466-5069
E-mail: webmaster@tokyu-cnst.co.jp
www.tokyu-cnst.co.jp/en/

Strategy and Performance

ProfileFoundations Supporting Our Strategies

Contents

ProfileStrategy and Performance

Foundations Supporting Our Strategies

Data

2

Corporate Philosophy/Vision10

CEO Message

40

Responding to Climate Change

70

11-Year Financial Summary

4

The History of the Tokyu Construction Group

16

42

Stock Information

Business Overview

Promotion of Environmentally
Conscious Management72

6

Dialogue: Taking on the Challenge of
New Value for the Future

73

Company Profile

8

Financial and Non-Financial Highlights

20

Value Creation Process

47

Respecting Human Rights

22

Materiality

48

Building a Responsible Supply Chain

23

Risks and Opportunities

51

Occupational Health and Safety

24

CFO Message

52

Enhancement of Quality Control Infrastructure

27

Special Feature 1:
Strengths of the Tokyu Construction Group54

Human Resources

59

Corporate Governance28

Overview of Each Business

64

Dialogue with External Directors

66

Compliance

67

Risk Management

68

Directors and Audit &Supervisory Board Members

28

Building Construction Business

30

Civil Engineering Business

32

International Business

34

Real Estate Business

36

Special Feature 2: Our future image of DX

38

Special Feature 3: Promoting Innovation

Editorial Policy

Reporting Period

The Tokyu Construction Group publishes the Integrated Report to provide shareholders, investors, and various other stakeholders with a deeper understanding of how the Group leverages
its strengths to create value and achieve sustainable growth. It compiles not only financial information but also material non-financial information that impacts our corporate value in an
integrated manner. For detailed financial reporting, please refer to the Annual Report. More detailed information on construction projects, technical services, and other issues can be viewed on
the Company’s website.
www.tokyu-cnst.co.jp/en/

FY2021 (April 1, 2021 to March 31, 2022)*Includes some information outside the reporting period.

Notes
Forward-looking statements such as forecasts of the Company’s results
contained in this document are based on information available as of thedate of publication and assumptions made as of the date of publication
regarding uncertain factors that may affect future results.
Except as otherwise provided for by law, the Company shall bear no
obligation to update these future predictions. Actual results may differ
from future predictions due to various factors.

Scope of the Report
TOKYU CONSTRUCTION CO., LTD. and its group companies

Reference sources
International Integrated Reporting Council (IIRC): “International Integrated Reporting Framework”
Ministry of Economy, Trade and Industry: “Guidance for Collaborative Value Creation”
Ministry of the Environment: “Environmental Reporting Guidelines 2018”
GRI (Global Reporting Initiative) “Sustainability Reporting Standards”

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

1

Profile

Foundations Supporting
Our Strategies

Strategy and Performance

Corporate Philosophy/Vision

2030 Corporate Vision “VISION 2030”

To zero, from zero.
The environment andthe excitement of the future.

Philosophy System

VISION 2030

VISION 2030

Long-Term Management Plan
Decarbonization

Delivered Values
Sources of Competitive Advantage

Provision of Three Values:

Human Resources Digital Technologies

Value and Ways

Reinventing what lies beyond building.
The challenge is immediate and inescapable.
Our intent is to develop entirely new approaches to sustainable urban development,

resilient, and more exciting.
As a construction company, we literally build the future, so it is our duty and ourManagement Policy

Principles of Conduct

Seek out new challenges.

Self-reliance

Maximize the potential of
our human resources.

aiming at zero carbon and zero waste.

ways to expand and integrate knowledge to make the living environment safer, more

Disaster Prevention
and Mitigation

Sources of Competitive Advantage

Redefining what it means to build.

Starting from zero, with no preconceptions, we will research new fields to find fresh

Zero Waste

Corporate Philosophy

Place the customer at
the center of our activities.

Speed
Teamwork
Reliability

Be fair and transparent inall our dealings.

Mission Statement (Purpose)
Fulfilling each individual’s dreams through the creation ofa reassuring and comfortable living environment.

responsibility to lead in innovating the solutions that society so urgently needs.
We already have the people and the technology to be part of innovation’s leading edge.
Now we must proactively seek out and welcome the wisdom of multiple specialized
disciplines, transcend conventional boundaries, embrace the latest digital technology
and unite as one in our purpose.
By maximizing these potentials, we can completely redefine what it means to build.
And more than that, we can reinvent the framework of what lies beyond building.

Schematic Diagram of Tokyu Construction’s Philosophy
Our purpose, which is drawn from the founding spirit of the Company, and shared values found in the organizationand our conduct (management policy and principles of conduct) are our most important foundation. In a businessenvironment that is growing more and more uncertain, it is important to adopt a vision-driven approach; therefore,
we set VISION 2030, the vision the Group aims to achieve in 2030. We will implement sustainability-oriented
corporate management that resolves social issues and creates economic value centered on “decarbonization,” “zerowaste,” and “disaster prevention and mitigation” using human resources and digital technology as our competitive
advantage and provide new affluence to stakeholders (customers, business partners, employees and their families,
shareholders, and society). As a member of the Tokyu Group, we will continue to conduct corporate activities andcontribute to society based on the group philosophy.

Repeatedly and wholeheartedly taking up this challenge will raise our corporate value
and allow us to offer a new level of prosperity and wellbeing to our customers, business
partners, employees and their families, and society at large.
1959 was the year of our establishment, with our first project being development of
Tama Garden City, aimed at relieving the population pressure on Tokyo.
Today, we are faster and more agile than others as we innovate new value.
The horizon we are advancing spreads to infinity.

2

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

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3

Profile

Strategy and Performance

Foundations Supporting
Our Strategies

The History of the Tokyu Construction Group

Postwar reconstruction of the capital was the starting point for Tokyu Construction. Beginning with the development of Tama
Garden City to resolve the social issues of Tokyo’s reconstruction and population concentration, the Group has grown alongwith the Tokyu Group and expanded its business to provide safe and comfortable urban development.

In addition to advancing the technologies and knowledge of the construction industry in response to the external
environment and market needs, we will accelerate our efforts to take on new challenges that go beyond the bounds of the
traditional construction industry in VISION 2030, our corporate vision for 2030.

2030

VISION 2030

Tokyu Construction—Projects and Development
1946
Establishment of Tokyo Construction
Industry Co., Ltd.

1971
Keikyu Hotel (Hotel Pacific Tokyo)

1960
Land readjustment project in
Nogawa First District

1984
Palau Pacific Resort

1954
Absorbed as the Construction
Industry Department of TOKYU LANDCORPORATION

Tokyu Corporation establishedthe Temporary Postwar
Reconstruction Committee two
weeks after the end of World War
II. Tokyu Construction Industry
Co., Ltd., the predecessor of
TOKYU CONSTRUCTION CO., LTD.,
was established based on the
Courtesy of
Tokyu Corporation reconstruction plan for the capital,
Tokyo. Because of this history,
Tokyu Construction’s mission isto resolve social issues.
Tokyu’s founder

Keita Goto

(million yen)

900,0002010
Shibuya station on the Tokyo Metro
Fukutoshin Line

2011
Futako Tamagawa rise

Redevelopment of the areaaround Shibuya Station

2012
Shibuya Hikarie
2014
Sanriku Railway Kita-Rias Line
Restoration Project

Tokyu Construction’s Starting point,
Postwar reconstruction of the capital

Net Sales

1991
Multi-level crossing construction of
Tokyu Ikegami Line
(The “STRUM Method,” ourrepresentative railway technology)

1966
Extension of the Den-en-toshi Line
Between Mizonokuchi and Nagatsuta

1979
SHIBUYA109

1989
Bunkamura
1993
SETAGAYA BUSINESS SQUARE

2010
Tama-plaza station area
redevelopment plan

2001
Cerulean Tower

2015
GLP Zama (Logistics Facility)
2017
PPP/Concession Business
Management of public seweragesystem in Hamamatsu City. Our firstwater/sewerage field project in Japan

2020
ROOFLAG Exhibition of Rental
Housing for Tomorrow(Large-scale wooden
construction)

2019
Jakarta Mass Rapid Transit Project
1969
The “four guidelines” laid out by
Noboru Goto, our first president

2004
New Tokyu Construction
Created through Spinoff

Net Sales
Operating Profit

Operating profit(million yen)

30,00020,000600,000

1959
TOKYU CONSTRUCTION CO., LTD. Founded

300,000

10,000001960Tokyu Spirit, the Founding Spirit
Expounded by the First President
Noboru Goto

Courtesy of
Tokyu Corporation

If business seems 100% safe toanybody, Tokyu does not needto do it. The business spiritthat we have built up over along time is not so relaxed, butrather a brave way of doing
things, carrying a torch aheadof all others.
The first president of
Tokyu Construction

Noboru Goto

4

1970

1980

Former Tokyu Construction (TC Properties)

1990

2000

2010

2020

Present-day Tokyu Construction

Fiscal 1990 was a 6-month period
from October to March.

Establish Business Foundation and Develop

Challenge During Economic Downturn

Evolution of Urban Development Know-How

1959-1995

1996-20102011-

As a member of the Tokyu Group, the Company played a role in the development of Tama Garden

Despite facing an unprecedented business

The Company has advanced its technologies in response

City (town planning including railway construction and residential land development), built its

crises due to the bursting of the bubble

to changes in the business environment and market

business foundation by working on a number of difficult construction projects, and expanded its

economy, the Company completed numerous

needs We evolve those in various regions and use thembusiness from throughout Japan to overseas. The Company then grew into the one of the leading

difficult construction projects that would

to create new value for sustainable cities demanded bysemi-major general contractors in the second half of the 1980s.

become city landmarks. We have refined out

the times.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

technologies and built up trust with customers.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

5

Profile

Foundations Supporting
Our Strategies

Strategy and Performance

Business Overview

Sales share

Overseas expansion of the Tokyu Construction GroupInternational Business

Real estate business, etc.

2.4%

0.8%

Dhaka
Hanoi

Domestic building construction

Domestic
civil engineeringbusiness

Consolidated net sales for
FYE March 31, 2022

20.4%

258.0 billion yen(including construction renewal)

ManilaYangon

Guam

76.4%

Bangkok
Singapore

JakartaFigures for construction sales and construction gross profit for the Building Construction Business
and Civil Engineering Business are on a non-consolidated basis (including International Business).

Building Construction BusinessBusiness
Construction of commercial
facilities, hotels, offices,
housing, factories, hospitals,
and distribution centers
Renewal business
Wooden building construction

Construction Sales
236.8

Business
Railways, roads, tunnels,
bridges, and otherconstruction, etc.
Reconstruction work after
earthquakes, etc.

Business
Real estate rental business
Real estate development
business
Equivalent exchange business,
etc.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

23.4

184.4

2019/32020/32021/3

Construction Sales

2022/3(billion yen)

2018/3

24.7

73.8

9.8
75.5

70.3

2019/32020/311.8

13.1

2021/32022/3

Construction Gross Profit (Loss)

88.0
7.1

Construction
business(buildingconstruction)

Core business

Strategic business

Domestic building
construction

Building renewal
business

Construction
business (civilengineering )International
Business

Domestic civilengineeringbusiness(billion yen)

Real EstateBusiness

8.2
6.0

56.8

-3.5

Real estatebusiness, etc.

–
New Business2019/32020/32021/3

Net Sales
2.02022/3(billion yen)

1.8

1.6

1.7

2018/3

2019/32020/32021/32022/3

2019/32020/32021/3Gross Profit (Loss)

2022/3(billion yen)

0.5

1.3

2018/3

6

238.2(billion yen)138.9

2018/3

Real Estate Business

Construction Gross Profit
27.5

206.9

2018/3Civil Engineering Business(billion yen)Management plan classification

Securities report
segment

2018/3

0.1

0.1

-1.3

-1.4

2019/32020/32021/32022/3

International Business

New BusinessBusiness

Business

Railways and roads,
construction of high risebuildings and factories, etc.

PPP / Concession Businesssuch as airports, water andsewage systems

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

7

Profile

Foundations Supporting
Our Strategies

Strategy and Performance

Financial and Non-Financial Highlights

Financial Highlights

Non-Financial Highlights (Non-Consolidated)

Net Sales

Operating profit or loss

CO2 emissions
Work sites(million yen)(million yen)

400,000

25,000320,711331,437

300,000

322,170
231,483(t-CO2)

21,987

21,41620,000(10,000 t)

45.0

60,00020,31553,3561,754

15,000258,083

Construction by-products generated

Office45,73540,0001,955

44,4782,016

44,3291,657 40,295

935

10,000200,000

37.5

5,000
100,00000-10,000

41.0
40.0

3,549

-6,07851,60220,00043,78042,67342,46139,360

35.0

34.8

35.5

-5,0002018/3

2019/32020/32022/32021/3

2018/3

Profit or loss attributable to owners of parent/ROE
Profit or loss attributable to owners of parent

20,00015,00022.2
18.1
16,118 15,504

2020/32021/32022/3

2018/3

10,000-7,459-5,0002018/3

2019/3(million yen)(%)

(Fuel oil conversion: ℓ/m2)

25

25,000100

23,907
12,843

7,875

11,7252020/32021/32022/30-10,000

2021/3

-7.6

-10

30.00

99.4

24.66

98

0

95.6

96

94.0

94
-25,000

93.3

93.5

2020/32021/3

25.33

23.32

20.00

21.50

22.65

10.00

92

-5

2020/32022/3(%)

5

2.6 2,6470

2019/32021/3

Energy consumed

10

2018/32020/3

Recycling rate15

14,9035,000

2019/3

Free cash flow

20

6.3
15.4

2019/330.0

ROE(million yen)

25,00032.0
0-40,928-50,000

2022/3

2018/3

2019/32020/30902021/32022/3

2018/3

2019/32022/3

2018/3

2019/32020/32021/32022/3* Until FYE March 31, 2021: Calculated as 1- (direct final disposal volume/total emissions)for all construction projects
FYE March 31, 2022: Calculated for new construction and new construction using recycling
data from major contractors

Dividend per share and payout ratio
Dividend per share

Owned capital/Owned capital adequacy ratio

Dividend payout ratio

Owned capital

(yen)

50

40.1

40
30
20

31
20.5

30
20.6

30

25

21.5

(million yen)

(%)

50

120,000

60

30

100,000
80,00060,00092,63378,94931.6

101,21542.9

102,96345.4

35.0

92,490 50
38.9 40

20

10

10

0

0

2018/3

2019/32020/32021/32022/3* Dividend payout ratio for the FYE March 31, 2022 is not shown due to the net loss forthe year.

8

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022(%)

(People)

4,000

0.50

0.43
0.40

3,000

0.20

0.19

20
10

0

0

2018/3

2019/32020/32021/32022/3

2,784

2,843

2018/3

2019/32020/3

3,010

3,012

2021/32022/32,000
0.20

20,000

2,735

0.30

30

40,00010

Number of employees (consolidated)

Owned capital adequacy ratio

(%)

40

Accident frequency rate

0.09

0.10

0.14

1,000

0

0

2018/3

2019/32020/32021/32022/3

Safety index: √ (Frequency rate x Strength rate)* The frequency rate is an index that shows the frequency of industrial accidents thatcaused injury and/or death per one million total extended working hours. The Strength
rate is an index that shows the scale of industrial accidents that caused workdays lost per
thousand total extended working hours.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

9

Profile

Strategy and Performance

Foundations Supporting
Our Strategies

CEO Message

FY2021 was a year in which we once again realized theam not sure. The Board of Directors and other members of

rapid pace of change in our business environment. The

the management team have repeatedly discussed whether

COVID-19 pandemic entered its second year, working styles

or not this is a fundamental issue for the Company, and wechanged, such as the spread of remote work, and the use of

have come to the conclusion that what we need to focus onvarious digital technologies accelerated. On theis reforming our organizational climate.

international front, political upheavals in Southeast andSince 2021, we have been holding vision dialogues with

South Asia, where we have a presence, as well as the

all employees to ensure that they understand and share ourescalation of tensions in Ukraine, have caused prices in

newly formulated VISION 2030. As part of our efforts toJapan to rise sharply and the yen to depreciate, something

prevent recurrence, we will continue to create a corporatethat has not happened in recent years. No one could haveculture that encourages employees to speak frankly withimagined such a situation.

each other through this vision dialogue and all kinds of

FY2021 is also the first year of our Long-Termother opportunities.

Management Plan “To zero, from zero.”, and these rapidchanges in the global situation have had no small impact on

Vision dialogue

the progress of our Long-Term Management Plan. With the

In an uncertain business environment where there are no

external environment changing at a dizzying pace, I amright answers, it is necessary for each and every one of us

keenly aware that we are in the midst of an era ofto think and act independently toward the same goal,

uncertainty as the person in charge of Tokyu Construction’s

instead of enforcing the will and orders of superiors tomanagement.

subordinates in the past. The Group has newly formulated
VISION 2030 as our ideal vision for 2030, and we believe

Defective tips of foundation piles in constructionin progressthat communication between management and employees

In 2021, a defective tip of a foundation pile was found in aThis is why we adopted the vision dialogue method, inconstruction project in progress, and we are currently in thewhich one senior management member and about fiveprocess of redoing the work. As a result of an investigation

employees, including executive officers, talk with eachby an internal verification committee that included a third

other, and we began by talking with all the employees inparty, it turned out that some of the workers at thethis manner. As a result, we have had dialogues with moreconstruction site had a serious non-compliance by falsifying

than 2,400 employees, more than 90% of the total. It isdata.

most crucial to continue this process, and we are currently

I would like to express my deepest apologies for theinconvenience and concern caused to our businessconducting a second round of dialogues.
The best way to get a deeper understanding of employees

partners, shareholders, and many other stakeholders, andis to talk directly with them onsite, but due to theRepresentative director,
President and CEO

under my leadership, the entire company is taking all

constraints of the COVID-19 pandemic, we have no choicepossible measures to prevent such a situation frombut to conduct this dialogue remotely. However, many

Mitsuhiro Terada

occurring in the future.

employees are open and honest about the importance of

I believe that the series of incidents were caused by

We will focus on restoring trust and improving business performance, while also leveraging our10

is important for understanding and sharing this vision.

quality and the creation of a culture that prevents

problems in the structure and culture of the Company, suchrecurrence, although the screen, and we feel that we areas the lack of a function to confirm the absence of errors onreceiving a variety of views from their words.

multiple occasions and the lack of communication between

Through this vision dialogue, I feel that our younger

strengths in increasingly complex and diverse urban planning. This will enable us to provide valuethat is unique to our company in creating the living environment for the next generation.

the two parties involved in the on-site process. Whengeneration has a very high awareness of the need tosomeone notices something wrong in daily work, is there acontribute to social issues. Many people have very good

We will realize VISION 2030, our ideal vision for 2030, by effectively combining the growth of both
employees and the Company.

climate in which it is possible to frankly discuss it,

ideas about the three deliverable values of decarbonization,

regardless of age or position in the Company? Is there azero waste, and disaster prevention and mitigation, andculture of open communication in the workplace, where

many people want to contribute to these types of social

people need to meet and work together every day? When I

issues, I am reaffirmed of the seriousness and sincerity ofask myself whether such a culture exists, I have to say that I

each and every Tokyu Construction employee.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

11

Strategy and Performance

ProfileFoundations Supporting
Our Strategies

CEO Message

The seamless teamwork between our civil engineering andstations and in local communities is deeply rooted in the
Company. In the case of the switchover from above-groundconstruction divisions has enabled us to achieve extremely

to underground rail lines within a few hours from the last

efficient construction in complex urban areas with minimal

train to the first train, we took great care in meticulous

impact on the surrounding area.

planning and construction management for more than 1,000

These are the roots of Tokyu Construction’s uniqueconstruction workers on the day of the switchover so thatcharacter, which has been nurtured by the founding Tokyu

customers could arrive at the station in the morning andSpirit, the spirit of carrying a torch ahead of all others, theboard their trains as if nothing had happened. In a similar

spirit of taking on challenges because we were a latecomer

manner, in the numerous construction projects we have been

to the industry, and our Mission Statement, which advocates

involved in around stations, mainly on the Tokyu Line, we

the realization of our clients’ dreams.

have given careful consideration not only to the direct client,

The Tokyu Construction Group aims to establish the

but also to the local community and station users who may

Tokyu Construction brand, which aims to enhance bothbe inconvenienced by the construction.

economic and social value, by building on the strengths ofOverall image of the Company’s Long-Term Management Plan “To zero, from zero.”

Progress of the Company’s Long-Term Management Plan “To zero, from zero.”Three deliverable values of decarbonization, zerowaste, and disaster prevention and mitigation

future, and we focus on short-term strategies over a period of

The Long-Term Management Plan “To zero, from zero.” hasIn the same way that the ideal state is likened to the top of

one year in a management cycle to increase effectiveness.

three deliverable values of decarbonization, zero waste, anda mountain, and the way up the mountain is reviewed

disaster prevention and mitigation as achievement. We believe

according to weather and other conditions, the plan is rolledthat the most important value we should provide to society isout flexibly each fiscal year according to changes in the

decarbonization to mitigate climate change. For theenvironment and the progress of the strategies. In FY2021,

construction industry, which uses what is built for a long time,

the first year of the plan, performance deteriorated

improving the environmental performance of buildings andsignificantly, and the Board of Directors once again discussed

infrastructure is an important mission, and at the same time,and reviewed the investment plan in light of changes in thean opportunity to expand our business. In addition, climate

external environment, and partially revised the investmentchange is causing more and more natural disasters, such asplan. Although the short-term targets for the next threetyphoons and river flooding caused by torrential rains, and theyears will be lower than the initial plan, we believe thatprobability of earthquakes directly below the Tokyo

recovery is possible and have not changed our 2030

metropolitan area is increasing. Our Mission Statement isperformance targets, which are operating profit of at least 22“Fulfilling each individual’s dreams through the creation of abillion yen and ROE of at least 10%.

reassuring and comfortable living environment,” so it is a

We believe that what the Tokyu Construction Group needs

matter of course that the Group will work to build a strong

to do now is to focus on measures to prevent the recurrence

infrastructure and create safe and secure communities.

of construction defects and other problems and on corporate

VISION2030
To zero, from zero. The environment and the excitement of the future.

Long-term management plan “To zero, from zero.” [sustainability strategy]■ Five priority strategies■ FY2030 KPIThe Tokyu Construction
brand

Establishment of the Tokyu Construction brand through the buildingof advantages in human resources and digital technology and theprovision of three values

Operating profit
Operating profit margin

At least 5.0%

Deepening of corebusinessStrengthening of problem-solving skills, construction and production
system innovation, and growth through alliances and M&A

ROIC

At least 7.0%

Growth of strategic
business

The creation of new growth opportunities through investments instrategic business and synergies with core business

Human resource
and organizational
strategies

Creation of results and acceleration of innovation through thestrengthening of human resources and reform of the organizationand corporate culture

Financial and capital
strategies

Emphasis on capital efficiency and the construction of stablefinancial foundations by pursuing the optimal capital structure

culture reforms, while showing stakeholders how we will get

Toward our visionback on track and achieve results over the next several years,

In order to realize our future vision without being influenced

and steadily implementing these measures.

by the short-term business environment, our plan is not aformulated every three years, but rather a Long-Term

Leveraging our strengths to establish the Tokyu
Construction brandManagement Plan for the next 10 years backcasting to clarify

As a longtime member of the Tokyu Group, we have been

our future vision VISION 2030 and to achieve it. We are

involved in railroad and urban development construction

always aware of where we want to be three years into theprojects, and the idea of never stopping people’s daily lives atconventional Medium-Term Management Plan that is

12

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

ROE
Debt-to-equity ratio

At least 22.0 billion yen

At least 10.0%
0.5 times or less

Capital adequacy ratio

About 45%

Employee engagement
ratingAAA

GHG emissions (FY2018 standard)

30.0% reduction

Decarbonization

Zero waste

Human
resources

Provision of three values

Sources ofcompetitive advantage

Disaster prevention
and mitigation

DigitalTOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

13

Profile

Strategy and Performance

Foundations Supporting
Our Strategies

CEO Message

the Tokyu Construction character that has been cultivated

Strategic businesssince the Company’s founding and by focusing on three

We will expand our real estate, international and newdeliverable values: decarbonization, zero waste, andbusinesses with a strong awareness of synergies with ourdisaster prevention and mitigation.

core business. In international business, we are focusing ontransportation infrastructure projects in Southeast and SouthCore business

Asia, fully leveraging our experience in urban development in

In our Long-Term Management Plan, we have positioned

Japan, particularly for railroads and stations. In the real

domestic civil engineering, domestic construction, andestate business, we will secure stable earnings throughbuilding renewal as our core businesses. Because the long-income-producing real estate while promoting a cyclical realterm contraction of the domestic market is inevitable due toestate business through moving assets off the balance sheet

Japan’s declining population, we plan to gradually increase

and other forms of securitization. In addition, we are currently

the proportion of strategic businesses (international

taking on various challenges to develop new businesses thatbusiness, real estate business, and new businesses) in our

will contribute to our sustainable growth and the next

business portfolio in FY2030.

generation. We are working on renewable energy-related
businesses and collaboration with venture companies.

Domestic building construction businessWith regard to building construction, a number of

Human resources and digital technologies

redevelopment projects are currently scheduled, mainly in

The Tokyu Construction Group has always placed one of its

the Tokyo metropolitan area. Most recently, we will continue

top management priorities on creating a workplace

to focus on redevelopment-related projects centered on

environment that encourages employees to play an active

railroad stations, an area in which Tokyu Construction excels,and rewarding role. As we move forward with this Long-Term

Environmental initiatives

and logistics warehouses, where we have one of the best

Management Plan, we believe that the key to sustainableAs a value provided in our Long-Term Management Plan, we

Report. It reflects the opinions of the management team,track records in the industry.

growth lies in how we can make our employees feel fulfilled

are working to reduce GHG emissions from the Tokyu

including myself as CEO, with the hope that it will help

and how we can nurture them into autonomous individuals

Construction Group and our supply chain, while implementing

stakeholders understand the present state of the Tokyu

warehouses is robust and that the domestic construction

who can make their own decisions and take their own

decarbonization and zero waste initiatives through ourConstruction Group and our journey toward VISION 2030, ourmarket, including building renewal, will not experience a

actions. Another point is effectively combining personal

business. To make these efforts even more effective, we haveaspirational vision.

major setback for some time, we believe that a major

growth and company growth. To this end, we are in the

introduced a performance-linked compensation system inchallenge is to deal with rising construction costs, including

process of developing human resources, encouraging themwhich the compensation of executives in charge is linked toprice pass-on, as prices of materials and equipment haveto take on new challenges, and listening to the opinions and

GHG emissions targets, and we are working to improverisen sharply.

thoughts of each and every employee through vision dialogue

information disclosure based on the TCFD recommendations

with them.

endorsed in October 2020.

While we currently expect that demand for logistics

Domestic civil engineering businessindustry as a whole, due in part to stricter restrictions on

For future people and society

which we exceed, is gradually recovering. Meanwhile, theworking hours. Labor savings are rapidly advancing through

Although the target year of our Long-Term Management Plandomestic civil engineering market is dominated by public

the use of digital technologies, which will become“To zero, from zero.” is 2030, the Tokyu Corporation Group

works projects, and recently, budgets have been secured forincreasingly indispensable in the future. Digital technology

must continue to grow sustainably 20, 30, and even moredisaster prevention and mitigation, as well as for accelerated

will become increasingly indispensable as the need for labor

years from now.

five-year measures for national land resilience. In Japan,

savings grows rapidly. However, such digital technologies are

there are many aging roads, tunnels, railroads, and othernot meant to replace people, they are tools to support

in which the next generation of employees can play an active

infrastructures that need to be maintained, and river levees

people’s work. I hope that Tokyu Construction Grouprole with a sense of fulfillment. We go about our daily workand dams are required to be improved from the perspective

employees will master these tools to provide the value

with this in mind. I hope to build a better society together withof support for disaster prevention due to the recent severe

demanded by customers and society, and even if the way weour customers and partners by creating businesses that offer

climate change disasters. Because these construction orders

do our jobs completely changes in the near future, we will

the provision of three values.

are expected to continue for some time, we will aim toopen up the future by doing creative work that only people

ability to make proposals and building up our track record.

14

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

We hope that this report will provide you an opportunity toengage with us.
September 2022

The shortage of workers is a pressing issue facing theCapital investment in railroad civil engineering, an area inestablish the Tokyu Construction brand by enhancing our

We are pleased to present to you our sixth Integrated

can do.

Mitsuhiro Terada
Representative Director, President and CEO

As a sustainable company, we would like to maintain a fieldWe sincerely hope that shareholders and investors
place their hopes in the future growth of the Tokyu
Construction Group.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

15

Profile

Strategy and Performance

Foundations Supporting
Our Strategies

Dialogue: Taking on the Challenge of New Value for the Future

Mitsuhiro Terada

and show the process of doing so to be well received, so theoperation of the products. We must involve suppliers inbigger the target, the better. In the construction industry,making proposals on how to use this material and how to use

the things we build take five or ten years to complete, andthis building’s energy. I believe that ESG compliance will test

buildings are used for decades afterwards. Moreover, when

our ability to make proposals, and at the same time, provide

considering the global environment, we are not talking about

us with business opportunities.

greenhouse gas emissions in three years, so we need to set

Yoshitaka: With energy and resource prices soaring thesegoals that look 10 or 20 years into the future.

days, it seems that making new proposals may lead to evenhigher costs.

Representative director, President and CEO

Mari Yoshitaka
Mitsubishi UFJ Research & Consulting Co., Ltd.
Fellow Principal Sustainability Strategist

Mitsuhiro Terada

Mari Yoshitaka

Joined Tokyu Construction in 1979. Became Executive Officer and General Manager ofRailway Business Division in 2010; Director, Managing Executive Officer, and General
Manager of Civil Engineering Division in 2012; Director, Senior Managing Executive Officer,
and General Manager of Civil Engineering Division in 2016; Representative Director, Executive
Vice President and Executive Officer in 2018; current position from 2019.

After working for an IT company, a US investment bank, and the Environmental Technology
Department of the International Finance Corporation (IFC) of the World Bank Group, sheestablished the Clean Energy Finance Committee at Mitsubishi UFJ Morgan Stanley Securities in
2000. With many years of experience in environmental finance consulting, she currently advises
various sectors in the areas of climate change, SDGs business and ESG investment. She has
been working for Mitsubishi UFJ Morgan Stanley Securities since May 2020, and has also held
positions at Bank of Tokyo-Mitsubishi UFJ and Mitsubishi UFJ Morgan Stanley Securities. She isalso an adjunct lecturer at Keio University’s Graduate School of Media and Governance.

ESG response is a business opportunity, not a cost

Terada: The recent soaring prices are one of our concerns,

Yoshitaka: There is a tendency to view ESG responses as aand if it is not possible to dig up new resources and use themcost. I believe that the construction industry is a field that isin abundance in the future, our costs may rise even more.

related to mobility and lifestyle, and as you mentioned earlier

However, our customers are also looking for social value, andabout innovation, new business opportunities will be created

I believe it is our role to firmly propose added value that isthrough collaboration. What are your thoughts on this, Mr.

commensurate with the cost.

President?
alone to address the major issue of climate change, so we areContributing to solving social issues by leveraging
our expertise in town planning

now working with other companies on new projects, such as

Yoshitaka: You have identified six materialities as importantthe development of concrete with low CO2 emissions.

issues to be addressed on a priority basis. Which of these

Yoshitaka: I think it is very important to involve othermaterialities is particularly unique to Tokyu Construction andcompanies. I have the impression that the construction

what are its strengths in relation to that materiality?

Terada: Naturally, it is difficult for the construction industry

industry is relatively passive. The reason is that you cannot

Terada: I believe that our mission is to take the lead incontrol your own materials and materials, nor can you control

addressing climate change, which is the biggest social issue

the requests of customers. However, I think it is difficult to

we face today, as a construction company with close ties tomanage risks if you are passive.

local communities. Another area in which Tokyu Construction

Terada: In the past, we have made what the customer asked

can demonstrate its uniqueness is in town planning. We have

us to make, but from now on, we need to make proposals

long been involved in town planning in the Shibuya area andthat take into account Scope 3, such as materials and thealong the Tokyu Line, and we believe that we can apply ourWhat is needed to simultaneously enhance social and economic value and achieve sustainablecorporate growth? We welcomed Ms. Yoshitaka, who specializes in environmental financeand ESG investment advisory services, for a discussion on the issues required for Tokyu
Construction’s ESG management.

16

Thoughts behind the vision “To zero, from zero.”strengths and what kind of company we want to be in order

Yoshitaka: I really like the phrase “To zero, from zero.” in theto address climate change and the various other social issues

Please communicate

VISION 2030 announced in 2021. I imagine that it was not an

outlined in the SDGs.

easy task for the construction industry to make a declaration

Yoshitaka: Many Japanese companies tend to be hesitant toto take on the challenge of carbon zero. What ideas did you

disclose information proactively, and to avoid publicly stating

your ESG strategy forput into this vision?

their long-term goals, so I think it is wonderful that a long-

Terada: We started in April 2021 with a new vision for 2030,

term vision spanning 10 years has been clearly presented.

the future with a story.

which is to “To zero, from zero.” and continue to build the

The construction industry is one of the few industries that canenvironment and excitement for the future. The “to zero”

think long-term and respond accordingly.

refers to zero carbon and zero waste, and “from zero” means

Terada: With VISION 2030 we have announced not a three-taking on challenges in new areas, and expresses our desire

year, but a 10-year Long-Term Management Plan, setting

to contribute to a sustainable society and increase ourtargets for the next 10 years and deciding what we should

corporate value. The management team and employees spent

do now by backcasting. We believe that we should promote

about five months discussing how we should leverage ourinnovation and technological development in a variety of ways

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

Mari Yoshitaka

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

17

Profile

Strategy and Performance

Foundations Supporting
Our Strategies

Dialogue: Taking on the Challenge of New Value for the Future

on plywood for formwork to ensure that we are not usingbusinesses. From more than 430 ideas gathered from about

Many new business ideas

South-Sea lumber, which is a human rights risk, and I believe

2,800 employees, we are currently nurturing 9 proposals. As

are being generated thatthat this will spread to a variety of materials in the future,for new businesses, we have set a profit target for the next 10

and we will take firm action in this area. In April 2022, weyears, so we are challenging ourselves to achieve this target.

will lead to solutions to social issues.

established a new human rights policy and are in the process

Yoshitaka: That is the very essence of ESG strategy. Howof conducting due diligence. At the same time, we have also

to improve corporate value over the long term while

Mitsuhiro Terada

formulated a Supplier Code of Conduct for procurement, andsolving social issues is exactly the kind of information

we will work to reduce human rights risks throughout ourinvestors are looking for in ESG strategies. Even if

supply chain.

something is a small sprout at first, institutional investors
and financial institutions want to know how it will lead tothe future corporate vision (purpose) and how it will lead

Yoshitaka: I think that when we work on ESG issues, if

to sustainability, so what you just said feels like a clear

we focus only on risks, we will not be able to do creativeroadmap to VISION 2030. I hope that you will communicate

things. How do you share with your employees theout story in this way, both internally and externally, tosignificance and importance of creating new value in orderraise expectations for Tokyu Construction.

to achieve VISION 2030?

Terada: Thank you very much. I feel that there are still someTerada: For about a year, I and the executive officers haveareas that are lacking in terms of information dissemination,

been holding vision dialogues, in which I and five otherand I would like there to be improvements so that theemployees engage in dialogue as a team. It is an opportunity

Company’s efforts are understood. Today’s discussion

for me to share my thoughts on the vision with all employees

reaffirmed our mission to contribute to the creation of aexpertise to the development of compact cities and smart

new urban development, as our specialty is to transform an

and ask them to think about what actions they can take tosustainable society in the future through our expertise in town

cities in the future.

existing town into a new town while making the best use of it.

make the vision their own. My impression from the dialogue isplanning and the new businesses we will nurture. Althoughthat employees are more aware of environmental and social

realizing VISION 2030 will not be an easy task, we will makeYoshitaka: I am a member of the selection committee for the18

Telling the story of how we will achieve VISION 2030

Ministry of the Environment’s Decarbonizing Neighborhoods

Diversity & inclusion fosters innovation

issues than before, and are thinking carefully about what theysteady progress with the involvement of various stakeholders.

Ahead of the Curve project, and we received many proposals

Yoshitaka: When I spoke with a UK pension fund manager

can do and taking action. We also held a moonshot contest

I hope that you monitor the future developments of Tokyu

for decarbonization models from many municipalities

some time ago, he pointed out that one of the risks forto raise the spirit of innovation and gather ideas for new

Construction.

in partnership with companies. What I felt was that it isJapanese companies is homogeneous, same-sex, same-

important to involve residents and work together. I think thatbackground management. In fact, data has shown thattown planning and addressing climate change can create

diversity makes it easier for innovation to occur, and that it

content that can change the minds of the people who liveis also related to stock prices. What are your thoughts on

there.

this point?

Terada: I feel that local governments have a strong sense of

Terada: I believe that new ideas cannot be created bycrisis when considering future population decline and climate

gathering together only people of the same age and whochange. I think that while communicating with local residents,

have grown up in the same circumstances, and thateach region can make progress in planning a distinctive town

corporate value is enhanced when diverse people exchange

by gathering opinions on things such as how to live withouta variety of opinions. We have also defined diversity andconsuming energy and what form of mobility is best. What isinclusion as one of our materialities, and we are promoting

important is the perspective of how the residents want to live

diversity and inclusion initiatives. In terms of gender,

there in the future.

although we are promoting the hiring of female employees,

Yoshitaka: With aging infrastructure in many parts of Japan,

the number of female employees itself is still just overthe key challenge is how to change existing towns. Building

10%, and we believe that increasing the number of femalea smart city on a vacant lot is not that difficult, but how canemployees is the first priority.

we change an existing town? This is where I would like to see

Yoshitaka: I think there are many challenges in the industry,

Tokyu Construction, which has accumulated a great deal of

but I have great expectations for the future. In terms ofexpertise, take the lead.

human rights, there is a growing interest in human rights

Terada: Our Management Philosophy emphasizes therisks associated with procured materials, and ESG investors

viewpoints of consumers. More than 20 years have passed

are paying attention to this issue.

since we started the redevelopment of Shibuya. Construction

Terada: We are also increasingly being asked about humanis still ongoing, and we will continue to be actively involved inrights risks by our customers. Right now, our main focus is

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

19

Foundations Supporting
Our Strategies

Strategy and Performance

ProfileValue Creation Process
PurposeTokyu Construction has been boldly taking on the challenge of opening up new businesses to address the social issue of theconcentration of population in the capital city of Tokyo, while at the same time striving to become a company that is loved by the
local community for many years to come.
Based on the strength of our non-stop urban functions cultivated through our consumer-oriented approach, we will work toenhance corporate value and solve social issues by deepening our core businesses and exploring new areas of business.

External Environment
Environment

Materiality• Advancement of global warming• Pollution and destruction of the global
environment• Intensification of natural disasters

Climate change (handlingand adaptation)

Domestic civilengineeringbusiness
Domesticbuilding
construction
business

Disasterprevention andmitigation

Plan

DesignConstruction

Maintenancemanagement

Inspection andexamination

Corporate Governance

Human resources

At least 22.0 billion yen

Operating profit margin

At least 5.0%

ROIC

At least 7.0%
At least 10.0%

ROE
Renovation

Dismantling

Debt-to-equity ratio

Digital platform based on BIM/CIM

Capital adequacy ratio

About 10.0%

Employee engagement
ratingAAA

GHG emissions(FY2018 standard)

Digital Technologies

0.5 times or less

30.0% reduction

Management witha long-term perspective
based onour strengths

Business model
Inputs

OutputStrengths of the Tokyu Construction Group

Human capital

Natural capital

Number of employees 3,012

Water, air, land, trees, seas, andrivers2
Energy consumption 22.65 l/m

Social andrelationship capital
Tokyu brandGroup companies14
subsidiaries
Affiliates 6
Collaborative partners 756
Sales offices
13 in Japan, 8 overseas
Institute of technology

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

Comprehensive strength of
Tokyu Group20

Zero waste

Operating profit

New Business

The construction and real estate value chain

P.22

Provision of
three values:

Management indicator

Town planning

Details

Number of registered patents
335
Technical personnel 1,990

Decarbonization

International
Business

Exploration

Synergy

Diversity and Inclusion• Lack of human resources and diversificationof values• Advances in diversity• Decline in skilled workers

Intellectual capital

Real EstateBusiness

Deepening

Real estate

Human resources and work styles

Total owned capital
92.4 billion yen
Total capital per share 883.11 yen
Interest-bearing debt
22.4 billion yen

Delivered Values

Strategic business

Building
renewalbusiness• Expectations for improvement of
productivity• Accelerated evolution of digital technology• Increasing number of issues that cannot be
solved by Tokyu Construction alone• Population growth and improvement inquality of life in developing countries• Expansion of overseas markets

Long-Term Vision “VISION 2030”

Innovation

Technology

Financial capital“To zero, from zero.”Core business

Structural changes in theconstruction industry

Overseas market

a reassuring and comfortable living environment.

Long-Term Management Plan

Construction industry• Shrinking domestic construction market• Population concentrating in urban areas• Increasing awareness of compliance• Easily affected by the economy, with large
fluctuations in orders and performance

Fulfilling each individual’s dreams through the creation ofpast

Founding spirit ofresolving social issues

Mindset of taking
on challenges
Consumer oriented

Acquire and accumulatetechnology andknow-how throughdevelopment around
Shibuya and otherstations along the Tokyu
Line with a focus on
consumers

Value creation

Building Construction Business

Value provided to society

Construction of commercial facilities, hotels, offices,
housing, factories, hospitals, and distribution centers,renovation and wooden building construction

Creating a reassuring and comfortable living
environment

Technology, know-how, andCivil Engineering Business
Railways, roads, tunnels, bridges, and otherconstruction, reconstruction work after
earthquakes, etc.

(FYE March 31, 2022)

teamwork that keep urban
functions running

International Business
Railways and roads, construction of high risebuildings and factories, etc.

Real Estate Businesspresent
Details

P.27

Real estate rental business, equivalent exchange

Providing value to shareholders
Dividend per share: 25 yen
Total dividends: 2.6 billion yen

Corporate value (FYE March 31, 2022)
Net sales: 258.0 billion yen
ROE: negative 7.6%

business, etc.
Details

P.28-35

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

21

Profile

Foundations Supporting
Our Strategies

Materiality

Risks and opportunities

Since its founding, Tokyu Construction Group has always conducted business with its mission of resolving social issues
through urban development in mind. In May 2021, we newly identified materiality (key management issues) based on
medium- and long-term changes in the business environment, and we will use this as a starting point to further resolve
social issues and achieve sustainable growth. In light of the rapidly changing business environment, we will continue toreview materiality as necessary.

Our Long-Term Management Plan “To zero, from zero.” was developed based on the identified materialities. Risks areminimized through the implementation of appropriate measures and continuous monitoring. Opportunities are maximized
through our growth strategy, which is based on five key strategies.

High

Risks and Opportunities

Materiality

Risks

Degree of importance among stakeholders

Stagnation of cost acceptance for technology that reduces environmental burden
Stricter response to sustainable purchasing
Stronger regulation throughout the construction business and building/structure lifecycle

Climate change (handling and adaptation)

Opportunities

Structural changes in the construction industry

Expansion of new business opportunities due to the government’s proactive stance and support
measures toward the realization of a decarbonized society
Actively working to establish a circular economy
Continuing to request infrastructure development from the perspective of preventing andmitigating disasters due to climate change

Innovation

Business strategy 1: Tokyu Construction brand

The Company will establish a Tokyu Construction leading brand that provides
decarbonization, zero waste, and disaster prevention and mitigation through developing
new technologies to respond to climate change.
Promotion of the Eco Certification P44
Initiatives for ZEB and ZEH-M (promotion of energy-efficient buildings) P44
Develop environmentally friendly materials (low-carbon concrete CELBIC, E-PEC,
preceding sustar) P45
Calculate all CO2 emissions related to buildings P45
Use of electricity from renewable energy P45
Realization of a recycling-oriented society, biodiversity initiatives P46

Structural changes in the construction industry

Town planning

Risks
Delays in responding to various structural changes such as population decline, aging
infrastructure, and acceleration of digital technology
Loss of public trust and economic loss due to inadequate succession of skills and techniquesthat contribute to ensuring the safety and quality of engineers
Soaring material prices, unstable procurement, and a decrease in the number of skilled workers
Insufficient response to respect for human rights in the supply chain

Diversity and Inclusion
Corporate Governance

Opportunities
Improving the construction production system from digital technologies and creating
opportunities to provide new value
Promoting solutions through open innovation
Stronger need for buildings and structures to have a lighter environmental burden

Business strategy 2: Deepening of core business

Increase earnings through improvements in the construction production system fromdigital technologies and M&As
Strengthen proposal capabilities (construction) and sales structure (civil engineering)P29, 31
Utilize digital technology and data (BIM/CIM) P29, 31
Work-style reform (efforts to reduce working hours) P29, 31
Health and safety initiatives P51
Enhancement of quality control infrastructure P52-53
Building a responsible supply chain P48-50
M&A and alliances (Indochine Group, Kawamura Sekisan, Iwase Precast)Innovation

Degree of impact on improvement of the Company’s corporate value

Risks

High

Shortage of human resources who can generate innovation in new business domains
Failure of management to continue to generate innovation
Lack of appropriate risk management related to investing
Instability of international situation

Opportunities
More opportunities to add value to the value chain, both upstream or downstream, through DX
Greater need to resolve social issues and environmental problems in the construction market
and peripheral fields
Quicker economic development in emerging market countries following the COVID-19 pandemic

Recognition of the medium- to long-term external environment

Environment

1.5˚C higher (compared to before industrial revolution)*
Progress of global warming
Environmental pollution/
destruction

Intensification of natural
disasters
Loss of biodiversity

1

AI
By the 2030s, AI and robots could replace
force *3
Expectation of greater productivity
Accelerated evolution of digitaltechnology

Construction industry[Roads and bridges]
2018
2033

63%

*2

Shrinking Japaneseconstruction market
Population concentrating inurban areas
Aging infrastructure
More diverse building
needs, such as environment
consideration and renovations[Tunnels]
2018

20%

% of Japan’s labor

Increasing number of issues
that cannot be solved by thecompany alone

Population growth in developing countries andgreater quality of life
Expansion of overseas markets
2033

42%

*2

Greater expectations of
products and services
Large volatility in earnings
because it’s easily impacted
by business conditions andchanges in orders

Human resources and work styles
2015

2030

77.28 million

68.75 million

Labor shortages and greater
diversity in values
Advances in diversity

Risks
Delay in responding to development of smart buildings/cities, etc.
Changing demands on buildings due to diversification of lifestyles/work styles

Opportunities
Stronger trend toward redevelopment and urban development around Shibuya
Using know-how acquired through urban-development construction projects along the Tokyu
train lines, including Shibuya

Business strategy 4: Human resource and organizational strategies

Accelerate efforts to diversify and strengthen human resources such as promoting
digital natives and employees with advanced specialization. The Company aims togenerate corporate growth and innovation through the reform of the organization andcorporate culture.
Strategic business: international business P32-33
Strategic business: real estate business P34-35
Accelerate open innovation and create a mechanism to continuously generateinnovation P38-39

11% decline*4

Decline in skilled workers

Business strategy 1: Tokyu Construction brandBusiness strategy 2: Deepening of core businessBusiness strategy 3: Growth of strategic business

Sustainable town planning that embodies the Tokyu Construction brandStrengths of the Tokyu Construction Group (Technology, know-how, and teamworkthat keep urban functions running) P27
Our future image of DX P36-37
Redevelopment of the area around Shibuya Station, redevelopment along the Tokyu
Line (Shin-tsunashima, Minami-machida, etc., running)

Diversity and Inclusion
Risks
Delay in introducing systems and responding to more fully promote and leverage diversity
Delay in implementing reskilling for mid-career employees and above related to skills thatshould be adapted, such as digital response
Stagnant/decline in employee engagement due to lack of response to human rights and D&I
progress

Opportunities

Working-age population*1 IPCC*2 Current State and Future of Aging Social Capital issued by Ministry of Land, Infrastructure, Transport and Tourism*3 49% of Japanese Labor Force Could be Replaced by AI, Robots, Etc. (2015) issued by Nomura Research Institute*4 National Institute of Population and Social Security Research

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

49

Overseas market

Aging social capital
Percentage of buildings that are at least 50 years old

Business strategy 3: Growth of strategic business

The creation of new growth opportunities through investments in strategic business andsynergies with core business

Town planning

Technology

Average global temperature in 2030 will be

25%

Response

Climate change (handling and adaptation)

Materiality

22

Strategy and Performance

Increased opportunities to take on diverse challenges such as environmental issues, new social
issues, DX, and new business domains
Promote activities of millennials and gen Z (digital natives)
Having women actively participate and capturing and using specialists with advanced skills and abilities

Business strategy 4: Human resource and organizational strategies

Accelerate efforts to diversify and strengthen human resources such as promoting
digital natives and employees with advanced specialization. The Company aims togenerate corporate growth and innovation through the reform of the organization andcorporate culture.
Formulate human rights policy P47
Develop autonomous human resources who are highly motivated to contribute (personnel
system reform, improve employee engagement, human resource development) P54-55
Reform of organizational culture (dialogue activities with all employees, thank you cards) P56
Women’s activities, employment of people with disabilities, reskilling, foreign
employees, partnership system (LGBTQ) P57
Reform of leadership and management style, work-style reform, health management P58

Corporate Governance
Risks
Failure to train next-generation managers
Loss of social credibility due to compliance violations, etc.

Opportunities
Increasing transparency in decision making
Appropriate response to change and establishment of a stable foundation for growth

Enhance fairness and transparency in management while strengthening functions toincrease the effectiveness of strategies
Strengthening Corporate Governance P59-63
Compliance and Risk Management P66-67
Developing Human Resources for Next-Generation Management P55

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

23

Foundations Supporting
Our Strategies

Strategy and Performance

ProfileCFO Message

Revision of investment plan in light of changes inbusiness environment and downward trend in
business performancethe balance sheet, and is not a change in the growth

In response to the larger-than-expected loss recorded in therolling out the current management plan, we havethe same time, we will promote a change
in mindset toward more efficient

fiscal 2021 financial results, we have lowered the total

determined that performance over the next three years

amount of investments planned in the Long-Termwill be lower than initially planned. However, we believethat we will be able to recover profit generation over the

management of invested capital.

Management Plan for the next 10 years from 170 billion yen
to 107 billion yen. This is a revision of the total investment

medium to long term by steadily implementing our new

amount, mainly in the real estate business, with an eye toinvestment plan. We will continue to strive to achieve

improving cash flow, shifting the business model to a more

VISION 2030, corporate vision for 2030, while maintaining

efficient cyclical real estate business, and moving assets off

a balanced allocation of resources.

We will steadily invest in growth while
keeping a close eye on changes inthe business environment, and at

Director, Senior Managing Executive Officer and
CFO, Corporate Strategy Division

Masatoshi Shimizu

investments set forth in the Long-Term Management Plan.
The business environment remains uncertain, and in

Growth investments

Business results for FY2021 and forecast for FY2022
In FY2021, we reported a net loss attributable toof overseas construction projects and a review of income andshareholders of the parent company of 7,459 million yen (net

expenditures in the real estate development business.

income of 2,647 million yen in the previous fiscal year), a

In FY2022, we expect a recovery in business performance,

significant decrease in profit.

as factors that reduced profits in the previous fiscal year will

The decrease in profit was due to increased expenses forbe eliminated. We will take necessary measures in response

defect repair related to construction in progress andto the concern about rising costs, including cost reduction

properties delivered in previous fiscal years. In addition theefforts and efforts to gain the understanding of customers toprovision of estimated losses from deteriorating profitability

pass on the higher costs to us.

The Long-Term Management Plan calls for growth

Japan. To further enhance our superiority, we are also

investments in the three areas of core business, strategic

working on the practical application of key materials suchbusiness, and human resources and digital technology. We

as low-carbon concrete.

will establish a competitive advantage by steadily investing insuch as the shortage of workers and restrictions on overtime

mitigation, human resource development, and utilization ofwork, it is essential to make construction production systems

digital technologies, which are our management axes.

more efficient and labor-saving. We have already establisheda precast (PC) plant as a joint venture to expand the PC

Investment in core business (domestic civilengineering, domestic construction, and building
renewal businesses)

construction method, which contributes greatly to labor

We will aggressively invest in the development ofutilization of BIM/CIM which is 3D data.

or more, and to provide stable shareholder returns throughits weak financial base up until now, now that it has a

the dividend on equity (DOE) ratio. In utilizing interest-

considerable amount of equity capital, the Group has shifted

bearing debt, we will pursue an optimal capital structure

its focus to management with a strong awareness of capitalthat balances growth and stability, with a D/E ratio of 0.5x as

efficiency in the Long-term Management Plan formulated in

our financial discipline, based on our past experience with

May 2021. Our policy is to invest in solid growth to achieve

deteriorating business conditions.

(ZEB), we have been working on the renovation of existing

Investment in strategic business (international, realestate and new business)buildings at the Institute of Technology since 2016 and haveAs the domestic construction market is gradually declining

achieved one of the highest levels of energy reduction indue to population decrease, we aim to achieve VISION 2030

Revision of investment amount
Total investment over 10 years

our medium- to long-term performance goal of ROE of 10%

300,000

289,000

258,083

Operating profit or loss

Profit or loss attributable toowners of parent(million yen)(million yen)

6,000

4,000

4,000

231,483
200,000

100,000

024

2022/32023/3(Forecast)

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

2,000

2,000

0

0

-2,000-2,000-4,000-4,000-6,000-6,000-8,000-6,078-8,0002021/3

4,000

3,549

2021/32022/3

3,500

2,647

2021/32022/3After revision:

Initially:

107 billion yen 170 billion yen

Core business (domestic
civil engineering, domestic
construction, and building
renewal businesses)
Business strategy
investment centeredon the three values weprovideMajor investments
Investment for technological development
Investment for production system innovation
and DX promotion
M&A investment

95 billion yen

160 billion yen

Strategic business(international, real estate andnew business)

Investment in sources of competitive advantage(human resources x digital technology)-7,459-10,000

2023/3(Forecast)domestic and overseas companies as subsidiaries for themarket expansion. In particular, in net zero energy buildings

Although the Group has placed priority on improving(million yen)saving, and are aggressively investing in M&A by acquiring

decarbonization technologies in anticipation of future

Financial and capital strategies in the Long-Term Management Plan

Net Sales

To address the challenges of the construction industry,

decarbonization, zero waste, disaster prevention and12 billion yen

10 billion yen

M&A investment for international businessexpansionAcquisition of real estate focusing on
synergies with core business
Investment in new business incubation
Investment in concession and PPP business
Investment in venture companies, venture
funds, etc
Investment for personnel system reform andhuman resource development
Establishment of environment and systeminfrastructure for company-wide DX
promotion

2023/3(Forecast)

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

25

Special
FeatureStrategy and Performance

ProfileFoundations Supporting
Our Strategies

1 Strengths of the Tokyu Construction Group

CFO Message

The spirit of the Company’s founding was to take on the challenge of addressing social issues in the postwar reconstructionof the nation’s capital, and since then, as a member of the Tokyu Group, we have long been involved in urban development,
developing a consumer orientation with a strong awareness not only of our direct customers but also of users of our services.
We are proud of our track record, technology, and expertise in the development of around railways and stations, which isunrivaled by any other construction company in the world. Under the new Tokyu Construction brand, we are taking on thechallenge of solving new social issues such as the urban form and environmental problems.

Strengths

Technology, know-how, and teamwork that keep urban functions running
mainly in Southeast and South Asia, we expect to strengthen

Investment in human resources anddigital technology

partnerships, including M&A investments, as partnerships

We have changed our personnel system from April 2022. Inwith local companies are indispensable for building

order to ensure that highly capable and motivated employees

sustainable business models in each country. In our cyclicalproduce more results, we have introduced more convincing

real estate business, we aim to generate stable profits andevaluation indicators and changed the salary structure tocontribute to the environment by leveraging synergies with

provide more flexible compensation. In addition, we will

our core business to transform real estate itself into

provide support for reskilling and innovation creation. We aresomething that contributes to the environment, increase its

also investing in the creation of a working environment thatvalue, and supply it to the market. In addition, we are working

enables efficient and diverse work styles, and in theto create new profit opportunities by investing in concession/development of a system infrastructure that seamlessly links

PPP projects and venture funds.

data scattered throughout the company for strategic use.

by expanding strategic businesses. In international business,

With a consumer-oriented and challenging mindset, we have demonstrated our ability to plan and manage
construction projects that do not disrupt daily life, as well as our teamwork as unity in for construction
and civil engineering.

Moving the line from aboveground to underground,providing an unchanged daily life

Ensuring a clear line of sight for users of
Shibuya Station

In the 2013 Tokyu Toyoko Line track switching project

Shibuya Scramble Square, completed in 2019, is a landmark

between Shibuya and Daikanyama stations, we converted

directly connected to Shibuya Station, rising 230 m directly

the tracks from aboveground to underground overnight. A

above the station. In addition to the difficulty of thetotal of approximately 1,200 construction workers

construction technology, the project was extremelycompleted the work within the limited time of approximately

challenging in every respect, including coordination with

3.5 hours after the last train, providing users with another redevelopment projects that were intricately

unchanged daily life.

intertwined, securing general pedestrian flow lines in thebuilding during construction, and construction withtransportation infrastructure in four directions andDividend policy

underground. We completed this five-year project with the

The Long-Term Management Plan recognizes the

40%, and the Company will consider implementing sharesafety of pedestrians and the surrounding environment asimportance of capital efficiency and emphasizes the stable

repurchases in a flexible manner.

our top priority.

and continuous return of profits to shareholders, which is

Although we regrettably decided to go below this policy in

not easily affected by short-term profit volatility. The

FY2021 due to unexpected business results, our dividend

Company’s basic dividend policy is to target a dividend

policy, which targets DOE of 4.0% or higher, remains

A culture of unity between civil engineering andconstruction

payout ratio of at least 4.0% DOE, which balances theunchanged, and we plan to pay dividends based on the basic

In order to realize consumer-oriented urban development, itmedium- to long-term performance goal of at least 10%

policy in FY2022.

is necessary to coordinate and resolve the interests of many
stakeholders. The Shibuya Redevelopment Project, which

ROE and a consolidated dividend payout ratio of at least

involves complex interactions between different project
Tokyu Toyoko Line Shibuya Station to Daikanyama Station track switchover

Company-wide business execution with an understanding of capital efficiency
In order to achieve VISION 2030, we believe it is importantthe meaning of investment efficiency and its relationship toto change our internal awareness of capital efficiency.

daily operations in an easy-to-understand manner.

While it is of course important to look at the profit and loss
perspective, such as profit and loss on construction projects
and project profitability, it is also important to understandthe invested capital and cash cycle, and to apply the balance
sheet perspective to daily operations. To this end, we areworking to share the idea of capital efficiency as the axisof decision-making down to the field level and implement
capital efficiency-oriented management throughout theCompany by distributing videos to all employees that explain

26

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

Video explaining capital efficiency in an easy-to-understand manner

entities, also makes full use of Tokyu Construction’scomprehensive capabilities in facilitating the project throughcollaboration between civil engineering and construction.

Deepening our strengths with digital technology
In the future, urban development in Japan will focus onwhich is one of our strengths. At the same time, there is arebuilding existing cities while maintaining daily life. We

need for sustainable cities, both domestically andbelieve that our strength in keeping urban functions can beinternationally, that are decarbonized and resource-recycling,demonstrated not only in the construction business, but also

and the use of digital technology in addition to conventionalin the real estate business and regional infrastructure

construction technology is indispensable. The Group will takeconcession business. In emerging countries, whereon the challenge of solving social issues by deepening the

populations continue to grow, urban development will bestrengths we have cultivated to date by making full use of

based on the development of transportation infrastructure,

digital technology.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

27

Profile

Strategy and Performance

Foundations Supporting
Our Strategies

Overview of Each Business

Building Construction BusinessWe will respond flexibly to the rapidly changing business environment
and promote the digital transformation of the construction business,
which is already underway, faster than any other company, to provide asafe and comfortable consumer-oriented living environment and valuethat goes beyond building as envisioned in Vision 2030.

Business
Construction of commercial facilities,
hotels, offices, housing, factories,
hospitals, and distribution centers
Renovation
Wooden building construction

Senior Managing Executive Officer
General Manager, Building Construction Business Division

Tomoya Masuda

Results for the previous fiscal year (FYE March 31, 2022) and outlook for the current fiscal year
In the current fiscal year, both sales and income increased,with construction sales of 184,407 million yen (up 32.7%
YoY) and construction gross profit of 13,132 million yen (up11.1% YoY).
The main reason for the increase in revenue was the
progress of large-scale private-sector construction projects
for which orders were received in previous years. Gross profit
increased due to a reduction in construction costs throughcreative construction management and additional work
acquisitions, despite the provision for defect repair expenses.
Orders received totaled 221,382 million yen, (down 8.9%
YoY), exceeding the initial forecast of 200 billion yen, despite adecrease in orders received for private-sector construction
projects, which included large-scale projects such as logistics
facilities in the previous fiscal year.

Future outlook
In fiscal 2022, the Company expects an increase inconstruction sales due to progress in construction projects forwhich orders were received in previous years. On the other
hand, intensifying competition and soaring prices of materials
and equipment are expected to put pressure on profits. In
addition, we expect to face the risk of process delays due toprolonged delivery times and labor shortages in the second
half of the fiscal year. We will minimize the impact of soaring
costs by implementing advanced procurement and othermeasures, while further promoting information sharing withcooperating companies and improving construction efficiency
through the use of digital technology. In addition, we will seek
the understanding of clients for price pass-through.

Construction Sales / Construction Profit Margin

Building construction business(non-consolidated, including international business)
238,2419.8%

206,956
11.9%

2019/32020/3

184,407

194,000

7.1%

6.6%

2021/3

Construction sales (million yen)2022/32023/3 forecast

Construction Gross Profit Margin (%)

Net Sales / Profit Margin

Construction renewal(Tokyu Renewal and Token Industry combined)
25,75624,867
19,66913.2%

2019/313.1%

2020/3

Net sales (million yen)

14,98914,801

11.4%

10.6%

2021/32022/32023/3 forecast

Business Strategies
As the digital transformation of the Building Construction
Business is imminent due to the evolution of technology, we willfurther sharpen our strengths in town planning without
stopping daily life, which we have cultivated through urban
development in Shibuya and other station areas, and aim tobuild a faster and more innovative construction businessthrough open-minded collaboration. We will not limit ourselvesto construction contracting alone, but will use the entire value

28

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

The Market Development Group, newly formed in 2021 to
analyze customer needs and issues, and the Solution Sales
Department, which gathers information and conducts sales
activities from a medium- to long-term perspect. These
departments will take the lead in determining targets that
contribute to each customer and application and the provisionof three values, and will work together seamlessly in sales,
design, construction, and inspection and examination toproactively make optimal proposals that contribute to theresolution of customer issues. We also actively promote our
low-carbon and energy-saving technologies and various
solutions to existing customers as well as new customers byholding events at industrial exhibitions and holding webinars.

9.0%

Profit Margin (%)

chain as a field to promote the reconstruction of safe andcomfortable cities that do not impair the convenience ofpeople’s lives and are environmentally friendly.
Demand for logistics facilities, which has been high in thenumber of projects planned over the past few years, remains
strong, and we will continue our aggressive efforts by taking
advantage of our industry-leading construction track record inJapan and applying our expertise to frozen and refrigerated

growth is expected. Although there are concerns about thecurrent sharp rise in the cost of materials and equipment aswell as supply delays in some areas, the entire organization
will respond flexibly with wisdom.

Progress on strategies - symbolizing initiatives
Enhancement of proposal capabilities

138,991
8.5%

warehouses and data centers. Furthermore, we will leverage ourexperience in Shibuya and the Tokyu rail line to work on
redevelopment projects in other areas, and expand our businessin the environmentally friendly building (ZEB/ZEH), wood andwood building construction, and renovation fields, where market

Transformation of construction andproduction systems
We are experimenting with the practical use of BIM in eachphase of the transformation of the construction and production
systems. We have newly started operating the construction BIM
estimate integration system, which shortens the time requiredfor cost estimation based on BIM design drawings created by
the design departments, and makes proposals to customers ina short period of time. In addition, the BIM first model, which has
been distributed to all work sites, has been expanded to include
a temporary construction planning function to optimize
construction planning, promoting efficiency through frontloading. Furthermore, we are further promoting the use of ICT
tools at our work sites and strengthening cooperation withcooperating companies, and we are building a track record oflower costs and shorter construction periods by improving

efficiency, reducing manpower, and increasing productivity,
which are urgent issues.

Environmental construction initiatives
We have developed a building energy simulation tool (TC-BES)
that utilizes BIM, and we are proposing optimal ZEB solutions
to our clients from the early design stage. In addition, we havebegun to provide customers with the results of calculations
based on a more precise stacking method*1, as there is a needto understand the CO2 emissions associated with all aspects ofa building, including materials, construction, and building
operation*2. This has allowed customers to recognize theeffectiveness of our decarbonization technologies. In addition,
the use of low-carbon fuel for heavy machinery and theprovision of three values that we are actually working on aredisplayed as icons in temporary enclosures at our work sites
to make them visible to the outside world.
*1: Refer to News Release February 2022, “Development of a Calculation Tool for CO2
Emissions from Building Materials Using a Stacking Method”*2: Refer to News Release July 2022, “Calculating and Providing Customers with All CO2Emission Amounts Related to Buildings”

Work-style Reform
In order to comply with the overtime work limit regulations
coming into effect in April 2024, we analyzed the work flow atwork sites, identified tasks that could be supported by backoffice operations, and launched work support activities at worksites through a support department established within the
Building Construction Business Division. While prioritizing
items that have been evaluated highly by measuring theireffectiveness, we will expand the scope of support to theextent possible in the future in order to reduce the work hours
of workers at the worksites.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

29

Profile

Foundations Supporting
Our Strategies

Strategy and Performance

Overview of Each Business

Civil Engineering Business
The mission of our civil engineering business is to improve social capital.
With our roots in the development of Tama Garden City, which was
designed to solve the social issues of Tokyo’s high population density,
we will continue to take on the challenge of solving social issues with thetechnology and pride we have fostered since our founding.

Business
Railways, roads, tunnels, bridges, andother construction, etc.
Reconstruction work after earthquakes,
etc.

Managing Executive Officer
General Manager, Civil Engineering Business Division

Yoshihiro Akada

Results for the previous fiscal year (FYE March 31, 2022) and outlook for the current fiscal year

Progress on strategies - symbolizing initiatives

In the current fiscal year, both sales and income decreased,with construction sales of 56,886 million yen (down 24.7%
YoY) and construction gross loss of 3,530 million yen(compared to profit of 6,031 million yen in the previous fiscal
year). The main reasons for the decline in domestic civilengineering revenues were a decrease in large-scale public
works projects and delays in the progress of some projects,
as well as a decrease in railroad civil engineering projects
due to restrained capital investment by railroad companies.
Gross loss was largely due to the provision for expenses
related to defective tips of foundation piles. Orders received
totaled 53,281 million yen, down 16.4% YoY, mainly due to alarge decrease in domestic private sector orders, which had
been large projects in the previous fiscal year, and a decline inrailroad construction. In the domestic public sector, theCompany won orders for earthquake-proofing work andrevetment work, which it has had little experience with in thepast.

Reinforcement of sales structure

Promotion of digital technologies

In general civil engineering, we believe that we can expect a
steady volume of orders based on the budget for national land
resilience, and we will increase orders by improving ourtechnical proposal and cost estimation capabilities. To this end,
we will work to strengthen our sales structure, including inregional areas, by increasing the number of job rotations andyoung sales staff. In railroad civil engineering, we believe thatthe linkage and redevelopment projects will proceed as planned,
and that a certain amount of orders will be placed formaintenance and management work for facilities. We will
increase orders by capturing customer needs and strengthening
our ability to make proposals. We will also aggressively expand
our approach to other companies besides private railways in theTokyo and surrounding area, making the most of our pastachievements.

Regarding the use of digital technologies, we will focus on
its implementation at sites. Having received several orders
for CIM-designated construction projects from the Ministry ofLand, Infrastructure, Transport and Tourism in the previous
fiscal year, we will work in earnest in cooperation with theclient, actively making proposals and accumulating know-how.
We believe that the number of digital human resources will
increase and the transformation to digital will further evolve
as we further promote various digital applications at worksites, such as the use of point cloud data from laser scanners
for construction planning, the use of AR and 4D on site, andthe deployment of inter-worksite liaison and coordination
support systems in terms of site management. We will further
strengthen our efforts to improve productivity.

In fiscal 2022, the Company expects to see an increase inboth sales and income, as construction sales are expected toincrease due to expected progress in domestic public sector
work and gross profit will also increase as factors that
deteriorated profitability are resolved.

Construction Sales / Construction Profit Margin
Civil engineering business(non-consolidated, including international business)
88,07870,381
14.1%

75,56856,8869.3%

8.0%

64,400
6.5%-6.2%
2019/32020/32021/3

Construction sales (million yen)2022/32023/3 forecast

Construction Gross Profit Margin (%)

Training of technical staff

Business Strategies
In addition to railroad construction work, leveraging our trackrecord in Shibuya and along Tokyu train lines, we will further
expand social infrastructure construction work for central
and local governments, where solid demand is expected fordisaster prevention and mitigation and for the fortification ofnational land infrastructure. In order to increase orders, wewill continue to improve our ability to make proposals basedon a timely understanding of client needs and to increase thenumber of construction projects and qualified personnel. We

30

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

will also work to strengthen peripheral fields other thanconstruction contracting, such as water, sewer, and airport
concession projects and infrastructure asset management. In
light of the occurrence of construction defects, we will work
together to improve construction quality and restore trustand business performance by thoroughly implementing
measures to prevent recurrence.

To strengthen our construction management capabilities, we
believe it is important to develop engineers who can find andsolve problems on their own and make improvements overtime. The visualized strengths and weaknesses of ourorganization and the respective organizational issues were fed
back to management and the persons responsible for eachorganization, such as general managers and work sitemanagers. We are reviewing our training programs toreconstruct the growth scenario of our technical staff and toaccelerate the training of personnel at the workplace headlevel by about five years. We are also reviewing our assignment
plan to enable personnel who tend to be fixed between generalcivil engineering and railroad civil engineering to gain
experience in both areas at an early stage so that they can play
an active role flexibly.

Point cloud data utilization

AR field application

Initiatives for the provision of three values
In April 2020, we acquired ISO55000 certification, aninternational standard for asset management of railroad
structures such as viaducts, bridges, and tunnels, as part ofour commitment to disaster prevention and mitigation forsocial infrastructure. Two years have passed, and we are
actively providing railroad companies with proposals for
efficient maintenance and management outside of the Tokyu
Line. As capital investment is limited due to declining railroad
revenues, safe and reasonable renewal of facilities is
expected, and we will continue to contribute as a tool that also
contributes to disaster prevention and mitigation.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

31

Profile

Strategy and Performance

Foundations Supporting
Our Strategies

Overview of Each Business

International BusinessBusiness

We will expand our business domain from ODA to PPP, and fromconstruction contracting to the entire infrastructure lifecycle, andcontribute to the construction of sustainable social infrastructure with
TOD* and next-generation infrastructure creation at the core.

Railways and roads, construction ofhigh rise buildings and factories*Transit Oriented Development

Executive Officer
General Manager, International Business Division

Masakazu Konishi

Results for the previous fiscal year (FYE March 31, 2022) and outlook for the current fiscal year

Progress on strategies - symbolizing initiatives

Both sales and income decreased, with net sales including
overseas subsidiaries of 6,267 million yen (down 35.5% YoY)
and gross loss of 951 million yen (compared to profit of 60
million yen in the previous fiscal year). This was mainly due
to the delay in progress of some ODA construction projects
and the provision of increased costs associated with theseprojects, as well as a decrease in sales at overseas
subsidiaries due to the impact of the spread of the COVID-19
pandemic.
In fiscal 2022, we expect net sales of 13,406 million yen(up 113.9% YoY) due to a reduction in the impact of the
COVID-19 pandemic at overseas subsidiaries and progress ina large-scale ODA project in the Philippines (Metro Manila
Metro Project (Phase 1), CP104 construction area). Profits arealso expected to recover due to the contribution of theseprojects and the absence of provisions recorded in theprevious fiscal year.

Philippines

Indonesia

In the Philippines, we were awarded a 43 billion yen ODA
project by the Philippine Department of Transportation. This is
the Metropolitan Manila Subway Project, a joint venture of
Tokyu Construction Co., Ltd., Tobishima Corporation, andMegawide, Inc. to construct an underground tunnel
approximately 3.4 km in length and two underground stations.
This project is expected to help alleviate serious traffic
congestion by meeting increasing transportation demand, as
well as contribute to curbing air pollution and mitigatingclimate change. This is a very significant project for us as well,as we have stated decarbonization as one of the three values
we provide. In addition, this subway project through the central
city is a large-scale urban civil engineering project in which
the Company has a wealth of experience and strengths inJapan. We will fully utilize the technological capabilities andknow-how we have fostered up until now to contribute to thedevelopment of social infrastructure in the Philippines, which
continues to experience rapid development.

In Indonesia, we were awarded a Japanese grant aid (ODA)
project, the Palu No. 4 Bridge Reconstruction Project in Central
Sulawesi Province. This project is to reconstruct the Palu No. 4
Bridge located at the mouth of the Palu River that flows throughthe city of Palu, Central Sulawesi Province, Indonesia, whichcollapsed due to the magnitude 7.5 earthquake that occurred inIndonesia in September 2018. As one of our three values
provided is disaster prevention and mitigation, we willcontribute to the creation of a disaster-resilient community andthe recovery and development of the infrastructure that isessential to the lives of local residents by rebuilding the bridge
as soon as possible.

Net Sales / Profit Margin
10.4%
11,516

2019/3

9.2%
13,6259,721
0.6%

2020/32021/3

Net sales (million yen)

6,267

13,406
6.1%-15.2%
2022/3 2023/3 forecast

Profit Margin (%)*Simple sum of our non-consolidated international business and overseas
subsidiaries.

Business Strategies
The international business carries high growth expectations
as a strategic business in the Long-Term Management Plan.
On the other hand, the business environment is not
optimistic, as the international business posted a significant
loss in the previous fiscal year. We will not postpone theresolution of issues and problems, but will instead build afoundation to achieve growth. In business development, we
will assess changes in the environment in the countries ofSoutheast and South Asia, our main target markets, andformulate and implement strategies tailored to the various

32

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

circumstances in each country, while gaining a deep
understanding of their unique circumstances. Our goal is tobecome involved in town planning projects such as TOD,
starting with ODA projects related to transportation
infrastructure, which is one of our strengths. Infrastructuredevelopment in developing countries is shifting from ODA to
PPP and private investment as countries grow. With an eye on
these changes, we will expand our business domain not onlyin the construction contracting business but also in theoverall life cycle of infrastructure.

The proposed Ortigas station construction
site, Ortigas North

The proposed Shaw station construction site(under the road), Ortigas South

Building construction
In the Building Construction Business, we have operations inIndonesia, Myanmar, Singapore, Thailand, Vietnam, and Guam
(US), and we are engaged in contracting business under the
direct control of local subsidiaries and divisions in each ofthese countries. In each of these ASEAN member countries,
with the exception of Guam, the situation is changing
dramatically, especially due to the remarkable economic
growth in recent years. In addition, due to factors including
the COVID-19 pandemic, the competitive environment has
intensified, and the conventional subcontracting business isfacing a difficult situation. Under these circumstances, wewill continue to build stronger cooperative relationships withlocal partners and focus on projects that require higher
added value, where our proposals for construction systems,
quality, and processes are well regarded. Furthermore, wewill aim to expand our business domain from theconventional contracting business to upstream anddownstream of the value chain.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

33

Profile

Strategy and Performance

Foundations Supporting
Our Strategies

Overview of Each Business

Real Estate BusinessBusiness

The Real Estate Business is positioned as one of the strategic
businesses in Vision 2030. We will create new growth opportunities
through initiatives and investments with strong awareness of synergies
with core businesses.

Real estate rental business
Real estate development business
Equivalent exchange business, etc.

Executive Officer
General Manager, Real Estate Business Division

Junichi Omuro

Results for the previous fiscal year (FYE March 31, 2022) and outlook for the current fiscal year

Progress on strategies - symbolizing initiatives

Net sales for fiscal 2021 totaled 1,731 million yen (up 2.8%
YoY). Gross loss was 1,492 million yen (compared to grossloss of 1,336 million yen in the previous fiscal year), mainly
due to the posting of a provision for loss on real estatebusiness, etc., following a review of profits in thedevelopment business, we have been working on it for a longtime, despite the recording of a profit in the rental business.
In fiscal 2022, the Company expects to generate income
from the real estate rental business, as factors thatworsened earnings in the development business have been
resolved. Although the vacancy rate has temporarily
increased in the domestic real estate market, we expect arecovery in demand in the post-COVID-19 world, and we willcontinue to acquire prime properties.

Commencement of environmental real estate
initiatives

Net sales of real estate business, etc. /Gross profit margin of real estate business, etc.
(Non-consolidated)
1,684

1,323

1,391

4.1%

10.9%

2019/3-79.4%
2020/32021/3

1,731

1,600
43.8%

-86.2%
2022/3 2023/3 forecast

Net sales of real estate business, etc. (million yen)
Gross profit margin of real estate business, etc. (%)

In order to focus on the environmental real estate market, whichis expected to grow in the future, we conducted a feasibility
study for the commercialization of environmental real estatethis current fiscal year. As we proceeded with the development
business for our own assets in Kyoto, we also identified issues
that need to be addressed in order to develop ZEB, ZEH, andother types of real estate with low environmental impact that
we are aiming to achieve. We will also acquire CASBEE(Comprehensive Assessment System for Built Environment
Efficiency) certification for the assets we currently own. We are
Value provided by
Tokyu Construction

Decarbonization

Business Strategies
We will expand our real estate business through real estatedevelopment and real estate value-added business by
maximizing synergies with our core businesses, targetingcustomers who are highly sensitive and interested in theenvironmental area centered on the three values we provide.
We will secure stable earnings mainly in the five wards ofcentral Tokyo and along the Tokyu Line, where we havestrengths, to complement our construction business, which
is subject to significant volatility. Going forward, we believethat the expansion of BIM in the construction business will
eliminate barriers in the value chain between construction
and real estate, and we will aim to provide value not only bybuilding but also throughout the value chain.

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TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

In order to manage capital invested in the real estatebusiness more efficiently, we will shift to a recyclingoriented real estate business and promote the separation ofreal estate from the balance sheet. Currently, we have astock of dozens of prime properties, which are managed inthree categories: medium- to long-term holdings,
replacement targets, and redevelopment andcommercialization. We plan to use the funds from the sale ofproperties to invest in new development projects, as well as
in the adoption of ZEB and ZEH specifications andacquisition of environmental certification from theperspective of environmental real estate.

Value provided by
the Real Estate Business• Development of real estate-related
businesses utilizing energy-saving
technologies• Pursuit of value-added provision
adapted to the ever-changing
environmental real estate market• Promotion of longevity of realestate through reconstruction andrenovation

Zero waste

Disasterprevention andmitigation• Realization of zero-waste buildings
through new technology, planning,and services• Provision of safe and secure spaces
by utilizing technologies and services
unique to a general contractor

also moving forward sequentially with development projects forother assets we own. While collaborating with the building
division, which possesses advanced design and construction
know-how, we will provide high-value-added real estate that
contributes to the provision of three values at the core ofmanagement of decarbonization, zero waste, and disasterprevention and disaster mitigation.

Development of the new brand TQ (TOP QUALITY)
We will actively develop our own brand named “TQ,” which is acombination of Tokyu Construction and TOP QUALITY. The TQ
series offers interior spaces with sophisticated design,functionality, and comfort that match the brand power of the
Tokyu Construction Group, the security and reliability of being ageneral contractor, and rental real estate with highenvironmental performance such as ZEB and ZEH, mainly inproperties developed in-house. A new website has beenlaunched to promote TQ’s branding concept.

Renovation of old office buildings
We will utilize the differentiation know-how unique to a
construction company, such as ultra-old office renovations likeour Higashi Azabu office, which was revitalized in August 2020
from a building more than 50 years old, and set-up offices thatare compatible with the new normal. We will revitalize older
buildings based on our own renovation policy, while
determining the approach for initiatives and renovations.

• Taking on challenge to create safe
communities through in-housedevelopment

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

35

Special
FeatureFoundations Supporting
Our Strategies

Strategy and Performance

Profile2 Our future image of DX
As a member of the Tokyu Group, our strength lies in town planning of entire areas, centering on railroads and stations.
Our Mission Statement (Purpose) of “Fulfilling each individual’s dreams through the creation of a reassuring and comfortableliving environment” has taken root there. The achievement of well-being* (a state in which people are completely fulfilled
physically, mentally, and socially), which is the goal of society these days, is our Management Policy. With the expected
increase in urbanization, we will further refine our existing strengths with data and digital technology, while collaboratingwith our partners to transform our business model and establish a competitive advantage.

Insights into the future: concentration of population in cities

we conducted scenario planning to gain insight into theprevention/mitigation.

future. The main scenario is a future in which, while

Nations, the urban population will increase from only 30% of

extent, population concentration in cities is expected in eachthe world’s population in 1950 to approximately 70% in 2050,

region, and urban models will be built with a stronger

and the rate of urbanization is expected to further accelerate.

Provision of
three values
Decarbonization
Zero waste
Disaster prevention
and mitigationthat keep
urban functions
runningReal
world
cities

According to global urban projections from the United

decentralization to rural areas will continue to a certain

Simulation

Virtualworld
citiesHuman
resources

Feedback

awareness of environmental considerations and disasterTechnology andknow-how

Solving various
urban issues

Using urban digital twin

Data upload

In our Long-Term Management Plan “To zero, from zero.”,

The Company’s
strengths

Integration

Further advanced
integration

With “the creation of a reassuring and comfortable living

associated with urbanization, such as updating aging existing

environment” as our Mission Statement, we have been deeply

facilities, energy issues, streamlining logistics, and responding

involved in the construction of buildings and infrastructure

to disasters. In addition, changes in people’s values, populationsuch as commercial, office, school, medical, and residential

concentration, and the rapid advancement of digital technology

buildings, in other words, town planning, mainly in Shibuya

are expected to require more complex town planning.

In the future, cities are expected to face a variety of challenges

Ensuresustainability

More consumer-oriented
in both normal times andemergencies

Sustainablesmart society
Human-centeredsociety throughinformation
integration

DigitalCorporate Philosophy and cultivated strengths
The Group’s core contribution to urban issues

Improvement inwell-being ofpeople in cities

Safe andcomfortablelivingenvironment

D at a - d r ive nTechnology and know-how that keep urban
functions running

Goals

PurposeFulfilling each individual’s
dreams throughthe creation ofa reassuring andcomfortable living
environment.

*Digital twin: A concept for monitoring and advanced simulation of physical space by sending information from physical (reality) space to cyber (virtual) space in near real time using IoT, etc., andreproducing the environment of physical space in cyber space.
*Well-being: The World Health Organization (WHO) Charter defines health as a state of complete physical, mental, and social well-being, not merely the absence of disease. Health can be interpreted
not only in the narrow sense of physical and mental health, but also in the broader sense of being satisfied with everything, including feeling emotionally happy and maintaining good social conditions.

Current efforts toward a digital twin
Next generation facility management with digitaltwin utilizing BIM models

and renewable energy through a digital twin, a virtual world.

and expertise of construction itself, but also the ability to

We have worked to transform our construction business byprovide value to our customers and society, and to makestation areas, which isrebuild cities while maintaining the safety and convenience ofutilizing BIM/CIM up until now. As part of these efforts, we

people feel reassured and comfortable.

unrivaled by any otherpeople living in them, without degrading urban functions andhave started a verification study to link BIM data, which had

We will continue to utilize data and expand our businessconstruction company in theeconomic activities even during construction. We believe thatbeen limited to the design and construction stages, to thenot only in the construction contracting domain but also inworld. In addition, we havethe essence of DX for us is to evolve that core businessmaintenance management and operation stages. We are

the entire value chain, considering the entire city from themade it our key mission tothrough data and digital technology, and to establish ausing BIM data to verify the benefits to building managers,

viewpoints of customers and consumers, and constantly

create valuable cities wherecompetitive advantage by adapting to change.

and along the Tokyu Line. In particular, we are proud of ourtechnology and expertise in the development of railroads and

The Group’s core business has been not only the technology

First, by solving building management issues, we aim tosuch as reduced manpower for facility management

strive to create new value, including the benefits of smart

residents and visitors canthrough remote monitoring, more efficient management ofurbanization and continuous improvement of attractiveness.

spend their time comfortably.

tenant information, and simulation of energy conservation

Shibuya boasts one of the largest number ofvisitors in Japan. Performing construction work
while maintaining the functions of the town

Real space

Virtual space

In collaboration with Tokyu Community
Corporation, we started a verification
study in July 2022 at its Tokyu Community

Toward DX in town planning

Technical Training Center NOTIA (adopted
as a Model Project for Facilitating
Building Production and Maintenance

Cities are expected to evolve into smart cities that utilize

digital twin to contribute to smart cities that bring wellbeing

data and digital technology in the future. An urban digitalto people as well as to realize the three deliverable values

twin, which reproduces data generated from the real world

we have set forth. These are not things that the Company

in the cyber world, is used to perform advanced simulations

can do alone. We will collaborate with like-minded

and feed back the results to the real world to solve various

companies, local governments, and other partners with anurban issues. The Group will further sharpen the strengths

open mind.

Management Processes Using BIM by the
Ministry of Land, Infrastructure, Transport
and Tourism in FY2022).
Remote monitoring andcontrol of facilities

Tenant information
management

we have cultivated in the real world and build an urban
Save labor for
facility management

36

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

Streamlining ofPM operations

Energy balance management

Energy conservation
and renewableenergy projects

Various data analysis

Data service business

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

37

Special
FeatureFoundations Supporting
Our Strategies

Strategy and Performance

Profile3 Promoting Innovation
In April 2021, we established the Innovation Department to achieve our plan to increase the percentage of revenue fromstrategic businesses (international business, real estate business, and new businesses) to 25% by 2030. With the mission of“establishing and promoting functions to continuously create new businesses,” the department is actively fostering a cultureof innovation through open innovation, training, and events, and reforming various systems, including the new businessproposal system.

Formation of a CVC fund (two-person partnership)
In February 2022, we established TCIF*, a CVC fund totaling 5billion yen, in a two-person partnership with Global Brain
Corporation, a leading independent venture capital (VC) firm,

CVC fundfor the purpose of accelerating venture investment. By
outsourcing a series of procedures related to venture

Acceleration of open innovation

Cooperation

investment to a VC, TCIF

Investmentcomplements the lack of know-how,investments, and strengthens

Internal CVC

We invest in venture companies in Japan and overseas to(VC)

addition, internal resources will be
synergies with portfolio companies.
Investment

zero.” namely decarbonization, zero waste, and disaster

Investeecompetitive advantage. We have also established a Venture

Investee

Investee

Investee

We have actively participated in the Tokyu Group’s TAP* andhave conducted many PoCs* with participating partners. We

Investment Committee chaired by the president to makewill continue to work with participating partners to co-decisions on investments quickly, thereby creating new growth

create businesses. We will continue to work with

opportunities through speedy investments and synergies.

Investee

Investeehttps://www.tokyu-cnst.co.jp/tcif/

Business creation through collaboration with the
Tokyu Groupdigital technology, which we have defined as sources ofInvestee* TCIF：TOKYU-CONST GB Innovation Fund L.P.

Collaboration

prevention and mitigation, as well as human resources andCollaboration

Investment

Investeeable to focus on maximizing

can contribute to the expansion of the three values we havedefined in our Long-Term Management Plan “To zero, fromOperation

oversight of financial returns. In

create new growth opportunities. We will invest in areas thatCVC fundGlobal Brain

speeds up the execution of

Establishment of an internal CVC(corporate venture capital) system

participating partners to co-create businesses.

*TAP: Tokyu Alliance Platform
Tokyu Group’s open innovation platform had 29 businesses participate. In the past sevenyears since 2015, we have received entries from a total of 947 companies, resulting in 94
PoCs and test implementations, 31 commercializations and full-scale implementations, andbusiness and capital alliances with 7 of these companies.
https://tokyu-ap.com/*POC (proof of concept): A simple trial to demonstrate the feasibility of a new concept, theory,or principle. It refers to an incomplete or partial demonstration conducted only to demonstrate
the feasibility of a key new idea in the preliminary stage of prototyping, where the entire
product is built up.

Investment in Girasol Energy Inc.
In June 2021, based on the above structure, the Company
invested in Girasol Energy Inc., a company that leverages its

PCS
Junction box

proprietary power line transmission technology and has
developed an AI/IoT platform for managing solar power

Creating a framework to continuously generate innovation

Solar panel

facilities down to individual panels. This will make it possible

Holding MOON SHOT CONTEST 2021

to increase system efficiency by remotely monitoring operation

With the aim of discovering internally generated newof power generation facilities via the cloud and maximize
power generated. Through the investment, we will deepen our
cooperation with the company to accelerate our response tobusiness ideas and fostering a culture of innovation, we

PPLC gateway
PPLC sensor

Cloud with Solar AI Engine

Conceptual diagram of AI/IoT Platform utilizationachieve our RE100 goals and promote DX.

held the MOON SHOT CONTEST 2021, a new business idea
contest for our Group employees. Of the more than 430
ideas submitted from the public, 12 ideas that passed thepreliminary screening were presented at Shibuya Scramble
Square in March 2022 (a digest version of the presentation

LP investment in Agya Ventures Fundin New York, US, Agya Ventures Fund invests in venturecompanies from around the world, enabling us to strengthen

the commercialization of the ideas selected and plan to holdInvestment
sourceCompanyA

our access to overseas companies that transcend differences

Company
B

Company
C

VC
(VC)

Fund
Operation

have not yet entered the Japanese market, and by building

the same contest again in FY2022.
In addition, as the first new business, theInvestment

in culture, customs, and laws and regulations. By making early
contact with seed and early-stage venture companies thatis available on YouTube). Currently, we are proceeding withLP investment

In March 2022, we invested in Agya Ventures Fund L.P. Basedcommercialization of the solar on-site PPA model, aCollaboration

Investment

renewable energy business field we are focusing on, hasbeen approved and sales activities have begun.

WEB

Digest version of the new business idea contest,
MOON SHOT CONTEST 2021

partnerships and collaborating with them, we will be able tocreate innovations.

38

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

Investee

Investee

Investee

Investee

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

39

Profile

Foundations Supporting
Our Strategies

Strategy and Performance

Responding to Climate Change

In November 2020, we endorsed the recommendations of the Task Force on Climate-related Financial Disclosure (below,“TCFD”), and we have also identified response and adaptation to climate change as a materiality (key management issue) in
our Long-Term Management Plan, which has 2030 as its target year. Recognizing the importance of the impact of climatechange on our business activities as a company, we will promote initiatives toward a decarbonized society and enhance ourinformation disclosure in line with the TCFD recommendations.

Governancestrengthen our oversight structure to achieve our goals,
including the progress of measures.

Direction

Introduction of renewable energy

Introduction of carbon tax¥10,000/ton

Board of Directors
Report (material items)

Sustainability Committee(former CSR Committee)
Activity
promotion

Committee chair: President

Cooperation
Report×

Risks and opportunities

Increase in the price of carbon (introduction ofcarbon tax)

Business divisions,subsidiaries, etc.

Stricter response to sustainable purchasingthese on our business. Among these scenarios, we havecalculated the financial impact on our group under the 2°C
scenario agreed to in the Paris Agreement (a scenario in which
the increase in average temperature is limited to within 2°C
Main measures

Reference year

Achievement level in 2030

Use of low-carbon fuels (GTL and RD) for heavymachinery at construction sites―

Utilization rate of 50% orabove

Promotion of ZEB design and construction

Risks

Stricter response to ecosystem destruction
Deterioration in work environment due to increasein temperatures
PhysicalTermination of construction due to stronger
disasters×

Fiscal 2030 operating
income target of ¥14.0
billion for the building
construction businessin the Long-Term
Management Plan

100% use of renewable energy andelimination of all Scope 2 emissions

Committed to achieving government target andhaving 50% of the Company’s new buildings ZEB.

Reduce cost about ¥100 million

Generate about ¥7.0 billion in operating income

Company-wide risks and opportunities based on materiality
are incorporated into short-term strategies formulated bybusiness units and subsidiaries to manage their progress,
and are reviewed based on the opinions of shareholders andother stakeholders. Each division’s initiatives are monitored
on a quarterly basis and reported to the Management
Meeting to evaluate and improve the status of response. In―

Reduction of GHG emissions through low-carbon
construction materials used―

30% reduction

Reduction of waste plastic generation

Average of 2018and 2019

25% reduction

Reduction of mixed waste generation

Average of 2018and 2019

50% reduction

Promotion of IAM using a database

From 2021

Hiring 3

Promotion of structural health monitoring system

From 2021

Orders received 30

Development of innovative technologies that
contribute to decarbonization

From 2021

Total number of
initiatives 7

Development of innovative technologies that
contribute to zero waste

From 2021

Total number of
initiatives 2

Development of innovative technologies that
contribute to disaster prevention and mitigation

From 2021

Opportunities

Greater demand for renewable energy

Government’s aggressive stance toward circular
economyContinual importance of developing infrastructure
Greater demand for buildings made to cope withstronger disasters

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

addition, we recognize risks and opportunities related toclimate change as particularly important issues, and haveestablished a system to ensure appropriate risk
management at all times through the Sustainability
Committee (formerly CSR Committee), which is chaired by
the president, and reports to and discusses them with theBoard of Directors.

At least 25% of orders

Progress is monitored using the greenhouse gas emissions (GHG) reduction rate and renewable energy electricity utilization rate
set forth in SBT and RE100, as well as the waste targets expressed in the Ministry of the Environment’s Eco-First Commitment
certification, as management indicators.

TCFD targets
Items

Base year

Greater need for energy-saving buildings
Products andservices
Greater demand for construction based on energysaving technology

40

Government ZEB
diffusion target “Onaverage 50% of newbuildings are ZEB”

Our Scope 2 emissions:approximately 10,000 tons
(FY2019 results)

Indicators and Targets
Expansion of the ratio of ZEB/ZEH and woodbuilding projects

Soaring disposal costs

Market*At the time of Long-Term
Management Plan formulation

Risk Management

During the development of our Long-Term Management Plan,
we used multiple future scenario analyses to identify short,medium, and long-term climate-related risks andopportunities, as well as to examine the specific impact ofEnergysource*IEA/WEO2019 used as reference for scenario analysis.

Head Office Divisions

Strategy

Transition

The financial impact under the 2°C scenario* is calculated tobe 12 to 16 billion yen (impact on operating income in FY2030).
We will calculate the financial impact using multiple scenario
analysis and then reflect it in the strategy.

Main Measures and Calculation of Financial Impact (Example)

Management System
In the process of developing the long-term management plan
disclosed in May 2021, the Board of Directors discussed risks
and opportunities related to climate change in light of theexternal environment.
In FY2021, we will report to the Board of Directors on
important company-wide sustainability activities, including
climate change, reported by the CSR Committee, and reflect
their opinions in the formulation of strategies for the next
fiscal year. In addition, we discussed how the committee
should oversee issues surrounding sustainability and climatechange, and changed the structure from the existing CSR
Committee to the Sustainability Committee. We are working to

Financial impact of a 2˚C increase in temperature

above pre-industrial levels). In light of the impact of climatechange on the Group’s business, we recognize that reducing
climate change risks and capitalizing on these opportunities is
a top management issue.
The Group has defined three core management values:
decarbonization, zero waste, and disaster prevention andmitigation, and is working to implement measures to reduceclimate change risks.

Greenhouse gas emissions

Objective

FY2021
Performance

2030 target

2050 target

Scope 1·2

5.4% reduction

30% reduction

100% reduction

Scope 3

51.6% reduction

30% reduction

–

2018

Renewable energy–

Renewable energy use rate

48.7%

100%

–

Waste

–

Final disposal rate

4.4%

3% or less

Zero

*Waste is a non-consolidated figure.

Total number of
initiatives 5

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

41

Profile

Foundations Supporting
Our Strategies

Strategy and Performance

Promotion of Environmentally Conscious Management

In Vision 2030 established in March 2021, we have placed the environment at the center of our corporate vision. We
have also declared four initiatives as our Eco-First Commitment: realizing a decarbonized society, realizing a recyclingoriented society, enhancing biodiversity conservation and environmental education, and promoting initiatives in the
supply chain. To achieve our Corporate Vision, we will continue to further strengthen our efforts, including reviewing ourmanagement system and enhancing information disclosure.
WEB
Eco-First Commitment (in Japanese)WEB

Our Environmental Charter and Environmental Policies

Category

1. Central Environment Committee meeting
With the Representative Director, Executive Vice President as
the chairman and with the participation of the General Manager(GM) of each division in the head office, discussions are held
twice a year on the feasibility and direction of initiatives related
to major matters on the environment in general, and the results
are reported to the Board of Directors. In FY2021, the committee
discussed the acquisition of third-party assurance forgreenhouse gas (GHG) emissions, improvement of the accuracyof GHG emission data, visualization of CO2 emissions, and areview of SBT certification targets for FY2025.

We introduced and obtained certification for our environmental
management system (ISO 14001) in 1999, and in 2014 we
shifted to a company-wide integrated management system.
We have completed seven updated audits to date and maintaincertification.

Process of evaluating and managing
environmental risk

Construction
Tunnels
Civil
works
Other
Construction
Tunnels
Civil
Other
works

Carbon dioxide emissions:
2.5% reduction from base year
(emissions)

Energy consumed
Amount of waste (excluding
blocks of concrete, blocks ofasphalt concrete, sludge)
2
Amount of waste plastic reduction*
Figure in parenthesis for target
is upper limit for emissions: 2.5%
reduction from base year (emissions)
Amount of mixed waste reduction*2 Figure in parenthesis for target
is upper limit for emissions: 5.0%
reduction from base year (emissions)

In response to requests from the international community, we participate in and endorse relevant initiatives to promote efforts tomitigate and adapt to climate change.

SBT

Eco First

FY2019FY2020

Performance

Performance

17,608
12,62012,222
8.5
121.2
29.3

12,003
14,275
13,826
7.0
100.6
24.3

12,342
13,913
15,291
9.4
111.3
27.4

17,897
10,258
9,794
9.9
94.8
23.2

16,287
11,673
11,306
8.4
97.5
21.7

15,847
11,35811,000
8.4
88.1
24.8

43.0
0.079

39.48
0.068

40.37
0.113

41.4
–

40.37
–

41.4
–

19.4

Emissionst-CO2

All office work
Construction

Emissions
intensity
t-CO2/100
million yen
2
kWh/m
3
2
m /m

Civil works

m /100 million yen

3

FY2021
Performance

FY20211

Targets

Evaluation*

Targets

20.6

–

–

–

*3

4,814

–

1,254

(Emissions 3,560)

120

241

Civil works

1,229*3–(Emissions 818)

(1,199)(1,168)Construction

*3

3,895

–

2,577

(Emissions: 1,318)

195

390

Civil works

704*3

–

(Emissions: 561)

(669)

(634)

Construction
Civil works

72.0
78.5

74.4
74.9

–
–

–
–

–
–

23.4

Construction
t

t

%

73.4
71.7

412

(4,573)(4,694)61

31(3,506)(3,700)

143

70

35

The FY2021 actual values for the key indicators shown in (1) to (13) in the table have received limited assurance from Ernst & Young
ShinNihon LLC. For details, please refer to the “Environmental Data” on our website.
Items

Purpose

Details

Unit

FY2018Base year3

Effective useof resources

Participation in and endorsement of initiatives

FY2018Base year

List of Waste Amounts, Including Supply Chain

2

Climate change is a pressing issue today. We approve of the
TCFD and are working to identify the business risks andopportunities from the perspectives of transition andphysical. We have specified matters important to theenvironment in general and consider their impact on theenvironment and the Company’s sustainable development interms of both risks and opportunities. We then adopt theresults as significant environmental aspects, incorporate
them into everyday work as targets, and implement
improvements within the ISO 14001 system.

Unit: Target achieved : Target not achieved*1 : Target sufficiently exceeded (10% or more above target)*2 Target: New establishment and new construction. From FY2021, the waste target was changed from emissions intensity to total reduction. The sorting rate target has been cancelled.
*3 Figures for the base year are averages for the two years of FY2018 and FY2019.

Responding to climate change *Certification of environmental management system

CDP

Items

Ratio of different types of waste

Management System

TCFD

PurposeEffective use of resourcesmanagement to realize a sustainable society that balances
the environment and the economy.

Environmental management system

2. Management review of the whole company
With the Representative Director, Executive Vice President as
the head and with the participation of the General Manager of
each division in the head office, discussions are held twice ayear on operational status of issues in and corrective measures
for the environment management system of the whole
company, and the results are reported to the Board of Directors.

FY2021 Unconsolidated Targets and Performance

Responding toclimate change

Environmental Charter and Environmental Policies
In our Environmental Charter enacted in 1997, we declared
we would make every effort to protect the global
environment. Our Environmental Policy, revised in 2019,states that we will promote environmentally conscious

Targets and Performance(1) Scope 1*
33,141
t-CO2
3, 4(2) Scope 2*
12,983(3) Total (Scope 1+2)
46,123
Reduction rate compared to base year–%
GHG emissions(4) Scope 3
5,638,106
t-CO2(5) Other categories
557,4295(6) Category 11*
5,080,677
Reduction rate compared to base year–%
Total emissions
5,684,230
t-CO2(7) Oils
479,368(8) Gases
6,446
GJ(9) Electric power
25,670
Energy(10) Total renewable electricity
122
consumed(11) Purchased renewable electricity0MWh(12) Purchase of non-fossil fuel certificates0(13) Renewable energy power
122
6
generation (on-site consumption) *Fossil fuel12,739KL
Amount used
City gas
143
Thousand Nm3
LPG
1t
Ready-mixed concrete
237,512m3
Main materials
Reinforcing bar
21,171t
Iron frame
19,851
Amount of industrial waste (including non-industrial waste)
404,462t

FY2019FY2020

FY2021

Performance Performance Performance

36,54911,00247,551-3.10
4,601,192
498,810
4,102,382
18.39
4,648,743
528,619
6,190
23,65400035,694
10,782
46,475-0.76
3,067,157
603,179
2,463,97845.60
3,113,632
509,618
13,604
26,235
2,368
0
2,243

37,6206,000
43,6205.43
2,753,764
506,616
2,247,148
51.16
2,797,384
543,641
6,054
26,591
12,954
11,478
1,346

124

124

130

14,050134
4148,181
14,42017,255
365,473

13,526144
141
535,280
38,91662,350369,385

14,433132
3300,213
58,167
17,536
335,542

Targets

30,65512,00942,6647.50
5,215,248––
7.50
5,257,912

Target (compared to FY2018)1

Evaluation*

FY2022

FY203029,827
11,68441,511
10.00
5,074,296

23,1999,088
32,28630.00
3,946,674

10.00

30.00
3,978,961––

Figures in the table are rounded to the first decimal place: Target achieved : Target not achieved*1 : Target sufficiently exceeded (10% or more above target)*2 Calculation of greenhouse gas emissions: The emissions intensity database for calculating greenhouse gas emissions of organizations through the supply chain presented annually by the Ministry of
the Environment has been applied.
*3 Assessment of on-site emissions: Actual data obtained for civil engineering and construction is extrapolated to the annual sales for civil engineering and construction, and the total is calculated.
*4 The calculation of Scope 2 emissions is based on the market standard*5 Scope 3 Category 11: 15 Buildings [Energy] of the above emission intensity database in *2 above presented annually by the Ministry of the Environment and emission factor for [Transportation] in thecalculation, reporting, and publication system of the Act on Promotion of Global Warming Countermeasures (1/3) (1) Fuel method Table 1 are applied. Energy consumption intensity by building use:
The annual Building Energy Consumption Survey Report (The Building-Energy Manager’s Association of Japan) is applied. The useful life of buildings is calculated as 30 years for stores, restaurants,
and factories, and 60 years for others*6 In-house power generation includes photovoltaic power generation and hydrogen power generation*For details of 2 to 6, please refer to the Environmental Data Collection on our website (3. Calculation Methods for Environmental Performance Data).
Revision: As a result of a review of data from previous years, GHG emissions category 11 for FYE March 31, 2021 (FY2020) was revised from 1,538,096 t-CO2 to 2,463,978 t-CO2.

FY2021 contribution to emission reductions during use through in-house architectural design (effect)
Unit (t-CO2: for service life)

RE100

JCLP (Japan Climate Leaders’ Partnership)

1

Design part*2

Design completion part*

42

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

NumberDesign emissions

16

391,612

Standard emissions Emissions Reduction

569,976

178,364

Reduction rate

31.3%

16

936,118

1,641,896

705,778

43.0%*1 Properties designed in FY2021*2 Properties designed in-house in previous years andcompleted in FY2021

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

43

Profile

Foundations Supporting
Our Strategies

Strategy and Performance

Promotion of Environmentally Conscious Management

In-house penetration and education
Promotion of the Eco Certification

Number of employees who passed the Eco Certification (cumulative)

We have been promoting Eco Certificationacquisition, an environmental and social
certification test, since FY2019 with the aim of
improving the environmental knowledge andawareness of all our employees. We support
employees who take the certification bysubsidizing certification fees, e-learning, andholding environmental lectures. A total of 510
employees passed the certification in FY2021,
bringing the total number of employees who havepassed to 2,052 (74.4% of all employees). In
FY2022, we aim to have 100% of our internal
employees and at least 75% of our external
employees obtain certification, and we areworking toward our goal of having 100% of ouremployees obtain certification for the Eco
Certification by FY2026.

Internal employees

Number of employees who passed
Acquisition rate (%)

Internal employees

External employees

External employees

Total

Total

78.0
74.4
67.4

62.6
54.8
40.7
36.2
30.3
19.5
11.0
7.8
2.1

1.5
1.1
0.3
27

2,052
1,542
854

653
196

30

3

FY2017

22

1,389

1,104

218

438

663

201

FY2018FY2019FY2020

FY2021

Efforts to Reduce the Environmental Impact of Our Business Activities
Initiatives to realize a decarbonized society

simulation tool, TC-BES, which facilitates communication andconsensus building with customers in the early design stageof ZEB proposals. The energy model generated by BIM andthe database of building and equipment specifications areanalyzed by Open Studio (an energy consumption
performance calculation program), making it possible toconduct case studies of primary energy consumption, BEI
values, costs, and CO2 emissions necessary to makecustomer decisions and realize ZEB in a simple and shortperiod of time.

Efforts Toward ZEB and ZEH-M
With the aim of promoting energy-efficient buildings, we havebeen promoting ZEB and ZEH-M initiatives for our own
design properties since fiscal 2016. In FY2021, four ZEB
design properties (ZEB: 1, ZEB Ready: 3) were completed andthree new ZEB buildings were designed. The ZEB renovationof the Institute of Technology has reduced energy
consumption by 76-78% (78% in FY2021) for four consecutive
years since its completion. Moreover, to promote the spreadof ZEH-M* (ZEH condominiums), the institute has registeredas a ZEH Developer and is accelerating its decarbonization
efforts not only in buildings but also in residential
construction. We have also developed a new energy*Condominiums that achieve substantial energy savings in electricity and gas (20% or morecompared to energy conservation standards) while maintaining a comfortable indoor
environment by improving energy-saving performance through the introduction of thermal
insulation and high-efficiency equipment and systems.

Number of ZEB/ZEH
Design (16 in total)

Construction (9 in total)

Completed (7 in total)

5
4

4

3

3

3

We are a registered ZEB planner,an expert in ZEB planning
operations.

2
1 1

1
0

FY201644

0 0
FY2017

1

1

1

0 0

0

FY2018FY2019TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

1

1

ZM2021-00097-DC

FY2020

FY2021

FY2022(plan)We are a registered ZEH
developer, a provider of total
support from proposals related to
introducing ZEH-M to completing
application procedures.

Promotion of technological development(1) Technological development
We are promoting the use of environmentally friendly
materials at construction sites through technologicaldevelopment.
In concrete, a main construction material, we havedeveloped CELBIC, a low-carbon concrete that uses blast
furnace slag fine powder to replace a portion of ordinary
cement. CELBIC is a concrete in which the replacement ratioof blast furnace slag powder can be specified within a rangeof 10% to 70%, depending on the performance required forthe casting area, and depending on the replacement ratio,
CO2 emissions can be reduced by 9% to 63%. A total of 1,800m3 of this concrete, which has CO2 reduction effects
recognized in the “Technical Performance Certificate forConstruction Materials” by the General Building Research
Corporation of Japan, was used in construction projects in
FY2021.
Furthermore, we obtained JIS certification for E-PEC, aconcrete that utilizes electric arc furnace oxidation slag, abyproduct of the electric arc furnace steel manufacturing
process, as part of the fine aggregate. This concrete reduces
CO2 emissions by up to approximately 10%, and also
contributes to the environment by protecting natural
aggregate resources and reducing waste.
In addition, we have developed and are currently using
Sustar, an alternative material for use as a preceding
mortar*. Although preceding mortar is intended to bedisposed of after use, conventional products manufactured atready-mixed concrete plants are often over-ordered becausea plant is unable to deliver only the desired amount of mortar
due to the plant facilities. Sustar first realizes minimizationof manufacturing loss of materials to be disposed of by
manufacturing only the necessary amount on site. After use,
Sustar becomes waste with no manufacturing loss, and sincemore than 90% (by weight) of its constituent materials are
by-products discharged from other industries, it can be
expected to contribute to the environment from the viewpointof effective waste utilization. In addition, since the amount of
cement used is also reduced by this material composition,
CO2 emissions during production can be reduced by morethan 70% compared to the same amount of conventionalmortar produced at ready-mixed concrete plants, thus
contributing to environmental load reduction from multiple
perspectives. In FY2021, it was introduced at seven sites.

This sheet makes it possible to understand the total
amount of CO2 emissions from buildings, and contributes tofurther reduction of CO2 emissions through reduction
proposals based on the calculation results.

*Materials used to maintain lubricity in concrete pumping pipes prior to the startof concrete pumping, to prevent blockages, and to ensure concrete quality

0%(2) Calculation of all CO2 emissions related to buildings
CO2 emissions associated with buildings, including the supply
chain, are roughly divided into three categories (building
materials, construction, and operation), which aresummarized on a single sheet and provided according tocustomer needs. In particular, for the calculation of CO2
emissions from building materials, we have developed ourown Accumulated CO2 Emissions Calculation Sheet.

Total CO2 emissions Calculation results Calculationdate

2022/7/11

Name ofconstruction work

7,400

New Construction Work
9%

Total CO2
emissions

Total floor
area

15%

5,638 t-CO2(Reference)

762

m2

75%

kg-CO2/m2
Scope 3 (building materials)
Scope 3 (construction)
Scope 1, 2 (use/year)

Breakdown(1) CO2 emitted during production of building materials (Scope 3)
Subtotal

4,277 t-CO

Reinforcing bar 24%

2

Other 19%

Ready-mixed concrete 57%(2) CO2 emitted during building construction (Scope 3)
Subtotal

531

t-CO2

(3) CO2 emitted during building use (Scope 1, 2)
Subtotal

831

t-CO2

Use of Electricity from Renewable Energy
Tokyu Construction Group joined RE100 in March 2021 andhas set a goal of converting all electricity used in ourbusiness activities, including construction and offices, toelectricity from renewable energy by 2030.
In FY2021, 25 domestic construction sites (civilengineering: 12, construction: 13) were equipped withelectricity from renewable energy. We also installed solar
panels at our Institute of Technology to generate andconsume 130MWh of electricity in-house.
For all business sites, including the head office andbranches, we converted approximately 1,346MWh ofelectricity consumption to renewable energy in FY2021 by
applying non-fossil fuel certificates.

Breakdown of electricity used by
the Tokyu Construction Group (FY2021)
20%

40%

Electricity received fromrenewable energy sources
11,478MWh

In-house power generation
130MWh

60%

80%

100%

Normal power
13,637MWh

Purchase ofnon-fossil fuel certificates
1,346MWh

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

45

Profile

Activities in the field
In 2015, we began nature conservation efforts at adevelopment project site in Kamigo-cho, Sakae Ward,
Yokohama City, which we are implementing. The program isdesigned to provide opportunities to learn about livingorganisms and to create an environment conducive to thegrowth of luciola cruciata (genji firefly). In FY2021, theprogram was held six times, with approximately 100 people
participating for the year. We also continued to participate intree-planting festivals hosted by Silva, which gave a lectureon the topic, from FY2019, and planted 4,103 trees on fouroccasions in FY2021 with a total of 56 people participating.

Initiatives to realize a recycling-oriented society
We aim to reduce the final disposal rate of waste to less than
3% by FY2030 and to zero by 2050.
We are working to reduce waste generation throughunitization and reduced packaging, holding waste separation
workshops in cooperation with industrial waste disposal
companies, and providing on-site guidance on waste
separation at large sites to ensure thorough waste separation.
In particular, waste plastics are sorted into smaller pieces toensure high-quality recycling and to improve the recycling
rate. In addition, as a measure to reduce emissions, we areexperimenting with the introduction of compression packaging
machines, and have reduced waste emissions by more than
10% by compressing waste plastic and paper waste at sites
where these machines have been introduced.

Biodiversity Initiatives
We invite lecturers from outside the company to giveenvironmental lectures twice a year. In FY2021, we focused on
biodiversity, and the first lecture was given by Toshiko
Kawashita, Representative Director of Silva, an environmental
NPO, on “What is a biodiversity field: What the natural world isaiming for and what the earth needs.” The second lecture wasfrom Yosuke Masuda, President of Mise Solutions, Inc. on thetheme of “Understanding Biodiversity”.
In addition, the theme of biodiversity was set for theenvironmental management course by position, which ismandatory for all employees to attend.

Foundations Supporting
Our Strategies

Respecting Human Rights

Promotion of Environmentally Conscious Management

Introduction of GTL FuelAs a measure to reduce emissions from the use of gas oil,which accounts for the majority of Scope 1 emissions(approximately 75% of greenhouse gas emissions fromconstruction sites), we will introduce gas-to-liquids (GTL),
which are liquid fuels derived from natural gas and have thesame properties as gas oil. We signed a basic agreementwith Itochu Enex Co., Ltd. in July 2021 and are proceedingwith the deployment at our work sites. In FY2021, 159.7 kL(1.2% of the total) was replaced by diesel oil, reducing CO2
emissions by 35 tons.

Strategy and Performance

The Tokyu Construction Group’s Mission Statement is “Fulfilling each individual’s dreams.”
Based on this mission, we consider respect for human rights to be one of our most important responsibilities in all of ouractivities, and we recognize that our business activities may directly or indirectly affect human rights.
Based on this belief, we have formulated our Human Rights Policy and will promote efforts to respect the rights of all people
involved in our business activities.

Tokyu Construction Group Human Rights Policy
The ideas embodied in the Tokyu Construction Group’s Corporate Philosophy are linked to the concept of respecting
human rights as the utilization of each individual’s personality and individuality, as well as teamwork and trust based oninterpersonal relationships.
Based on this philosophy, we have established a Human Rights Policy and will promote efforts to respect the human rights ofall people involved in our business activities.

1. Scope of application

4. Human Rights Due Diligence

The Tokyu Construction Group Human Rights Policy (below,
the “Policy”) applies to all officers and employees of Tokyu
Construction and its affiliates.
In addition, the Tokyu Construction Group expects its
business partners, including cooperating companies andsuppliers, to understand and comply with the Policy.

Environmental and social contribution activities(status in FY2021)
April (1 time)
Bamboo grove
maintenance

June (1 time)
Firefly survey
experience

September (1 time)
Wetland maintenanceNovember (1 time)
Mowing and branchremoval from rivers

December (1 time)
New employee training
wetland maintenance

Living (looking at)
Bamboo shoot digging

Interaction withlocal residents
Living things (experience)
Firefly observation

Firefly observation
at night
Original experience (memorable)
Experiential learning

Experiencing wetlands
Living things (learning)

2. Respect and Observance of Codes and Laws
The Tokyu Construction Group supports and respects
international norms on human rights, including theInternational Bill of Human Rights (Universal Declaration of
Human Rights and International Covenants on Human Rights)
and the ILO Declaration on Fundamental Principles and Rights
at Work, and as a signatory to the UN Global Compact, we
support the ten principles set forth in the initiative.
We have also established the Policy based on the UN Guiding
Principles on Business and Human Rights, and will promote
initiatives to respect human rights.

The Tokyu Construction Group will establish a human rights
due diligence mechanism to identify, prevent, and mitigate
negative human rights impacts related to its businessactivities on an ongoing basis, integrate corrective measures
into internal processes, and publicly disclose its humanrights initiatives.

5. Correction and remediation
If it becomes clear that the Tokyu Construction Group iscausing or contributing to negative human rights impacts,
we will work to correct or remedy the situation throughappropriate means.
In the event that the Tokyu Construction Group’s business
partners, such as cooperating companies and suppliers, arecausing negative impacts on human rights, we will workwith our stakeholders to make improvements to ensure thathuman rights are respected and not infringed upon.

6. Education

3. Responsibility to respect human rights
The Tokyu Construction Group will fulfill its responsibility
to respect human rights by striving to avoid human rights
violations against others in its business activities, and by
taking appropriate action when it becomes clear that its
business activities are causing or contributing to negative
human rights impacts.

The Tokyu Construction Group will reflect the Policy inthe necessary procedures to ensure that it takes root
throughout its business activities, and will continue toprovide appropriate education and training to all directors,
officers, and employees.

7. Dialogue and consultation with stakeholders

Firefly breeding andobservation

Firefly larvae observation

Basic knowledge and experience ofenvironmental conservation

In a series of initiatives under the Policy, the Tokyu
Construction Group will collaborate with third-party
organizations with expertise in human rights, and will
engage in dialogue and consultation with relevant
stakeholders in good faith.
Adoption of the policy was resolved at a meeting of the Boardof Directors of Tokyu Construction held on April 22, 2022

Endorsement of and signature to the United Nations Global Compact
In April 2022, the Tokyu Construction Group signed a statement of endorsement of the United Nations Global Compact and supports
activities based on the 10 principles in the four areas of human rights, labor, the environment, and anti-corruption.
WEB

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TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

Endorsement of and signature to the United Nations Global Compact

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

47

Profile

Strategy and Performance

Foundations Supporting
Our Strategies

Building a Responsible Supply Chain

In order to realize Tokyu Construction’s Mission Statement of “the creation of a reassuring and comfortable living
environment,” we have established a procurement policy and implementation system based on the view that it is importantto build a responsible supply chain in cooperation with our business partners.

Tokyu Construction will contribute to creating sustainable
society and communities by valuing mutual respect offering
equal business opportunities, thoroughly complying withregulations, and making fair selection based on partnerships of
mutual development with subcontractors and other vendors.

The future shortage of workers in the construction industry isa serious problem, as the number of skilled workers is aging
and the number of young people entering the workforce
remains at a low level. Therefore, we recognize the urgent
need to strengthen our relationships with cooperatingcompanies who have skilled workers and to ensure a stablesupply of such workers.
We also recognize that the business of a prime contractor
would not be possible without its cooperating companies, andwe are committed to active dialogue with our subcontractors
with the aim of mutual development.

1 Strict Compliance with Laws and Regulations, and Fair
and Equitable Transactions

Visits to cooperating companies

Procurement Policy
We have been concluding fair contracts with our partner
subcontractors through compliance with laws and regulations,
including the Principles of Construction Contracts stipulated in
the Construction Business Act, and endorsement of the
Declaration of Respect for Labor Cost Estimates by the Japan
Federation of Construction Contractors. We have alsoannounced the Declaration of Partnership Building to promotevalue creation by solving problems faced by the constructionindustry, such as securing the next generation of construction
workers and improving productivity, together with ourcooperating companies. We have been engaged in businessactivities while giving due consideration to compliance withlaws and regulations, reduction of environmental impact, andrespect for human rights.
In addition to these activities, we will disclose our
Procurement Policy as an action policy in FY2020 andformulate a Human Rights Policy in FY2022 to respond to thegrowing social demands of recent years, such as SDGs and
ESG, and share these ideas widely both inside and outside theCompany. We will continue to strive to build a responsible
supply chain based on our Procurement Policy and Human
Rights Policy.

Tokyu Construction Group Procurement Policy

2 Ensuring Quality
3 Securing Safety and Health
4 Consideration for the Environment
5 Respect for Human Rights and Building a Good Working
Environment
6 Thorough Information Security
7 Rejecting Relations with Antisocial Forces
8 Building a Disaster Risk Management System(Supply Chains)
9 Establishing a Procurement SystemWEB

Declaration of Respect for Labor Cost Estimates (in Japanese)WEB

Tokyu Construction Group Procurement Policy (full text)

Implementation system
The Tokyu Construction Group believes that in order to fulfill
its social responsibilities and realize sustainable procurement,
it is essential to work together with business partners,
including cooperating companies and suppliers, to addresssocial issues such as human rights, health and safety, andthe environment throughout the supply chain. We requestthat our business partners understand and support the Tokyu
Construction Group Supplier Code of Conduct and implement

Engagement with cooperating companies

this code. In addition to Japanese, we have preparedand published the Code of Conduct in English, Chinese,
Korean, Vietnamese, and Indonesian in order to promote
understanding of our diverse workforce.
WEB

Tokyu Construction Group Supplier Code of Conduct

In addition to supporting our partner cooperating companies
in dealing with labor shortages and business succession
issues, since July 2020, the Procurement Department
General Manager has been working with Tokyu Insurance
Consulting Co., Ltd. to directly visit subcontractors’
workplaces as part of communicating our management andprocurement policies. We ask them to recognize theimportance of the environment, human rights, labor issues,and the like by encouraging them to take the Eco Certificationand to engage in on-site activities related to the three values
we deliver. Currently, we have already completed visits tomore than 100 companies, and our cooperating companies
are taking positive steps to do what they can, such ascommuting by train instead of by personal car and switching
to LED lighting. Including new contents such as the Human
Rights Policy and Supplier Code of Conduct formulated andannounced in May, we are aiming to visit 150 companies by
the end of FY2022. We plan to continue to make visits tocooperating companies as a part of the Company’s structure.
We visit cooperating company offices and factories to see theworking environment and production facilities with our own
eyes, so that we can learn firsthand about the ingenuity andhardships faced by each company. When they visit us as well,
we try to directly ask them about things they feel difficult to say
or requests they have for the Company. We are building a true

Environmental outreachWe encourage our cooperating companies to introduce
renewable energy to their facilities through visits to theiroffices. We also ask material manufacturers to actively
propose CO2-saving building materials and to report GHG
emission intensity during product manufacturing, thereby
promoting environmentally conscious management together
with our cooperating companies.

Improvement of Occupational Health and Safety
and BCPWe have organized an Accident Prevention Cooperative
Association with subcontractors engaged in construction andare promoting the smooth progress of construction workthrough cooperation. In addition, we are promoting a varietyof activities to eliminate accidents and disasters, including
the operation of a “Meister” certification system for excellent
foremen.
In the event that infrastructure is damaged by a disaster, we
also work with our partner companies to ensure the early
restoration of infrastructure by laying out disaster relief roads
and other measures. We have concluded cooperationagreements in the event of disasters with the national
government, local governments, and other organizations, aswell as with infrastructure-related companies.

Construction Career Up System (CCUS)
Tokyu Construction is putting in place an environment inorder that our skilled workers, who play a key role on-site,
receive proper evaluation and treatment in accordance with
their skills and experience. As part of this effort, we are
actively cooperating in the promotion of the Construction
Career Up System as a managing company of theConstruction Career Up System Headquarters established by
the Japan Federation of Construction Contractors, in which IC
cards are distributed to individual skilled workers and theirwork histories and qualifications are stored in a unified
industry system.

partnership by deepening mutual understanding.
(Hiromori Yashiro, General Manager of Procurement, Cost Planning
Department, Building Construction Division)

Declaration on Partnership Building
Partnership Building was established by the Council on
Promoting Partnership Building for Cultivating the Future,
whose members include the Chairman of Keidanren, thePresident of the Japan Chamber of Commerce and Industry,
the President of The Japanese Trade Union Confederation, andrelevant ministers (Cabinet Office; Ministry of Economy, Tradeand Industry; Ministry of Health, Labour and Welfare; Ministryof Agriculture, Forestry and Fisheries; and Ministry of Land,
Infrastructure, Transport and Tourism). It is a declaration
made that it will build new partnerships by promoting

48

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

cooperation, coexistence and mutual prosperity with suppliersand value-creating businesses in the supply chain. The
Company announced its endorsement of the declaration in
March 2021, and we will aim for co-existence and mutual
prosperity across our entire supply chain, and will not only
strive to optimize subcontracting transactions, but will also
work together to resolve issues facing the constructionindustry, such as securing the next generation of workers andimproving productivity.

Pledge on the Three Values we deliver
Vision 2030: Pledge on the Three Values we deliver
Company name:

Corporation

Provision of
three values

Targets

Decarbonization
Zero waste

Achievementdate• Switch to LED office lighting• Convert company cars to hybrids
August 2022
• Use public transportation instead of commuting by car• Reduce paper use (promotion of paperless offices)
June 2022• Encourage employees to use their own bags, cups, etc.

Zero waste
Disasterprevention • Stockpile emergency supplies• Loan out company vehicles during disasters
and mitigation

June 2022

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

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Profile

At our construction site, we conducted a demonstration
using a BIM model to pre-cut and install LGS (lightweightsteel frame) base material and gypsum board incollaboration with Nohara Holdings, Inc. The verification was
conducted to reduce waste and CO2 emissions, improve
construction productivity and safety, and the results showedthat construction work hours were reduced by up to 50%, andthe amount of other materials and waste generated was also
reduced. Going forward, we will work on further
improvements and openly involve the supply chain to
improve construction productivity and contribute to a
decarbonized and recycling-oriented society in the industry
as a whole.

Season 1 (November 2020 to July 2021) included projects toimprove the image of the construction industry and interviews
with specialized construction companies, in the hope that they
will provide an opportunity to find employment at our partners
in specialized construction. In Season 2, we will continue topromote the appeal of civil engineering through various
collaborative projects with Kento Sugo.

Human
resources

Disasterprevention andmitigation

Digitaltechnology

On-site productivity improvement
Closing work sites for a total of eight daysout of every four weeks.
Overtime work limit regulations.

Demonstration projectplanning, management,
and evaluation
Provision of space, workflow
design, and technical assistance

Ongoing and evolving implementation of BIM-pre-cut demonstration
Establishment of workflow and new construction methods
Problem solving andprovision of IT infrastructure

Evaluation andimprovement plan
Problem solving
throughout the supply
chain (production,delivery, construction)
Provision of a mechanism
to connect all parties
through BIM and IT
technology

In order to realize our Mission Statement of “creation of a reassuring and comfortable living environment,” we promote
continuous safety and health activities based on our Safety and Health Policies, recognizing that the basic premise is that all
employees and other parties involved in our business can work in a safe and healthy work environment with good physicaland mental health.

Safety and Health Policies
Under the strong leadership of top management, we will cooperate with all members involved in the construction business, in order torealize safe, healthy and comfortable work environments, by implementing a PDCA cycle through the united efforts of the head office,branches and work sites.
1 Identifying Risk
We work to prevent accidents, by identifying dangerous andinjurious factors that may be hazardous sources from thestandpoint of work-related safety and health.

Decarbonization

Zero waste

Reducing environmental impact entire life cycle byusing low-carbon fuels
We are also actively engaged in decarbonization initiatives incooperation with our cooperating companies. One suchinitiative is the use of low-carbon fuel for heavy machineryand cranes at construction sites. In August 2021, we
introduced nationwide GTL fuel, an alternative to diesel fuelthat emits approximately 8.5% less CO2 than conventional
diesel fuel, and began using renewable diesel for the firsttime in the construction industry. Renewable diesel is anenvironmentally friendly fuel made from waste cooking oil,animal and vegetable oil, etc., and when used in heavymachinery, it reduces CO2 emissions by approximately 90%
on a life cycle assessment basis*.
* Lifecycle assessment is a method of quantitatively evaluating the environmental impact ofa product or service over its entire life cycle (raw material production, product production,
distribution, disposal, recycling, etc.) or at some stage of its life cycle.

CDP2021 Supplier Engagement Rating
In recognition of our efforts to manage greenhouse gas
emissions and reduce risks in collaboration with our partnercompanies, CDP, an international environmental non-profit
organization, selected us as one of the Leader Board
companies, the highest rating in the Supplier Engagement
Rating conducted in 2021. We will continue to work with ourcooperating companies to realize adecarbonized society.

2 Setting Priority Implementation Activities(1) Eradication of public accidents, fatal accidents and major
accidents(2) Reduction of accidents due to crashes and falls(3) Reduction of accidents involving construction machinery andcranes, etc.
(4) Reduction of accidents due to collapse

Based on the Construction Occupational Health and Safety
Management System (COHSMS), we strive to prevent
occupational accidents, promote workers’ health and create acomfortable work environment, and continuously enhance andimprove the level of safety and health by implementing the
PDCA cycle in cooperation with our stores and work sites.
Since fiscal 2019, we have been working on the evolution ofsafety management, and in fiscal 2021, we are continuing tostrengthen communication by conducting workplace safety
and health patrols by management and exchanging opinionswith top management, workplace employees, and managers
and safety and health managers of cooperating companies.

We collaborated with the YouTube channel “Kocchi no Kento”
by popular YouTuber Kento Sugo for a series that conveys theappeal of civil engineering called “Learn About Civil
Engineering with Kento Sugo,” and started Season 2.

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TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

4 Compliance with Laws and Regulations
We clarify laws and regulations related to industrial safety andhealth and internal regulations and comply therewith.
5 Systems Operation/Improvements
We operate the established Health and Safety management
systems, and continuously make improvements.
6 We take initiatives regarding all of our employees andworkers involved in construction work.

We have also adopted the safety index as a KPI for safety
and health activities. In fiscal 2021, occupational accidents
such as crashes and falls and accidents involving construction
machinery and cranes occurred. The status of theseoccurrences, their causes, and countermeasures are
discussed at a study meeting on the investigation of causes
and prevention of recurrence, and information on the identified
recurrence prevention measures is shared within the Group to
ensure that they do not recur.

Trends in occurrence of accidents*
FY

Safety index*

2017

Performance

0.20

Evolution of Safety Management

2018

Performance

0.43

1 Strengthen the safety management system by

2019

Performance

0.09

increasing top management’s participation

2020

Performance

0.19

2 Review the safety construction work cycle

2021

Performance

0.14

Targets

0.10 or lessTargets

0.10 or less

3 Strengthen communication
as the NEW COHSMS and new risk assessments, as

SUPPLIERENGAGEMENTLEADER

3 Maintaining and Enhancing Physical and Mental Health
We promote the health of all our employees and those involvedin construction work to create a stress-free workplace.

Safety and health management

4 Comply with the latest management systems such

Improvement of image of construction industry andsupport for hiring activities

Foundations Supporting
Our Strategies

Occupational Health and Safety

Building a Responsible Supply Chain

Demonstrating the effects of using BIM models toimprove productivity and reduce environmental
impact at construction sites in collaboration withspecialized construction companies

Strategy and Performanceother revisions

2022
WEB

* √ (Frequency rate x Strength rate)*Scope of coverage: Tokyu
Construction’s domestic nonconsolidated and cooperatingcompany workers at domestic
work sites
Overseas work sites of Token
Industry, Tokyu Renewal Corporation,
and Tokyu Construction’sInternational Division are notincluded in the scope.

Health and Safety Initiatives

2021

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

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Profile

Strategy and Performance

Foundations Supporting
Our Strategies

Enhancement of Quality Control Infrastructure

The products provided by the construction industry are social infrastructure that are used not only by the direct client but
also by many other people over several decades. To fulfill this social responsibility, the Company has introduced and isoperating a quality management system.

Quality Policies

improvement activities based on PDCA. To conduct internal
audits, a requirement of the QMS, we offer internal auditor
certification to learn auditing skills and follow-up training
after a certain number of years.

In this way, we aim to improve quality, reduce defectevents, and prevent recurrence, and provide products andservices that satisfy our customers.

Internal system, education, and awareness activities to support quality

In order to assure the quality of our products (civil engineering structures and buildings), with the aim of improving customer
satisfaction, we carry out the following activities when undertaking design, construction supervision and construction work.

1 Initiatives for Risks and Opportunities

We identify risks and opportunities that may exert an influenceon the assurance of product quality and improvement ofcustomer satisfaction and consider the extent of their potential
influence in order to respond accordingly.

2 Understanding Needs and Expectations

To meet customer needs and expectations as well as applicableregulatory requirements, we explore, clarify and understandsuch needs and expectations.

3 Setting Quality Targets■ Civil Engineering Business Division■ Building Construction Business Division
The support division for management establishes targets
related to the effective utilization of resources to support theachievement of the goals of the above departments (humanresources, information and communication technology andother infrastructure, employee work environments, know-how,etc.)

4 System Operations and Improvements

We will operate and continuously improve our quality
management system in the planning, design, construction, andafter-sales service processes.

We set effective quality targets for the following businessdivisions, for the purpose of assuring product quality andincreasing customer satisfaction, while supporting ourmanagement policies.

PDCA of Quality Management System (QMS)
By October 2000, our headquarters and all branches
nationwide had acquired the international standard of ISO
9001 certification. In September 2004, we registered under
the company-wide integrated QMS. Since 2005, we have also
conducted annual external audits combined with ourenvironmental management system (EMS). At each stage ofsales, design, and construction, we confirm that head office
departments and branches are following the manuals andimplementation procedures based on the quality
management system, and implement continuous

In response to the defective tip of a foundation pile
discovered in July 2021 during station improvement work,
we are strengthening and reviewing our quality control
system to prevent recurrence.
Before starting construction, members of our branches,
work sites, and specialized departments check safety andquality control checkpoints for the relevant construction
project from multiple perspectives. On site, based on theitems reviewed in advance, we confirm and share overall
QCDSE (*) with cooperating companies and other parties byusing such venues as construction safety review meetings,
work procedure familiarization meetings, and work meetingsprior to implementation of the relevant type of work. When aconstruction issue arises, we proceed to the next step after
discussing the issue with our engineering department andother departments. In addition to reinforcing theimplementation of this process, we are reviewing our system
to ensure that information is promptly shared withmanagement in the event of a construction problem. The
Company’s engineers working at work sites will becomposed of appropriate personnel based on experience andother factors. In addition to technical guidance and personnel
support during busy periods, the head office and branchdepartments have reviewed and strengthened systems
related to quality assurance, such as internal inspections.

In addition, we are continuously reviewing our training
programs to improve the construction management skills ofmanagers and middle class, and to improve the skills andearly development of young engineers. Specifically, we areconscious of effective and efficient education by conducting
job rotation for diverse experience and using an OJT Master
Card to record and visualize the acquisition status ofnecessary basic knowledge and skills. We are working toraise employee awareness of quality through such means as
sharing examples of quality management and defectresponse during regular training sessions and daily
meetings, Site-Learning, a workplace-based study session,and rolling back, in which work arrangements are visualized
and veteran employees’ experience is passed on.
Starting in FY2022, we will conduct awareness-raising
activities by designating November as Quality Month and thefirst week of the month as an enhancement week. In January2022, we expanded the scope of the whistleblowing system
to include cooperating companies, etc., in order to prevent
quality problems before they occur and to detect and remedy
them as early as possible.
We will work together company-wide to improve
construction quality and restore trust by thoroughly
implementing measures to prevent recurrence.

*QCDSE: An acronym for quality, cost, delivery, safety, and environment, the five elements that form the basis of construction management.

Implementation of quality management system

ACT

PLAN
Management review (instructions)

Quality Policies

Plan to prevent recurrenceContinuous improvement

MR response plan

Opportunities for
improvement
Audit, measurement, analysis,
and evaluation

CHECK

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TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

Administrative support (general affairs and clerical work)

Quality targets

Qualityassurance
Achievementof customer
satisfaction
improvement

Quality manual

Sales support

Design support

Construction support

Estimate
Technical proposal
Etc.

Design knowledge management
Etc.

Temporary construction planning
Procurement
Inspection
Construction supervision
Etc.

To planSupportSupportInternal Audit

Management review (evaluation)

支援

From
implementation
results

Resources

Operation

Operation

Sales

DesignConstruction

DO

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

53

Profile

Strategy and Performance

Foundations Supporting
Our Strategies

Human resources

In our Long-Term Management Plan, human resources are positioned as a source of competitive advantage along withdigital technology. As part of efforts to enhance the capabilities of each employee and strengthen human resource
development so that they can fully demonstrate their individual strengths, we are promoting a human resource strategy
to accelerate innovation in construction production systems and take on challenges in new business domains throughmeasures such as personnel system reforms and work style reforms.
Human resource strategies in the Long-Term Management Plan
Handling of structural changes in
the construction industry
Labor-intensive
style

Innovation in construction andproduction systems＋

Knowledge-intensive style
Capital-intensive style

Reform of our business portfolio
Challenges towards new business areas

Creation of innovation
Promotion of diversity and inclusion

Reform of leadership and management style

Acquisition and development ofhighly specialized human resources

Autonomous and co-creation style
management

Promotion of active female participation

Leadership that supports autonomy

Evolution of succession planning
Promotion of reskilling

Improvement

Promotion of work style reformof employee
engagement

Promotion of health and productivity
management

Fostering autonomous human resources with a strong desire to contribute
We aim to develop autonomous human resources who can leadchange with a high level of expertise and professionalism, pride,passion, ambition, and the ability to persevere.

Reform of the personnel system
In April 2022, we reformed our personnel system with the aimof developing the human resource base necessary to achieve
Vision 2030. In the age of VUCA (Volatility, Uncertainty,
Complexity and Ambiguity), we believe that each and every
employee, regardless of age, position, or job title, must be able
to act autonomously. The new system includes an evaluation
system that motivates employees from the perspective of thehuman resources and behaviors we seek, early selection ofyounger employees, and a system that encourages the active
participation of specialized personnel and the senior generation,
as well as other systems that enable a diverse range of
employees to work in a rewarding and autonomous manner.

Improvement of employee engagement
Employee engagement is defined as “the willingness of each
employee to contribute by properly understanding thestrategies and goals set by the Company and voluntarily
exerting his or her abilities,” and since 2018, we have been
conducting a regular employee engagement survey for our

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TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

Group employees. In addition to providing an understanding of
employee awareness across the Company, the survey visualizes
the status of each department and organizational issues.
Managers take the lead in resolving organizational issues basedon the results. Various support measures are provided to
managers to help them resolve issues on their own initiative.

Engagement rating*FYE Mar. 2019BB

FYE Mar. 2020BB

FYE Mar. 2021

BBB

FYE Mar. 2022

BB

FYE Mar. 2031 target

AAA

Trends of the Entire Tokyu Construction GroupStrengths• High level of satisfaction toward contributing to society and having rewarding work
• A large number of employees feel a sense of unity with shared goals at the workplace

Weaknesses• Employees are uncertain about their company’s relative strengths and future prospects• Employees feel a lack of vertical communication between hierarchical levels and asense of company-wide solidarity*Engagement rating using Link and Motivation Inc.’s “Motivation Cloud.” Subjects are employeesof the Group as a whole, including subsidiaries. Rating is divided into a total of 11 stages, and thecurrent “BB” is the fifth rating from the top after “AAA,” “AA,” “A” and “BBB.”

Human resources development
Aiming to develop autonomous human resources, we haveestablished an education system with three elements:
compulsory basic business education by position and theme tosupport the improvement of business and digital skills;
compulsory specialized education specialized by job type toenhance expertise as a source of problem solving; and elective
and selective education to support voluntary actions toward
career independence in order to provide value. Bycomprehensively combining programs such as on-the-job
training, group training, self-development support, and careerdevelopment support according to each individual’s career
stage, we are supporting skill development and theenhancement of an environment for growth.

initiative, we are laying the groundwork for the consistent andappropriate selection of management personnel.

Specialized education specialized by job type

Development of global human resources

In order to raise the technological level of the Company, we
provide various opportunities such as on-the-job training and
off-the-job training to improve the skills of our engineers.
In the Civil Engineering Division, new employees in the fieldof civil engineering take part in a 10-month-long training
program based on a practical curriculum that aims to cultivate
their ability to respond to work site situations before they are
assigned to a work site. The Building Construction Divisionalso provides a friendly competition environment by
positioning the first year as a training period, in which trainees
are assigned to work in pairs after four months of training. In
addition, we have established a First-class Registered
Architects School within the Company to support qualificationacquisition.

We are expanding related educational programs, including
overseas work experience, with the aim of developing humanresources who can play an active role overseas, which isnecessary for aggressive overseas expansion. In addition tothe overseas trainee system for mid-career employees, wehave implemented an overseas internship system to motivate
young employees to work overseas, and send several
employees to overseas projects every year. In addition, alongwith providing opportunities to acquire knowledge of local
laws and international contract clauses (FIDIC) required foroverseas projects, we have provided online English
conversation content since FY2018 to encourage motivatedemployees to improve their language skills.

Developing Human Resources for Management
In order to improve each of the organizational issues identified
in the Employee Engagement Survey, we provide management
skills training for managers and provide support fororganizational improvement activities. In addition, the activitiesof the Shinka Management School, targeted at inexperienced
to veteran employees in various positions, has been ongoingsince 2017. This initiative consists of a series of selfparticipatory trainings on topics such as finance andorganizational theory with the objective of acquiring thenecessary knowledge and a higher, broader perspective forpositions in management and administration. As of now, over
10 percent of employees have already participated in thisinitiative.

Developing Human Resources for
Next-Generation Management
Since FY2019, we have launched the selective Next Generation
Management Academy for candidates for promotion to generalmanager and executive officer positions. The Academy
provides internal and external training and opportunities forinteraction with current management in order to produce
human resources with the skills and high perspective
necessary to fulfill the duties of management. Through thisHuman resource exchange within the Tokyu GroupWe dispatch employees to joint training programs that also
serve as human resource exchanges with employees of Tokyu
Group companies in a wide range of industries. The training
provides an opportunity for young employees who will lead thenext generation of management personnel and the future of
the Tokyu Group, as well as an opportunity for mutual
development among participants, and for each individual togrow as management personnel who will continue to realize
the philosophy of the Tokyu Group. Through this exchange ofhuman resources, we have gained significant assets that
contribute to the Company’s growth, such as experience andknow-how that we do not have.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

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Profile

Foundations Supporting
Our Strategies

Strategy and Performance

Human resources

Promotion of diversity and inclusion

Education and training achievements

Number of training programs
Training hours
Number of trainees
Investment per person

FY2019FY2020

FY2021

95

99

111

4,652 hours

3,607 hours

4,590 hours

3,985
71,000 yen/year

3,626
57,000 yen/year

6,348
72,000 yen/year

Creation of innovation and reform of organizational culture
The basic policy of the Group is to continuously enhance
corporate value through the practice of intellectual explorationand deepening of knowledge.

Intellectual exploration
Tokyu Construction is a company that has taken on various
challenges as a latecomer to the industry, based on thefounding spirit of Tokyu Spirit, which means to run out with thetorch held aloft at the very beginning of a project. We believethat the market is expected to gradually decline over the longterm due to Japan’s declining population, and that it is essential
to create innovation by taking on even greater challenges than
before. To this end, we are working to create a structure andculture that allows us to boldly take on new challenges without
being constrained by precedents.
(Reference P38-39 “Promoting Innovation”)

Deepening of knowledge
We will further deepen and refine the strengths we havecultivated in the construction business. The source of thesestrengths, including technology and know-how that do not stop
urban functions, and teamwork that transcends the boundaries
of civil engineering, construction, and other businesses, arebased on nothing less than our values and the voluntary actionsof our employees. We, who are responsible for social
infrastructure development and the creation of safe andcomfortable communities, strongly feel our reason for being inbringing joy not only to our direct customers, but also to thecommunities and people who use our facilities, and we haveworked hard to realize this. We value the spontaneous
motivation of our employees and have established a training
system to promote their growth.

TOPICS
Vision Dialogue
Since 2021, we have been conducting an online dialogue in which the management andexecutive officers, including the president, and five employees of different ages andoccupations consider the future of the Company on an equal footing. We have alreadycompleted dialogues with more than 2,400 employees, more than 90% of the total, and havestarted the second round of dialogues. The first dialogues were conducted with the theme ofcreating an opportunity to permeate the newly formulated vision, and the latest internal
recognition rate surveyed in February 2022 was 99%. In response to the quality issues, we haveadded a new theme of creating a culture in which employees can frankly discuss issues
regardless of their positions, and in the second round of dialogues, we are encouraging
behavioral change toward taking on challenges and change. We plan to continue this dialogue
to make it part of our organizational culture.

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TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

Promotion of active female participation
Based on the results of an assessment of the present
conditions and an analysis of issues under the Act on the
Promotion of Female Participation and Career Advancement in
the Workplace, we have formulated an action plan and set
targets accordingly. By carrying out recruitment of womenalong with new graduate and mid-career recruitment in linewith the plan, we increased the number of women employees
to 289 in FYE March 31, 2022, an increase by 13 compared tothe previous fiscal year.
We are working to create systems and improve theworkplace environment so that female employees can fully
demonstrate their abilities and play an active role in theirprofessional lives.
In October 2021, based on the Act on
Promotion of Women’s Participation andAdvancement in the Workplace, we acquired
the Eruboshi certification, which recognizes
companies with excellent status in“Eruboshi” certification
promoting women’s activities.
WEB

Action plan based on promoting women’s success in the workplace

Vision dialogue between President Terada andemployees

We also make the thank-you cards known in ourcompany newsletter.

Performance
2017/3(reference)

2020/32021/32022/3

Number of female career-track
employees hired

18

26

22

20

Ratio of female career-track
positions (%)

16.5

17.9

16.7

17.7

Number of female managers

2

1

2

4

Number of female candidates for
management positions

3

5

5

3

Percentage of female employees
taking childcare leave (%)

100

100

100

100

Percentage of male employees
taking childcare leave (%)

4.9

6.4

6.8

37.3

Employment of persons with disabilities
We continue to employ people with disabilities under thephilosophy of creating an inclusive society where anyone canparticipate in society through work. Our employment rate ofpersons with disabilities in FY2021 was 2.39%. We havecontinuously exceeded the statutory employment rate for
persons with disabilities since FY2015.

Promotion of reskilling
We conduct second career training for employees aged 50 and
59, with the aim of taking stock of their own experience andskills and discovering what is worthwhile and rewarding about
their work in the future.
We position this as a mindset for relearning to be aware ofand adapt to future business changes, and provide e-learningand other learning support to acquire the required skills.

Targets and achievements based on the action plan

Support for foreign employees[Target 1]
Increase the ratio of female career-track employees to thetotal number of female employees by 10% or more by the FYEMarch 31, 2023
15.8% (recruitment activities for FYE March 31, 2020)
25.8% (recruitment activities for FYE March 31, 2023)

We regularly hold lectures on Japanese communication
culture and opinion-exchange meetings where senior foreign
employees share their concerns and receive advice. Thesemeetings are designed to relieve stress caused by differencesin communication and customs that foreign employees may
have, and to help them build more comfortable working
relationships.

[Target 2]
Triple the number of female management candidates by FYEMarch 31, 2023
Female management candidates: 5 people 15 people

Digital thank-you card
We have presented Performance Achievement Awards to commend initiatives that contributeto business performance, such as completed construction projects. In addition, we have now
begun using digital thank-you cards that allow employees to easily send an expression ofgratitude to anyone, regardless of whether they are a supervisor, a subordinate, or a
department. The thank-you cards that are sent can be viewed by anyone, so we hope toenhance communication and job satisfaction with colleagues by sending appreciation andpraise to each other, which will deepen understanding (knowing the differences between us
and others) and acceptance (acknowledging and accepting each other).

Tokyu Construction is working to create a workplace in which adiverse range of human resources can demonstrate their fullpotential, transcending the boundaries of work category,generation, gender, nationality, or ethnicity. By effectively
utilizing the various perspectives and values created bydifferent personalities, we are striving to foster a corporate
culture in which diversity is a strength.

[Target 3]
Within the plan period, increase the childcare leave acquisition
rate to at least the following levels within the plan period
Female employees: Increase the acquisition rate to 90% or more
Male employees: Increase the acquisition rate to 7% or more

Partnership system (LGBTQ)
We have introduced a partnership system to promote a
workplace environment in which diverse human resources canplay an active role. Even if the relationship is not legally
recognized as a marriage, if certain criteria are met, it isrecognized as a partnership under this system and employees
are treated in the same way as if they were legally married interms of leave entitlement, various benefits, and otherpersonnel systems.
In addition, we promote understanding of sexual minorities
through e-learning for all employees, and conduct training forexecutives and managers to further deepen understanding
and create an appropriate work environment.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

57

Profile

Human resources

Corporate Governance

Reform of leadership and management style

At Tokyu Construction, we have a Corporate Philosophy that consists of our mission statement, management policy, and Codeof Conduct that describe the type of company we seek to become. To make this vision a reality, we are working to contributeto society through our corporate activities and achieve sustained growth and higher medium- to long-term corporate value.
Fostering strong and capable corporate governance is a key management issue in these efforts, and consequently, we areconstantly striving to make improvements that will result in more effective and efficient corporate governance.

We are implementing initiatives to change the mindset ofmanagers and improve their management skills so that they
can not only anticipate and prepare for environmental
changes, but also respond flexibly to unpredictable changes
and situations.

improve work efficiency by reforming thought processes andutilizing tools, we are also implementing a flextime system,
teleworking, and interval work to foster a workplaceenvironment where employees and workers can choose
various work styles according to their circumstances and workwith high productivity.

Autonomous and co-creation style management
We believe that the role of supervisors is to create anorganization in which members understand the connection
between the Company’s strategies and goals and their own
organization’s strategies and goals, and can create their own
work and its significance with a sense of ownership, and tocreate an environment in which members can communicate
their own intentions and where psychological safety is
guaranteed. To achieve this, we have adopted the idea ofservant leadership, in which members serve as the main
actors and are subsequently guided, as one type ofleadership, and have been implementing it as servant
leadership training for managers since FY2019. The training
is offered on a voluntary basis, starting with those who arehighly motivated to improve the organization, and expanding
the target audience as we roll out best practices companywide. Up until now, approximately 100 managers have taken
the course. In FY2020, we also conducted telework
management training (130 participants) to improve
communication skills under telework conditions.

Leadership that supports autonomy
Career reports are conducted for employees who have beenwith the company for three years or more, with the aim ofenabling them to be active and fulfilled on their own. This ispositioned as an important initiative for fostering anorganizational climate of mutual respect and cooperation, in
which anyone can feel free to communicate their opinions, andis used to enhance the human resource development
curriculum and optimize the rotation system. In addition, we
have implemented a new workshop to learn how to be asupervisor when interviewing subordinates based on theircareer reports. In FY2021, approximately 40 employees
participated in this workshop to improve their management
skills.

Promotion of health and productivity management
Based on our desire to be an organization that enables eachand every employee to realize his or her dreams, we haveestablished the Tokyu Construction Health Declaration tofurther strengthen our health management and are working tomaintain the health of our employees and their families.
WEB

Tokyu Construction Health Declaration

Health and productivity management promotion system
With the president as the Chief Health Officer, we haveestablished a health and promotion system centered on the
Human Resources Department in cooperation with industrial
physicians and public health nurses.
In addition, we are working closely with the Work-style
Reform Promotion Committee to promote a more effective
system for improving the work-life balance of employees,
which is essential for promoting health management.
Main health measures
1. Enhancement of health checkups
2. Promotion of cancer prevention
3. Reinforcement of anti-smoking measures
4. Promotion of mental health care
5. Efforts to raise health awareness of employees
These efforts have been certified as a Health & Productivity
Management Organization 2022.

Strengthening Corporate Governance
The Company has established the Tokyu Construction Corporate
Governance Basic Policy for the purpose of clarifying its basic
stance on corporate governance, and to prevent misconduct,
while enhancing sustainable growth and medium to long-term

The Work-style Reform Promotion Committee plays a central
role in promoting various measures.
In addition to the implementation of construction
management that makes full use of ICT/IoT technology toestablish a two-day workweek at workplaces, and efforts to

FY

WEB

Audit &
Supervisory Board member

Director●●●●●●●●

2011

Tokyu Construction Corporate Governance Basic Policy

Committees, systems, etc.

● Inside officers

●●●●●

2015

●●●●●●●●●●

●●●●●

2017

●●●●●●●●

●●●●●

2019

●●●●●●●●●●

●●●●●

2022

●●●●●●●●●●●●●● External officers● Female external officers

Establishment of
Appointments andRemunerations Committee
Establishment of GovernanceCommittee

Corporate governance structure
Corporate Governance Structure
Shareholders’ Meeting
Appointment / Dismissal

Appointment / Dismissal

Appointment / Dismissal
ReportAccounting
AuditorReportCooperation

Board of Corporate Auditors
Auditor’s Office

Audit / Investigation

Audit

Board of Directors

ReportCooperation

Nomination / Direction /Direction

Advisory Committee of the Board of Directors

Appointments andRemunerations Committee

Consultation
ReportGovernance Committee
Internal Control Office

Management Audit

Director, President

ReportSupervision

Audit

Management Meeting

Council of Business Unit Managers

Venture Investment Committee

Sustainability Committee(discussion and decisions on
business execution)(reports and instructions on
business execution)(deliberate and make decisions on
investments in startup companies)(reports and discussions onsustainability issues)

Head Office Risk Management Council, Orders Received Council, Overseas Orders Council
Real Estate Transaction Council, Business Investments Council

Business Execution Divisions
Internal Audit

Head Office Divisions

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

corporate value through efficient and effective corporate
governance, and is working to strengthen corporate governanceunder this policy.

Board of Directors/Audit & Supervisory Board structure and systems

Promotion of work style reform

58

Foundations Supporting
Our Strategies

Strategy and Performance

Division Management Committee
Branches and Divisions

Subsidiaries

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

59

Profile

Foundations Supporting
Our Strategies

Strategy and Performance

Corporate Governance

Board of Directors
Roles and Responsibilities: The Board of Directors has been
defined as having eight roles and responsibilities, including
proactively and continuously working to contribute to society
through our corporate activities and achieve sustained growthand higher medium- to long-term corporate value in the “Tokyu
Construction Corporate Governance Basic Policy,” the Company
will appropriately delegate decision-making on matters notdecided by the Board of Directors to the executive directors andexecutive officers in accordance with laws and regulations andinternal rules. In addition, it discloses a summary of the scopeof its mandate and formulates a corporate philosophy,
management plan, management policies to set the Company’s
direction and make the best efforts to realize it.
Chair: Director, President
Members: 8 directors (including 4 external directors, all ofwhom are independent directors)
Frequency of meetings: Regular Board of Directors meetings
held once a month in principle, and extraordinary Board of
Directors meetings held as necessary (15 meetings in FY2021)
Term of office: 1 year
External director: A business manager with extensive
knowledge as a certified public accountant and certified tax
accountant; a lawyer with expert insights from her profession
and work experience in the real estate industry; an expert withextensive knowledge related to digital technology and scienceand knowledge of technical strategy formulation, new businesscreation, large acquisition deals, and similar issues; an expert
with many years of experience at conducting operations at atrust bank and abundant experience and extensive knowledge
acquired at a real estate think tank have been invited to serveas external directors. They provide much-needed perspectives
in deliberations on agenda items and function as a powerfulcheck on directors to ensure legality in how their duties are
performed.

Audit & Supervisory Board Members and Audit &Supervisory Board
Roles and Responsibilities: In the Tokyu Construction Corporate
Governance Basic Policy, the Audit & Supervisory Board has
been defined as having four roles and responsibilities, including
to make appropriate judgments from an independent andobjective standpoint, actively and proactively exercise theirauthority, and appropriately express their opinions at meetingsof the Board of Directors or to those who execute operations,and full-time Audit & Supervisory Board members shallmaintain an audit environment, actively collect internal
information, and share this information with other Audit &Supervisory Board members.
Members: 5 Audit & Supervisory Board members (including 3
external Audit & Supervisory Board members, all of whom are
independent officers)
Frequency of meetings: In addition to regular meetings,
meetings are held as needed (held 7 times in FY2021)
Term of office: 4 years
External Audit & Supervisory Board members: Working toenhance our operational audit function in line with compliancemanagement, we have invited a lawyer, a former government
agency employee, and a former financial institution employee tocontribute their expert insights and extensive knowledge andexperience as external Audit & Supervisory Board members.

Support Systems for External Officers
The Company has a system in place for communicating andsharing information with external officers by, for example,
providing advance explanations of board meeting proposals in

Reason for Appointment as Director and Attendance at Board of Directors Meetings
Name

Independent
officers

Reason for appointment

Attendance
rate

Years
in officeMitsuhiro Terada

Mr. Terada has abundant management experience at the Company and strong leadership as the Representative
Director and President in the Group. Accordingly, he was reelected as director.

15/15

10

Motoyuki Takagi

Mr. Takagi has served as Representative Director of the Company. He has advanced expertise in the overall
construction business, as well as abundant experience and extensive knowledge as a business manager. Accordingly,
he was reelected as director.

15/15

6

Masatoshi Shimizu

Mr. Shimizu was reelected director because of his abundant management experience at the Company and strong
insights pertaining to overall business administration.

15/15

5

Setsu Hamana

Mr. Hamana is a director of Tokyu Corporation, the core company of the Tokyu Group. He was elected as director due
to his abundant experience and broad insights regarding real estate, human resources, labor relations, etc., as wellas the Company’s expectations that he will contribute to the Company’s management using his opinions from theviewpoint of one familiar with the overall knowledge of business administration.

––

Isao Onda

Mr. Onda has abundant experience and broad insights as a business manager, as well as his professional expertise asa certified public accountant and certified tax accountant. He was reelected as external director with the expectationthat he will contribute to oversight of overall businesses with his beneficial advice and opinions through his expertiseand experience.

15/15

2

Kahori Yoshida

Ms. Yoshida has professional expertise as a lawyer and work experience in the real estate industry, and was reelected
as external director with the expectation that she will contribute to oversight of overall corporate businesses with her
beneficial advice and opinions through her expertise and experience.

15/15

Kunihiro Koshizuka

Mr. Koshizuka has professional expertise in digital and science technology with a wealth of experience and broad
insights with respect to technical strategy formulation, new business creation, and large acquisition deals. He wasreelected as external director with the expectation that he will contribute to oversight of the overall businesses withhis beneficial advice and opinions through his expertise and experience.

Tsutomu Tsunashima

Mr. Tsunashima has gained broad insights through his career with a wealth of experience as a business manager ata think tank specialized in the real estate business, as well as years of experience as an officer in business execution
at a trust bank. He was reelected as external director with the expectation that he will contribute to oversight of theoverall businesses with his beneficial advice and opinions through his expertise and experience

Appointments and Remunerations Committee

consideration of their urgency and importance, and the
Corporate Administration Department serves as a contact point
for receiving advance questions regarding board meeting
proposals. In addition, dedicated staff are assigned to the
Auditor’s Office to support the Audit & Supervisory Board
members’ duties.

The Appointments and Remunerations Committee, the majorityof whose members are independent external directors, hasbeen established to make recommendations and provide advice
on personnel matters and compensation for directors and otherdelegated matters. The committee is chaired by the leadindependent external director and met six times in FY2021 todeliberate on candidates for directors, Audit & Supervisory
Board members, and executive officers, as well as on
succession planning for the president.

Executive Officers
To expedite decision-making in business execution andstrengthen the functions of each unit, the Board of Directors
elects 33 full-time executive officers who, like directors, serve
one-year terms.

Governance Committee
The Governance Committee is an advisory body to the Board of
Directors on general issues related to corporate governance. It
is composed primarily of external directors, external Audit &Supervisory Board members, and the president.
Chaired by the lead independent external director, thecommittee met twice in FY2021, mainly to ascertain current
issues through a questionnaire for evaluating the effectivenessof the Board of Directors and to deliberate on the Company’s
governance and the operation of the Board of Directors.

Management Meeting
To expedite decision-making concerning importantmanagement policies and issues, the Management Meeting,composed of three executive directors and two executive
officers centered on the president, is convened as needed (48times during FY2021).

Officer Remuneration and Incentive System
Remuneration for directors is determined based on their position,
the status of business execution, employee salary levels, and athird-party survey on remuneration of domestic corporate
executives. In addition, in order to elicit incentives for short-term
performance and medium and long-term improvements incorporate value, compensation consists of monetarycompensation and stock-based compensation, with monetarycompensation consisting of fixed and variable compensation. The
allocated ratio of payment to each remuneration item is set at theapproximate level of 60% for fixed remuneration, 20% for variable
remuneration, and 20% for stock-based remuneration at an
average performance level for directors.
In addition, in order to elicit incentives for short-term
performance and medium and long-term improvements incorporate value, compensation consists of monetarycompensation and stock-based compensation, with monetarycompensation consisting of fixed and variable compensation.
The remuneration to external directors and directors notengaging in business execution is only fixed remuneration of thebasic remuneration.
Audit & Supervisory Board members’ remuneration consists
only of fixed monetary remuneration. The method ofdetermining remuneration is decided through discussions by
the Audit & Supervisory Board.
Variable remuneration: Remuneration linked to short-term
performance is aimed at incentivizing directors toward better
performance in the short term, and the remuneration amount iscalculated by multiplying the basic amount according to position
by a performance achievement ratio based on performanceindicators set in the management plan. The annual amount is
paid in two installments. The performance achievement ratio is
calculated based on various factors from a comprehensive
viewpoint, such as non-financial indicators such as the GHG
emissions reduction rate and performance results by segment,
as well as financial indicators including operating income. The
payment ratio is between 0 and 200 percent and depends on theperformance achievement ratio.
Stock-based remuneration, which is aimed at incentivizing
directors to improve corporate value in the medium to long term
and to share economic value between directors andshareholders, is provided as restricted stock to directors
excluding external directors and directors not engaging inbusiness operations. The number of shares granted isdetermined based on the basic amount according to position.

Amounts of remuneration, etc., for directors and Audit & Supervisory Board members (FY2021)

12/12

12/12

3

1

1

Total amount of remuneration, etc., by type (million yen)

Total amount of
remuneration, etc.
(million yen)Fixed remuneration

Variable remuneration

Stock-based
remuneration

Directors(excluding external directors)

154

116

14

23

6

Audit & Supervisory Board members (excluding
external Audit & Supervisory Board member)

32

32

–

–

2

External officers

45

45

–

–

8

Classification of officers

Monetary remuneration

Number of target
officers

Note: As the remuneration system for directors was changed to the aforementioned officer remuneration and incentive system from June 2021, the variable remuneration amounts shown are theremuneration amounts paid under the system before the change.

60

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61

Profile

Strategy and Performance

Foundations Supporting
Our Strategies

Corporate Governance

Policy and procedures when appointing/dismissing and nominating officers andsuccession planning for the president
The selection of candidates for directors and Audit & Supervisory
Board members and the appointment of executive officers
are decided by a resolution of the Board of Directors, after
receiving a report from the Appointments and Remunerations
Committee, the majority of whose members are independent
external directors, on the appropriateness of the personnel plan
prepared by the president. In addition, in selecting the president,
the Appointments and Remunerations Committee deliberates
more carefully and recognizes that the development of a
successor to the president is an important issue. In principle,
a third party conducts an objective evaluation of management
personnel as candidates to succeed the president, and selects
candidates who possess the following qualities, and provides
training as necessary in accordance with the characteristics ofthe candidates.

Training of directors and Audit & Supervisory Board members(1) Have integrity, a high sense of ethics, a strong sense of
curiosity and a desire to learn.
(2) Have the ability to listen to others’ opinions regardless of
their position.
(3) Be able to make quick and decisive decisions on one’s own
responsibility, and to have the courage to carry through withanything.
(4) Be able to respond flexibly to changes in the environment,
realize the Company’s corporate philosophy and corporate
vision, and contribute to enhancing the value of the Tokyu brand.
In the event that circumstances necessitate the dismissal of
the president, other directors and executive officers, the Board of
Directors will consult with the Appointments and Remunerations
Committee in a timely manner, and the Board of Directors will
deliberate on the matter after considering the committee’s report.

Skill matrix
In order to realize the Long-Term Management Plan, the Board of Directors considers it important to have a well-balanced composition ofmembers with the knowledge, experience, and abilities stated in the skills matrix below.

Name

Corporate
management

Director
Mitsuhiro Terada
Motoyuki Takagi
Masatoshi Shimizu

Sales

Law andcompliance

Finance andaccounting

Development of
human resources

International
mindsetIn principle, directors, Audit & Supervisory Board members, andexecutive officers participate in external training programs uponassuming office in order to acquire the necessary informationand knowledge to fulfill their expected roles and responsibilities.
External directors and external Audit & Supervisory Board

members are briefed on the Company’s management situationand other matters at the time of their appointment. In addition,
training sessions for directors and Audit & Supervisory Board
members are held as needed in accordance with the Training
Policy for Officers during their term of office.

Policy Regarding Strategic Shareholdings
The Company acquires and holds shares issued by our partnercompanies with the aim of contributing to the increase in
the Company’s corporate value by strengthening business
relationships and maintaining good relationships with them.
We also examine whether there is a risk of a decrease in thevalue of the shares, and whether there are sufficient benefits
for the cost of capital, using the performance indicators forthe most recent fiscal year and the expected performanceindicators for the next several fiscal years. We also perform
quantitative verification by examining whether the benefits
are sufficient in relation to the cost of capital, using actual
indicators for the past several years as well as projectedindicators for the next several years. Furthermore, we also
perform a qualitative review of the future business relationshipbetween the Company and the issuer of the shares. Basedon the results of these reviews, each year we confirm at theBoard of Directors meeting whether or not there is significancein holding these shares while comprehensively consideringfactors such as economic rationale and future prospects.
In principle, we sell and reduce our holdings of shares thatno longer meet this purpose or are no longer recognizedas significant taking into consideration factors such as thecircumstances of the issuing companies as well as market
trends.

Dialogue with Shareholders
Digital / Innovation

The president, the officer in charge of IR, and other officers
will basically consider the purpose and effectiveness of
dialogue with shareholders, and consider how to respond tosuch dialogue, and directors including external directors, or
Audit & Supervisory Board members respond as necessary.
Specifically, we engage in constructive dialogue with investors

through financial results briefings and interviews, and disclose
necessary information to investors in a timely manner on our
website. After each major activity, a summary and identificationof issues is made, advice is obtained from external support
firms as necessary, and the Board of Directors receives reportson the status of dialogue with investors.

Setsu Hamana
Isao Onda(external, independent)
Kahori Yoshida(external, independent)
Kunihiro Koshizuka(external, independent)
Tsutomu Tsunashima(external, independent)

Audit & Supervisory Board member
Satoshi Hashimoto
Masashi Ochiai
Youichi Saito(external, independent)
Yoshikazu Kato
(external, independent)

Analysis and Evaluation of the Board of Directors’ EffectivenessAt Tokyu Construction, our Corporate Governance Basic Policy
stipulates that the Company evaluates whether the Board of
Directors is functioning properly and discloses a summary of
the results every year.
In FY2021, we cooperated with external consultants to
conduct an evaluation using methods that encouraged
each officer to express their individual opinions, such as
an anonymous questionnaire about the Board of Directors’
effectiveness targeted at all directors and Audit & Supervisory
Board members on the Board of Directors, as well asinterviews by outside consultants with some directors andAudit & Supervisory Board members.
The Governance Committee, which is composed mainlyof outside directors, external Audit & Supervisory Board

members, and the president, then evaluated the Board’s
effectiveness by discussing the issues that were highlighted
by the questionnaire and confirmed the results with the Boardof Directors. The results of the questionnaire were generally
positive. We were able to confirm the Company’s Board of
Directors is sufficiently effective and that improvements
are steadily being made in the composition of the Board of
Directors and in the content and operation of deliberations at
Board of Directors meetings, which were identified as issues
in the previous evaluation, there were comments requesting
further efforts to clarify the roles, responsibilities, andauthority of the Board of Directors, and we will continue ourefforts to improve its effectiveness.

Kazuo Kitamura(external, independent)

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63

Profile

Strategy and Performance

Foundations Supporting
Our Strategies

Dialogue with External Directors

a prerequisite for this, it is important to take the approachthat governance should function well in a defensive manner,and further delegate authority to the executive officers to thefullest extent possible.
Koshizuka: So, in order to go on the offensive, it is necessary
to have a functioning defensive governance system.

Governance evolves through information sharing

Kunihiro Koshizuka External Director

Tsutomu Tsunashima External Director

Joined Konishiroku Photo Industry Co., Ltd. (current KONICA MINOLTA, INC.) in 1981.
Became a Director and Managing Executive Officer in 2016, External Director of AEON
MALL Co., Ltd. (to present) in 2020, External Director of WILL GROUP, INC. (to present) andExternal Director of F.C.C. Co., Ltd. (to present) in 2022, and Director of the Company (topresent) in 2021.

Joined Yasuda Trust And Banking Company, Limited (current Mizuho Trust & Banking
Co., Ltd.) in 1979, and became Managing Executive Officer of the company in 2008.
Became President and CEO of Urban Research Institute Corp. in 2010, External Auditor
of DYNIC CORPORATION in 2011, External Audit and Supervisory Board Member of
NIPPON SIGNAL CO., LTD. in 2015, External Director of Chuo Warehouse Co., Ltd. in
2016, and Director of the Company (to present) in 2021.

We asked two of our board members, who have been with the Company since June 2021, to share
their thoughts and feelings about the past year on the board.
Koshizuka: I come from a technical background as a director
and CTO of a high-tech manufacturer. I believe that theBoard of Directors should supervise execution with rigor
and at the same time be a strong supporter for boldly taking
on the challenge of execution. I would like to contributeto the Company’s significant growth through aggressive
governance, especially the latter, by making use of myexperience in areas including DX, new business creation, andoverseas M&As.
Tsunashima: I have served as a general operations manager
for shareholder meetings and stock administration for listedcompanies at a trust bank, and since 2011, I have served
as an external director at five companies, including theCompany. I have served as an external director at a time
when companies are rushing to review and restructure
their governance systems, such as with the release of the
Corporate Governance Code. Based on these experiences,I am expected to strengthen corporate governance and toprovide opinions on so-called defensive governance, such as
risk management and compliance systems.

Defensive governance, offensive governanceKoshizuka: Everyone is surprisingly honest and frank intheir discussions at the meetings of Board of Directors.
Tsunashima: I have the impression that the discussions

64

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

are very open. For example, in the case of the construction
quality issue, we asked the external directors to report infine detail on the cause of such issues and what we will doin the future. We spent a lot of time discussing the issue
because it was a situation that could have put management
at risk, but on the other hand, there were many issues todeal with during the past year, and I think the time to discuss
aggressive governance was limited.
Koshizuka: I agree. I feel that there was relatively little
time for discussion at a time when we should have been
focusing on the Long-Term Management Plan for 2021 andestablishing a competitive advantage. The mission of theBoard of Directors is to enhance corporate value and achievesustainable growth. There are defensive and offensive formsof governance. Preventing recurrence of quality problems isimportant, but it is not the same as developing our strengths
and establishing a competitive advantage. For this reason, I
would like to have more specific discussions about improving
corporate value and growth with an eye to the future.
Tsunashima: From the perspective of aggressive
governance, management that makes decisions quickly isimportant. In order to make management decisions thatemphasize speed while taking maximum risk, it is necessary
to separate management and execution and shift thefunctions of the Board of Directors to a monitoring style. As

Koshizuka: I receive the agenda materials about a week
before the meeting of the Board of Directors, and I
read them in advance and ask questions. In addition, I
talk directly with the people in the department to gain
an understanding of the actual situation in my field ofexpertise, digital-related issues.
Tsunashima: If there are any questions, the secretariat
is always available to answer them, and on the day of
the Board of Directors meeting, the director in charge
will provide a detailed explanation. If the agenda is more
complex or highly specialized, we ask participants to discuss
it in advance online or through other means. For example,
regarding the rolling Long-Term Management Plan, we have
set up several opportunities to explain the plan and havethe Board of Directors communicate the ideas that havebeen considered internally in advance, and the informationnecessary for substantive discussions at Board of Directors
meetings is shared sufficiently and carefully.
Koshizuka: In addition to these meetings of the Board of
Directors, we started to hold meetings of external directors
and external corporate officers from May 2022.
Tsunashima: How can the Board of Directors be more
effective toward achieving VISION 2030? I believe that inaddition to the Board of Directors, official and unofficial
meetings will become very important in the future. The
Appointments and Remunerations Committee and theGovernance Committee, which are advisory committees,
and the External Directors Committee, which was started
this year on the initiative of Mr. Onda, the lead external
director, are becoming more and more active. As these threecommittees become more and more active, the time andcontent of discussions at the Board of Directors will become
more selective, and I expect that this will lead the Board of
Directors to move more toward a monitoring board.
Koshizuka: We have always had a diverse group of memberswith various specialties, but since last year we have added
two of our own with practical experience in different areasof expertise, and the discussions at each meeting are more
lively from a variety of perspectives. I also learn a lot fromthe discussions.
Tsunashima: The Appointments and Remunerations
Committee has begun to discuss the development ofcandidates to succeed the President. President Terada isalso a member of the Governance Committee, and we aretrying to make it a meeting where the executives and us,
the external directors, can work together to contribute toimproving the governance of the Company. The External
Directors Meeting is a forum for the free exchange of

opinions and information among the external directors, andwe will also start a session in which we invite the persons
in charge of business divisions to explain the issues they
are experiencing and other issues, and then the external
directors will freely exchange their opinions with them.

Establishing competitive advantage through digitaland human resources
Koshizuka: In last year’s Integrated Report, President
Terada stated that, “Improving operational efficiency,
centralizing data management, and company-wide use ofdigital technology are the minimum that should be done,
but without a customer perspective, they amount to nothing
more than self-indulgence, and it is important we find ways
to link them to the value we provide.” In other words, thedefinition of DX is about transform, not improvement. Whatis needed to survive amidst rapidly changing times is toprovide new value and new business models that adapt tothe times. I would like to focus on what kind of value andbusiness model Tokyu Construction will create in the future.
The world will rapidly urbanize and adopt smart cities. I
believe that Tokyu Construction, with its superior technology
and know-how to evolve cities without stopping the current
functions of the city and its promotion of digitalization,
should lead the way.
Tsunashima: What I expect is that human resources serve
as a source of competitive advantage. The revised Corporate
Governance Code also requires disclosure of human capital
strategies. How do you think employees think now, how do
you develop human resources to increase corporate value,and how do you transform organizational culture? I believethat the Board of Directors should spend more time on theseissues. I would like to see the Board of Directors create alittle more time this year to discuss human resources andorganization strategy, one of the priority strategies of theLong-Term Management Plan, since it would be preferable
to report on the status of improvements in the immediatesurroundings, such as reform of current work styles, healthmanagement, and improvement of workplace environment.
Koshizuka: It is considerably difficult to combine social
issues and business. Ideas and conceptual ability are
required. That is why human resources are so important.
Tsunashima: As I mentioned at the beginning, there is nogoal for corporate governance that is just sufficient, andwe are very sincere and serious about our governance.
However, it may be necessary to be a little more creativein our information disclosure to successfully appeal to ourshareholders and other stakeholders.
Koshizuka: The Company has a culture of being modest
about good ideas that have not yet been completed. I think
it is very important to clearly state Tokyu Construction’s
unique approach toward its ideal image. I would like to makean effort to become a company that can be widely supported
by our stakeholders by further promoting our story ofgrowth that they can widely identify with.

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65

Profile

Foundations Supporting
Our Strategies

Compliance

Risk Management

In order to realize our Mission Statement of “creation of a reassuring and comfortable living environment,” we promote
continuous safety and health activities based on our Safety and Health Policies, recognizing that the basic premise is that all
employees and other parties involved in our business can work in a safe and healthy work environment with good physicaland mental health.

In addition to preventing risks from materializing, we have established mechanisms to respond when risks do materialize andwhen changes occur in the business environment.

Guidelines for Action and Compliance CodeRisk Management System

As a member of the Tokyu Group, we have established the
Guidelines for Action as a code of conduct to embody our
corporate philosophy and a Compliance Code as an ethicalstandard to ensure that we always act ethically, based on the
Tokyu Group Compliance Guidelines, which are the basic
principles for actions to embody and put into practice theGroup philosophy.

WEB

Policies, standards, etc. related to corporate governance (in Japanese)WEB

Guidelines for Action and Compliance CodeWEB

Tokyu Group Compliance Guidelines

WEB

Basic Policy for Foreign Compliance

Compliance Promotion Structure
Compliance Officer
The officer in charge of the Internal Control Office acts as thecompliance officer, and performs the following roles as the chief
officer of risk management through compliance management.
• Formulating the Compliance Code, etc.
• Establishing the structure for “risk management throughcompliance management”• Reporting the status of compliance measures to the Board of
Directors, etc.

Internal Control Office
The Internal Control Office fulfills the following roles.
• Spreading knowledge of the Compliance Code, etc., and fosteringawareness of compliance• Implementing surveys on adherence to the Compliance Code, etc.,
and making improvements• Handling consultations regarding and responding to violations of
the Compliance Code, etc.
• Planning and implementing training on compliance• Understanding the state of practice at each division, branch,business unit and subsidiary, etc. (implementing audits)

The Manager in Charge of Compliance/The Person
Responsible for Compliance
The general manager of each division, branch, and business
unit, and other line managers who directly report to the
President, as well as the presidents of subsidiaries areappointed as the “managers in charge of compliance,” and thegeneral manager of the general affairs at each division, branch,business unit, etc., the general managers of the Corporate
Strategy Division and Business Administration Division, and thegeneral managers of the general affairs divisions of subsidiaries
are the persons responsible for compliance. The managers incharge of compliance and persons responsible for compliancecooperate with the Internal Control Office in working to develop
and improve the compliance structure and prevent corruption ineach department while evaluating the state of practice eachyear and incorporating the results of the evaluation into theimprovement plan for the following fiscal year.

Education and Training of Employees
In order to deepen the understanding of directors andemployees on the importance of risk management throughcompliance management, the Company continuously
conducts (1) group training to raise awareness of complianceby incorporating compliance lectures into position-based
training programs, etc., (2) voluntary training, mainly throughcase studies and discussions tailored to the actual situation
at each workplace, and (3) training utilizing e-learning toraise awareness of compliance among all employees. In
addition, we conduct group training for compliance leaders ofeach department to ensure the effectiveness of complianceat each workplace.

Whistleblowing system
Based on our Compliance Consultation and Reporting
Regulations, the Company has a whistleblowing system in place.
The whistleblowing system has been set up internally as well
as at an outside law firm, and any director, advisor, employee,
hired worker, temporary worker, retiree, cooperating company

66

Strategy and Performance

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

In the formulation of the Long-Term Management Planannounced in 2021, we analyzed the environment the Group
operates in, including the future environment, and theManagement Meeting and Board of Directors identified
medium- to long-term risks and opportunities. We haveestablished a system for comprehensively uncovering risks
from phenomenon and factors that could impact the promotionof business and impede management and conducting annual
reviews to flexibly respond to changes in the environment. In
light of these risks, the company-wide situation is monitored at
the Council of Business Unit Managers, which confirms andshares information on the execution of operations, and quarterly
business monitoring is conducted by top management. As forindividual cases related to construction orders, real estatetransactions, investments in start-ups, and other business
investments, the Company established the cross-organizational
Head Office Risk Management Council, Orders Received Council,
Overseas Orders Council, Real Estate Transaction Review Board,
Business Investments Review Board, and Venture Investment
Committee, creating a mechanism to examine risks in advanceand monitor them.

Business Continuity Management
In preparation for large-scale disasters that may occur, weformulated a business continuity plan (BCP) in 2008. The
following year, in 2009, we received certification for“Construction Company Continuity Capacity During Disasters”
from the MLIT Kanto Regional Development Bureau, and we
update that certification every two years.
Our efforts in business continuity management (BCM) include
conducting drills and other training led by the Emergency
Response Department at headquarters that include
participation by directors, and repeatedly working to identify
and improve issues with the BCP. At each of the Group’s bases,
we maintain a stockpile of essential items, including food andbeverages, power generators in case of prolonged power
outages, and emergency communication equipment, to ensure
an operational environment for a certain amount of time in theevent of various types of disasters. Since December 2021,
assuming the recent teleworking work style, we have operated
a disaster response headquarters in a joint all-branch format
with the participation of all 14 bases, using a hybrid approachwith both attendees and remote participants.

In addition, because our head office is located adjacent to
Shibuya Station, one of Japan’s major transportation hubs, weare a part of a council comprising Shibuya Ward Office staff andlocal businesses that is responsible for helping people unable toreturn home in case of a disaster and regularly participate indrills run by the Ward and this council to support disaster
response efforts as a member of the community. In December
2021, we were certified as a Tokyo Metropolitan Government
company promoting the prevention of employees returninghome en masse, and we are strengthening and promoting
efforts to ensure the safety of employees and prevent confusioncaused by the occurrence of people having difficulty returning
home. Furthermore, at our work sites nationwide, we haveconcluded cooperation agreements with various national andlocal government agencies and infrastructure-relatedcompanies in the event of disasters, and we are also working
with our cooperating companies to fulfill our social
responsibility by doing our utmost to quickly restore
infrastructure, including disaster relief roads.

Business Continuity During the COVID-19 Pandemic
In addition to allowing remote work for operations that can be
conducted from home, we continue to undertake construction
projects after giving the greatest consideration to the health ofrelated parties and employees by reinforcing and thoroughly

implementing measures to prevent infections by the COVID-19
pandemic at work sites. We are also moving forward withvarious efforts, such as PCR testing for employees and business
partners and offering vaccines for employees, etc.

Information security
employee, or joint venture employee of the Company or its
subsidiaries may consult or report anonymously by telephone,e-mail, in writing, or in person, and is protected against any
unfair treatment.

We have established a Basic Information Security Policy toprotect information assets related to our operations fromthreats such as information leakage incidents and accidents, aswell as to live up to the trust of society’s clients. In addition, in

March 2019, we revised our information security guidelines andare conducting e-learning based on these guidelines.
WEB

Basic Information Security Policy

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67

Profile

Foundations Supporting
Our Strategies

Strategy and Performance

Directors and Audit & Supervisory Board Members
As of June 24, 2022

1

Mitsuhiro Terada (March 1, 1957)
Representative Director, President and CEO

Apr. 1979
Jun. 2010

Joined TOKYU CONSTRUCTION CO., LTD.
Executive Officer of the Company

Apr. 2012
Jun. 2012

Senior Executive Officer of the Company
Director, Senior Executive Officer of theCompany
General Manager, Civil Engineering Division of
the Company
Director, Senior Managing Executive Officer of
the Company
Representative Director, Senior Executive Vice
President of the Company
Representative Director, President of theCompany (to present)

Apr. 2013
Apr. 2016
Apr. 2018
Jun. 20194

Setsu Hamana (July 25, 1960)
Director

Apr. 1983
Apr. 2011

Jun. 2014
Apr. 2015
Apr. 2017

Apr. 2019

Sep. 2019
Apr. 2020
Jun. 2022

68

Joined TOKYU CORPORATION (“Tokyu”)
Executive Officer of Tokyu
General Manager of Building Division, Urban Life
Creation Division of Tokyu
Director and Executive Officer of Tokyu
Deputy General Manager, Urban Life Creation
Division of Tokyu
Director and Assistant of Tokyu
Representative Director and President of Tokyu
Facility Service Co. Ltd.
Director and Executive Officer of Tokyu
Corporation
General Manager, Building Operation Division of
Tokyu Corporation
Director and Executive Officer of Tokyu
Corporation
Director, Senior Executive Officer of theCompany (to present)
Director of the Company (to present)

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

7

2

5

Motoyuki Takagi (November 25, 1955)
Representative Director, Executive Vice
President, and COO
In charge of Business Management, Safety &Environment, and International Business

Apr. 1979 Joined TOKYU CONSTRUCTION CO., LTD.
Apr. 2011 Executive Officer of the Company
Apr. 2016 Senior Executive Officer of the Company
General Manager, Building Construction Divisionof the Company
Jun. 2016 Director, Senior Executive Officer of theCompany
Jun. 2018 Director, Senior Managing Executive Officer of
the Company
Apr. 2020 Representative Director, Senior Executive Vice
President of the Company (to present)
Jun. 2020 In charge of Business Management, Safety &Environment, and International Business of theCompany (to present)

5

Isao Onda (April 4, 1949)
External Director

Oct. 1973 Joined EIKO Accounting Corporation(current Ernst & Young ShinNihon LLC.)
Jul. 1990 Partner of Century Audit Corporation (“Century”),
Manager of Chiba officeJun. 1993 Director and Partner of Century, Manager
of business development department, andManager of Chiba officeJun. 2002 Executive Director and Partner of Ernst & Young
ShinNihon Audit Corporation, General Manager
in charge of public stock offering business andpublic accounting business, Deputy General
Manager in charge of general consulting
business, and Manager of Chiba office
Sep. 2008 Executive Director of Ernst & Young ShinNihon
LLC (“EY ShinNihon”), Department Head incharge of oversight of advisory services Ernst &Young Global Japan Area Advisor
Sep. 2010 Advisor of EY ShinNihon
Oct. 2010 Special Advisor of GTM Research Institute Inc.
Apr. 2011 Representative Director, President of GTM
Research Institute Inc. (to present)
Jun. 2012 Corporate Auditor of the Company
Jan. 2019 Partner of GTM Tax Co. (to present)
Apr. 2019 Visiting professor of Institute for Technology,
Enterprise and Competitiveness, Doshisha
University (to present)
Jun. 2020 Director of the Company (to present)

3

3

1

Masatoshi Shimizu (January 20, 1959)
Director, Senior Managing Executive Officer
and CFO
General Manager of Corporate Strategy
Division, in charge of Business Administration
Division of the Company

Apr. 1982
Apr. 2012

Joined TOKYU CONSTRUCTION CO., LTD.
Executive Officer of the Company

Apr. 2017

Senior Executive Officer of the Company
General Manager of Business Administration
Division of the Company
Jun. 2017 Director, Senior Executive Officer of theCompany
Apr. 2020 Director, Senior Managing Executive Officer of
the Company (to present)
Apr. 2021 General Manager of Corporate Strategy Division,in charge of Business Administration Division of
the Company (to present)

6

Kahori Yoshida (December 19, 1972)
External Director

Apr. 1996
Sep. 2010
Dec. 2011

Apr. 2012

Nov. 2018

Jun. 2019
Aug. 2020

Oct. 2020

Oct. 2021
Apr. 2022

Joined Recruit Cosmos Co., Ltd.
Passed the bar examination
Joined Yoshiko Takagi Law Firm (current T&T
Partners Law Office) (to present) Registered as
LawyerMember of the Operation Committee for Housing
Dispute Examination Meeting, Daini Tokyo Bar
Association (to present)
Special member of the Chuo Construction
Project Dispute Examination Committee, theMinistry of Land, Infrastructure, Transport, andTourism (to present)
Director of the Company (to present)
Member of the Central Review Council for
Kenchikushi, the Ministry of Land, Infrastructure,
Transport and Tourism (to present)
Professional Member of Architecture
Subcommittee, the Social Infrastructure
Improvement Council, the Ministry of Land,
Infrastructure, Transport and Tourism (Teamfor preventive measures for accidents anddisasters of buildings) (to present)
Temporary Member of the Japanese Industrial
Standards Committee, the Ministry of Land,
Infrastructure, Transport and Tourism (to present)
Member of Tokyo Metropolitan Government
Housing Policy Council (to present)
Expert Examiner of Tokyo Metropolitan Board of
Building Examiners (to present)

2

7

4

Kunihiro Koshizuka (September 30, 1955)
External Director

Apr. 1981 Joined Konishiroku Photo Industry Co., Ltd.
(current KONICA MINOLTA, INC.)
Apr. 2012 Executive Officer, Manager in charge ofDevelopment Management Department andTechnology Strategy of KONICA MINOLTA, INC.
Apr. 2013 Executive Officer, Manager in charge ofTechnology Strategy and General Manager incharge of Business Development of KONICAMINOLTA, INC.
Apr. 2014 Managing Executive Officer, General Manager
in charge of Development Management
Department and Manager in charge ofTechnology Strategy Department of KONICAMINOLTA, INC.
Apr. 2015 Managing Executive Officer, General Manager
in charge of Business Development Department
and Development Management Department of
KONICA MINOLTA, INC.
Jun. 2015 Director, Managing Executive Officer, General
Manager in charge of Business Development
Department and Development Management
Department of KONICA MINOLTA, INC.
Apr. 2016 Director, Managing Executive Officer, General
Manager in charge of Business Development
Department, and in charge of Technology of
KONICA MINOLTA, INC.
Jun. 2019 Senior Technical Advisor of KONICA MINOLTA,
INC.
May 2020 External Director of AEON MALL Co., Ltd. (topresent)
Jun. 2021 Director of the Company (to present)
Jun. 2022 External Director of WILL GROUP, INC.(to present)
External Director of F.C.C. Co., Ltd. (to present)

Masashi Ochiai (September 22, 1960)

10 Full-time Auditor

Apr. 1983 Joined TOKYU CONSTRUCTION CO., LTD.
Jun. 2007 General Manager, Corporate Planning
Department of the Company
Apr. 2010 General Manager, General Affairs Department of
Building Construction Division of the Company
Apr. 2012 General Manager, Finance & Accounting
Department of Business Administration Divisionof the Company
Jun. 2020 Full-time Auditor of the Company (to present)

9

6

8

Tsutomu Tsunashima

8(September 8, 1956)

External Director
Apr. 1979 Joined Yasuda Trust and Banking Company,
Limited (current Mizuho Trust & Banking Co., Ltd.)
Apr. 2007 Executive Officer, Manager of Osaka Branch,
Mizuho Trust & Banking Co., Ltd.
Apr. 2008 Managing Executive Officer, Manager of Osaka
Branch, Mizuho Trust & Banking Co., Ltd.
Apr. 2010 President & CEO of Urban Research Institute Corp.
Jun. 2011 External Auditor of DYNIC CORPORATION
Jun. 2015 External Audit & Supervisory Board Member of
NIPPON SIGNAL CO., LTD.
Jun. 2016 External Director of Chuo Warehouse Co., Ltd.
Jun. 2021 Director of the Company (to present)

Saito (December 12, 1973)
11 Yoichi
Audit & Supervisory Board Member
Oct. 2005 Passed National Bar Examination
Sep. 2007 Registered as an Attorney
Member of Crime Victim Support Center of Daini
Tokyo Bar Association
Sep. 2015 Member of Discipline Committee of Daini Tokyo
Bar Association (to present)
Apr. 2016 Member of Legal Apprenticeship Committee of
Daini Tokyo Bar Association (to present)
Jun. 2016 Auditor of the Company (to present)

Kitamura (February 25, 1956)
13 Kazuo
Audit & Supervisory Board Member

⓾

9



Satoshi Hashimoto (February 17, 1958)
Full-time Auditor

Apr. 1981 Joined TOKYU CONSTRUCTION CO., LTD.
Apr. 2010 General Manager, Internal Control Office of theCompany
Apr. 2012 Executive Officer of the Company
Jun. 2016 Full-time Auditor of the Company (to present)

Yoshikazu Kato (September 9, 1956)
12 Audit& Supervisory Board Member
Apr. 1982 Joined the Science and Technology Agency,
Cabinet Office
Jul. 2001 Director of Research Environment and Industrial
Cooperation Division, Research Promotion
Bureau, Ministry of Education, Culture, Sports,
Science and Technology (“MEXT”)
Jul. 2008 Counselor to Director General for Science,
Technology and Innovation Policy, Cabinet Office
Jul. 2010 Deputy Director-General, Research andDevelopment Bureau, MEXT
Apr. 2012 Vice President of Japan Aerospace Exploration
AgencyApr. 2015 Director of Technology Division, Cabinet SatelliteIntelligence Center, Cabinet Intelligence andResearch Office, Cabinet Secretariat
Nov. 2017 Specially Appointed Counselor, Remote Sensing
Technology Center of Japan
Mar. 2021 Visiting Professor, Fukui University ofTechnology (to present)
Apr. 2022 Counselor, Remote Sensing Technology Centerof Japan (to present)

Apr. 1980 Joined The Chiba Bank, Ltd.
Jun. 2005 Branch Manager of Sakura Branch, The Chiba
Bank, Ltd.
Jun. 2009 General Manager of Operation Planning Division,
The Chiba Bank, Ltd.
Jun. 2010 Auditor of Toho Kogyo Co., Ltd.
Jun. 2012 Director of Chibayaku Groceries, Inc.
Jun. 2014 Managing Executive Director of Chibayaku
Groceries, Inc.
Jun. 2015 Auditor of Chibayaku Groceries, Inc. (to present)
Jun. 2020 Auditor of the Company (to present)

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

69

Profile

Strategy and Performance

Foundations Supporting
Our Strategies

11-Year Financial Summary

Unit

FYE Mar. 2012

FYE Mar. 2013

FYE Mar. 2014

FYE Mar. 2015

FYE Mar. 2016

FYE Mar. 2017

FYE Mar. 2018

FYE Mar. 2019

FYE Mar. 2020

FYE Mar. 2021

FYE Mar. 2022

Orders received

million yen

212,410

210,933

290,647

341,992

303,758

293,539

299,436

285,476

215,109

320,916

292,797

Net sales

million yen

227,843

228,570

226,164

262,815

296,393

243,618

320,711331,437

322,170

231,483

258,083

Ordinary profit or loss

million yen

1,572

1,154

2,630

6,009

18,17817,211

21,41621,987

20,315

3,549(6,078)

Ordinary income (loss)

million yen

1,884

2,301

3,559

8,024

19,76818,83922,12822,932

21,9694,891(5,132)

Profit or loss attributable to owners of parent

million yen

1,799

(566)

2,685

5,805

13,34013,691

16,11815,504

14,903

2,647(7,459)Total assets

million yen

154,442

154,195

169,685

192,226

214,526

204,813249,756

264,996

235,897

226,568

237,811

Total net assets

million yen

31,39032,48735,25844,861

54,23866,38079,17592,981

101,703

103,509

93,064

Cash flows from operating activities

million yen(11,486)

14,264(9,302)

2,111

39,003(23,545)

16,226

29,694(33,439)

11,62912,201

Cash flows from investing activities

million yen

20

(619)

(2,072)(1,525)(334)(1,717)(3,383)(5,786)(7,488)(3,753)(476)

Cash flows from financing activities

million yen

4,704(8,569)

6,476

(675)

(6,035)(2,788)(6,457)(3,575)

21,604(3,308)(7,531)

Cash and cash equivalents at end of year

million yen

17,881

23,097

18,215

18,31850,674

22,582

28,86549,14529,54934,17338,648Net income or loss per share

yen

16.86

(5.31)

25.16

54.40

125.00128.30151.05145.37139.7924.95(71.26)

Net assets per shareyen

293.46

303.61

329.35418.59506.04619.91739.87868.87949.39983.90883.11Dividends per share

yen

3.00

0.00

5.00

13.00

25.00

26.00

31.00

30.00

30.00

10.00

25.00

Dividend payout ratio

%

17.8

–

19.9

23.9

20.0

20.3

20.5

20.6

21.5

40.1

–

Capital adequacy ratio

%

20.3

21.0

20.7

23.2

25.2

32.3

31.6*

35.0

42.9

45.4

38.9

Return on equity (ROE)

%

5.8

(1.8)

7.9

14.5

27.0

22.8

22.2

18.1

15.4

2.6

(7.6)

Times

12.6

–

17.4

12.5

7.4

6.8

7.6

5.7

4.1

24.1

–

People

2,446

2,403

2,313

2,340

2,412

2,464

2,537

2,523

2,576

2,617

2,624

(Male/Female) People

2,285 / 161

2,231 / 172

2,148 / 165

2,161 / 179

2,219 / 193

2,249 / 215

2,303 / 234

2,275 / 248

2,308 / 268

2,330 / 287

2,325/299

%

1.81

2.16

2.07

1.84

2.22

2.26

2.30

2.46

2.52

2.46

2.39

Office

t-CO2

1,060

1,370

1,607

1,841

1,913

1,820

1,754

1,955

2,016

1,657

935

Work sites

t-CO2

37,26051,06944,39759,394

66,112

67,33351,602

43,78042,461

42,67339,360t

361,347

451,353490,293403,918

473,004

395,309410,245

375,815

348,812355,349

320,355

%

93.3

94.7

96.8

96.1

95.9

98.4

99.4

94.0

93.3

93.5

95.6

%

1.07

1.02

1.04

0.84

0.73

0.70

0.79

0.58

0.39

0.61

0.48

–

–

–

–

–

–

–

BB

BB

BBB

BB

Operating Results

Financial Position

Cash Flow

Per Share Indicators

Financial Indicators

Price earnings ratio (PER)

Non-Financial Indicators (Non-Consolidated)
Number of employees at end of year
Gender breakdown
Employment rate for persons with disabilities
CO2 emissions

Construction by-products generated
Recycling rate

*2

Accident frequency rate
Employee engagement rating*3*1 Tokyu Construction has adopted the Partial Amendments to Accounting Standard for Tax Effect Accounting, etc. (“the Standard”) from the start of the current fiscal year, and the Standard has been
retroactively applied to the figures as of March 31, 2018.
*2 Until FYE March 31, 2021: Calculated as 1- (direct final disposal volume/total emissions) for all construction projects
FYE March 31, 2022: Calculated for new construction and new construction using recycling data from major contractors*3 Engagement rating using Link and Motivation Inc.’s “Motivation Cloud.”
Subjects are employees of the Group as a whole, including subsidiaries.
Rating is divided into a total of 11 stages, and the current “BBB” is the fourth rating from the top after “AAA,” “AA” and “A.”70

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

71

Profile

Stock Information

Strategy and Performance

Foundations Supporting
Our Strategies

Company Profile(as of March 31, 2022)

Total number of sharesauthorized to be issued

400,000,000 shares

Outstanding stock

106,761,205 shares(Including 567,286 treasury shares)

Number of shareholders 39,547

Listed stock exchange

Prime Market of the Tokyo Stock Exchange

Securities code

1720

Shareholder registryadministrator

1-4-1, Marunouchi, Chiyoda-ku, Tokyo, Japan
Sumitomo Mitsui Trust Bank, Limited

Status by owner

Major Shareholders (Top 10) As of March 31, 2022
No. of shares held(Thousands)

Name

TOKYU CORPORATION

15,362

Percentage of total
shares issued

Treasury shares

14.47%The Master Trust Bank of Japan, Ltd. (Trust Account)

11,07210.43%

Mizuho Trust & Banking Co., Ltd. - TAISEI CORPORATION
retirement benefits trust account re-trust trustee Custody
Bank of Japan, Ltd.

4,000

3.77%

Custody Bank of Japan, Ltd. (Sumitomo Mitsui Trust Bank,
Ltd. re-trust - Tokyu Corporation retirement benefits trust
account)

3,520

3.31%

Custody Bank of Japan, Ltd. (Trust Account)

3,484

3.28%

SHIMIZU CORPORATION

3,000

2.83%

MSIP CLIENT SECURITIES

2,743

2.58%

MUFG Bank, LTD.

2,550

2.40%

Sumitomo Mitsui Trust Bank, Limited

2,110

1.99%

KINDEN CORPORATION

1,924

1.81%

Financial
institutions

0.53%

Company NameTOKYU CONSTRUCTION CO., LTD.

Founded on

Tokyo Construction Industry Co., Ltd. was founded on March 12, 1946.
(TOKYU CONSTRUCTION CO., LTD. was founded on November 11, 1959)

Date of Establishment

April 10, 2003

Capital¥16,354.44 million

Head Office

1-16-14, Shibuya, Shibuya-ku, Tokyo

Representative

Mitsuhiro Terada, Representative Director, President

Number of employees

3,012 (consolidated), 2,624 (unconsolidated)

Construction License(TOKU-29) No. 20220 by Minister of Land, Infrastructure, Transport and Tourism

Main Business

Civil engineering and building construction Investigation, construction plan, geological survey, measurement, design andothers for civil engineering and building construction

OfficesHead Office, 13 branches, 11 sales offices and others
Branches
Sapporo Branch, Tohoku Branch (Sendai city), Hokuriku Branch (Niigata city), Chiba Branch, Civil Projects East Japan
Branch (Shibuya, Tokyo), Building Projects East Japan Branch (Shibuya, Tokyo), Urban Development Branch (Shibuya,
Tokyo), Building Projects Metropolitan Branch (Shibuya, Tokyo), Nagoya Branch, Kansai Branch, Hiroshima Branch,
Shikoku Branch (Takamatsu city), Kyushu Branch (Fukuoka city)
Laboratories
Institute of Technology (Sagamihara city, Kanagawa)Overseas offices
Bangkok, Yangon, Dhaka, Hanoi, Jakarta, Manila, Singapore

Group Companies

Tokyu Renewal Co., Ltd. (Shibuya, Tokyo)
Token Industry Co., Ltd. (Shibuya, Tokyo)
Kawamura Sekisan Corporation (Bunkyo, Tokyo)
Ch. Karnachang-Tokyu Construction Co., Ltd. (Thailand)
Pt. Tokyu Construction Indonesia (Indonesia)
Golden Tokyu Construction Co., Ltd. (Myanmar)
Indochine Engineering Limited (Singapore, Vietnam, Australia)
TC Pacific Construction, LLC (Guam, USA)38.95%

Individuals andothers18.33%

Foreigncompanies, etc.

14.14%

Financial
instruments
dealers

Other
companies

3.79 %

24.26%

Note: 1. Percentage of total shares issued has been calculated after deducting treasury shares (567,286 shares).
2. Tokyu Corporation has contributed 7.5 million shares to retirement benefit trust accounts, including 3.52
million shares to the Custody Bank of Japan (Sumitomo Mitsui Trust Bank, Ltd. re-trust - Tokyu Corporation
retirement benefits trust account).

Stock price
High/Low
(yen)
1,500

External Evaluations and the Company’s initiatives

1,200

900

600

FTSE Blossom Japan Sector Relative Index

S&P/JPX Carbon Efficient Index

300

0
4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

CDP

Trading volume

TCFD

SBT

Monthly total(Thousand shares)
150,000

120,000

JCLP(Japan Climate Leaders’ Partnership)

RE100

Eco First

90,00060,00030,000
ZM2021-00097-DC

0
4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3

2013

72

2014

2015

2016

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

2017

2018

2019

2020

2021

2022

ZEB Planner

ZEH Developer“Eruboshi” certification

Health & Productivity
Management Organization

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2022

73