I N T E G R AT E D
REPORT
2023
F Y E M A R C H 3 1, 2 0 2 3

T o z e r o, f r o m z e r o .

Tokyu Construction Co., Ltd.
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
https://www.tokyu-cnst.co.jp/en/Our contri buti on to s o ci e ty

PurposeFulfilling each individual’s
dreams through thecreation of a reassuring
and comfortable living
environment.

Our Purpose
A Consumer-Oriented
Mindset That Supports
DreamsTo this end, our business domain is definedby creating a safe and comfortable living

Core management principles to foster

environment. Tokyu Construction willcontinuous, positive development ofcontinue to provide valuable products andservices to consumers in response to theirincreasingly diverse values. We will nurture

We gather under the Tokyu Construction

the dreams of each of our customers andphilosophy to leverage our construction

pass down a bountiful environment, as welltechnologies and expertise with the goal ofas the technologies and values that support

solving the various problems faced by ourit, to the next generation.

customers in a meticulous manner. We also

Helping our clients achieve their dreams

aspire to the creation of a company that is

enables us to understand the meaning of

more consumer-oriented* and that will be

our work, our existence, and our contribution

loved for a long time to come.

to society, and ultimately leads to thefulfillment of the dreams of each and every
one of us.
*Consumers are the people active in all aspects of life,
including social, consumer, cultural, and production
activities, as well as the end users (e.g., those who

Tokyu Construction

Management
Policy• Seek out new
challenges.
• Maximize thepotential of ourhuman resources.
• Place the customer
at the center of ouractivities.
• Be fair andtransparent in all
our dealings.

purchase condominiums and/or use public facilities).

Es s e n ti al val u e s a l l s t a ff s h o u l d s t r i v e t o
i mp l e me n t i n th e i r da i l y l i v e s

Code of
Conduct• Self-reliance.
• Speed.
• Teamwork.
• Reliability.
TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

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1960

The Tokyu Spirit and Resolving Social Issues
1979

Tokyu Construction Originated during the Postwar Reconstruction of Tokyo

Land readjustment project in
Nogawa First District

1960

Two weeks after the end of World War II, Tokyu Corporation established the Temporary Postwar
Reconstruction Committee. Tokyo Construction Industry Co., Ltd., the predecessor of Tokyu
Construction Co., Ltd., was established based on the reconstruction plan for the Tokyo capital.
The Tokyu Construction mission to resolve social issues was born from this history.

The Tokyu Spirit-Our Founding Spirit Espoused by Noboru Goto, the Company’sFirst President

Establishment and development ofour business foundation

1959 -1995

Extension of the Den-en-toshi Linebetween Mizunokuchi and Nagatsuta

1966

1989

1979

SHIBUYA109

1989

Bunkamura

1996-2010

If business seems 100% safe to anybody, Tokyu does not need to do it. The business spirit that
we have built up over a long time is not so relaxed, but rather a brave way of doing things,
carrying a torch ahead of all others.

Challenge during economic downturn
QFRONT

1999

Shibuya Mark City

2000

Cerulean Tower

2001

New Tokyu Construction created through comapny split

2003

2001

Shibuya Station on the Tokyo Metro Fukutoshin Line2010

Founder of Tokyu

First President of Tokyu Construction

KEITA GOTONOBORU GOTO

*Photo courtesy of Tokyu Corporation*Photo courtesy of Tokyu Corporation

Evolution of our urban
development expertise

2011-

Shibuya Hikarie

2012

Shibuya Scramble Square

2019

2022

2019

Tokyo Metro Shibuya Station

Redevelopment of the areaaround Shibuya Station

Our History
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TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

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3

Our Strengths

Strength
1

Technology that keeps urban
functions running
In 2013, Tokyu Construction worked on an
overnight project that required the undergroundinstillation of the tracks above ground on the Tokyu
Toyoko Line between Shibuya and Daikanyama
Stations. Approximately 1,200 construction
workers completed this instillation within thelimited time of about 3.5 hours after the last trainof the night. This is just one example of how wekeep urban functions running and provide
seamless daily lives for users.

Strength2

Ex p e r t is e
Shibuya Scramble Square, completed in 2019, is a
230-meter-high landmark directly above Shibuya
Station. This project was extremely challenging inevery respect. We faced difficulties such as utilizing
difficult construction techniques, coordinating withother complex and intertwining redevelopment
projects, securing general pedestrian traffic flow
within the building during construction, andworking in an area with both four-way andunderground traffic flow. We completed this fiveyear project while prioritizing the safety ofpedestrians and the surrounding environment.

Te a m wo r k
It is necessary to coordinate and resolve theinterests of many stakeholders to achieve a
consumer-oriented mindset. Our comprehensive
capabilities are utilized to facilitate collaborations
between civil engineering and construction inprojects such as the Shibuya Redevelopment
Project, where different project entities are
intricately involved.

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TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

The Technology,
Expertise, andTeamwork That Keep
Urban Functions
Running

The founding spirit of the Company was to solve social
issues in the postwar reconstruction of the nation’s
capital. Since then, we have long been involved inurban development as a member of the Tokyu Group,developing a consumer-oriented mindset highly awareof our direct customers in addition to users of ourservices. We are proud of our track record, technology,
and expertise in the development of areas aroundrailways and stations, which is unrivaled by any otherconstruction company in the world. Under the new
Tokyu Construction brand, we are taking on thechallenge of solving new social issues such as theurban form and environmental problems.

Strength
3

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

5

History ofValue Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Business Overview
The core businesses of the Tokyu Construction Group include the Domestic Building Construction Business and the Domestic Civil

Domestic Building
Construction BusinessEngineering Business. Strategic businesses includes the International Business, the Real Estate Business, and New Businesses. The
Group provides the best solutions to the various challenges faced by our customers and the ever-changing society.

Business Lines

Strategic Businesses• Construction of commercial facilities, hotels, offices,
housing, factories, hospitals, and distribution centers

International Business(Construction and Civil
Engineering)•R enewal businessCore Businesses

3.3%
Real Estate Business

3.5%

Domestic Civil
Engineering Business
Net Sales for
19.3% Consolidated
FYE Mar. 2023•W
 ooden building construction business, other

Domestic Civil Engineering
Business
Business Lines

288.8• Railways, roads, tunnels, bridges, and otherconstruction

billion yen•E arthquake reconstruction projects, other
Domestic Building Construction Business

73.9%(Including Construction Renewal)

Core Businesses

Real Estate BusinessBusiness Lines

The Relationship between Each Business Segment and Management Strategy Classification

Disclosure Categories in the
Annual Securities Reports

Management
Strategies
Classification(in this Integrated
Report)Core
Businesses

Construction Business(Building Construction)

Construction Business(Civil Engineering)

Domestic Building
Construction (Including
Construction Renewal)

Domestic Civil Engineering

Real Estate Business

Strategic
Businesses

Net Sales

Real Estate Business

International Business
New Business

216.9

Ordinary Profit or Lossbillion yen

61.8
5.1

billion yen

10.0

billion yen

billion yen

Strategic Businesses

The relationship between the disclosure categories in the Annual Securities Report and the categories in this Integrated
Report is as follows.

• Real estate rental business•R eal estate development business quivalent exchange business, other•E

International Business(Construction and Civil Engineering)

New Businesses

Business LinesBusiness Lines• Railway and road improvementbusiness, high-rise building
construction, factory construction,
other

•P
 PP/Concession Businesses for airports,
water, and sewage systems, and other• Business related to power generation
supply of electricity and heat, and other(FYE March 31, 2023)

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TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

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7

History ofValue Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Contents
Editorial Policy
The Tokyu Construction Group publishes
the Integrated Report to provide
shareholders, investors, and various otherstakeholders with a deeper understandingof how the Group leverages its strengths tocreate value and achieve sustainablegrowth. This report is an integrated
compilation of financial information andmaterial non-financial information that
impacts our corporate value. For detailed
financial reporting, please refer to theAnnual Securities Report. Visit our websites
for more information on construction projects,
technology, services, and other topics.
www.tokyu-cnst.co.jp/en/

01
02

Referenced Guidelines
IFRS Foundation 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

03

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TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

History of Value Creation
01

Our Purpose

02

Our History

04

Our Strengths

06

Business Overview

54

Human Resource andOrganizational Strategies

56

Dialogue For Continuous
Change at Tokyu Construction60

 uman Resource Strategies toHAchieve Management Strategies

62

Reporting Period

Human
CapitalScope of the ReportO rganizational Culture Reform to
Support Human Resources Strategy

Tokyu Construction Co., Ltd. and its Group
companies

Driving Force for Sustainable Value Creation
10

Message from the President

16

Message from External Directors Responsible
for Corporate Governance

04

Notes

Corporate Governance64

Corporate Governance

70

Compliance

18

Value Creation Process

20

The Tokyu Construction Group Materiality

71

Risk Management

22

VISION2030

72

24

Priority Strategies in Our Long-Term
Management Plan: “To zero, from zero.”Directors and Audit &Supervisory Board Members

26Long-Term Management Plan KPIs

28

Financial Strategy

05

Value Creation Initiatives
32
36

Three Values
Responding to Climate Change(Information Disclosure in Line
with the TCFD Recommendations)38

Building Construction Business

40

Civil Engineering Business

42International Business

44

Real Estate Business46

New Businesses

48

Town Planning and DX

50

DX Strategy

51

Technology Strategy

52

DX in BusinessClimateChangeStructural
Changes in theConstruction
Industry
Strategic
Business

06

FY2022 (April 1, 2022 to March 31, 2023)*Some of information included is fromoutside the reporting period

Corporate
GovernanceFoundation for Value Creation

Forward-looking statements in thisintegrated report, such as forecasts of ourbusiness performance, are based on
available information and assumptions on
uncertain factors that may affect our futurebusiness performance as of the publication
date of this integrated report.
The Tokyu Construction Group shall bear
no obligation to update forecasts outlinedin this integrated report, unless otherwise
required by law. Actual results may differ
from forecasts due to various factors.

Front Cover74

B asic Approach to Environmental Considerations

76

Enhancement of Quality Control Infrastructure

78

Respecting Human Rights

79

Our Responsible Supply Chain

81

Occupational Health and Safety

This integrated report uses the zero of “Tozero, from zero.” stated in our VISION2030
and long-term management plan, as amotif to express the towns and lifestyles
that emerge from “zero,” our founding
values, and future challenges.

Corporate Data
82

Financial and Non-Financial Highlights

84

11-Year Financial and Non-Financial Summary

86

Stock Information

87

Company Information

Town
Planning

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

9

History ofValue Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Message from the President
Creating Corporate Value by Resolving Social Issues
In 2021, the Tokyu Construction Group announced its corporate vision, VISION2030: “To zero, from zero.”
Under this vision, we continue to build an environment and excitement for the future. “To zero, from zero.”represents our commitment to zero carbon and zero waste, as well as our intention to enter new business fields.
The Zero to Challenge represents our promise to the environment, while the Zero From Challenge represents
our desire to contribute to sustainable societies and enhance corporate value by providing excitement.
Before putting this vision to paper, we wanted the leaders of today’s generation and the leaders of
tomorrow to share their dreams. We brought together a balanced group of employees from different
departments with various job titles and positions to form a 55-member project team.
We reaffirmed our management philosophy (purpose) to create reassuring and comfortable living
environments that fulfill the dreams of every person, as well as our ongoing pledge to solve social issues. We
also discussed in meetings the need for an exciting vision that will inspire us to continue the pursuit ofexcellence for decades to come. I was particular about the word excitement. And I worked with team members
to formulate this vision under the strong conviction that we wanted our stakeholders to experience excitement
through the services we offer. In the end, we created a vision that demonstrates clearly to our stakeholders that
we will be a company that provides this kind of value.
To achieve our vision, we established three values as part of our long-term management plan: decarbonization,
zero waste, and disaster prevention and mitigation. We recognize that our mission is to solve social issues andthat addressing climate change is essential for sustainable business growth. These three values form the axis of
our strategy based on their affinity with our capabilities. Our long-term management plan is the sustainability
strategy we follow to create corporate value, balancing economic value and social value. The plan also serves asa guide for employees to make decisions and act independently.

Employees Working Together to Achieve Our Vision
We have been holding Vision Dialogues with employees since 2021 to foster an understanding of andcommitment to VISION2030. These dialogues are forums in which executive officers and other senior
management facilitate and communicate online with groups of five employees at a time. We recognized that we
had not sufficiently communicated our vision to employees in the past. Therefore, we began this program in thehope that employees will hold this vision in mind and embrace it as their own.
The first round of dialogues began with discussions about the vision we formulated, while the second round
was about actions each employee could take to help us achieve the vision. We believe employee awareness ofthe need to solve social issues and enhance corporate value has improved considerably.
The five participants in these Vision Dialogues were chosen at random. This means participants were ofdifferent ages and job categories. Some of the employees had never met each other before. Listening to different
perspectives provided an opportunity to deepen mutual understanding, as well as to learn about and accept

Excitement for all stakeholders.

diverse ways of thinking. This program had a significant effect in revitalizing communication in the Group.

Becoming a company that builds excitement.

Excitement happens when the experience exceeds the imagination. We strive constantly to provide services

Mitsuhiro Terada Representative Director, President

and share our vision. We set no finish line in terms of communicating our philosophy and vision, but rather hope

We are conducting the third round of dialogues at present. The theme for this round is “Excitement,” andwe are constructing the dialogues to focus on past experiences or ways to create the most excitement.
that exceed the expectations of our customers who invest billions of yen—sometimes tens of billions of yen—in
constructing the future success of their companies. Our goal is to be a company that builds excitement.
It is important that the many employees who joined us after we began these dialogues in 2021 understand

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TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

to continue Vision Dialogues, making dialogue part of our corporate culture.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

11

History ofValue Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Message from the President
Tokyu Construction Group Long-Term Management Plan: “To zero, from zero.”

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
The Tokyu
Construction
brand

Establishment of the Tokyu Construction brand bycreating advantages in human resources and digitaltechnology and through the provision of three values

Strengthening of problem-solving skills, construction
Deepening of coreand production system innovation, and growth throughbusinessalliances and M&A
Growth ofstrategic business

Creation of new growth opportunities throughinvestments in strategic business and synergies withcore business

Human resource
Achievement of results and acceleration of innovationand organizational through the strengthening of human resources andstrategies
reform of the organization and corporate culture
Financial andcapital strategies

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

FY2030 KPIs
Operating profit

At least 22 billion yen

Operating profit margin At least 5%
ROIC

At least 7%

ROE

At least 10%

Debt-to-equity ratio

0.5 times or less

Capital adequacy ratio

About 45%

Employee engagementAAAratingyears ago was very serious. Over the past several years, defects detected in already completed have affected

GHG emissions(vs. FY2018)

addition to local measures at work sites, to eliminate incidents and defects. Furthermore, since even minor

30% or lessour business performance. We strengthened support and management at branch offices and headquarters, inrework and corrections can affect quality and efficiency, we initiated a practice called front-loading, which
involves repeated verification of the validity of construction methods and procedures from the initial stages.
Above all, we must not hesitate to report and discuss frankly even the smallest abnormality discovered in theInitiatives to Improve Profitability

course of daily work at the site or workplace. We will continue to foster an open organizational climate to catch
risks while they are still small.

The Tokyu Construction Group recorded significant losses in FY2021 due to an issue related to quality defects.
Immediately upon recognizing the issue, we took steps to prevent recurrence. In FY2022, we worked in unison

Creating New Business Opportunities through Our Strengths in NonDisruptive Urban Reconstruction and an Integrated Value Chain

to recover business performance. However, the competitive environment is challenging, and profit margins werethin due to the sharp rise in raw materials prices.
The market for FY2023 remains firm. We expect robust demand in the construction business forredevelopment projects in urban areas, tourism-related projects (resort facilities, hotels, etc.), frozen and

The Tokyu Construction Group identifies six areas as materialities: (1) Climate change; (2) Structural changes in theconstruction industry; (3) Strategic businesses; (4) Town planning; (5) Human capital; and (6) Corporate governance.
In terms of structural changes in the construction industry, Strategic businesses, and town planning, we are bolstering

refrigerated warehouses, and data centers. With the enactment of the Revised Basic Act for National Resiliencestructures to provide a full range of upstream and downstream services. As part of our 2030 long-term management

Contributing to Preventing and Mitigating Disasters for Developing Resilience in the Lives of the Citizenry inplan, these initiatives move us away from an emphasis on construction contracting. We create new business

June 2023, the market for civil engineering projects should continue to be solid. We expect a certain level ofopportunities through synergies between our core Domestic Construction Business and Domestic Civil Engineering

demand to continue for overseas Official Development Assistance (ODA) projects, as the Japanese government

Business in collaboration with our strategic Real Estate Business, International Business, and New Businesses.

plans to expand infrastructure exports. With the high balances of construction work in progress for companies in

To date, the Tokyu Construction Group has been a part of many development projects around railways andour industry, we expect the competitive environment to ease somewhat compared to the past. We hope to getstations. We classify station buildings and surrounding structures as building construction and railroads andback on track with our long-term management plan over the next three years.

subway infrastructure as civil engineering. Among these classifications, the Group’s greatest strength lies in our

However, customers are having a hard time dealing with soaring construction costs. As a business, we ask
customers to pay the pass-on costs. However, we are also a business partner whose job is to propose creative

ability to reconstruct urban functions by integrating building construction and civil engineering without
disrupting daily life.

solutions to help our customers succeed. To this end, we propose design plans and construction innovations
beginning with the upstream design stage. We work together with our clients to provide better services at lower
prices. To support our efforts, our Building Construction Business intends to secure design personnel throughincreased hiring and M&A, aiming to increase the ratio of design work to construction.
Another important topic for improved profitability is to reduce lost profit due to quality incidents andafter-sales maintenance (defect repairs) after construction is completed. The large-scale quality incident two
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TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

Materialities
ClimatechangeStructural changes
in the constructionindustry

Strategic
businesses

Town
planning

HumancapitalCorporate
governance

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

13

History ofValue Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Message from the President
The future will see cities rebuilt on digital technologies. Building information modeling (BIM)*1 andstructures, and on-site power purchase agreements (PPA). In addition, we are shifting electricity usage toconstruction information modeling and management (CIM)* will be important tools in this process. Using 3D

renewable energy sources and encouraging all employees to acquire eco-certifications to raise awareness.

1

model data and attribute information will open exciting new possibilities for urban development. We operate at

We redefined our former materiality of Diversity and inclusion to the broader concept of Human capital. Asvery high levels compared to other companies in our industry. Our successes include the relocation of the Tokyo

of April 2024, the Act on the Arrangement of Related Acts to Promote Work Style Reform applies to theMetro Ginza Line (Shibuya Station), for which we received the 3rd Civil Engineering Prize at the Japan Federation

construction industry. In addition, securing human resources and labor issues remain major challenges. In theof Construction Contractors Awards in 2022 and the 2019 i-Construction Grand Prize, among others. We are

future, competition for human resources will become even more intense, not only in the construction industry,currently constructing an underground pedestrian walkway and underground roadway at a busy Shibuya

but across society as a whole. Securing and nurturing human resources is now a top materiality for management.

intersection. Our work is highly praised for improved productivity and shortened construction periods based on

Our previous medium-term management plan focused on human resources development. Our current long-

construction planning using BIM/CIM and the data accumulated over many years in the Shibuya area. The Building

term management plan identifies human resources as the source of our competitive advantage. In particular, we

Construction Business acquired ISO 19650 certification, which is the international standard for BIM. We are also

defined the human resource portfolio needed to pursue the strategies of our long-term business plan. The

working toward further evolution in collaboration, not only within the Group, but also with outside entities.

Group will focus on hiring and training civil engineering and construction personnel, design professionals

The Real Estate business is developing business models with a strong awareness of synergies with the
Building Construction Business. We acquire older properties and add value by creating eco-friendly buildings
utilizing net zero energy building (ZEB)*2 technologies cultivated in the construction business. These renovatedresponsible for increasing the design-to-build project ratio, energy-related personnel in environment-related
fields, and digital human resources.
We began executing a training plan for digital human resources development in June 2023. The goal ofbuildings become environmental real estate leveraged to secure stable rental income and gains on sales ofthis program is to improve the digital skills and literacy of our employees, helping them take action toward

properties. Our environmental real estate featuring environmental and safety technologies also contributes tochange and challenge. Here, we follow the new Tokyu Construction Digital Human Resources Overview todisaster prevention and mitigation in our communities. Redevelopment projects involve owning real estate indevelop digital human resources, digital human resource promoters, and expert digital human resources.

certain areas while gathering information and acquiring real estate to secure future orders.
*1 T hese techniques increase the efficiency and sophistication of construction production and management systems through the use of
3D models in the planning, survey, and design stages. This approach also facilitates information sharing among all parties involved
throughout the project by linking and developing 3D models in the subsequent construction and maintenance stages.
*2 A building that aims to achieve comfortable indoor environments while reducing the annual primary energy consumption of a building
to net zero.

Focusing on efforts to respond to climate change and strengthen
human capitalThrough our diversity and inclusion efforts, we aim to achieve a target ratio of female new hires, as well as atarget ratio of female employees to total employees. We also intend to focus further on female participation. To
this end, we will review our systems for women to play more active roles and improve Tokyu Construction Groupbranding activities, both internally and externally.
We previously defined innovation as a materiality, and we have revisited this materiality from the perspectivethat it is a necessary element across all business activities. People create innovation. However, change is difficult
if we focus solely on existing businesses within the Group. We must venture out to search for new knowledge
and deepen existing knowledge through interchange with people outside the Group. Therefore, we will instill agreater sense that innovation is the product of new experiences and new insights.

We consider climate change, our first materiality, to be the most important social issue we address. We strive to
reduce the environmental impact of our Building Construction Business, which is responsible for significant CO2
emissions, through materials development such as low-carbon concrete, proposing ZEB and other low-

To Our Stakeholders

emissions buildings to our customers, using wood and wood-based construction, extending the service life of
We take seriously the Action to Implement Management that is Conscious of Cost of Capital and Stock Priceissued by the Tokyo Stock Exchange regarding our current price-to-book ratio of less than 1.0 times.
We must increase profitability if we are to be regarded more highly by the stock market. Therefore, ourfocus will be on eliminating any quality incidents or defects that result in lost profits, rebuilding our earnings
capacity through higher levels of problem-solving skills.
Our FY2030 target are to achieve an operating profit margin 5.0% or more and an ROE of 10.0% or greater.
By improving the effectiveness of corporate governance, we intend to increase the certainty with which we willachieve these target, communicating the bright potential of the Tokyu Construction Group. In so doing, wehope to gain the trust and raise the expectations of as many of our stakeholders as possible.
We ask you, our stakeholders, for your continued support.

September 2023

Mitsuhiro Terada
Representative Director, President

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15

History ofValue Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Messages from External Directors Responsible for Corporate Governance
Aiming to improve governance effectiveness throughContributing to active governance, creating

the monitoring functions of the Board of Directors

positive impressions internally and externally

Isao Onda

Kahori Yoshida

External Director

External Director

To improve the effectiveness of corporate governance, the Board of Directors
began shifting toward stronger monitoring functions in FY2022. In other words,
the role of the Board of Directors is shifting toward greater monitoring andsupervision over the decisions made in Management Meetings. Therefore, it isimportant that Board meeting materials are sufficient to communicate clearly thedetails of discussions in Management Meetings and the decision-making
process, including issues and risk recognition. In this way, external directors will
be able to discuss matters in Board meetings from a supervisory perspective.
We are seeing progress in Board meeting agenda materials and details ofexecutive discussions. However, we hope to improve the effectiveness of theBoard through further examination of issues uncovered through Board of
Director effectiveness evaluations.
Meetings of external directors began in May 2022. We sometimes invite theheads of business divisions to these meetings to exchange opinions to foster aproper understanding of the company’s businesses. We continue to strive forfree and vigorous discussions, taking a proactive stance in submitting proposals
as external directors to improve the effectiveness of governance.

I feel confident that employees of the Company are earnest and sincere.
At the same time, they are unassuming. They make honest efforts to achieve
results, and I hope to see more active communications and to publicize these
efforts internally and externally in the future.

Pursuing digital transformation and green
transformation to achieve a higher mission

Monitoring functions that support proactiverisk-taking by executives

Kunihiro Koshizuka

Tsutomu Tsunashima

External Director

External Director

I hope to contribute to stronger active governance, particularly in digitaltransformation (DX) and green transformation (GX), bringing my experience as adirector and CTO in the manufacturing industry. To play offense in an era of multivariant change including values, the recognition of social issues, geopolitical risks, andtechnological evolution in a phase of industrial revolution, we must shift fromconventional thinking to thinking that encompasses a big-picture, medium- to longterm perspective, as well as diverse viewpoints. I look forward to deeper discussions
on new value offerings, business model transformation, and DX in response toessential customer projects. The Strength of our company lies in urban developmentthat fosters open-ended upgrades to urban functions. I hope to see the Company
become a construction provider that achieves a higher mission to minimize the social
costs of decarbonized energy, depopulation, and transportation and logistics,
contributing to the enrichment of lives: smart cities in the broadest sense of the word.
The most important feature of the Board of Directors is that we are very open
and frank in our discussions. We recognize that our customers, shareholders, andemployees desire that we enhance corporate value and sustainable growth throughCSV (intersection between corporate activities and solutions to social issues). As aboard, we desire to contribute to the achievement of this outcome through open andfrank discussions at Board meetings.

16

As a Board member and attorney, I recognize that many expect me to play adefensive role in corporate governance. At the same time, I have experience inconstruction from the standpoint of a property developer contracting withconstruction companies. So, I have a good understanding of discussions
related to the construction business. By understanding the background andintent of matters on our agenda, I help facilitate understanding at Board
meetings and contribute to deeper discussions in terms of active governance.
I continue to receive regular reports on subsequent efforts to prevent therecurrence of construction quality issues, such as those identified in July 2021. I
am happy to see that the head office and branch departments have reinforced
human-based support systems and that the Company expanded the scope of
persons eligible to use its internal reporting system, including subcontractors.
We believe these sincere efforts are yielding positive results.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

When the Board of Directors deliberates new business and investment projects
green-lit by executives, we always confirm whether there are any material
omissions in the assumed risks. We take this approach from the perspective offulfilling the monitoring function of the Board.
The executive side of the business provides Board meeting with materials
from the stance of offering as much relevant information as possible, helping ourmeetings be more effective. This system allows external directors to attend
meetings with advanced preparation. At the same time, a good understandingof the construction business is necessary for confirming the presence of risks. We
believe that deepening an understanding through dialogues with businessdivisions and site tours, held several times to date, continues to be an issue.
In a business environment where society is undergoing dramatic changes,
employee satisfaction is the driving force for meeting customer needs andcreating corporate value. The Vision Dialogues project under President Terada’s
leadership has been an excellent initiative to align the Company’s purpose andvision with the vector of employee growth. I believe that human resources are
not a liability—a cost—but rather human capital, or capital that can play a keyrole in improving the value of the company and society if we educate our
employees and improve working environments.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

17

Driving Force for
Sustainable Value Creation

History ofValue Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Value Creation Process
Tokyu Construction has consistently worked to solve social issues since its founding. We create economic and social value by
deepening our core businesses and exploring new areas based on our consumer-oriented strength of development to keep
urban functions running.

INPUT

BUSINESS MODEL

Materiality

OUTPUTOUTCOME

P.20 - P.21

Stakeholders

Financial Capital
Net assets per share

905 yen
P.38- P.41

Owned capital

ConsumerOriented
Mindset toSupport Dreams

P.42 - P.47

95.2 billion yen

Cooperatingcompanies

Employees andtheir families

Shareholders
and investors

Society and future
generations

Interest-bearing debtCustomers

Core
Businesses

21.9 billion yen

Strategic
Businesses

Social Value

Purpose(Our contribution
to society)

Management
Policy(Core management
principles to foster
continuous,
The Tokyu Spirit
positiveand Resolving
development
Social Issuesof Tokyu
Construction)

Code of
Conduct(Essential values all
staff should strive toimplement in their
daily lives)

P.1-P.5

Long-Term Management Plan

Human Capital

P.24-P.27

Three Values(Resolving Social Issues)

Number of employees

3,041

Strengths in Promoting
Urban Development

Intellectual Capital
Number of registered patents

338
Technical personnel

1,997Natural Capital
Energy consumption



23.84ℓ / m2

Technology
That Keeps
Urban
Functions
Running

Expertise

Teamwork

Human
Resources

P.54-P.63

DigitalTechnologies

P.48, P.50, P.52-P.53

ConsumerOriented
Urban
Development
That Keeps
Urban
Functions
Running

Domestic
Building
Construction
Business

Institute of Technology

Consolidated subsidiaries 11

International
Business

New
Businesses

Ordinary profit or loss

Real Estate and Building
Construction Value Chain

Overseas 8
Tokyu Construction Group

Deepen Synergy Explore

Economic Value

Tokyu brandTokyu Construction

Real EstateBusiness

Building
RenewalBusiness

Social and
Relationship Capital Domestic sales offices 13

Technology,
Expertise, andTeamwork That
Keep Urban
Functions
Running

P.32-P.35

Domestic Civil
Engineering
BusinessReal
EstatePlan

Design Construction

MaintenanceAffiliates 6

Survey and
Diagnosis

5.1 billion yen
Ordinary profit or loss 1.8%

Renovation Dismantling

ROIC
ROE

3.0%
5.6%

Debt-to-equity (D/E) ratio 0.23

Collaborative partners 757

Capital adequacy ratio 38.2%(As of FYE March 31, 2023)

Corporate Governance
18

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

P.16 - 17, P.64- P.73

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

19

History ofValue Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

The Tokyu Construction Group Materiality
Since our founding, the Tokyu Construction Group has always conducted business with the mission of resolving social issues
through urban development in mind. In formulating the new vision announced in 2021 and our long-term management plan
toward 2030, we sought to understand the environment surrounding the Group, recognize the risks and the opportunities,
and identify our most important materialities. We review these materialities from time to time in light of stakeholder
feedback and changes in the external environment.

External Environment

Risks and Opportunities

Defining Materialities

Our recognition of the future external environment
was developed through scenario planning
conducted through a corporate visioning process
involving 55 employees ranging from ouryoungest staff to senior management.

The Tokyu Construction Group discusses risks and opportunities to enhance corporate value by solving social issues, reflecting thedemands for companies to address the SDGs and other social issues, considerations of the future external environment, and other factors.

We evaluate materiality based on two
axes: importance to stakeholders andimpact on improving corporate value.
We identified six issues of particularimportance as materialities.

Environment
Dramatic increase in public concern about climate change
Average global temperature in the year 2030

Climate change

1.5˚C higher (compared to before the Industrial Revolution)*

1

Construction Industry

Tunnels
2018
2033

25%

20%

63%*

2

Structuralchanges in theconstructionindustry2• Expanding demand for low-emissions buildings (ZEB andwood buildings) for decarbonized societies• Lost orders due to delays in the development andintroduction of technologies to reduce environmental
impact• Increase in renewable energy business opportunities due
to energy policy• Increased costs due to soaring energy prices and theadoption of low-emissions materials• Increased orders for construction work related to usefullife extensions of structures in accordance with theInfrastructure Life Extension Plan

• Damage recovery costs due to major disasters, costs torectify construction period delays• Increased orders for disaster prevention-related projects
under the Basic Plan for National Resilience• Decrease in the number of technical staff due to declining
birthrates and aging population, etc.; reduction ofworking hours due to laws and regulations• Loss of public trust and economic loss due to inadequate
succession of skills and techniques that contribute toensuring the safety and quality of engineers

Strategic
businesses*

49%

of Japan’s labor force*3• Shortage of human resources capable of innovation in
new business domains• Failure of management to foster ongoing innovation• Lack of appropriate investment risk management• Instability in international affairs

Overseas Markets* Population growth in developing countries andimproved quality of life
* Expansion of overseas markets* Instability in international affairs

Town planning

Human capital*

2030

68.75 million 11% decline*

4

Source:*1 IPCC*2 C
 urrent State and Future of Aging Social Capital, Ministry ofLand, Infrastructure, Transport and Tourism*3 T he Potential for 49% of the Japanese Labor Force to be
Replaced by AI, Robots, Etc., 2015, Nomura Research Institute*4 National Institute of Population and Social Security Research

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

• Delay in reskilling (digital technologies, etc.) for midcareer and other employees• Stagnation or decline in employee engagement due toinsufficient response to human rights, diversity andinclusion, mental and physical wellness, etc.

* Decline in working-age population

20• Changing demands on buildings due to thediversification of lifestyles and work styles• Delays in adopting systems and response to diversity(gender, national origin, skills, etc.)* Diversified values regarding lifestyles and work styles

77.28 million• Delay in responding to the development of smart
buildings, smart cities, etc.

Corporate
governance• Failure to train next-generation managers (core humanresources)• Loss of social credibility due to compliance violations, etc.

1
Understand changes inthe external environmentand stakeholder demands

Climate change

Structural changes in
the constructionindustry2
Summarize perceptionsof Group-wide risks andopportunities

Strategic businesses*• Advancements in solutions through open innovation• Stronger need for buildings and structures to have asmaller environmental footprint• More opportunities to add value to the upstream anddownstream value chain through DX

Town planning

Human capital*

3
Conduct internal
discussions and deliberate
the recognition of risks
and opportunities, needfor revisions• Greater need to resolve social issues and environmental
problems in the construction market and peripheral fields• Quicker economic development in emerging markets
following the COVID-19 pandemic

Corporate governance• Stronger trends toward redevelopment and urban
development around Shibuya• Use of expertise acquired through urban development
construction projects along the Tokyu train lines,
including Shibuya• Expansion of smart city and compact city concepts

Human Resources and Work Styles

2015• Transformed construction production systems throughdigital technologies

Six Materialities• Insufficient response to respect for human rights in the
supply chain

Technology
By the 2030s, AI and robots could replace• Increased costs due to carbon taxes and other emissions
regulations• Soaring material prices, unstable procurement, and adecrease in the number of skilled workers

42%*

AI

Opportunities• Stagnant innovation in response to external
environmental changes such as population declines,
aging infrastructure, and accelerating digital technology* Population concentrated in urban areas*S hortage of generational owners, demands for
shorter working hours* Aging social capital
Percentage of infrastructure 50 years or older

Roads and bridges
2018
2033

Risks

RevisedMaterialities• Increased opportunities to take on diverse challenges,
including environmental issues, emerging social issues,
DX, and new business domains• Opportunities to leverage the activities of millennials and
Gen Z (digital natives)• Recruitment and activity of diverse human resources(gender, national origin, skills, etc.)

4
Exchange opinions withexternal officers

FY2022 Review of Materialities* Innnovation Strategic businesses
As innovation is a necessary element of
all business activities, we reworded thismateriality to reflect our intent to grownew businesses.
* Diversity and inclusion Human capital
We revised this materiality under a broader
concept than the previous definition

5
Reflect Board
resolutions, reflectrevisions in the longterm management plan

• Increased transparency in decision-making• Appropriate response to change, establishment of astable foundation for growth

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

21

History ofValue Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

VISION2030

To zero, from zero.
The environment
and the excitementof the future.
Redefining what it means to build.
Reinventing what lies beyond building.
The challenge is immediate and inescapable.
Our intent is to develop entirely new approaches to sustainableurban development, aiming for zero carbon emissions and zero waste.
Starting from zero, with no preconceptions, we will
research new fields to find fresh ways to expand and integrateknowledge to make the living environment safer, more
resilient, and more exciting.
As a construction company, we build the literal future.
So it is our duty and our responsibility to lead in innovating
the solutions that society so urgently needs.
We already have the people and the technology to be part ofthe leading edge of innovation. Now we must seek out and welcome the wisdom ofmultiple specialized disciplines, transcend conventional boundaries, embrace the latest
digital technology, and unite as one under our Purpose.
By maximizing this potential, we will redefine what it means to build.
And more than that, we will reinvent the framework of what lies beyond building.
Repeatedly and wholeheartedly taking up this challenge will raise our corporate value andallow us to offer a new level of prosperity and well-being to our customers, business
partners, employees and their families, and society at large.
In 1959, the year of our establishment,
our first project was the development of Tama Garden City,
aimed at relieving the population pressure on Tokyo.
Today, we are faster and more agile than others in innovating new value.
The horizon toward which we advance spreads to infinity.

Long-Term Management Plan

To zero, from zero.
Our Management Plan to Achieve VISION2030

22

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

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23

History ofValue Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Priority Strategies in Our Long-Term Management Plan: “To zero, from zero.”
Our long-term management plan, “To zero, from zero.” defines three values that align with social issues (the SDGs, climate

businesses represent our core businesses. Our International, Real Estate, and New Businesses represent our strategicchange, etc.) and our own capabilities: Decarbonization, zero waste, and disaster prevention and mitigation. These values
form the axis of our strategies. Our Domestic Civil Engineering Domestic Building Construction and Building Renewal

businesses. We pursue five priority strategies, leveraging human resources and digital technologies as the source of ourcompetitive advantage.

Materiality

Long-Term Management Plan
1

Three Values

2

Deepening of core business

Strengthen on-site capabilities and pursue DX to innovate
construction production systems, create alliances andleverage M&A opportunities to increase earnings

Structural changes
in the constructionindustry3

Growth of strategic business

Create new growth opportunities through investments instrategic businesses and synergies with core businesses

Strategic
businessTown
planning

The Tokyu Construction brandEstablish Tokyu Construction as a leading brand thatprovides decarbonization, zero waste, and disasterprevention and mitigation through the development of newtechnologies to respond to climate change.

ClimatechangeSources of Competitive Advantage

Human
Resources

Human
capitalCorporate
governanceDigital1

The Tokyu Construction brand2

Deepening of core business

3

Growth of strategic business

Sustainable town planning that embodies the Tokyu
Construction brand4

Human resource and organizational strategies

Accelerate efforts to diversify and strengthen humanresources, generate corporate growth and innovation
through organizational and corporate culture reform

Ensure management transparency and fairness, strengthenfunctions to enhance the effectiveness of strategies andcontinued sustainable growth

5

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

Contribution to the SDGs

• ZEB and ZEH-M initiatives• Use of environmentally friendly materials• Use of renewable energy• Advancement of wood construction
P.32-P.37

Domestic Building Construction Business• Increased ratio of design-build projects• Increased orders for wood frame, ZEB, ZEH, and otherenvironmentally friendly buildings (ratio of orders)• Improvement of construction employee productivity• Establishment of a construction value chain through BIM

Domestic Civil Engineering Business• Initiatives in response to the Basic Plan for National Resilience• Productivity improvements through CIM, digital advancements• Initiatives to strengthen on-site capabilities

International Business• Contributions to sustainable community development
through government development assistance initiatives• Strengthened partnerships with local general contractors
for business growth
Real Estate Business• Start of environmental real estate initiatives• New brand: TQ (TOP QUALITY)• Renovation of old offices
New Businesses•P ublic-private partnership (PPP) reorganization andTodoroki Ryokuchi redevelopment project started• Launch of on-site solar PPA services• Open innovation• Fostering a culture of innovation

P.38-P.41

P.42-P.47

Sustainable town planning that embodies the Tokyu Construction brand• Redevelopment of the area around Shibuya Station• Station area redevelopment leveraging our strengths• Railway improvement construction utilizing BIM, CIM• Overseas development of transportation infrastructure construction• Construction production systems reform through BIM, CIM
P.48-P.53• Development of human resources for increasingly complex management environments• Strengthening of on-site capabilities to advance core businesses• Recruitment and development of human resources capable of leading change• Organizational culture reform
P.54-P.63• Strengthened corporate governance• Compliance and risk management• Development of human resources for next-generation management
P.16-17, P.64-P.73

Financial and capital strategies

Emphasize capital efficiency and the construction of stablefinancial foundations by pursuing an optimal capital structure

24

Main Initiatives

Five Priority Strategies• Financial and capital strategies
P.28-P.29

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

25

History ofValue Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Long-Term Management Plan KPIs
We established financial and non-financial KPIs as part of our sustainability strategy to provide value to society and create

2030

sustainable corporate value. We are committed to a 10-year vision, and we will implement our strategy steadily over time,
updating short-term strategies in one-year increments and milestones in three-year increments.

2021

2022

Long-Term Management Plan:

Five Priority
Strategies
The Tokyu
Construction brandDeepening ofcore business
Growth ofstrategic business
Human resource andorganizational strategies
Financial andcapital strategies

2023

VISION2030

2025“To zero, from zero.”
The environment andthe excitement of
the future.

“To zero, from zero.”
FY2022 FY2023 Forecasts

・・・

FY2025 KPIs

At least 22.0
billion yen

Our Purpose

Operating profit margin

At least 5.0%

We fulfill dreams

-

ROIC

At least 7.0%

through the creation of

4.2%

At least 7.5%

ROE

At least 10.0%

0.23 times 0.5 times or less

0.5 times or less

5.1 billion yen

5.3 billion yen

At least 11.0 billion yen

Operating profit
margin1.8%

1.7%

At least 3.0%

ROIC*1

3.0%

-

ROE

5.6%

Capital adequacy
ratio
Employeeengagement*2
GHG emissions*3

FY2030 KPIs
Operating profit (loss)

Operating profit(loss)

Debt-to-equity ratio(Fiscal Year)

Debt-to-equity ratio

0.5 times or less

38.2%

40%

40%

Capital adequacy ratio

About 45%

BB

A

A

Employee engagement

AAA

47.1% reduction 12.5% reduction

17.5% reduction*1 We are working to restore profitability and have set a medium- to long-term target level of 7.0% for ROIC by FY2030.
*2 E
 ngagement rating using Motivation Cloud from Link and Motivation Inc.
Respondents consisted of Group employees, including subsidiary employees.
Ratings are divided into 11 stages, and our FY2022 score of BB falls in fifth after AAA, AA, A, and BBB.
*3 Based on FY2018.

GHG emissions

30.0% reduction

reassuring andcomfortable living
environments.
Our Purpose, drawn from thefounding spirit of the Company,
is our most important foundation.
In a business environment that is
growing more uncertain, we mustThree Values

adopt a vision-driven approach.
In 2021, we published our
VISION2030, the ideal we aim toachieve as the Tokyu

Management Cycle

Construction Group.

In place of a medium-term management plan, previously formulated every three years, we adopted a new management
cycle based on a 10-year long-term management plan and short-term action plans toward achieving VISION2030.
We are committed to a 10-year vision, and we will implement our strategy steadily over time, updating short-term
strategies in one-year increments and milestones in three-year increments each fiscal period in a flexible rolling plan
responding to changes in the environment and progress in our strategies.

27

26

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27

History ofValue Creation

Financial andCapitalStrategies

Rebuilding our earnings capacity,
improving capital efficiency, andinvesting in growth to enhanceshareholder value and employeecompensation.
Masatoshi Shimizu
Director and Senior Managing Executive Officer
Corporate Strategy Division

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Growth Investment Forecasts
We plan to expand investments in real estate, renewableenergy, and make other growth investments to increase
earnings. We will also invest more in human resources andtechnology, including digital technology, which will serve as
another foundation for growth.
In the Real Estate Business we are acquiring older buildings inpursuit of a circular real estate business. Leveraging our strengths
as a general contractor to enhance the value of these buildings
through new environmentally friendly features and wellness, we
expect this business to contribute to earnings through stable rental
income and the sale of properties as we review our holdings.
We are also expanding investments in renewable energy.

These investments will reduce our consumption andenvironmental impact, while also contributing to our bottom line.
The greatest assets in the Tokyu Construction Group,
however, are our people. The growth of our employees isessential to our growth as a Group. In addition to improving
compensation, we are investing in a variety of ways to ensurethat our people continue to upgrade their skills. Our per capita
investment in education and training is approximately threetimes the average for companies with more than 1,000
employees (source: National Institute of Advanced Industrial
Science and Technology(AIST) FY2021 survey), and we willcontinue to focus on human resources development.

Investment Plan

Business Results for FY2022 and Forecast for FY2023
For FY2022, we reported consolidated operating profit of
5,107 million yen (6,078 million yen operating loss in theprevious consolidated fiscal year) and profit attributable toowners of parent of 5,245 million yen (loss of 7,459 million
yen in the previous consolidated fiscal year). This result was
mainly due to an 11.9% increase in net sales to 288,867
million yen stemming from progress in large-scaleconstruction projects, etc., and the absence of quality issues
that affected profits negatively in the previous consolidated
fiscal year. We recorded extraordinary income of 2,738
million yen from the partial sale of strategic shareholdings to
improve capital efficiency, and profit recovered significantly
compared to FY2021. However, profit levels remain
unsatisfactory to company management.
The low level of gross profit margin was mainly due tothe soaring cost of construction materials and certain
unprofitable construction project orders received in aseverely competitive environment in the Domestic Building
Construction Business. The Domestic Civil Engineering
Business experienced the impact of orders taken as part ofa strategy to improve Group technical capabilities anddevelop human resources.
At the same time, the Real Estate Business posted asignificant increase in net sales and profits due to the saleof available-for-sale real estate.
We expect FY2023 net sales and operating profit toincrease year on year, while net profit will likely decrease
due to the absence of the aforementioned extraordinary
income. However, we recognize FY2023 as a turning point
toward a recovery in business performance in the next andsubsequent years, as the results of our efforts to focus on
profitability and the Domestic Civil Engineering Businessstrategies to date are beginning to bear fruit.

Financial and Capital Strategies, Investment Plans under our Long-Term Management Plan
To date, we prioritized increasing Tokyu Construction
Group owned capital to levels appropriate for business risk.
Having reached a certain level of owned capital, we begantransitioning to business management oriented to capitalefficiency in FY2021. Our FY2030 KPIs are to achieve an
operating profit margin 5.0% or more, ROIC of 7.0% or
greater and an ROE of 10.0% or greater. However,
COVID-19, soaring prices, and issues related to internal
profit structure have hampered our ability to track a growthtrajectory over the past two years. Our greatest challenge
as corporate management is to rebuild Tokyu Construction’s
earnings capacity.
To this end, we plan to invest 130 billion yen throughFY2030, rebuilding our earnings capacity throughinvestments in our core Domestic Civil Engineering andDomestic Building Construction Businesses, as well as New
28

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

Businesses human resources, and digital technologies. In
this way, we aim to improve our treatment of our mostimportant assets—our employees—while maintainingbalance with shareholder returns.
We intend to procure funds on a stable basis throughcommitments with financial institutions. In the future, wewill consider more advantageous financing channels
including green loans and sustainability financing. Our
FY2022 D/E ratio was 0.23 times, below our maximum
standard of 0.5 times and demonstrating the stability of our
financial position. We will continue to strive for both growthand stability.
The significant increase in cash and cash equivalents at theend of FY2022 was mainly due to the concentration of deposits
from customers at the end of the fiscal year. This balance is inline with the level we have determined as a general target.

Investment

AmountTotal investment through FY2030

Investments in Domestic Civil Engineering, Domestic Building
Construction, and Building Renewal projects

Corebusinesses
Business strategy
investments focusing
on three values:• Investments in technological development• Investments in production system innovation and DX• M&A investments

120 billion yen

Investments in International, Real Estate, and New Businesses• M&A investments for international business expansion• Acquisition of real estate focusing on synergies with core businesses• Investments in new business incubation• Investments in concession and PPP businesses• Investment in venture companies, venture funds, etc.

Strategic
businesses

Investment in sources of competitive
advantage (human resources, DX)

Main Investment Areas

130 billion yen

10 billion yen• Investments in personnel system reform and human resources development•E stablishment of environment and system infrastructure for Company-wide DX

Policy Regarding Strategic Shareholdings
Each year, the Board of Directors discusses the significanceof strategic shareholdings, including operating effectivenessand investment efficiency. In FY2022, we disposed of six
holdings, bringing the ratio of investment securities toconsolidated net assets to 14.8%. We have a strong focus
on capital efficiency, and we aim to bring this ratio to 10%
or less by FY2030.

Strategic Shareholding Reduction
BS Balance (left axis)
Ratio to Consolidated Net Assets (right axis)(Billion yen)
20.0

18.2

15.0
10.0

16.0

19.7
15.8

17.9

17.3

16.4
17.7

(%)
25

14.2

20
15

14.8

5.0

10
5

0

0

2019/32020/32021/32022/32023/3

Dividend Policy
The Company’s basic dividend policy targets a dividend
payout ratio of at least 4.0% DOE, which balances themedium- to long-term performance goal of at least 10%
ROE and a consolidated dividend payout ratio of at least
40%. Our dividend per share for FY2022 will be 36 yen.
To enhance the corporate value of the Tokyu
Construction Group, regaining our earnings capacity is of
the utmost importance. We must engage in Company-wide
efforts to raise profit levels and communicate these efforts
to stakeholders in an easily understood manner.

We will also focus on information disclosure anddialogue activities to ensure customers understand the Tokyu
Construction Group vision and growth strategy, looking
forward to our future growth and trusting our decisions.
We are firm in our commitment to improving PBR,
currently 0.9 times, and we intend to provide stableshareholder returns, increasing profits steadily, and fostering
future expectations to this end.
*PBR: Price book-value ratio. Share price divided by net assets per share, which
is an indicator of how many times net assets per share can be purchased for theshare price.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

29

Value Creation
Initiatives

Climate Change

P. 32-P. 37

Structural Changes
in the Construction
Industry

P. 38-P. 41

Strategic Business

P. 42-P. 47

Town Planning

P. 48-P. 53

Human Capital

P. 54-P. 63

Corporate
Governance

P. 64-P. 73*T okyu Construction is involved in many of the major buildings and infrastructure in the Shibuya area (highlighted buildings
and infrastructure in the photo above)

30

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TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

31

Steps in Value Creation

Value Creation
Initiatives

Driving Force for
Sustainable Value Creation

Foundation for Value
Creation

Corporate GovernanceCorporate Data

Climate Change

Three values

Creating sustainable corporate value by resolvingsocial issues, with climate change as the mostimportant materiality
Climate Change Initiatives
The Tokyu Construction Group has designated climatechange as a materiality and recognizes that addressing
climate change is a top-priority management issue. Our
long-term management plan, “To zero, from zero.” defines

decarbonization, zero waste, and disaster prevention andmitigation as the three values we deliver. We are tacklingthe challenge of achieving carbon zero through active
participation across various initiatives.

Pursuit of Three Values for Climate Change Risk Reduction

Initiatives Aimed at Achieving a Decarbonized Society
ZEB and ZEH-M Initiatives

Decarbonization

Post-handover CO2 emissions (Scope 3) from buildings arenotably high in our business. Therefore, we actively provide
environmentally friendly materials and equipment andpropose the utilization of ZEB and ZEH-M to customers
ordering construction.
We have integrated ZEB and ZEH-M standards into ourproperty designs since FY2016. In FY2022, we two ZEB
design properties (ZEB: 1, ZEB Ready: 1) were completed,and four new ZEB (ZEB: 4) properties were designed. The
ZEB retrofit of the Technical Research Institute has achieved
a 76-78% reduction in energy consumption for four
consecutive years since its completion. For ZEB-completedbuildings, we collect monthly measurements of detailed
items (air conditioning, ventilation, lighting, hot water supply,
elevators and escalators, and photovoltaic generation),compare design values and actual measurements, andprovide support for energy operations. We provide
feedback for ZEB proposals and designs by accumulating
and verifying the obtained data. In addition, we registeredas a ZEH Developer to respond more flexibly to customer
needs. We are accelerating our efforts to decarbonize
not only commercial
buildings, but also
residential construction.

Three Values
Number of ZEB and ZEH Properties

Climate Change Risk Reduction
Decarbonization

Zero waste

Design (27 jobs in total)

10Construction (14 jobs in total)

Construction completed (10 jobs in total)

Disaster prevention
and mitigation

5
4

4

4

4
3

3

3

Main Initiatives• Promotion of ZEB• Conversion of all electricity used in our businessactivities to renewable energy• Entry into renewable energy-related businesses• Conversion of heavy machinery and dump truck fuelto non-fossil fuel• Decarbonization of construction materials• Promotion of wooden construction projects• Development and operation of decarbonizationrelated technologies• Reduction of final disposal of waste plastics and otherwastes2• Promotion of recycled material use• Development and operation of waste recycling
technology• Contribution to infrastructure longevity throughinfrastructure asset management*• Extension of the service life of buildings and disasterprevention/mitigation through the use of building
health diagnosis technology and torrential rain
damage forecasting technology• Creation of a disaster simulation tool through the useof digital twins

1

1

1
0
FY2016

0

1

1

0

0

FY2017FY20180

1

FY2019*Base year: 2018
*2050 target: 100% reduction in Scope 1 and 2

Endorsement announced in
November 2020

*This is an ambitious initiative, the first of its kindamong general contractors in Japan

Eco-First Commitment Declaration

32

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

* Infrastructure asset management: A series of actions to treat social
infrastructure, such as structures, as assets and to maintain and restore theirlevel of functionality to provide appropriate services to users from asocioeconomic perspective. In April 2020, we obtained ISO 55001
certification, the international standard for railroad structures.

FY2022

FY2023 (planned)

In recent years, increasing concerns about climate change
led to a demand to understand buildings' CO2 emissions,

Scope 1 emissions from construction sites account for
approximately 75% of all greenhouse gas emissions, themajority of which are from the use of diesel fuel. As ameasure to reduce emissions from the use of diesel fuel, we
are introducing GTL fuel (gas to liquids), a liquid fuel derived
from natural gas that has properties equivalent to those ofdiesel oil. In April 2022, we began introducing renewablediesel, manufactured from waste cooking oil, animal andvegetable oil, and reduces CO2 emissions by approximately

including those in the supply chain. As such, we developed
our own Accumulated CO2 Emissions Calculation Sheet for

projects since FY2022 and propose CO2 reduction proposals
that meet customers needs.
Currently, there is an increasing need for stacking
method calculations, as opposed to estimated calculationsof CO2 emissions generated during the manufacture ofbuilding materials used in construction projects. This shiftreflects the utilization of low-carbon materials and efforts
to reduce emissions in various construction processes. By
sharing the approach of this sheet on the CO2 emissions

Conversion of all electricity used inour business activities to renewableenergyFY2021Introduction of
Low-Carbon Fuels

CO2 emissions from newly commissioned construction

GHG reduction target

FY2020Calculating All CO2 Emissions AssociatedDecarbonization
with Buildings

calculating CO2 emissions from building materials.

Information Disclosure

10This sheet enables us to determine the total amount ofLevel Attained by 2030

2

calculation framework, we hope to provide our customers
with highly reliable evaluation results and promote
adoption among other companies with the same
objectives.

Decarbonization

90% according to a life cycle assessment basis. In addition,
we have begun efforts to introduce B100 fuel in FY2023,
which is produced from waste cooking oil, is carbon neutral,and has the potential to reduce CO2 emissions byapproximately 100%.
In FY2022, 288.1 kℓ of diesel oil was replaced by GTL,
19.2 kℓ by renewable diesel, and 0.7 kℓ by B100, reducing
CO2 emissions by 115 tons.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

33

Steps in Value Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Climate Change

Three values

Obtained JIS Certification for E-PEC, an
Environmentally Friendly Concrete
That Uses Electric Arc Furnace Oxidized Slag
Fine Aggregate-Realization of improved constructability anddurability in addition to utilization ofindustrial by-products and reduction of
Zero waste
CO2 emissions
Together with Kanto-Ube Concrete Industry Co., Ltd.’sMizonokuchi Plant, Tokyu Construction obtained JIS
certification for E-PEC, an environmentally friendly concrete
using electric arc furnace oxidized slag fine aggregate.
E-PEC contributes to the conservation of aggregate
natural resources by using electric arc furnace oxidized slag
fine aggregate as a substitute for crushed sand and otherresources. E-PEC is also an environmentally friendly concrete(resource conservation and low carbon) that contributes tothe reduction of CO2 emissions (up to approximately 10%)because it reduces the amount of cement used while
ensuring strength. In the future, E-PEC will be madeavailable for widespread distribution, not only within the
Company, but also to other construction companies.
We will promote the internal use of E-PEC to achieve

Use of Renewable Energy

Decarbonization

As a member of RE100, we are working toward the early
realization of a decarbonized society, with the goal of
converting 100% of the electricity used in our businessactivities to renewable energy by FY2030.
This shift to renewable energy electricity has been infull swing since FY2020, and the FY2022 introduction rate
for renewable energy electricity at construction sites
in Japan was already 60%.
To further promote the introduction of renewableenergy electricity, the Company decided to utilize the
Virtual PPA service scheme and signed a Virtual PPA service
agreement with Clean Energy Connect Inc. Clean Energy
will develop 47 new non-FIT low-voltage solar power plants
exclusively for Tokyu Construction and sell the generated
electricity to the wholesale power trading market, whileproviding us with the environmental value offset electricity.
This initiative will generate the environmental value ofapproximately 4.4 million kWh of electricity annually fromrenewable energy sources with additional potential and will
reduce CO2 emissions by approximately 1,900 t-CO2. Theseemissions represent approximately 20% of our annual CO2
emissions from electricity use at our construction sites.

decarbonization and zero waste, and aim to distribute thistechnology throughout the industry.

Electric arc furnace oxidized slag
fine aggregate

General aggregate (crushed sand)

Non-FIT low-voltage solar power generation facility developed exclusively
for Tokyu Construction

Virtual PPA Service Contract(Provides Environmental Value over the Long-Term)
Non-FIT
Solar Power
Plant

Selling
electricity
to themarket(Owned by CEC)

34

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

WholesaleElectricity
Market(JEPX)

Power supply(regularelectricity)
RetailElectricity
Providers

Tokyu
Construction
Construction Sites

Promoting Wood and Wood-Based Construction
Decarbonization

Zero waste

With the enactment of the Law for Promotion of Wood
Construction1, social expectations with regard to thepromotion of wood construction that contributes to a
decarbonized society are increasing. Through our businessbrand Moctas, we offer a diverse value in wood and woodbased construction. For pure wood construction, we havedeveloped and offer Moctas 4, a four-story building thatcan be used for multiple purposes, including as an office orapartment building. In addition to pure wood construction,
we are also involved in the development of wood-based
fire-resistant components, the creation of effective wooden
spaces through mixed structures, and collaborative efforts inthe development of mid- and high-rise wooden construction
methods. In FY2022, we worked on a diverse range ofwood and wood-based construction projects, including therestoration of old private homes and pure wood lodging
facilities. We will continue to strive towards further expansionof our project orders.
Moctas WOOD (Semi-fireproof) Beams Acquired
Certification from the Ministry of Land, Infrastructure,
Transport, and Tourism
We have obtained ministerial certification2 for one-hoursemi-fireproof construction and 75-minute semi-fireproof
construction of Moctas WOOD3 (Semi-fireproof) Beams, awooden semi-fireproof construction technology. Thesebeams make it possible to provide exposed wooden spaces(known as mokuarawashi) in semi-fireproof buildings4.
This technology consists of a wooden beam composed ofa wooden load-bearing structural member covered with wooden
cladding as a fireproof covering (fire-resistant), and follows
the Moctas WOOD (Semi-fireproof) Pillar technology. Because
wood cladding can be made from ordinary wood without
special treatment, it is a quick and cost-effective solutionthat can be used not only for new construction but also forconversions utilizing existing wood load-bearing members.
 he P&UA Construction Method, a Mid- to High-Rise
T
Wood Building Construction Method, Receives
Individual Evaluation from the Building Center of JapanIn October 2022, a model plan for a 10-story apartmentbuilding, developed using the construction method of the
P&UA Construction Method Joint Technology Development
Group5, in which we participate, received an evaluation fromthe Building Center of Japan. Since it can provide the highstrength, rigidity, and toughness required to promote thedesign and construction of medium- to large-scale woodenbuildings, we plan to add it to the Moctas brand lineup for
further development in the future.
1. A ct Concerning the Promotion of the Use of Wood in Buildings, etc. toContribute to the Realization of a Decarbonized Society (Law for the
Promotion of Urban Wood Construction) (effective October 1, 2021)
2. Ministerial approval numbers QF060BM-0010 and QF075BM-0010-1
3. M
 octas WOOD is a registered trademark of Tokyu Construction.
(Registered trademark No. 6566919)
4. This technology has been granted patent No. 7119151.
5. Technical developers: Tokyu Construction, Ichiura Housing & Planning,
Orimoto Structural Design, Toda Construction, Toray Construction, Nishimatsu
Construction, Haseko Corporation, Sumitomo Mitsui Construction. Joint
Researchers/Collaborators: Hiroshi Isoda, Professor, Kyoto University; Koichi
Matsumoto, Associate Professor, Kinki University; Forestry Technology Center,
Hiroshima Prefectural Institute of Technology; and nine other companies

FillerWooden Load-Bearing Structural Member(General lumber of any species, laminated lumber,
LVL, cross-sectional dimension
105 x 240mm or more)

Available

Adhesive

Wooden Cladding(General lumber of any species, laminated lumber,
LVL, thickness 60mm or more)

Diagram of Moctas WOOD (semi-fireproof) beams

Heating test specimen of Moctas WOOD (Semi-fireproof) Beams

Four-story pure wood model using conventional framework construction
Exterior view of Moctas 4

Artist’s rendering of a 10-story apartment building (that received an
individual evaluation from the Building Center of Japan) designed with the
P&UA Construction Method

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

35

Steps in Value Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Climate Change

Responding to Climate Change (Information Disclosurein Line with the TCFD Recommendations)
In November 2020, we endorsed the recommendations of the Task Force on Climate-related Financial Disclosure (“TCFD”).
We have also identified response and adaptation to climate change as one of the materialities in our long-term management
plan to achieve by 2030. Recognizing the importance of the impact of climate change on our business activities as a company,
we will promote initiatives that are working toward a decarbonized society and enhance information disclosure in line with
TCFD recommendations.

Risks, Opportunities, and Responses Related to Medium- and Long-Term Sustainability
Risks and
Opportunities

Regulatory
risks

Governanceopportunities related to climate change and monitors
company-wide progress.

Report (material items)

Sustainability Committee
Activity
promotion

Committee chair: President

Cooperation
ReportRisk

Board of Directors

Oversight

Market risks

Strategy

Overview

Society As
a WholeThe Business
Landscape
Surrounding
the Tokyu
Construction
Group

Note: We referred to IEA WEO 2022 Net Zero by 2050, IEA WEO2021, andother sources to obtain information necessary for the study.

4°C Scenario

2°C or Less Scenario

We recognize the following business environment under the
4°C scenario, in which society as a whole takes a less proactive
approach to addressing climate change and in which the severityof physical risks will be more serious, including more frequent
large-scale disasters and worsening summer working conditions.

Under the 2°C or less scenario, we recognize a business environment
characterized mainly by transition risks, as climate change mitigation
efforts and regulations progress to reduce temperature rise and society
as a whole moves towards a low-carbon society.

Although regulations and policies concerning climate changerisks are progressing to some extent, particularly in developed
countries, their effectiveness is limited, resulting in insufficientmeasures being taken. Environmental regulations do not exert
a significant influence on the business sector. On the other
hand, temperatures continue to rise unchecked, resulting
potentially in more frequent and significantly larger disasters.

Society as a whole is actively taking measures to combat climate change,
including the implementation of carbon taxes and the advancement ofpolicies to regulate greenhouse gas emissions. Every company will face thecost of responding to this situation, as well as cost transfer from suppliers.
Furthermore, companies with a lack of environmental commitment are
expected to be affected by a pullback in investment and a deteriorationin their brand image.
In addition, the shift to renewable energy and innovation in decarbonization
technologies will change customer attitudes and increase demand for
products and services that can contribute to a low-carbon society.

Anticipated consequences include not only direct disasterdamage to on-site construction, but also an increase in casesof heat stroke in the summer due to rising temperatures andcost pressures due to reduced labor efficiency.
At the same time, the demand for disaster prevention andmitigation is expected to increase due to the increasing
number of disasters. This potential for disasters will lead to aneven greater expansion of the social responsibility of the Tokyu
Construction Group, including infrastructure development anddisaster preparedness measures.

We expect further expansion of low-carbon buildings, including ZEB, torequire construction management with low environmental impact.
Growing interest in new construction projects and energy conservation
has led to increased demand for renovations and energy conservation
measures for owned properties.
In addition, associated demand for renewable energy-related facilities
will increase as renewable energy becomes more prevalent.

Risk Management
Based on the risks and opportunities presented by climate change, we incorporate initiatives into the annual action plans
formulated by each business unit. Action plans are monitored on a quarterly basis for risk management.
36

Chronic
risks

Opportunities

The financial impact on the Tokyu Construction Groupof each risk and opportunity was analyzed under two
scenarios: a 2°C or less scenario, in which progress is
expected to be made in addressing and regulating climatechange, and a 4°C scenario, in which the severity of disasters
becomes more serious. In light of the impact of climatechange on the Tokyu Construction Group’s business, werecognize that reducing climate change risks and taking
advantage of these opportunities is a top management
priority. The Group has defined three values (decarbonization,
zero waste, and disaster prevention and mitigation), andwe are working to implement measures to reduce climatechange risks.

Business Impact*2
Estimated
Timeframe*1 2°C or
4°C
less

Introduction of acarbon tax•C arbon tax burden based on our emissions

MediumMedium
term—

Strengthening ofemissions reporting
requirements• Profit pressure due to compliance costs
and cost burdens of non-achievement
if subject to the Tokyo Metropolitan
Government’s total volume reduction
obligation

Short- tomedium- Medium
term—

Increased demand for
low-carbon buildings• Lost order opportunities due to an inability
Short- toto comply with regulations andmediumrequirements for low-carbon buildings
termsuch as Zero Energy Building (ZEB)

Transition to
construction
management with lower
environmental impact• L ost order opportunities due to inability toMediumperform construction work with low
toMediumenvironmental impact that meets
long-term
customer requirements

Conversion of owned
properties to meet
ZEB requirements

Major

Measures• Expand use of low-carbon fuels (GTL and RD) in heavyequipment and generators at construction sites•R educe carbon emissions associated with and increase
utilization of construction materials•C onvert to electricity derived from renewable energy
sources for RE100• Expansion of resources allocated to ZEB, ZEH-M, andwood construction-related departments• Develop technology to support the company’s wood andMediumwood-based construction brand• Strengthen sales force by developing ZEB/ZEH-M design
proposal tools—• Develop innovative technologies that contribute todecarbonization and zero waste (reduction of waste plastic
generation, reduction of mixed waste generation)• Improve construction efficiency through the use of BIM/CIM• Decrease in revenues due to an inability to
Short- topass on to rents the costs of ZEB
medium- Medium
conversion and other measures applied totermowned properties—• Promotion of energy-efficient real estate offerings,
including those that comply with ZEB standards• Promotion of disaster-resistant office space by renovating
old buildings• Strengthen cost competitiveness through internal
collaboration and new services

Expansion of therenovation market•M issed opportunities for orders resulting
from delayed response to demand andexpected expansion of energy-efficient
retrofit projects in the renovation market—• Capture demand for energy-efficient retrofit projects andequipment upgrades

Soaring raw
material prices• Urgency to adopt materials with lower CO2
emissions, such as wood, due to shifts in
Mediumcustomer preferences; Increased pressure
termon the bottom line if the increased costs
cannot be passed on—• Transition to low-carbon construction materials andexpansion of utilization rates• Provision and enhancement of accuracy for a CO2
emissions calculation tool for construction materials basedon the accumulation method

Rising summer
temperatures• Increased costs due to reduced efficiencyof workers due to higher number ofextremely hot days, and heat-related
measures, etc.

Mediumto
long-term

Head Office Divisions

Business Units, Subsidiaries, etc.

During the development of the long-term management
plan (published in May 2021), we considered a wide rangeof climate change impacts over the short, medium, andlong term through multiple future scenario analyses. We
have identified risks and opportunities that we believe areof particular importance.

Major Impact on
Tokyu Construction Group

Technology
risks

Transition Risks

We have defined issues surrounding sustainability asmaterialities (important management issues on which theGroup places priority) and report to the Board of Directors
on the progress of these initiatives. To respond flexibly tochanges in the environment, we have established a system tocomprehensively identify and review risks on an annual basis.
We recognize that climate change, one of our materialities, isa particularly important issue. The Sustainability Committee,
chaired by the president, reviews and discusses risks andInfluencing
Factors

Type

Short- tomedium- Medium
term

Major

—

• Improvement in construction efficiency through theutilization of BIM/CIM
Medium • Improvement of on-site work efficiency throughpre-cutting finishing materials and promoting Pca
conversion of structures•E xpansion of resources allocated to ZEB, ZEH-M, andwood construction-related departments•D evelop technology to support the company’s wood andMediumwood-based construction brand•S trengthen sales force by developing ZEB/ZEH-M design
proposal tools

Resource
efficiency

Increased demand for
low-carbon buildings•E xpand orders for low-carbon buildingsthat comply with standards such as ZEB

Short- tomediumterm

Energysources

Transition to
construction
management withlower environmental
impact• Increased opportunities to win orders by
responding to increased demand forenergy-saving technologies or renewableenergy use during construction

Mediumto
Mediumlong-term—

Increased demand forrenewable energy• Increased sales due to higher construction
demand for solar power plants, wind
power plants, and other renewableenergy-related facilities

Short- tomedium- Medium
term

Minor

Expansion ofrenewal market• Increase in renovation projects in line withgrowing demand for energy conservation

Short- tomedium- Medium
term—

Longevity of
infrastructure• Increased revenue through the incorporationof long-term durability projects in theMedium• Promotion of databases that employ IAM
infrastructure asset management businesstoMedium Medium • External IAM collaborations• Increased opportunities to win orders by
long-term• Development of carbon-neutral technology
developing long-life construction methods
using low-carbon materials

Entry into new markets•C reation of new businesses in nonconstruction fields

Products
andservices

MarketMajor•D
 evelopment of innovative technologies that contributeto decarbonization and zero waste•E nhancement sales capabilities by providing andimproving the accuracy of CO2 emissions data fromconstruction work•A
 ccumulation experience in renewableenergy-related construction• Capture of demand for energy-saving retrofit projects andequipment upgrades• Creation of new energy sources that contributeto decarbonization• Improvement and utilization of existing energy sources
MediumMedium Mediumthat contribute to decarbonizationterm• Participation in electricity market trading and power
supply business using energy storage facilities

1. Definitions of estimated timeframe Short-term: 0 to 2 years Medium-term: 3 to 9 years Long-term: 10 to 30 years
2. Definitions of business impact Minor: Less than 100 million yen Medium: between 100 million yen and 1 billion yen Major: 1 billion yen or more

Indicators and Targets
We monitor progress using management indicators such as the greenhouse gas (GHG) emissions reduction rate andrenewable energy electricity utilization rate outlined in SBT and RE100, as well as the waste targets expressed in the Ministryof the Environment’s Eco-First Commitment certification.

TCFD Targets
Items

Base Year

Subject

FY2022 Performance

FY2030 Target

FY2050 Target

Scope 1•2

9.2% reduction

30% reduction

100% reduction

Scope 3

47.4% reduction

30% reduction—

Greenhouse gas
emissions2018

Renewable energy—

Renewable energy usage rate

59.6%

100%

—

Waste

—

Final disposal rate

6.1%

Less than 3%

Zero

Note: Waste is a non-consolidated figure.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

37

Steps in Value Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Structural Changes in the Construction Industry

Building Construction Business
Strategy Progress and Initiatives

We provide building construction
services to our clients that exceed
their expectations by establishing avalue chain that utilizes BIM tools
and increases the ratio of designand construction.

1

Director, Senior Managing Executive Officer
General Manager, Building Construction Business Division

Long-Term Strategy Story

Long-Term Strategy Framework• Improvement of design and construction
project ratios

Fulfill customers’ requests in the upstream phases and efficiently
simulate construction• Environmentally friendly building initiatives

Design wood-based, ZEB, ZEH, and other decarbonization and energyconscious projects and implement them in construction• Improvement of construction productivity

Save labor through the use of digital technologies and robotics, as well as
divide labor through the introduction of supporting systems

2

FY2022 Review and Future Outlook
Revenue and profits increased in FY2022 with construction
sales of 192.0 billion yen (up 4.1% YoY) and construction
gross profit of 13.7 billion yen (up 4.9% YoY).

companies and implementing advanced procurement.
At the same time, we will seek the clients’ understanding
as we pass prices.

The increase in revenue was driven by the progress oflarge-scale private-sector construction projects for which
orders were received in previous years. Gross profit increased,
despite the impact of rising prices and other factors, due to a
reduction in construction costs through creative construction
management, acquisition of additional work, and a reduction
in defect repair expenses.
Orders received totaled 183.5 billion yen (down 17.1%
YoY), falling short of the 200.0 billion yen initial forecast due
to the delayed timing of large-scale construction orders.

The Building Construction Business Division will also
work to comply with the new overtime work limit regulations
and improve construction efficiency through the use ofdigital technology.

In FY2023, we expect an increase in construction sales
due to the completion of large-scale redevelopment
projects that were received in previous years. On the other
hand, we also expect pressure will be put on profits due toconcerns about a decrease in skilled workers, high prices formaterials and equipment, and an increasingly competitiveenvironment. Our division will minimize the impact of soaring
cost increases by strengthening relationships with cooperating
38

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

Construction Sales and Construction Gross Profit Margin
Building Construction Business(Non-Consolidated, Including International Business)

206,956
11.9%

184,407

192,052

196,000

7.1%

7.2%

7.0%

2022/32023/3 2024/3 Forecast

138,991
8.5%

2020/32021/3

Construction Sales (Million yen)

Construction Gross Profit Margin (%)

Orders Received
FY2021221.3 billion yen

FY2022183.5 billion yen

The Building Construction Business Division must focus on planning and proposal activities in the upstream
phase of the construction industry value chain to increase competitive advantage. Customer demand forenvironmentally friendly progress will increase going forward. As such, we will improve the ratio of designand construction projects to increase opportunities to provide
technical proposals, aiming to achieve a ratio of 70% by 2030.
Utilizing BIM as a platform to create an efficient construction
value chain will enhance the reliability of design and construction.
We will use virtual systems that utilize 3D models based on BIM for
design and construction projects. Through these systems, ourdivision will work on design verification and energy simulation in thedesign phase, as well as other areas such as cost and construction
simulations, and will further pursue active front-loading.

Tomoya Masuda

The Building Construction Business Division stores data from the value chain, such as data on sales, planning, design, construction,
operation, maintenance, renovation (RN), and reconstruction, on our Building Information Modeling (BIM) platform to visualize
and understand building information through a digital twin. We will increase the ratio of design and construction projects thatleverage data-based proposals. In doing so, we will develop new customers highly interested in the environment and use
front-loading to reduce costs and save labor and manpower. Our construction gross profit margin will exceed 10% by 2030.

Improvement of Design and Construction Project Ratios

BIM energy simulation

Receiving Orders for Wood-Based, ZEB, ZEH, and Other Environmentally
Friendly Buildings
The Building Construction Business Division will work to increase orders forwooden and wood-based buildings, energy-efficient buildings, and otherenvironmentally friendly buildings to spread and promote their use in our efforts toachieve a decarbonized society.
We have been working on ZEB and ZEH initiatives for our own design properties
since FY2016 to promote energy-efficient buildings. In addition, we registered as a
ZEH Developer to promote the spread of ZEH-M (ZEH condominiums), to accelerate
decarbonization efforts in both buildings and residential construction. TC-BES is anenergy simulation tool that enables simple and quick case studies of primary energy
consumption, BEI values, costs, and CO2 emissions necessary for customer decisionmaking and achieving ZEB. The development of TC-BES enables further reinforcementof environmentally friendly proposals.
We will continue to develop and build a track record in the areas of wood andwood-based construction, as well as ZEB and ZEH-M. We will also expand orders
through proposals that exceed the ever-increasing demands for environmentallyfriendly buildings.
Note: B
 EI value: Building Energy Index (BEI). BEI refers to the ratio of primary energy consumption of thedesigned building compared to the reference building. ZEB is achieved when BEI ≤ 0.50, excluding
renewable energy.

3

H1O Umeda-Chayamachi• Administrative entity
Nomura Real Estate
Development Co., Ltd.

• Project Members
Tokyu Construction Co., Ltd.
and Sumitomo Forestry Co., Ltd.

Improvement of Construction Productivity
Tokyu Construction launched the NxT-PJ (NxT-Project) in FY2019 to improve productivity in our Building
Construction Business Division. Our division is currently studying and implementing various measures.
One of the measures we have implemented so far is a system of on-site support by theworkshop support group, which has been successful. We outsource operations that canbe performed remotely while support staff belonging to the workshop support groupperform operations that can only be performed on-site. Our division will continue efforts
to improve construction productivity by increasing operational efficiency in preparation
for the expected overtime restrictions. In addition, we will work to improve efficiency
through the use of digital technology by increasing the rate of adoption of ICT standard
NxT-Project
tools in our workplaces.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

39

Steps in Value Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Structural Changes in the Construction Industry

Civil Engineering Business
Strategy Progress and Initiatives

We are polishing problem-solving
skills to support the foundation of
National Resilience

1

Yoshihiro Akada
Director, Managing Executive Officer
General Manager, Civil Engineering Business Division

Long-Term Strategy Story
The Civil Engineering Business will enhance our ability to provide our three values (decarbonization, zero waste, and disasterprevention and mitigation) and lead the game-change of the construction industry through global environmental issues.
We aim to expand civil engineering work for central government agencies that contribute to disaster prevention, mitigation,and national land resilience by leveraging our track record in urban civil engineering and rail lines in the Kanto region. Our division
will also continuously secure maintenance and repair work in the railroad field and enter into regional railroad civil engineering.
We will expand initiatives such as community contribution projects derived from public-private partnership projects (PPP/
concession), mainly in the water, sewage and industrial water projects.
Our civil engineering gross profit margin will exceed 10% by 2030.

Develop experienced engineers, expand the field of urban disaster prevention, andstrengthen external collaboration between local regions and the maintenance field•P rocurement of orders for railroad
civil engineering

Expand our maintenance field in metropolitan area private railways and newly enter
into local private railways• I mprovement ofconstruction productivity

Establish new construction production systems, such as labor-saving and automation
through the use of digital technology

2

FY2022 Review and Future Outlook
Construction sales increased 6% year on year to 60.3 billion
yen in FY2022, thanks to steady progress centered aroundlarge-scale construction projects. Construction gross profit
increased significantly with the elimination of factors that
deteriorated quality issues recorded in FYE March 31, 2022.
However, the profit margin remains low at 5.7%. Factors
included low-profit construction projects, which we receive
for strategic purposes, such as JV subcontracts, and thedeteriorating profitability of some overseas construction
projects. Orders received increased significantly to 84.2
billion yen, up 58% year on year. This increase was due to anincrease in orders for ODA projects overseas, including theManila subway in the Philippines, as well as numerous orders
for tunnel construction projects in Japan.
For FY2023, we expect civil engineering sales to increase
29% year on year to 78.0 billion yen, with a profit margin of
7.6%. We will steadily advance our abundant on-handconstruction work from increased orders in FY2022. Whereas

40

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

in public works projects, we will build up our track record andincrease the number of qualified personnel, while continuing
to strengthen our proposal-making capabilities. Lastly, in ourstrongest area of railroad construction, we will respond to arecovery in customer demand to procure orders.

Construction Sales and Construction Gross Profit Margin
Civil Engineering Business(Non-Consolidated, Including International Business)

88,07875,5689.3%

8.0%

2020/32021/356,88660,325
5.7%

78,0007.6%(6.2%)
Construction Sales (Million yen)2022/32023/3 2024/3 Forecast

Construction Gross Profit Margin (%)

Orders Received
FY2021

53.2 billion yen

FY2022

84.2 billion yen

Disaster prevention-related projects are increasing in response to the occurrence of large-scale disasters andother risks associated with climate change. Maintenance and management work is also becoming increasingly
important to extend the service life of infrastructure. The Civil Engineering Business Division will work together
with our management and engineering teams in light ofthese trends in infrastructure development to train the next
generation of human resources and develop technologies thatmatch the changing times and strengthen our sales structure.
The Early Contractor Involvement (ECI) method of ordering is
expected to increase in the future, making it necessary to
expand our expertise and build a structure for in-house efforts.
Railroad construction customers are also demanding improved
proposals by strengthening their own planning support
systems. As such, we will further enhance existing clients in
the Tokyo metropolitan area and work to establish newclients, including those in rural areas.
Tunnel Cross-Sectional Inspection and Diagnosis
System iTORELLong-Term Strategy Framework•E xpansion of general civilengineering orders

Initiatives in Response to the Fundamental Plan for National Resilience3

Productivity Improvements Through CIM Usage and Digital Advancements
The construction industry is riddled with issues. As such, our division will continue to advance transformation
through the use of digital technology to change the structure of the industry. We will also continue to provide
training and develop technical staff who can use Computer Integrated Manufacturing (CIM) in their daily work.
In doing so, we aim to actively promote the use of CIM throughout the entire process from design to construction
and maintenance. Our division will additionally actively introduce new Information and Communications
Technologies (ICT) tools on-site and integrate them withexisting tools to transform our construction management
system. We will actively pursue external collaboration on
construction automation technology and quality control
labor-saving systems, and encourage the use of CIM fromthe construction planning phase. The Civil Engineering
Business Division also promotes the use of a pile support
layer determination system, a reinforcement inspection
system, automated technology for tunnel face monitoring,and 4D simulation using VR as the embodiments ofConstruction planning with 4D simulation
technology that contributes to productivity improvement.

Initiatives to Strengthen Problem-Solving Skills
Our division will continue to strengthen and deepen our problem-solving skills to prevent loss of public trustand economic loss caused by insufficient assurance of safety and quality. We will spread awareness of the safetyassurance rules formulated in response to an occupational accident that occurred at a tunnel construction site
in FY2022. In addition, we will monitor compliance statuses in work procedures, and thoroughly work toprevent recurrence. Since FY2022, we have been working on quality initiatives such as assigning quality
certifiers and conducting quality patrols. We will leverage these initiatives to disperse issues horizontally andcreate risk management (RM) processes for each workplace to prevent quality accidents. In addition, we will
strengthen support for workplaces. Our efforts will include supporting workplaces during busy periods throughsetup teams, encouraging improvement activities through the Theory of Constraints (TOC) promotion, andproviding technical support through specialized committees. For human resource development, the foundation of
our problem-solving skills, we will rebuild our growth scenario and establish a training program to develop
workstation managers five years ahead of schedule. At the same time, we will review periodic employeetransfers to increase the mobility of human resources and ensure flexible and active human resources.
Note: Theory of Constraints (TOC). This theory assumes that eliminating constraints improves production efficiency. Tokyu Construction introduced thissystem as part of its efforts to change company work styles, and utilizing various methods to focus on our goals and pursue overall optimization.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

41

Steps in Value Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Strategic Business

International Business
Overseas Development of the Tokyu Construction GroupWe will expand business areas,
particularly in ODA projects,
and transform our businessmodel using digital technologies.

Dhaka
Hanoi

ManilaYangonMasakazu Konishi

Guam

Executive Officer
General Manager, International Business Division

Bangkok
Singapore

Long-Term Strategy Story

Jakarta

The International Business will focus on Official Development Assistance (ODA) projects as a pillar of our business and aim to
win new projects in various countries with our strong experience in railroad and road-related projects. Through these initiatives,
we will work to achieve sustainable growth. Our other contracting businesses will shift focus to their own business development
and rebuild business by supporting the growth of local general contractors and strengthening cooperation with them.
Furthermore, we will expand our business domain upstream and downstream in the value chain. Our efforts include participationin transit oriented development (TOD) through collaboration with partner companies, based on infrastructure development work
funded by ODA. In addition, we aim to expand our business domain by proactively investing earnings from ODA projects andother sources. In the medium to long term, we aim to increase the value we provide by building on our unique strengths
through the transformation of our business model in the contracting business through digital transformation.

Long-Term Strategy Framework• Increased profitability of contracting business(short-term issue)

Acquire highly profitable ODA projects; support growth andstrengthen ties with local general contractors• Expansion of business domains(short- to medium-term issue)

Collaborate with partner companies to expand into upstream anddownstream areas of the value chain• Collaboration with partner companies to expand into
upstream and downstream areas of the value chain

Leverage our BIM platform throughout the value chain• Improved and advanced governance in line withour business strategy

Establish appropriate governance in line with both the nature of ourbusiness and the speed of our growth

Strategy Progress and Initiatives

1

FY2022 Review and Future Outlook
Profits declined in FY2022 due to the influence of soaring
prices on deteriorating profitability of certain construction
projects, provisions for repair costs of defects in properties
delivered in previous years, and other expenses. We expect

Net Sales and Gross Profit Margin

sales to increase significantly in FY2023 due to progressin each of the construction projects carried over fromthe beginning of the fiscal year, including the ODA
projects awarded in FY2022. We also expect revenue andprofit to increase from the elimination of deteriorating
factors from FY2022, aiding the recovery of profits.

20,246
9,567

6,245

9,680
8.8%

2021/3
Net Sales (Million yen)2022/3

FY2021(3.9 billion yen)*

0.0%(15.4%)

Orders Received (Non-Consolidated)(23.4%)
2023/32024/3 Forecast

Gross Profit Margin (%)

FY202222.7 billion yen* This negative figure resulted from our review of contracts prior to theprevious period.

2

Contributing to Sustainable Town Planning through ODA Initiatives
ODA projects are one of the pillars of our business. Our current ODA initiatives include five projects in fivecountries (Indonesia, Bangladesh, the Philippines, Vietnam, and Myanmar). In FY2022, we were awarded theMetropolitan Manila Subway Project (Phase 1) CP104
Construction Area in the Philippines. This is the first subway inthe country and is expected to help alleviate serious traffic
congestion in the city center, curb air pollution, and mitigate
climate change. Our business has accumulated experience inrailway development for the Tokyu Line, and town planning inTama Garden City since establishment. We are committed tocontributing to sustainable town planning in developing andemerging countries by this accumulated expertise in railroad
construction and urban development.
Manila Subway contract signing ceremony (May 2022)

Strengthening Alliances with Local General Contractors for Business Growth
While there are expectations of market expansion in Southeast Asian countries due to their remarkableeconomic development, growth of local general contractors and the characteristics of the market, which are
different from those in Japan, have created a tough competitive environment. In response, the International
Division works to strengthen our alliances with local general contractors who have both a high appetite for
growth and reliability. We will achieve business growth for local general contractors with high potential
through our various technical and construction management expertise accumulated domestically as aJapanese general contractor. Furthermore, we will contribute to the development of high quality
infrastructure in these countries by participating in TOD and other activities through synergies with ourefforts in ODA projects.

Note: T he above figures are simple sum of our non-consolidated International
Business and overseas subsidiaries, and do not take into account theelimination of internal transactions.

42

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

43

Steps in Value Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Strategic Business

Real Estate Business
Strategy Progress and Initiatives

We will pursue a cyclical realestate business throughefficient management andsecure stable income fromrental real estate.

The Real Estate Business will renovate old properties to create comfortable and arrangeable business spaces that meetcustomer needs and add value as highly flexible office buildings. To do so, we will leverage our strengths in urban development
in Shibuya, as well as our construction expertise as a general contractor.
Going forward, we will continue to work on value-added developments, such as revitalizing and adding value to existing
properties, by leveraging the unique strengths of a general construction company. In doing so, we aim to expand earnings in
the Real Estate Business.

1

Junichi Omuro
Executive Officers
General Manager, Real Estate Business Division

Long-Term Strategy Story
The Real Estate Business aims to create social value and economic value by offering environmental real estate with proprietaryenvironmental technologies to small- and medium-scale properties difficult for large developers to handle.
We will accelerate efforts to develop and replace our owned properties new ones as one of our strategic businesses. In
doing so, we aim to expand our business and diversify our earnings from a business model focused on the leasing business,thereby securing stable earnings over the medium to long term.

Long-Term Strategy Framework
Earnings Expansion through the Accumulation of Assets (Rental Income and Sale Earnings)• Acquisition of income-producing real estate in line with our strategy to manage an appropriate asset scale based oninvestment efficiency•T ransition to a cyclical real estate model with a strong awareness of capital efficiency while accumulating asset holdings toa certain degree

Promotion of New Development, Reconstruction and Renovation under the TQ Brand

2• Environmental real estate initiatives based on the three values•A ccumulation of TQ brand assets•C reation of further synergies with the core businesses

FY2022 Review and Future Outlook
In FY2022, the Real Estate Business struggled to acquire
new properties due to the high real estate market. However,we acquired a property in Shibuya Ward at the end of March2023 and are currently working on a revitalization projectthrough our renovation work.
We are currently constructing a new building in Kyoto
City as part of our development project for our asset holdings.
With its construction, we aim to address environmental realestate issues, and we are additionally considering the designof a new building in Shibuya Ward, Tokyo.
In addition to our property acquisitions and development
projects in FY2022, we took the opportunity to replace
assets and proactively sold owned properties, contributing
significantly to profits.
We expect our assets to shrink, and sales from rental
income to decrease to about 1.0 billion yen at the44

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

beginning of FY2023 as a result of these initiatives. We are
active in our stance on asset acquisition, gathering more
property information than ever before. Going forward, we
will pursue new property acquisitions and development
projects through land purchases.

Commencement of Environmental Real Estate Initiatives
We conducted a feasibility study for commercialization to
focus on the environmental real estate market, which is
expected to grow in the future. As we proceeded withthe development business for our own assets in Kyoto
City, we also identified issues that need to be addressed
to develop ZEB, ZEH, and other types of real estate withtargeted low environmental impact. The Real EstateBusiness will also acquire Comprehensive Assessment
System for Built Environment Efficiency (CASBEE)
certification for the assets we currently own. We will
move forward sequentially with development projects forother assets we own. The Building Construction Business
Division possesses advanced design and construction
expertise. Through collaborations with this division, we
will provide high-value-added real estate that contributes
to our three values of decarbonization, zero waste, anddisaster prevention and disaster mitigation, all of which
are at the core of our management.

Values Provided by theReal Estate Business• Development of real estaterelated 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
and renovation• Implementation of zero-wastebuildings through new technology,
planning, and services• Provision of safe and secure
spaces by utilizing technologies
and services unique to a
general contractor• Taking on challenges to create
safe communities throughin-house development

Development of Our New TQ Brand
We will actively develop our own brand named TQ,
which is a combination of Tokyu Construction and TOP
QUALITY. The TQ series offers interior spaces withsophisticated design, functionality, and comfort thatmatch the brand power of the Tokyu Construction Group,
guarantees security and reliability as a general contractor,
and focuses on the development of in-house rental realestate with high environmental performance such as
ZEB and ZEH. We launched a new website to promote
the TQ branding concept.
The TQ brand logo is a registeredtrademark of the Company(No. 6284447).

Net Sales and Gross Profit Margin

Values Provided by
Tokyu
Construction

TQ Residence Karasuma-Oike
This is the first rental apartment
development project under
the TQ brand.

Illustration of completed building

TQ Yoyogi ParkIn March 2023, we acquired a
new property in Kamiyamacho,
Shibuya Ward, Tokyo to promote
its rental real estate business.
Illustration of completed building

9,151
1,684

1,391

1,731

31.0%

1,000

10.9%
(79.4%)
2020/3
Net Sales (Million yen)

50.0%

2021/3(86.2%)
2022/32023/3Gross Profit Margin (%)

2024/03
Forecast

3

Renovation of Old Office Buildings
We will leverage our unique expertise as a construction company to renovate extremely old offices andset-up offices that are compatible with the new normal. This expertise can be seen in our Higashi Azabu
office, which we renovated in August 2020 from a building more than 50 years old. The Real Estate Businesswill revitalize older buildings based on our own renovation policy, while determining our approach toinitiatives and renovations.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

45

Steps in Value Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Foundation for Value
Creation

Corporate GovernanceCorporate Data

Strategic Business

New Businesses

Creating New Businesses Through
Synergistic Initiatives
Long-Term Strategy Story
Establishing competitive advantage and exploring new business opportunities require a great deal of new knowledge and ideas.
The Tokyu Construction Group will engage with intention to foster an organizational climate for continuous innovation throughmechanisms that nurture human resources and human resources development.
At the same time, we plan to incorporate innovative technologies and business models from outside through open
innovation. Our approach to creating new businesses will incorporate a strong awareness of synergies between our three values(decarbonization, zero waste, and disaster prevention and mitigation) and our core businesses, which will form the axis ofmanagement decisions.

Long-Term Strategic Framework• Engage proactively in PPP initiatives for concession business projects for water, sewage, airports, etc., as well as for smart
city development (group collaboration)• Develop a function to create new businesses continuously; launch new businesses in fields that contribute to our threevalues (renewable energy, etc.) and fields that utilize digital technologies

Todoroki Ryokuchi Redevelopment Project Public-Private Partnership (PPP)The Tokyu Construction Group has been involved in private
finance initiative (PFI) projects since 2003 in response torising needs for public-private partnerships and future market
expansion. We participate in a number of projects: Sendai
Airport, Hamamatsu public sewerage, Hiroshima Airport, andMiyagi Prefecture public water and sewerage and industrial
water. In April 2023, we became part of the Kawasaki City
Todoroki Ryokuchi redevelopment project. The project will
be managed by Kawasaki Todoroki Park Corporation, which
was established by nine companies, including Tokyu
Corporation and our Company. The plan is to redevelop thestadium, arena, and other facilities in the area, maintaining
and managing the entire green space for 30 years throughMarch 2053. We will participate in project management,

Grid Stabilization
Excess Electricity: Charge
Insufficient Electricity:
Discharge
Electric Power Grid
(Transmission Line)Power Storage Facility
Weather-Dependent
Renewable Electricity

Open Innovation
In February 2022, we formed TOKYU-CONST GB Innovation
Fund L.P., a corporate venture capital (CVC) fund. This fund isa two-party partnership with Global Brain Corporation,a leading independent venture capital firm. In FY2022, thefund made equity investments in three startup companies.

Business Lines

Expected Synergies

WebsiteClean Energy
Connect, Inc.

Non-FIT renewable energy
generation business forcorporations (off-site
corporate PPA) and green
power solution
business (consulting).

Advance the Tokyu Construction
Group’s renewable energy
business (off-site corporate PPA
business and VPP business)through knowledge in renewableenergy business models.

Investment in Clean
Energy Connect, Inc. acompany providing
Offsite Corporate Power
Purchase Agreements

Cellid, Inc.

Development and supply of
display modules for highperformance AR glasses.
Development and supply of
VSLAM software.

Improve construction
management, planning, design,and management operations
efficiencies at construction sites
using VSLAM and AR technology.

Accelerate Digital
Transformation with open
innovation! Investment inCellid Corporation

ToggleIndustries, Inc.
(USA)

Development and supplyof processing and software
using automatic rebar
assembly robots.

Automate rebar processing andassembly to reduce labor andimprove productivity.

WEB

WEB

Artist’s conception of the Todoroki Ryokuchi after redevelopment(courtesy of Kawasaki Todoroki Park Corporation)

To create decarbonized societies, we must be proactive in
reducing CO2 (Scope 3) emissions from the buildings weconstruct. We launched on-site solar PPA services as part ofthis effort. On-site solar PPA is a service in which we, as a
power generator, install and operate solar power generationequipment at customer sites, supplying electricity fromrenewable energy to the customer.
Our first project was a solar power generation systeminstalled on the roof of the Sano Plant of Tokyu Linen Supply
Co., Ltd. As a result, approximately 28% of the electricity
used at the facility will be replaced by renewable energy,
which is expected to reduce CO2 emissions by approximately

WEB
Investment in Toggle
Robotics a Company that
Uses Robots to Automate
the Assembly of Rebar

Fostering a Culture of Innovation

25% (63.5 tons).
Our first on-site solar PPA project at the Tokyu Linen Supply Sano Plant

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

We are working to stabilize the supply and demand ofelectric power in Japan and to make effective use ofrenewable energy. Current efforts include the launch of anenergy storage facility (grid storage batteries) business at ourown plant in Sagamihara City, Kanagawa Prefecture.
By connecting large-scale storage batteries directly tothe power grid, the facility will absorb surplus power fromrenewable energy sources, provide supply and demandbalancing, and discharge power when power supply anddemand are tight in various power markets.
The project is scheduled to begin the installation oflarge-scale storage batteries in January 2024 and begin
operation in April 2024.

contributing to the community and society through the town
planning expertise we gained through our past construction
work and PFI projects.

Start of On-Site Solar PPA Services

46

Storage Depot Scheduled for FY2024 Launch

The Group sponsors the MOON SHOT CONTEST toencourage the submission of internally generated businessideas and foster a culture of innovation. We also launched
the InFiNiTO Club in FY2022 as part of our efforts to develop
human resources oriented to new business creation.
InFiNiTO Club is an in-house training program in which
participants learn programming to develop and propose
new products. We use both programs to identify and selectideas for commercialization.

MOON SHOT CONTEST participants

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

47

Steps in Value Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Town Planning

Town Planning and DX

Further accelerating the advantage of rebuilding
cities while maintaining daily life with data anddigital technology
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 comfortable living
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 the very essence of our Management Policy.
In the future, urban development in Japan will focus on rebuilding existing cities while maintaining daily life. Our strengthlies in our ability to rebuild cities while maintaining urban functions and economic activities without compromising safety andconvenience. We will further refine the strengths we have cultivated to date with data and digital technology, and will takeon the challenge of solving social issues in collaboration with our partners.

Achievements in Urban Development
We have been involved in many projects involving railroads
and urban development around train stations. We haverefined our expertise by pursuing and realizing construction
projects that minimize disruptions to everyday life and take

into account not only our direct clients but also the users
and the local community. These achievements havebecome our strengths: technology and expertise that keep
urban functions running.

Redeveloping Areas around Stations by
Leveraging Our Strengths

Railroad Improvement Construction Projects
Using BIM/CIM

By taking advantage of our strength in construction aroundstations and near railroads, we have become involved withvarious redevelopment projects beyond the Shibuya Station
Tokyu Line projects. We are further honing our existing strengths
through experience gained in difficult construction projects.

We have completed various overnight construction projects toconvert aboveground tracks to underground, such as the tracks
between Tokyu Toyoko Line Shibuya and Daikanyama Station,
without affecting users' daily lives. We enhance our railroad
construction capabilities by utilizing the latest technology.

Shin-Tsunashima Station Area Type 1 Urban
Redevelopment Project

Toward DX in Town Planning
Our Strengths

Technology
and expertise

Leveraging Urban Digital Twinsat
Simul ion

Cities ina virtual
world

Decarbonization
Zero waste
Disaster prevention
and mitigation

Toward a higher
level of integration

Feedback

Data upload

Integration

A reassuring
and comfortableliving environmentMore focused on theneeds of our customers,
both in normal times
and during emergencies

Sustainablesmart society
Toward a human-centricsociety through thefusion of information

Human Digital
Resources

D a t a - d riv e n

In the future, cities are expected to evolve into smart cities
that utilize data and digital technologies. An urban digitaltwin, which reproduces data generated from the real worldin the cyber world, is used to perform advanced simulations
and apply the results in the real world to solve various
urban issues. The Group will further sharpen the strengths
we have cultivated in the real world and build an urban

What we Aim
to Achieve

3D model created at the time of planning

Three values

to keep the city
functioning

Cities in
the real
world

Solving Various
Urban Issues

Improving thewell-being ofurban residents

EnsureSustainability

Image created based on theimplementation design(March 2020)
Client: Shin-Tsunashima Station Area Urban Redevelopment Association
Opened in March 2023, a mixed-use redevelopment facility directly connectedto the new station, integrating residential, commercial, and public facilities.

Itabashi Station Itabashi Exit Area Type 1 Urban
Redevelopment Project (JR Itabashi Station)

PurposeMissionStatement

Tokyo Metro Ginza Line Shibuya Station Improvement WorkWe were honored with the Third Japan Federation ofConstruction Contractors Civil Engineering Award and the
FY2019 i-Construcition Award Grand Prize for Excellence from
the Ministry of Land, Infrastructure, Transport and Tourism forour achievement in completing challenging construction
projects under limited time constraints, utilizing BIM/CIM and
VR technology. This accomplishment was made possible
through collaborative discussions and consensus-building withentities in civil engineering track, signaling, communications,and power systems, as well as those involved with theconstruction of new station facilities and station personnel.

Overseas Expansion of Transportation
Infrastructure Construction

We fulfill each individual’s
dreams through thecreation of a reassuring
and comfortable living
environment.

twin. The Company will do this not only to contribute tosmart cities that bring well-being to people, but also to
realize the three values we have set forth. These are notthings that the Company can do alone. We will collaborate
with like-minded companies, local governments, and otherpartners with an open mind.

Client: Nomura Real Estate Development Co., Ltd. and East Japan Railway Company
Mixed-use development, including an urban tower condominium directly connectedto the station facilities.
Commercial facilities will be located on the lower floors to improve conveniencefor station users and nearby residents.

Kakoicho East District Type 1 Urban Redevelopment
Project (JR and Tokyo Metro Nakano Station)

We are applying our experience in domestic infrastructure
construction to assist in the economic development ofSoutheast Asian countries. In cooperation with local
companies and personnel, we contribute to sustainableurban development by developing social infrastructure,
particularly transportation infrastructure networks.

Jakarta MRT

48

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

Construction status

Client: Kakoicho East District Urban Area Redevelopment Association
Mixed-use redevelopment of a large (approx. 2.0 ha) area in close proximity to
the station, incorporating residential facilities, offices, and commercial facilities.
Enhancing accessibility from the station square by creating an integrated plazawith adjacent land and enhancing circulation by improving pedestrian pathways.

Hanoi City Ring Road No. 3
Construction Project (Mai Dich-SouthThang Long), Section 2

Dhaka MRTTOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

49

Steps in Value Creation

Value Creation
Initiatives

Driving Force for
Sustainable Value Creation

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Town Planning

DX Strategy

Technology Strategy

Creating New Value and Innovative Business Models
with Digital Technology

Maximizing Customer Value and Strengthening
Fundamental Technologies

We intend to solve urban social issues by implementing the digital twin concept. This is a process in which the technologies
and know-how we have acquired in the real-world construction business are modeled in virtual reality. The issues we areworking on include creating safe and citizen-friendly environments, as stated in our corporate philosophy; achieving thethree values of decarbonization, zero waste, and disaster prevention and mitigation, as stated in our long-term management
plan; and creating the smart cities that are expected to evolve in the future.

We are developing across seven categories, not only emerging technologies, but also those that will meet the potential
future needs of our customers. We are also actively collaborating with external parties to quickly establish a construction
production system that is responsive to changes in the environment. Our goal with this system is to deal with social issues
and enhance our corporate value.

The important point with digital transformation (DX) is how we link it to the creation of social value. The Tokyu Construction
Group puts the issues to be addressed using DX into one of the four quadrants below, with issues categorized on the verticalaxis in terms of being internal or external to our Group and on the horizontal axis in terms of deepening knowledge andintellectual exploration.

Overview of DX Initiatives
Improving and increasing the value created to date

External

1. Continue providing value-added and superior construction services and technologies that meet customer needs.
2.	Look to introduce cutting-edge technologies, actively collaborating with different industries, jointly developing
technologies with organizations outside of our Group, and acquiring technologies that our customers select to be one
step ahead.
3.	Develop technologies that improve quality, productivity, safety, and environmental friendliness, focusing on early
application and dissemination.

Seeking and implementing new value for the future
Collaborating internally and externally to provide unprecedented
value to customers

Adding more value for customers by using digital technology

Basic Policy

Strategic Categories and Main Technologies

Decarbonization• 3 R• C ircular Economy
Digitalizing customer
contact points

Promoting
BIM/CIM

Improving
QCDSE** QCDES: Quality, Cost, Delivery, Safety, and Environment

Deepeningof Knowledge

Improving operational efficiency and speeding
up decision-making with DX

Decarbonization

Zero
waste

Implementing ourthree values

Disasterprevention
andmitigation

Reorganizing business processes and systems and developing
IT infrastructure with DX always kept in mind

Achieving external
collaboration

Achieving digital
innovation

Intellectual
Exploration
Handling numerous challenges of
HR development and corporate culture reform• Earthquake Resistance• I nfrastructure andBuilding Health• Water Damage Resistance• BIM/CIM• Sustainability and Convenience

PaperlessCreating self-learning
opportunities

Establishing an
innovation budget

Staying One Step Ahead in
Areas Peripheral to Construction

Customer Value

Information Examining hybrid
sharing using operations on site
Introducing otherdigitalformats
aspects of DX

Reorganizing
internal systems
and setting rules

Accelerating
data-driven
decision-making

Internal

Practical training

Evaluating challenges

Setting up help
desks/lines

Developing DX
human resources

Developing systems
that generateinnovation

Demonstrating
cross-departmental
teamwork

The DX initiatives we are implementing meet the certification
criteria set out by the (Japanese) Ministry of Economy, Tradeand Industry, and we are now a DX Certified Operator.
We have released our long-term management plan, To
Zero, from Zero. Furthermore, by leveraging the competitive
advantage provided by digital technology and our people,
we will practice sustainability management to solve social
issues and create economic value while achieving our three
TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

• ZEB/ZEH• Energy Management•R enewable Energy, Hydrogen Usage• Environmentally Friendly Concrete• Wooden Buildings

Obtaining DX Certification

50

Quality

Basic Policy
on Technology
Development• Materials• Construction Management• Design and Wellness

Productivity• Construction• Construction Methods• Labor-Saving and Automation

Town
Planning

Safety• Safety Monitoring Technology• Hazard Prediction Information

Cross-departmental teams

OK!
Let’s try!

Improving efficiency
by fundamentally
reviewing operations

DisasterPrevention
andMitigation

Strategy
Category

Creating systems, structures, and opportunities that creates aculture of fast-paced problem solving and overall optimization

Changethe rules!

Signatureless

Zero
Waste

• Energy Conservation• Greenhouse Gas Emission Reduction•3
 R, Circular Economy

values of decarbonization, zero waste, and disaster prevention
and mitigation. In addition, to put DX into practice, we are
fully committed to a digital shift, which we will achieve by
developing digital human resources and building digitalplatforms. Going forward, by creating new business models
and services, we will further accelerate our DX initiatives, withthe aim achieving our
VISION2030.

•S afety and Security
Seismic Resistance, Seismic isolation,
and Vibration Control (Seismic)
Integrity Assessment and Flood
Damage Resistance• Maintenance Management• Smart City Wellness• Environmental Preservation• Biodiversity• High Quality, High Durability• Short Construction Periods

Strengthening Fundamental Technologies

Innovative Construction Production Systems
Quality

Productivity

Safety•	Materials•Q uality Control Systems
 egradation Prediction•D
Technology

Construction•	•A dvancement of Construction
Technology•	Construction Methods•N ew Construction Methods
to Save Labor andIndustrialize Construction• Labor-Saving and Automation• Labor-saving and Productivityenhancing Construction Technology•P artially AutomatedConstruction Technology•M odularization, Unitization,and Systemization•P hotography, Inspections, etc.,
Using Robots and Drones•P rocess, Labor, and Design Work•P
 artial Workflow Automation (e.g.,
in Progress Management)• Safety Monitoring		• Construction-Site
Safety-monitoring
Technology• Human/Vehicle
Detection Technology

Construction Management•	• Construction Management
Technology• Inspection Systems• Design and Wellness•E quipment-related
Technologies• Vibration and NoiseControl Technologies• Improvement of Living
Environments• Wellness Building Design

Hazard Prediction•	
Information• Technology for
Communicating Hazard
Prediction Information

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

51

Steps in Value Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Town Planning

DX in Business
Building Construction Business

Civil Engineering Business

BIM BSI Verification Based on ISO 19650

Social Implementation of the iTOREL Tunnel
Inspection System

On March 30, 2023, we were certified by BSI Group Japan
K.K. (British Standards Institution) for BIM BSI Verification
based on ISO 19650-2*.
ISO 19650 is an international standard for information
management throughout the entire life cycle of construction
using BIM. Proper data management is important, as the useof BIM allows for real-time collaboration among clients,
designers, contractors, and maintenance managers within acommon data environment that includes 3D models.
The application of ISO will shorten the time-consuming
process of reaching a consensus with clients, which is always
a challenge. This process will also transform the businessmodel of our building construction business and humanresources versed in digital technologies.
* ISO 19650: Integration and digitization of information, including BIM, forbuilding construction and civil engineering works.
ISO 19650-1 2018: BIM-Based Information Management: Concepts and Principles
ISO 19650-2 2018: BIM-Based Information Management: Asset Delivery Phase

Solutions for Urban Energy Conservation
Energy conservation in buildings will be an important issue
in the cities of the future. In this context, we developed andlaunched the Tokyu Construction-Building Energy Simulator(TC-BES), a building energy simulation tool we use topropose solutions tailored to customer needs. Using BIM,
we create various case studies in a short period of time in theearly design stages to study ZEB, etc., for optimal solutions.

TC-BES, a primary energy simulation tool for building construction

Transforming the Building Production Systemthrough BIM
Building production systems and supporting value chains
are transforming in anticipation of urban digitalization. In
particular, data-driven solutions using BIM havetransitioned from a trial phase to a phase of practicaladoption. In connection with construction planning, wedeveloped BIM solutions compatible with heavy
construction machinery manufacturer BIM solutions forearth bracing, underground construction, and aboveground temporary work planning. We offer a DX systemusing a one-stop digital twins approach from the planningstage through practical utilization at the construction site.

52

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

BIM model (including temporary construction plans)

Streamlining Administrative Operations
through Digital Technology
In Japan, where earthquakes are common, strict standards
for construction are in place. A single measurement error
in building piling construction can lead to a severe quality
incident, making multiple physical inspections and otherburdensome tasks on site a challenge. The Tokyu Construction
Group developed a cast-in-place concrete pile control
device to ensure the quality of cast-in-place concrete piles.
The use of digital technology facilitates the standardizationand streamlining of management tasks, which relied in parton technician experience in the past. In the future, we aim
to improve this technology further through a web application
for a more intuitive interface related to the status of the
pouring process.
In addition, we continue to improve on-site efficiency
through the use of ICT. Currently, we use 18 tools toimprove efficiency at construction sites, striving to change
the mindset of on-site technicians. For example, we install
network cameras, wearable cameras, and 360-degree
cameras for remote verification, the automatic recording ofevidence, and information sharing with related parties.
Other communication tools between site supervisors andworkers improve construction process efficiency. Tablets andsmartphones make communication easier, allowing for the
sharing of safety and quality instructions and real-time
progress monitoring. We will continue to utilize effective
tools to improve operational efficiency.
At the same time, we endeavor to transform theconstruction production system of the future and comply
with overtime work regulations that will come into effect inApril 2024.

The Tokyu Construction Group developed the iTOREL
tunnel inspection system to replace manual tunnel
inspections with more efficient and advanced tunnel
inspection operations. The system incorporates anautomatic crack detection unit, which detects cracks
and protrusions in overlay concrete, and a hammering
test unit. This system allows the acquisition of inspection
data used to determine quantitative and temporal changes
while improving work efficiency, from physical inspections
to the creation of reports. In a field trial conducted at the
Katsuiwa Tunnel on National Route 127 in Chiba Prefecture,
we confirmed that the system can reduce the number ofpeople required for inspection work by up to 40%. Office
work, such as the preparation of reports, can be reduced
by up to 18.5%.
The system has been given marks for practicality,
designated by the Kanto Regional Development Bureauof the Ministry of Land, Infrastructure, Transport andTourism as a standardization technology under a program
to match on-site needs with technology seeds. iTOREL
also received the Outstanding Performance Award (Social
Infrastructure, Disaster Response, and Firefighting Field)in the 10th Robot Awards.
Disaster prevention and mitigation is one of the values
we offer our customers. As part of our commitment to thisvalue, we will pursue the social implementation of the iTOREL
tunnel inspection system in cooperation with companies that
conduct tunnel inspections.

on-site form and support work, leading to a 35% reduction(compared to conventional on-site casting) in the timeneeded to construct a box culvert of 7.0 meters by 5.2
meters by 10 meters.
The PPCa Box Culvert method was first applied in
the construction of the underpass around Shibuya Station
on R2 National Route 246 (“project”) after obtaining an
Advanced Construction Technology and Technical Review
and Certificate in June 2021. The project involves constructing
underground lanes and sidewalks directly under Route 246
to improve convenience for pedestrians and vehicles inthe vicinity of the west exit of Shibuya Station toward
Sakuragaoka. The PPCa Box Culvert method was used toconstruct box culverts for approximately 22 meters of theunderground roadway.
Construction took place in the common-use space
above and below ground necessitated by the work being
conducted on the Metropolitan Expressway No.3 Shibuyaline and Shibuya Station west exit pedestrian bridge.
Therefore, we created a detailed construction plan andconducted construction work based on 4D simulations thatincorporated a time axis into virtual reality and 3D models.
We plan to use this construction method in the future tobuild 25-meter box culverts for the underground walkway
that is part of the project.
* PPCa Box Culvert is a registered trademark of Asahi Concrete Works Co., Ltd.
(registered trademark No. 6453626)

Partial precast installation

PrecastTop Plate
Robot Awards winners

Productivity Improvements via Partial PreCast(PPCa) Box Culvert and 4D Simulations
The PPCa Box Culvert* is a method developed jointly by the
Tokyu Construction Group and Asahi Concrete Works Co.,
Ltd. This method of constructing large box culverts replaces aportion of sidewalls and top plates with precast components.
Under this method, partially unitized precast components
are fabricated in a factory, while concrete is installed on-site,enabling construction within the constraints of the construction
machinery. The method significantly reduced the need forPrecast Side Wall
Case-in-Place Concrete
PPCa Box Culvert

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

53

Steps in Value Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Human Capital

Human Resources and Organizational Strategies
Human resource strategy linked to management strategy

Human Resources Strategy
Strengthening Problem-Solving Skills to Advance Core Businesses

Nurture and Recruit Human Resources Capable of Leading Change

We continue to deepen our problem-solving skills by passing thestrengths we have cultivated in our construction business to the next
generation. These strengths are our technology and expertise in
keeping urban functions running, as well as teamwork that transcends
the boundaries of civil engineering, construction, and other businesses.

We aim to develop professional and autonomous human resources
who can lead change with expertise and professionalism, pride,passion, ambition, and the ability to persevere.

01

01 Recruiting highly skilled external professionals• Recruit and hire experienced human resources to expand into new
business fields and pursue innovation• Determine job grades and compensation based on the size of therole and responsibility; offer compensation commensurate withmarket value.
• Establish a new specialist certification system as a career option tofoster specialists

Pursue further technical development
and retain experience and skills•	Offer a skills development program that combines basic businesseducation, specialized education, and selective training•	Conduct systematic on-the-job training to ensure the experience,skills, and expertise of multiple generations are passed on to thenext generation

younger employees and give
02 Select
them challenging opportunities•	Assign job grades based on the size of the job responsibilities,
not years of employment•	Select and appoint excellent human resources based on an objective
evaluation of abilities•	Employ rotation rules to broaden experiences and create
opportunities for growth•	Engage in active career mid-career recruitment to complement
generational shortages

03

Enhance Corporate Value andImprove Employee Engagement

DeepenKnowledge

Intellectual
Exploration• Strengthen on-site capabilities• Invest in strategic businesses• Innovate construction
production systems• Create new growth opportunities
through synergies withcore businesses• Grow through alliancesand M&A

Develop Human Resources for
Increasingly Complex Management Tasks

Pursue health management to keep
workers vibrant and active•	Pursue health management strategies based on KPIs
•	Optimize working hours to prevent health hazards caused by long
working hours•	Sponsor mental health care initiatives to promote mental health•	Offer more detailed medical checkups and physical examinations for
employees and families to maintain safe working conditions• Identify and foster next-generation
management candidates• Offer regular training and experiences• Continue to learn and grow

→ Next Generation Management Academy→ Prepare successors for key positions→ Executive officer training programsupport for autonomous career
02 Provide
planning to broaden horizons• Create a career selection system aligning employee goals andaspirations with company needs, and place the right person in theright job• Provide career design education that solidifies career paths andencourages autonomy• Offer overseas training and internship programs to expand careersand provide opportunities for new challenges; adopt an open
application system• Introduce a training system for all employees to become digital
human resources

03

Diversify human resources to meet
diversified needs• Reform work styles to reduce the number of sites requiring long
working hours and create environments encouraging active roles
among workers regardless of time constraints• Recruit regional career-track employees and conduct year-roundrecruitment to include the recruitment of employees with limited
possible work locations• Create environments welcoming and sensitive to diverse humanresources and values, conduct activities supporting non-Japaneseemployees, and foster LBGTQ+ -friendly workplaces

Organizational Culture Reform

01

Management leadershipfor change• Engage in ongoing dialogue
with employees to ensure ashared vision

54

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

02

Efficient work style tocorrect long working hours• Reduce working hours throughefficiencies through digitization and IT• Adopt systems for diverse work styles• Ensure eight days off every four weeks
at job sites

03

Foster an organizational
culture of challenge, praise
and appreciation• Thank-You cards• MOON SHOT Contest• Commendation systems

autonomy and
04 Encourage
leadership transformation• Conduct dialogues and organizational
improvement activities based on employee
engagement survey results• Provide servant leadership training• Foster psychological safety through dialogue

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

55

Steps in Value Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Human Capital

Dialogue: President Terada and Outside Experts

Kayo Iketeru
I’S Plus Co., Ltd.
Representative Director
Yamano College of
Aesthetics
Specially Appointed
Professor

Mitsuhiro
TeradaTokyu Construction
Co., Ltd.
Representative
Director and President

For Continuous Change at
Tokyu Construction
Tokyu Construction believes that human resources are a source of competitive advantage. The Company’s
corporate vision, VISION2030, defines an ambidextrous human resources strategy linked closely to
management strategy. We invited I’S Plus President Kayo Iketeru to join our President Terada in discussing
human resources and organizational strategies to improve corporate value and employee engagement.

56

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

Becoming a United Organization That Takes
on Challenges with Integrity

the psychological safety of being allowed to verbalize

Kayo Iketeru: My first question to you, President Terada, issponsors wonderful initiatives, such as your Vision Dialogues,

your view of management. The Tokyu Construction in-house

while the diversity that makes each person different gives

magazine had an article about integrity as an important creed

strength to a company.

and how company management strives to take on challenges

Terada: While we are in the construction industry, every

and change. This aligns with VISION2030, formulated in

job entails different duties: engineers, designers, sales,

2021, and the slogan, To Zero, From Zero. The environment

accounting, clerical, etc. When customers or colleagues

and the excitement of the future.

express their appreciation for a job well done, we feel a

Mitsuhiro Terada: Integrity is something both I and thesense of fulfillment and satisfaction in our work. By listening

Company must uphold. And I have adopted the word

to the thoughts and stories of colleagues, we have an

integrity as a personal creed, which includes ethics andopportunity to embrace diversity and realize that we are also

integrity from a higher perspective. We foster a corporate

diverse in our own way. We want to create an environment

climate and culture that encourages employees to take on

where we can understand each other’s nature (individuality)

challenges while working toward the achievement ofand find a common language.

VISION2030.

Iketeru: What other measures are in place to increase

Iketeru: What was the thought process behind “To zero,

employee satisfaction?

from zero.”Terada: We have a thank-you card system to send notes to

Terada: We launched a project to formulate a corporate

people we want to thank, so everyone knows who thanked

vision for the COVID-19 pandemic in 2020. We chose thatwhom and for what. In the future, we plan to use this systemphrase after gathering the ideas and dreams expressed by

as a tool to communicate what people are thinking, including

the employees involved in the project. The To Zero challenge

praise and congratulations.

represents our commitment to decarbonization and carbon

Iketeru: That’s wonderful. There is the “thank you” thatneutrality as something we can do for the environment.

expresses gratitude, the “thank you” that expresses

The From Zero challenge represents our determination toemotion, and the “thank you” that expresses emotional

provide new value. At the same time, we also incorporated

excitement. A workplace that fosters good communication

our desire to deliver excitement to our stakeholders.

is one in which top management, leaders, and employees

Iketeru: In my own life, there are things I like, things I dislike,can all express their feelings. Even negative expressions

things I want to do, and I pay attention to those feelings.

can be constructive if we talk about what we can do going

Excitement is what sparks emotions. Tokyu Construction is aforward rather than blaming the person for what they said.

town planner, and towns can move the heart. Even buildings

It is important to create an environment where people

that look the same at first can be impressive when we know

bring in others to address problems together rather than

the story about the monument, a staircase design, or thesimply asking for their problems to be solved.

structure. I believe town planning itself is an inspiring andTerada: It is essential that we listen to the emotions ofmoving process.

those around us in the workplace. We should ask directly if

Terada: Thank you. When we create products and provide

they are angry, sad, or excited. We strive to create anservices, our customers feel the emotions in our work, andenvironment where people can express their feelings about

these emotions are what moves customer hearts. Exciting

what they want to do and how they want to do it.

feelings, and the sense of unity to share feelings are all
essential elements for this to happen. Tokyu Construction

goods and services serve as a differentiating factor fromother companies and foster loyal customers. These days,
our competitors all have similar technologies. We must
provide stirring solutions that exceed customer imaginations

Regaining the Will to Take on Challenges
through VISION2030

to demonstrate our uniqueness.

Iketeru: What are your thoughts behind VISION2030?

Iketeru: Every person has a different point of excitement.

I would also like to hear about what kind of human resources

I believe that employees should communicate theirare you looking for to achieve your vision.

excitement to each other in the workplace and increase

Terada: We conducted a Hofstede Organizational Culture

the frequency of such communication to raise the level

Scan1 during the visioning project. The results showed thatof excitement. An awareness of excitement in the workplace,

employees lacked a sense of challenge, could not express

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

57

Steps in Value Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Human Capital

Dialogue: President Terada and Outside Experts
their thoughts, and were unwilling to take risks and step

depending on how goals are perceived. What if we were toempathy when you, as president, work with employees toforward. Since our founding in 1959, we have grown alongchange the name from “managers” to challenge referees

create a vision and communicate that vision. The second

our country’s rapid economic growth. And we did so throughor challenge backers? Our employees will hear the word

is the degree of involvement. Creating opportunities forour spirit of taking on challenges. Since the bursting of thechallenge very often. It will be a familiar part of our language.

involvement with superiors, subordinates, colleagues, andbubble economy, we have seen a rising desire to protect

1. A
 model for diagnosing organizational culture developed by Dutch social
psychologist Dr. Geert Hofstede.

top management is important. The third is a sense of growth.

what we have and avoid risk, to avoid repeating our history

Ambidextrous Human Resources Strategy
Linked Closely to Management Strategy

those around must understand that change leads to growth.

autonomously—people who have the spirit and determination

Iketeru: In VISION2030, you formulated an ambidextrous

Terada: We emphasize this sense of growth, too. While

to take on challenges.

human resources strategy to deepen knowledge and practicethe root of employee engagement is for the company and

Iketeru: To start a new business, you have to take risks.

intellectual exploration in conjunction with your management

employees to grow together, we are looking at ways to

Terada: The failure to take that risk was a reflection of thestrategy. What was the intent behind this decision?

demonstrate in language and other formats the opportunities

previous long-term business plan from 2010 to 2020. As long

Terada: In 2011, we formulated a corporate vision for 2020,

employees have to experience growth.

as our core businesses perform well, we don’t feel the need

Advancing Shinka. At that time, our aim was to deepen our

Iketeru: It would be nice if leaders could recognize andparticipated in FY2021 under the theme VISION2030. A total

to invest in new businesses or take on new challenges.

core businesses and evolve toward new business fields,

communicate the breadth of growth paths and goals. Forof 2,447 employees participated in FY2022 under the theme

However, when business performance is strong is exactly

leveraging these two shinka (evolution) to become a company

example, improving company performance, creating social

Action Required for Change. FY2023 dialogues deal with thewhen we must take on new business challenges with anthat offers true value. However, this evolution was insufficientvalue, and daily actions can lead to growth in one’s personal

theme of Excitement, as addressed in VISION2030. Theseeye to the future. Otherwise, we won’t be able to achievefor us to expand into new business fields. Therefore, welife. The world often tells us to look for role models, but I

dialogues will focus on job satisfaction and pride.

sustainable management. We cannot beat our competitors

redefined our human resources strategy into deepen

believe it’s fine to look for partial models. Rather than trying

Iketeru: This will be an excellent opportunity to deepenby continuing to do things the same old way. So, we haveknowledge and pursue intellectual exploration. With respect

to find a perfect role model, I think we should search forthe teamwork that is so important in our work. Vision

to incorporate innovation into our core businesses. This is

to deepening knowledge (strengthening on-site capabilities

partial models—people who have certain outstanding areas

Dialogues across departmental boundaries are sure to create

why we added a new evaluation category in our FY2022

in our core businesses), we continue to evolve our on-siteor certain traits to emulate. I think people can grow by

more highly unified teams.

human resources system reform that rewards people forcapabilities by passing the strengths we have cultivated inlooking at different exemplary partial models.

Terada: Yes, I believe so. Our principles of conduct emphasize

taking on challenges.

our construction business to the next generation. These

Terada: I feel the same way. In this sense, it is important toteamwork, unchanged since the founding of our Company.

Iketeru: For example, we can change the name and role ofstrengths are our technology and expertise in keeping urban

have leaders from whom we can learn.

And while I have experienced teamwork since my time

the goal management system, devising a challenging goal

functions running, as well as teamwork that transcends the

2. The first organizational improvement cloud in Japan, developed by Link andMotivation Inc.

working at on-site projects, there were times when I felt

system, or something similar. We can encourage employees

boundaries of civil engineering, construction, and otherorganizational barriers that prevented teams and departments

to think of goals as a challenge to take on rather than abusinesses. With respect to intellectual exploration (recruitingfrom working together as well as they could. We must

matter to be managed. When you join Tokyu Construction,and developing human resources capable of change),

you should have a sense of excitement about new town

we aim to develop professional and autonomous humanplanning and imagining the kind of town you would like toresources who can lead change with a high level of expertiselive in. That is going to be the theme for our new businesses.
In the end, the work may be the same, but the actions will vary

guessing whether we should take on challenges. We wantto undo this trend through VISION2030. To this end, we seek
people who are willing to respond to change and grow

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

Providing opportunities for each person to verbalize themeaning behind their work promotes a sense of growth.

Vision Dialogues Improve the Quality of
Employee Actions

change our organizational climate and culture to understandand professionalism, pride, passion, ambition, and the ability

Iketeru: You began Vision Dialogues in FY2021 as a means

example, by reaching out when another department seems

to persevere.

for organizational culture reform.

especially busy. Our human resources evaluation considers

Iketeru: This is truly a human resources strategy integrated

Terada: We designed Vision Dialogues to communicate

efforts to help in areas outside one’s normal jurisdiction.

with management strategy. You say that your human

our corporate vision to all employees, with the aim of

Iketeru: I think providing opportunities for dialogue about

resources strategy aims to increase corporate value andunifying management, communicating our corporate

your vision will keep employees excited. I encourage you

employee engagement. How did you establish employee

vision repeatedly, and encouraging employees to act

to continue Vision Dialogues into the future.

engagement metrics?

autonomously. These dialogues consist of an hour-long

Terada: We intend to conduct the program for 10 years,

Terada: We have been using Motivation Cloud for about

online meeting between a director or executive officer,

and we are already seeing changes in employee perception

three years, setting KPIs based on those scores. Employee

including me, and five employees from different departments,

after only two years. As I mentioned earlier, we must

engagement is affected in some respects by the most recent

ages, and job categories combined randomly. Every

restore the spirit of taking on challenges that existed at theperformance and compensation. So, we don’t necessarily

employee must understand and empathize with our vision

beginnings of our Company. We have always conductedfeel one way or the other about these scores. What is

if we are to achieve it. Through small-group dialogues,

business based on integrity, and if we add to that theimportant is for management to move toward improvement

we encourage participants to see their own personaldesire to challenge ourselves, there is nothing to be afraid

when scores trend downward.

responsibility in our corporate philosophy, vision, andof. We want to continue to be a Tokyu Construction that

Iketeru: I believe there are three key points to improving

management plan, starting a cycle of understanding,changes constantly while implementing our management

employee engagement. The first is empathy. You strive for

empathy, and action. Of our 2,700 or so employees, 2,436

philosophy with integrity.

2

58

You must make a call to action that change equals growth.
Each individual must initiate change on their own, whileof rebuilding. The situation continues to be one of second-

the work and circumstances of other departments. Ideally,
departments should be willing to help each other, for

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

59

Steps in Value Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Human Capital

Human Resource Strategy to Achieve Management Strategies
Develop Human Resources for Increasingly Complex Management Tasks
More than ever, the lack of human resources to deepen
knowledge and engage in intellectual exploration is a majorrisk in a market environment of rapid changes and increasingly
complex management requirements. To deal with this issue,
we are building a next-generation human resources poolthrough a next-generation management academy, as well as
joint training programs and interchanges with Tokyu Group
companies across other industries. In this way, we seek todevelop human resources suited to key management in a
regimented manner.

Intellectual Exploration: Nurture and Recruit Human Resources Capable ofLeading Change
Highly expert and experienced human resources areindispensable to international business, the real estatebusiness, and in creating new businesses.
Through various measures, we recruit and nurtureautonomous human resources capable of leading change
by combining a high level of expertise and professionalismwith pride, passion, ambition, and the ability to persevere inorder to expand business domains and deliver innovation.

01. Recruiting Highly Expert Professionals

Deepen Knowledge: Strengthening Problem-Solving Skills to Advance Core Businesses
The source of our strength is our technology and expertise in
keeping urban functions running, even during on-site
projects, and teamwork that transcends the boundaries ofcivil engineering, construction, and other businesses. We
feel that this source of strength reflects our purpose inbringing joy, not only to our direct clients, but also to thecommunities and people who use the facilities we construct.
From the beginning, we have endeavored to fulfill thispurpose. We intend to deepen our problem-solving skills,
supported by the initiative, experience, and skills of
employees who share this vision, ensuring that thesecapabilities are passed on to the next generation.

02. Selecting Younger Employees for
Challenging Opportunities

01. Pursue Further Technical Development
and Retain Experience and Skills

possible, our Civil Engineering Division has new employees
take part in a 10-month-long training program before being
assigned to a work site. This training is based on a practicalcurriculum that aims to cultivate the ability to respond to worksite situations. The Building Construction Division provides afriendly competitive environment by using an employee’s firstyear as a training period. During this time, trainees are
assigned to work in pairs after four months of training.
We create many other opportunities for growth by rotating
employees between internal and external departments toincrease experience and by assigning them to responsibilities
that balance aptitudes and aspirations.

We have established an education system consisting of threeelements: (1) Compulsory basic business education byposition and topic to support the improvement of businessand digital skills; (2) Compulsory specialized education
specialized by job type to enhance expertise as a source ofproblem solving; and (3) Elective and selective education to
support voluntary actions toward career independence inorder to provide value.
We also strive to create organizational knowledge
through business progress management incorporating TOC
theory methods, knowledge sharing, video content coveringbuilding construction knowledge, construction methods, andtechnological information, combined with on-the-job training.
FY2020

FY2021

FY2022

Number of training
programs

99

111

124

Training hours

3,607
hours

4,590
hours

4,786
hours

Number of trainees

3,626

6,348

8,703

Investment per person

57,000yen/year

72,000yen/year

91,000yen/yearWEB

Human Resource Development Master Plan (in Japanese)

We transitioned to a two-tiered grading system based oncompetence (functions) and roles (responsibilities). Job
grades are assigned according to responsibilities, whichhelps younger employees be selected and take on new
challenges regardless of experience in terms of years.
We also select and appoint excellent human resources
based on an objective evaluation of abilities reflecting job
grade definitions, creating growth opportunities throughplanned rotations. This approach is one way in which weaccelerate the speed of employee growth.
To ensure new hires gain confidence as quickly as

03. Pursuing Health Management to Keep
Workers Vibrant and Active
With the majority of employees in their 50s and 60s, working
with peace of mind and without health concerns is increasingly
important. To ensure a peaceful, healthy environment,
we designated our president as chief health officer,
establishing a health promotion system led by the Human
Resources Department in cooperation with industrial
physicians and public health nurses.
We also established KPIs health management initiatives
and monitor the effectiveness of each measure.
WEB

60

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

Tokyu Construction Health Declaration

We established a new specialist certification system as acareer option to foster specialists. This system helps us
secure personnel essential to each business from outside
the Company at compensation commensurate with market
value. Within the Company, we designate individuals as
specialists who are highly specialized and expected tomake a significant contribution to company or divisionperformance. We compensate these specialists at the sameor higher level than executives within the organization inquestion. This approach has expanded the range of career
options and clarified the path to greater specialization.

02. Providing Support for Autonomous
Career Planning to Broaden Horizons
We encourage employees to engage in career autonomy
and take on challenges through opportunities to think andact in the interest of their own careers. Measures include a
career selection system for all employees to pursue their
aspirations, goals, and future dreams, career design training
to take stock of one’s career at a certain age and think about
the future, an open application system for employees tovolunteer in response to departmental requests, and an
overseas internship program to encourage human resources
who want to take on overseas business challenges.
In addition, we view digital technologies as a source ofcompetitive advantage on par with human resources. We
recruit and nurture digital human resources as a means toincorporate digital technologies at higher levels. We createda human resources development plan specifically to improve
digital skills and literacy among all employs, fostering theability to act in response to change and challenges.
Digital Human Resource
Promoters

Expert Digital Human Resources
Digital Human Resource
Digital Human Resource Promoters
Digital Human Resources
Increased productivity of organization
Data Analysis

PC Basics

Utilization of
On-Site Tools

Microsoft 365

DX Overview

Mind

Business reform and value-added creation in business areas
Data Analysis

DX Planning

Digital Promotion

Expert Digital Human Resources
Support for business units and promotion of company-wide policies
Data Science

DX Strategy &Promotion

DigitalTransformation

03. Diversifying Human Resources to Meet
Diversified Needs
To adapt to diversifying customer needs, expand into new
business domains, and pursue innovation, we foster a
corporate culture that incorporates various viewpoints andvalues from a cross-section of different personalities. We
pursue the creation of workplaces where diverse humanresources can maximize their talents. To ensure diversity,
we encourage active female participation, recruit regional
career-track employees, conduct year-round employment,
provide support for non-Japanese employees, and support
LGBTQ+ persons.
Based on the results of an assessment of the present
conditions and an analysis of issues, we have formulated an
action plan (April 2023 through March 2026) to promote
female advancement and participation and set targets
accordingly.
WEB

General Employer Action Plan (2023-2025) (in Japanese)

We made progress in hiring women in line with our plan
through FY2022, increasing the number of female
employees in FY2023 to 314, an increase of 25 (11.9%)
compared with the previous fiscal year. We will continue tosystematically recruit and promote new employees this fiscal
year and beyond.
2021/32022/32023/3

Number of female career-track
employees hired

18

17

22

Ratio of female career-track
positions (%)

16.1

18.3

21.0

Number of female managers

2

4

3

Number of female candidates for
management positions

5

3

9

Percentage of female employees
taking childcare leave (%)

100

100

100

Percentage of male employees
taking childcare leave (%)

6.8

37.3

41.9

In October 2021, we received the Eruboshi
Certification under the Act on Promotion of
Women’s Participation and Advancement in
the Workplace. This certification recognized
our advancements in promoting theadvancement of women in the workplace, including training
and coaching related to career development.

Partnership System (LGBTQ+)In July 2022, we introduced a new partnership status thattreats same-sex partners and employees as de facto(common-law) marriages. In November 2022, our efforts
were recognized with the PRIDE Index Gold status, adesignation granted by Work with Pride*.
* An organization for the promotion and establishment of diversity management
related to LGBTQ+ persons.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

61

Steps in Value Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Human Capital

Organizational Culture Reform Supporting Our Human Resources Strategy
Organizational Culture Reform
01. Management Leadership for Change
In an uncertain business environment where there is no
single correct answer, every individual must think and act
autonomously toward a shared goal, rather than simply
follow someone else’s lead. Since 2021, management andexecutive officers, including the president, have acted as
facilitators for small groups of five employees of different
departments, ages, and occupations to aid the understanding
and empathy of the future of Tokyu Construction. We
completed a second round of these dialogues through aconvenient online format with the participation of 2,500
employees, and a third round is underway.
The first round consisted of an explanatory video as astarting point for creating our vision, and participants sharedin the process of vision ideation, hearing the thoughts ofmanagement, and exchanging opinions in an encouraging

atmosphere. The theme of the second round was to rethink
behavior toward challenge and change, fostering a climateof honest discussion regardless of job title to breathe newlife into our organizational culture. Participants offered
numerous opinions on a variety of issues.
The current round consists of discussions regarding thespecific topic of excitement (services that inspire emotion),reflecting the idea of excitement from our long-term
management plan, reaffirming pride in our work, andaddressing the gap between our current state and where wemust go to achieve our vision.
We see this round as a chance to communicate theearnestness of management and encourage autonomouschanges in behavior. At the same time, these meetings will
foster an organizational culture of dialogue, increasing
opportunities for employees to connect in different ways.

Vision Dialogues
Unifying management, communicating the corporate vision repeatedly, and encouraging employees toact autonomously
What are Vision Dialogues?
Vision dialogues are an hour-long online meeting with a director or executive officer, including the president, acting as a facilitator
to a group of five employees from different departments, ages, and job categories combined randomly.
We conduct the program year-round for all employees.
The board members who serve as facilitators conduct dialogues two to three times a month.
Executive officers meet annually before a round of dialogues begins to discuss how to proceed, ensuring an effective forum for discussion.
BackgroundIn 2021, the Tokyu Construction Group formulated VISION2030, our vision for 2030, and a new long-term management plan toachieve this vision. Traditionally, we shared new plans with our employees in various ways, including explanatory presentations. But, wealways met difficulties in getting the entire Company on board with plans that involve challenges and changes. This time, instead offorcing employees to listen to one-way explanations, we wanted to create a cycle of understanding and empathy with our philosophy,
vision, and management plan. To this end, we created a small-group interactive format for participants to understand, empathize, andset their own goals as part of this vision, hopefully leading to autonomous action.
Vision Dialogue rules• Everyone participates in dialogues as equals, not as presenters andlisteners, but as colleagues engaged in building a better future in this eraof VUCA.
• We work together to create a climate in which people feel free to speak
frankly, regardless of job title or status.
Participation and Frequency
1st Round
FY2021

Reaffirm VISION2030; excitement(satisfaction and pride in one’swork)

02. Creating Efficient Work Styles
The Work-Style Reform Promotion Committee plays acentral role in advancing various measures, including
reducing working hours in anticipation of the overtime hourcap that will take effect in April 2024. For work sites where
employees tend to work long hours in particular, thecommittee endeavors to ensure closing work sites for a
total of eight days out of every four weeks for all
62

done outside their own department and the relationships
between departments (e.g., understanding different roles).
Expressing even the most minor of everyday details in words
leads to a new awareness about relationships and increases
our capacity to accept others (e.g., acknowledging andaccepting others).
We expect this practice of sending appreciation and praise
will lead to increased communication among colleagues andjob satisfaction for the employees so recognized.

We focus on the following measures to improve thehealth of our employees and their families as part of ourefforts to advance healthmanagement.
1. M
 ore detailed health checkups
2. Cancer prevention activities
 tronger smoking
3. S
cessation programs
4. M
 ental health care awarenessand advancement
5. G reater employee awareness of healthcare
6. Appropriate working hours
As a result of these efforts, we were certified as a
Health & Productivity Management Organization 2023
(Large Enterprise Category) by the Ministry of Economy,
Trade and Industry (METI) and the Nippon Kenko Kaigi(Large Corporations), recognizing Tokyu Construction as acompany that addresses employee health from a strategic
management perspective.

03. Fostering an Organizational Culture of
Challenge, Praise, and Appreciation
We hold the Performance Achievement Awards to commend
initiatives that contribute to completed construction projects
and other business results. We also began digital thank you
cards that allow employees to send expressions of gratitude
to anyone easily, regardless of relationships as a supervisor,
subordinate, or different department.
All employees can view these thank you cards on their

04. Pursuing Autonomy throughLeadership Transformation
We believe that the role of a manager 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. Managers must foster asense of ownership and significance, creating an environment
in which members can communicate their own intentions
and where psychological safety is guaranteed.
Based on the results of our employee engagement
surveys, we felt it was necessary to reaffirm the role ofmanagers to improve problem solving and organizational
improvement while instilling leadership toward creating aneven more positive organizational environment. To this end,
we championed the idea of servant leadership. In FY2019,
we began servant leadership training for managers,emphasizing the role of team members as the main actors
and managers as the supporting players. We began the
training on a voluntary basis, starting with highly motivatedmanagers to improve our organization and expanding
eligibility as we roll out best practices Company-wide. A totalof 130 individuals have participated through FY2022. We
continue to expand the concept of servant leadership andpsychological safety as we roll out successful case studies ofpost-training organizational improvement Company-wide.

Improving Employee Engagement

2,436 employees (93%) Opportunity to understand andTotal of 511 times
share our new vision.

In progress

devices, which encourages a deeper understanding of work

Topic

2nd Round 2,447 employees (90%)
Actions needed for change
FY2022
Total of 571 times
3rd Round
FY2023This approach to work style reform is inseparable fromour pursuit of health management, as we believe an
increased awareness of health also affects the way wework. To this end, the Work-Style Reform Promotion
Committee, the chief health officer, and the Management
Meeting work closely in coordination under a more
effective implementation framework.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

“Meeting in small groups encourages participants to share theirreal opinions. It is important that we continue with these dialogues
rather than one-and-done. I want dialogue to be a part of ourculture.” (President Terada)

employees. To this end we are looking to improve work
efficiency through construction management methods thatfully use ICT and IoT technologies, thought process reform,
and other tools.
We are also implementing a flextime system, teleworking,and interval work to foster a workplace environment where
employees and workers choose various work styles according
to their circumstances, facilitating greater productivity.

We believe that human resource strategy measures linked tobusiness strategy is part of a process contributing to businessperformance and corporate value. We also believe thisprocess ties to employee engagement, which is way we use
engagement rating* as a KPI in our human resources strategy.
We define employee engagement as the willingness ofeach employee to contribute by properly understanding thestrategies and goals set by the Company and voluntarily
exerting his or her abilities. Since 2018, we have conducted aregular employee engagement survey for Group employees
to understand employee awareness, visualize the status andissues in each organization, and drive improvement activities.
We encourage team dialogues around organizational
improvement activities inspired by survey results andfeedback. In this way, we aspire to improve psychologicalsafety within the organization and create an environment
conducive to improvement activities and new ideas, fostering
spontaneous problem-solving among our managers.

Tokyu Construction Group Trends
Strengths• High level of job satisfaction and sense of social contribution• Many employees feel a sense of unity and shared goals in the workplace
Weaknesses• Uncertainty about the relative strengths and future of the company• Lack of vertical communication between levels and weak companywide solidarity

Engagement Rating
FYE Mar. 2022

BB

FYE Mar. 2023

BB

FY2030 Target

AAA*Engagement rating Motivation Cloud from Link and Motivation Inc.
Engagement ratings are based on feedback from Tokyu Construction Group
employees, including employees of subsidiaries. Ratings are divided into 11
stages, and our most recent rating of BB is the fifth after ratings of AAA, AA, A
and BBB.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

63

Steps in Value Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Corporate GovernanceCorporate Governance
Overview of Major Institutions

At Tokyu Construction, we have a Corporate Philosophy that consists of our purpose, management policy, and Code of
Conduct that describes 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 enhance sustainable growth and medium- to long-term corporate value.
Fostering strong and capable corporate governance is a key management issue in these efforts. We are constantly striving to
make improvements that will result in more effective and efficient corporate governance.
WEB

Board of Directors

Audit & Supervisory Board
Members and Audit &Supervisory Board

PurposeThe Board of Directors is
responsible for the Company’s
management philosophy,
management policies, and otherimportant matters concerning
the execution of business
operations. It supervises theexecution of duties by directors
and actively and continuously
works to enhance sustainablegrowth and medium- to longterm corporate value.

The Audit & Supervisory Board
determines audit policies,
methods for investigating thestatus of operations and assets,
and other matters related tothe execution of duties by the
Audit & Supervisory Board
Members. Each member of the
Audit & Supervisory Board
audits the execution of duties
by directors to ensure soundcorporate governance.

To enhance the independence,
objectivity, and accountability of
the Board of Directors’
functions, discussions anddeliberations are held regarding
the fairness and appropriatenessof personnel matters andcompensation of directors.

In order to enhance the overall
corporate governance of theCompany and increase its
corporate value,
recommendations are made to
the Board of Directors regarding
corporate governance.

Chairperson

Representative Director,
President

Full-Time Audit & Supervisory
Board Members

Lead Independent
External Director

Lead Independent
External Director

10 directors (including 4 external
directors, all of whom are
independent directors)

5 Audit & Supervisory Board
members (including 3 external
Audit & Supervisory Board
members, all of whom are
independent officers)

6 directors (4 external directors,
the president and 1 director not
engaged in business operations)

6 directors (4 external directors,
the president and 1 director not
engaged in business operations)and 3 outside members of the
Audit & Supervisory Board

16 meetings in FY2022

8 meetings in FY2022

5 meetings in FY2022

4 meetings in FY2022

The Board of Directors
deliberates and makes
resolutions following discussions
on critical business activities,
such as the formulation ofmanagement plans andmanagement policies, inaccordance with internal
regulations that specify mattersrequired by laws, the Articles ofIncorporation, matters
authorized by resolutions of thegeneral meeting of shareholders,and matters referred by the
Board of Directors. It also
receives reports from time totime on the execution ofimportant business operations
and other matters.

In accordance with their duties
and responsibilities, eachmember of the Audit &Supervisory Board attends
meetings of the Board of
Directors and other important
meetings, reviews important
approval documents, andconducts inquiries andinvestigations into the executionof tasks within relevant
departments to gain anunderstanding of the process ofsignificant decision-making andthe status of business execution.
Additionally, they may receive
business reports fromsubsidiaries and others asnecessary. Members of the Audit& Supervisory Board monitor the
Board of Directors’ performanceand provide audit reports to thedirectors based on the results.

The Nomination andCompensation Committee
deliberates on succession
planning for the President, andpersonnel matters for directors,
executive officers, etc. It alsodeliberates and determines
individual director compensationand other matters based on
resolutions delegated by the
Board of Directors.

The Governance Committee
deliberates on issues raised by
the results of the annual
questionnaire regarding theeffectiveness of the Board of
Directors and works to improve
its effectiveness. In FY2022, itconfirmed its intent to review the
Board of Directors’ agenda
criteria and enhance matters fordiscussion and consideration.
Consequently, the committee
recommended partial revision of
the Board of Directors’ Regulations
to the Board of Directors.

Corporate GovernanceIn addition to clarifying our core principles on corporate
governance, we have formulated the Tokyu Construction
Corporate Governance Basic Policy with the goals of
preventing misconduct and enhancing sustainable growthand medium- to long-term corporate value through theachievement of effective and efficient corporate
governance. We will continue working diligently tostrengthen corporate governance in line with this policy. To
strengthen the function of supervising management, we are
steadily advancing efforts to operate a monitoring-typeboard of directors through discussions at the Board of
Directors and Governance Committee meetings.

Organizational Design: Company with Audit &Supervisory Board
Directors (including external directors)

10 (4)

Term of Office

1 yearNumber of Board Meetings (FY2022)

16 times

Audit & Supervisory Board Members (including
external Audit & Supervisory Board members)

5 (3)Number of Meetings of the Audit & Supervisory Board(FY2022)

8 times

Adoption of Executive Officer System

Yes

Number of Independent Directors

7

Members

Number of
eventsCorporate Governance Structure
Corporate Governance Structure
StatusShareholders’ Meeting(Appoint/Dismiss)Accounting (Report)
Auditor(Cooperate)(Appoint/Dismiss)Audit & Supervisory(Board) Members
Auditor’s Office(Audit/Investigate)(Report)(Audit)(Report)(Appoint/Dismiss)

Board of Directors(Consult)(Cooperate) (Select/Dismiss/Supervise)(Report)Nomination andCompensation Committee

Nomination and Compensation
Committee

Governance Committee

Governance Committee
Internal Control
Office(Report)Representative
Director, President(Supervise)

Management Meeting

Sustainability Committee

Council of Business UnitManagers

Strategy Meeting

Executive Officers

External Board of Directors

To expedite decision-making in business operations andstrengthen departmental functions, the Board of Directors
elects 26 full-time executive officers who, like directors,
serve one-year terms.

To properly understand our business, external officers
enhance communication through dialogue and information
sharing with our business divisions. They also seek topromote mutual understanding through the exchange of
opinions among external directors. Three meetings were
held in FY2022.

Management Meeting(Audit)Head Office Risk Management Council, Orders Received Council, Overseas Orders Council
Real Estate Transaction Council, Business Investments Council, Venture Investment Committee

Business Execution Divisions(Internal Audit)

Head Office Divisions

Division Management
Committee*
Branches andDivisions

Subsidiaries* A committee that makes decisions through consultation on operational policies and business execution by each branch anddivision based on company-wide policies.

64

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

To expedite decision-making concerning importantmanagement policies and issues, the Management
Meeting, composed of five executive directors and two
executive officers centered on the president, is convened
as needed. 51 meetings were held in FY2022.

Support Systems for External Officers
The Company has a system in place to communicate andshare information with external officers by, for example,
providing advance explanations of board meeting
proposals in consideration of their urgency and importance,
and the Corporate Administration Department serves as acontact point for receiving questions in advance regarding
board meeting proposals and other matters. In addition,
dedicated staff are assigned to the Auditor’s Office tosupport the Audit & Supervisory Board members’ duties.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

65

Steps in Value Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Corporate GovernanceCorporate Governance

Skill Matrix

 olicy and Procedures When Appointing/Dismissing and Nominating Officers andP
Succession Planning for the President

In nominating candidates for directors and officers, wedefine the following skills as necessary for advancing thelong-term management plan to achieve VISION2030. The

Board of Directors decides on the nominees after
consulting the Nomination and Compensation Committee
and considering the balance of these skills.

Skill Matrix
Corporate
Management

Industry
Insight

Mitsuhiro Terada••

Yoshihiko Suwa••

Masatoshi Shimizu

•

•

Name

Law andCompliance

Finance and Development of International
MindsetAccounting Human Resources

Digital/Innovation

Sustainability/
ESG

Director

Tomoya Masuda•

Yoshihiro Akada••

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

•
•

•

•

•

•

•
•
•

•

•

•

•
•

•

•

•

•
•

•

•

•

•

•

•

•

•

•

•

•
•

Audit & Supervisory Board Members
Satoshi Hashimoto•

Masashi Ochiai•

Youichi Saito(external, independent)
Yoshikazu Kato
(external, independent)
Kazuo Kitamura(external, independent)

•

•
•

•

•

•

•
•

•
•

•
•

Reasons for Skill Selection

66

Corporate
Management

We believe that it is necessary for directors and others in the Company to possess knowledge and experience incorporate management, such as that of directors of operating companies, in order to promote the Long-Term
Management Plan and sustained enhancement of corporate value.

Industry Insight

The construction business is our core business. To sustainably enhance our corporate value, we need to be familiar
with the construction business and have experience in formulating and implementing business strategies.

Law andCompliance

Knowledge and experience in legal and compliance matters is necessary to improve the effectiveness ofmanagement oversight by the Board of Directors.

Finance andAccounting

Knowledge and experience in financial accounting are necessary from the viewpoint of a stable financial base andimproved capital efficiency.

Developmentof HumanResources

The basic policy of our Long-Term Management Plan positions human resources as one of the sources of ourcompetitive advantage. Therefore, knowledge and experience in human resource development, diversity, andhuman resource management are necessary.

International
MindsetGiven that we have strategically positioned international business as a key focus in the long-term management
plan, we believe that experience in international business, etc. and knowledge of international affairs are essential.

Digital/Innovation

The basic policy of the Long-Term Management Plan positions digital technology as one of the sources of ourcompetitive advantage and focuses on new businesses as one of our strategic initiatives. Therefore, knowledge
and experience in digital technology and the creation of new businesses, etc. are necessary.

Sustainability/
ESG

Our VISION2030 calls for the implementation of sustainability-oriented corporate management that resolves social
issues and creates economic value. Therefore, knowledge and experience in Environment (E), Society (S), andGovernance (G) are necessary.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

The selection of candidates for directors and Audit &Supervisory Board members and the appointment ofexecutive officers are decided by resolution of the Board of
Directors. These decisions are made after receiving a reportfrom the Nomination and Compensation Committee, themajority of whose members are independent external
directors, on the appropriateness of the personnel plan
prepared by the president. In addition, in selecting thepresident, the Nomination and Compensation Committee
deliberates more carefully and recognizes that thedevelopment of a successor to the president is an
important endeavor. In principle, candidates for succession
to the president are subject to an objective management
personnel evaluation conducted by a third party. We selectcandidates who have the following qualities, and train themas necessary according to their individual characteristics.

(1) Integrity, a high sense of ethics, a strong sense of
curiosity and a desire to learn.
(2) The ability to listen to others’ opinions regardless of
their position.
(3) The ability to make quick and resolute decisions on
one’s own responsibility, and the courage to see
things through to the end.
(4) The ability to respond flexibly to changes in theenvironment, realize the Company’s corporate
philosophy and corporate vision, and contribute toenhancing the value of the Tokyu brand.
In the event that circumstances necessitate thedismissal of the president, other directors or executive
officers, the Board of Directors will consult with theNomination and Compensation Committee in a timely
manner. The Board of Directors will deliberate on thematter after considering the committee’s report.

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 issues asummary of the results every year. In FY2022, we
cooperated with external consultants to conduct anevaluation using methods that encouraged each officer toexpress their individual opinions, such as an anonymousquestionnaire about the Board of Directors’ effectivenesstargeted at all directors and Audit & Supervisory Board
members on the Board of Directors. The questionnaire isdesigned to capture the current state of issue recognition
regarding the composition, operation, and discussions of
the Board of Directors, the support system for directors andauditors, officer training, and dialogue with shareholders(investors). It also aims to assess the status of improvements
made in response to issues identified in the previous

questionnaire. The Governance Committee, which iscomposed mainly of outside directors, external Audit &Supervisory Board and chaired by the lead independent
external director, deliberates on the issues raised by the
Board of Directors through the above process. The resultsof the deliberations were reviewed during a meeting of theBoard of Directors, and an evaluation of their effectivenesswas carried out. The results of the questionnaire weregenerally positive. We were able to confirm the Company’s
Board of Directors is sufficiently effective and that
improvements are steadily being made on issues identified
in the previous evaluation. On the other hand, there werecomments calling for further improvements in thecomposition of the Board of Directors and the method
used to submit proposals, etc. We will continue our efforts
to improve the effectiveness of the Board of Directors.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

67

Steps in Value Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Corporate GovernanceCorporate Governance

Officer Remuneration and Incentive System
Remuneration for directors is determined based on theirposition, the status of business execution, employee salarylevels, and a third-party survey on remuneration ofdomestic corporate executives, etc. In addition, to elicit
incentives for short-term performance and medium- tolong-term improvement of corporate value, ourremuneration consists of monetary and stock-based
remuneration. Monetary remuneration consists of fixed andvariable remuneration based on position. Fixed
remuneration is a fixed monthly amount. Variable
remuneration is intended to strengthen incentives for theachievement of short-term performance. It is calculated bymultiplying the base amount for each position by thepayment determination value, and is paid in two
installments annually. The payment determination value iscalculated by comprehensively considering financial
indicators such as operating income and net income,non-financial indicators such as GHG emission reduction
rate and employee engagement rating, and the degree ofachievement of action plan measures or departmental
performance evaluation. In addition, the payment rate will

Payment Determination Value Weighting
WeightFinancial indicators such as
operating income andnet income

70%vary from 0 to 200% depending on the payment
determination value. Remuneration for external directors
and directors not engaged in business operations is limited
to a fixed base salary.
Stock-based remuneration, which is aimed atincentivizing directors to improve corporate value in themedium to long term and to share economic value
between directors and shareholders, is provided as
restricted stock to directors excluding external directors
and directors not engaging in business operations. The
number of shares granted is determined based on the basic
amount according to position. Director-allocated ratio of
payment to each remuneration item is set at theapproximate level of 60% for fixed remuneration, 20% forvariable remuneration, and 20% for stock-based
remuneration at an average performance level for directors.
Audit & Supervisory Board members’ remunerationconsists only of fixed monetary remuneration. The methodof determining remuneration is decided throughdiscussions by the Audit & Supervisory Board.

Variable remuneration payment rate model

President,
Department Head
Department Heads
Concurrent
Non-Salaried
Directors
Directors

Valuation Index

Training of Directors and Audit & Supervisory Board Members

Payment
rate
Maximumallowance
200%
150%

60%
100%

Non-financial metrics such as GHG
emissions reduction rate andemployee engagement rating

10%

Achievement of action planmeasures or departmental
performance evaluation

20%

10%

In principle, directors, Audit & Supervisory Board members,
and executive officers participate in external training
programs upon assuming office to acquire the necessary
information and knowledge to fulfill their expected roles
and responsibilities. External directors and external Audit &Supervisory Board members are briefed on ourmanagement situation and 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 ourpartner companies with the aim of contributing to theincrease in our corporate value by strengthening business
relationships and maintaining good relationships with them.
We also examine whether there is a risk of a decreasein the value of the shares, and whether there are sufficient
benefits for the cost of capital, using the performanceindicators for the most recent fiscal year and the expected
performance indicators 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
projected indicators for the next several years.
Furthermore, we perform a qualitative review of the futurebusiness relationship between the Company and the issuerof the shares. Based on the results of these reviews, eachyear we confirm at the Board of Directors meeting whether
or not there is significance in holding these shares while
comprehensively considering factors such as economic
rationale and future prospects. In principle, we sell andreduce our holdings of shares that no longer meet thispurpose or are no longer recognized as significant taking
into consideration factors such as the circumstances of theissuing companies as well as market trends.

Ratio of Recorded BS Amount to Consolidated
Net Assets
Recorded BS Amount

Ratio to Consolidated Net Assets(Billions of Yen)

(%)

20

25

18.2

17.9
16.4

16.0

15

17.3

17.7

15.8

10

20

14.2

19.7

15

14.8
10

5
5

0

0

2019/32020/32021/32022/32023/350%

Dialogue With Shareholders

30%
0%0% 50%

Percentage Composition of Directors’ Remuneration

External directors
Non-executive director
Audit & Supervisory
Board members

150%

200% Payment
determination value

Variable remuneration(Approx. 20%)

Fixed remuneration(Approx. 60%)

Managing directors

100%

Minimum allowance

Stock-based remuneration(Approx. 20%)

Fixed remuneration(100%)

Dialogues with shareholders are generally conducted by
the president and officer in charge of IR, after considering
the purpose and effectiveness, of such dialogues and how
to respond to them. Directors including external directors,
or Audit & Supervisory Board members, are expected torespond as necessary. Specifically, we engage inconstructive 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, we summarize and identify issues
and, if necessary, seek advice from external support firms.
The Board of Directors also receives reports on the status ofour dialogue with investors.

Amounts of Remuneration for Directors and Audit & Supervisory Board Members (FY2022)

68

Total Amount of Remuneration by Type (Millions of Yen)

Classification of
Officers

Total Amount of
Remuneration(Millions of Yen)

Fixed Remuneration

Variable Remuneration

Stock-BasedRemuneration

Directors (excluding
external directors)

108

85

—

23

5

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

32

32

—

—

2

External officers

48

48

—

—

7

Monetary Remuneration

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

Number of Target
Officers (Persons)

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

69

Steps in Value Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Corporate GovernanceCompliance

Risk Management

We believe that compliance management is an essential element for increasing corporate value and remaining a trusted

In addition to preventing risks from materializing, Tokyu Construction has established mechanisms to respond when risks dobrand of choice for our customers, and we are committed to proactively promoting compliance.

materialize and when changes occur in the business environment.

Guidelines for Action and Compliance CodeAs a member of the Tokyu Group, we have established
Guidelines for Action to embody our Corporate Philosophy
and guide our actions, as well as a Compliance Code to set
ethical standards that ensure we always act ethically. Bothare based on the Tokyu Group Compliance Guidelines, thebasic principles of behavior established to embody and put

Risk Management System

into practice the Group philosophy.
WEB

Guidelines for Action and Compliance CodeWEB

Tokyu Group Compliance Guidelines

WEB

Basic Guidelines for Overseas Compliance

Promotion Structure
Compliance Officer
The officer in charge of the Internal Control Office acts as
the compliance officer and performs the following roles as
the chief officer of risk management through compliancemanagement.
• Formulating the Compliance Code, etc.
•E stablishing the structure for risk management throughcompliance management•R eporting the status of compliance measures to the Board of
Directors, etc.

Internal Control Office
The Internal Control Office fulfills the following roles.
•S preading knowledge of the Compliance Code, etc., and fosteringawareness of compliance•C onducting surveys on adherence to the Compliance Code, etc.,
and making improvements•P roviding consultation on the Compliance Code, etc., andresponding to violations•P lanning and conducting compliance training• L earning the state of practice at each division, branch, business
unit, and subsidiary (conducting audits)

Managers in Charge of Compliance andPersons Responsible for Compliance
The general manager of each division, branch, andbusiness unit, and other line managers who directly reportto the President, as well as the presidents of subsidiaries
are appointed to be managers in charge of compliance.
The general manager of the general affairs unit at eachdivision, branch, business unit, etc., the general managersof the Corporate Strategy Division and Business
Administration Division, and the general managers of thegeneral affairs units of subsidiaries are the persons
responsible for compliance. Managers in charge ofcompliance and persons responsible for compliancecooperate with the Internal Control Office in working todevelop and improve the compliance structure and prevent
corruption in each department while evaluating the state ofpractice each year and incorporating the results of theevaluation into the improvement 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 ofcompliance by incorporating compliance lectures into
position-based training programs, etc., (2) voluntarytraining, mainly through case studies and discussions
tailored to the actual situation at each workplace, and (3)training that uses e-learning to raise awareness ofcompliance among all employees. In addition, we conduct
group training for compliance leaders of each department toensure the effectiveness of compliance at each workplace.

Whistleblowing System
Based on our Compliance Consultation and Reporting
Regulations, the Company has a whistleblowing system inplace. Whistleblowing contact points are set up internallyas well as at an outside law firm, and any director, advisor,
employee, hired worker, temporary worker, or retiree of the70

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

In formulating the Long-Term Management Plan announced
in 2021, we analyzed the environment the Group operates
in, including the future environment, and the Management
Meeting and Board of Directors identified medium- tolong-term risks and opportunities. To respond flexibly tochanges in the environment, we have established a system
to comprehensively identify risks based on events andfactors that could potentially affect business and impede
management, and we review them annually. In light ofthese risks, the company-wide situation is monitored at theCouncil of Business Unit Managers, which confirms andshares information on the execution of operations, and atquarterly business monitoring sessions conducted by top
management. As for individual cases related to construction
orders, real estate transactions, investments in start-ups,
and other business investments, the Company establishedthe cross-organizational Head Office Risk Management
Council, Orders Received Council, Overseas Orders
Council, Real Estate Transaction Council, Business
Investments Council, and Venture Investment Committee,
creating a mechanism to examine risks in advance andmonitor 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 our“Construction Company Continuity Capacity During
Disasters” from the Ministry of Land, Infrastructure andTransport Kanto Regional Development Bureau, and we
update that certification every two years.
Following the BCP, disaster response headquarters
members, which include directors, conduct drills and otheractivities to continuously identify and improve on issues
and work on business continuity management (BCM). At
each of the Group’s bases, we maintain a stockpile ofessential items, including food and beverages, power
generators in case of prolonged power outages, andemergency communication equipment, to ensure an
operational environment for a certain amount of time in theevent of a disaster. Given that more employees are
teleworking recently, we conduct drills with a hybrid format,
in which both people physically present and others at
remote locations operate a disaster response headquarters.
In addition, because our head office is locatedadjacent to Shibuya Station, one of Japan’s majortransportation hubs, we are part of the Council on
Measures for People Stranded around Shibuya Station,
which is comprised of Shibuya Ward Office staff and local
businesses and organizations. As such, we cooperate withdisaster response efforts as a member of the community. In
December 2021, we were certified as a Tokyo Metropolitan
Government company working to prevent a situation where
employees try to return home en masse. We arestrengthening and promoting efforts to ensure the safety of
employees and prevent confusion when people are having
difficulty returning home. Furthermore, at our work sites
nationwide, we have concluded cooperation agreementswith various national and local government agencies andinfrastructure-related companies 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.

Hybrid comprehensive BCP training with remote and in-person participation(December 2021)

Information Security
Company or its subsidiaries, as well as any cooperatingcompany employee or joint venture employee, may consult
or report anonymously by telephone, e-mail, in writing, orin person, and is protected against any unfair treatment.

We established a Basic Information Security Policy toprotect information assets related to our operations fromthreats such as information leaks and accidents, as well as
to live up to the trust of our clients in society.

In addition, in March 2019, we revised our Information
Security Guidelines and are now conducting e-learning
based on these guidelines.
WEB

Basic Information Security Policy

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

71

Steps in Value Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Corporate GovernanceDirectors and Audit & Supervisory Board Members(As of June 27, 2023)

3

4

5

11

12

14

13
6
15

8

1 Mitsuhiro Terada (March 1, 1957)
Representative Director, President
Apr. 1979 Joined TOKYU CONSTRUCTION CO., LTD.
Jun. 2010 Executive Officer of the Company
Apr. 2012 Senior Executive Officer of the Company
Director, Senior Executive Officer of the Company
Jun. 2012	
Apr. 2013	General Manager, Civil Engineering Divisionof the Company
Apr. 2016	Director, Senior Managing Executive Officerof the Company
Apr. 2018	Representative Director, Senior Executive
Vice President of the Company
Jun. 2019	Representative Director, President of theCompany (current)

2 Y oshihiko Suwa (August 3, 1956)
Representative Director, Executive Vice President
Apr. 1980 Joined TOKYU CONSTRUCTION CO., LTD.
Apr. 2010	General Manager, Safety & Environment
Division of the Company
Apr. 2011 Executive Officer of the Company
Apr. 2013	General Manager, Housing Business Divisionof the Company
Mar. 2017	Representative Director, President of Tokyu
Geox Co., Ltd.
President and Chief Executive Officer
Apr. 2023 Advisor to the Company
Jun. 2023	Representative Director, Senior Executive
Vice President of the Company (current)
Officer in charge of Safety & Environment
Division and Value Creation Office of theCompany (current)  3 M asatoshi Shimizu (January 20, 1959)
Director, Senior Managing Executive Officer
Apr. 1982 Joined TOKYU CONSTRUCTION CO., LTD.
Apr. 2012 Executive Officer of the Company
Apr. 2017	Senior Executive Officer of the Company
General Manager, Business Administration
Division of the Company
Jun. 2017	
Director, Senior Executive Officer of the Company
Apr. 2020	Director, Senior Managing Executive Officerof the Company (current)
General Manager, Corporate Strategy Division,
Apr. 2021	
Officer in charge of the Business Administration
Division of the Company (current)

72

7

4 T
 omoya Masuda (March 10, 1959)
Director, Senior Managing Executive Officer
Apr. 1984 Joined TOKYU CONSTRUCTION CO., LTD.
Apr. 2017 Executive Officer of the Company
Apr. 2018	Deputy Branch Manager, Urban Development
Branch of the Company and General
Manager of Building Construction Division 1
Apr. 2020	Senior Executive Officer of the Company
General Manager, Building Construction
Business Division of the Company (current)
Senior Managing Executive Officer of the Company
Apr. 2022	Jun. 2023	Director, Senior Managing Executive Officerof the Company (current)

5 Yoshihiro Akada (December 26, 1961)
Director, Senior Executive Officer
Apr. 1984 Joined TOKYU CONSTRUCTION CO., LTD.
Apr. 2018	Senior Executive Manager, Civil Engineering
Business Division of the Company
Apr. 2019	Executive Officer of the Company
Apr. 2022	Senior Executive Officer of the Company
	General Manager, Civil Engineering Business
Division of the Company (current)
Apr. 2023	Officer in charge of International Business of
the Company (current)
Jun. 2023	Director, Senior Executive Officer of theCompany (current)  6 S
 etsu Hamana (July 25, 1960)
Director
Apr. 1983 Joined TOKYU CORPORATION (“Tokyu”)
Apr. 2011	Executive Officer of Tokyu
General Manager of Building Division, Urban
Life Creation Division of Tokyu
Jun. 2014 Director, Executive Officer of Tokyu
Apr. 2015	Deputy General Manager, Urban Life Creation
Division of Tokyu
Apr. 2017	Director, Research Officer of Tokyu
Representative Director, President of Tokyu
Facility Service Co., Ltd.
Apr. 2019	
Director and Executive Officer of Tokyu Corporation
General Manager, Building Operation
Division of Tokyu Corporation
Sep. 2019	Director and Executive Officer of Tokyu Corporation
Apr. 2020	Director, Senior Executive Officer of Tokyu
Corporation (current)
Jun. 2022 Director of the Company (current)

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

1

7 I sao Onda (April 4, 1949)
External Director
Oct. 1973	Joined EIKO Accounting Corporation (current
Ernst & Young ShinNihon LLC.)
Sep. 1990	Partner of Century Audit Corporation(“Century”), Manager of Chiba OfficeJun. 1993	Director and Partner of Century, Manager ofbusiness 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. (current)
Jun. 2012 Corporate Auditor of the Company
Jan. 2019 Partner of GTM Tax Co. (current)
Apr. 2019	Visiting Professor, Institute for Technology,
Enterprise and Competitiveness (ITEC),
Doshisha University (current)
Jun. 2020 Director of the Company (current)

8 K ahori Yoshida (December 19, 1972)
External Director
Apr. 1996 Joined Recruit Cosmos Co., Ltd.
Sep. 2010 Passed the bar examination
Dec. 2011	Joined Yoshiko Takagi Law Firm (current T&T
Partners Law Office) (current) Registered as Lawyer
Apr. 2012	Member of the Operation Committee for
Housing Dispute Examination Meeting, Daini
Tokyo Bar Association (current)
Nov. 2018	Special member of the Chuo Construction Project
Dispute Examination Committee, the Ministry ofLand, Infrastructure, Transport, and Tourism (current)
Jun. 2019	Director of the Company (current)
Aug. 2020	Member of the Central Review Council for
Kenchikushi, the Ministry of Land,
Infrastructure, Transport and Tourism (current)
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) (current)
Oct. 2020	Temporary Member of the Japanese Industrial
Standards Committee, the Ministry of Land,
Infrastructure, Transport and Tourism (current)
Oct. 2021	Member of Tokyo Metropolitan Government
Housing Policy Council (current)
Apr. 2022	Expert Examiner of Tokyo Metropolitan
Building Examination Committee (current)2

9 K unihiro Koshizuka (September 30, 1955)
External Director
Apr. 1981	Joined Konishiroku Photo Industry Co., Ltd.
(current KONICA MINOLTA, INC.)
Executive Officer, Manager in charge ofApr. 2012	
Development 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 incharge of Technology Strategy Department of
KONICA MINOLTA, 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 KONICAMINOLTA, INC.
May 2020 External Director of AEON MALL Co., Ltd. (current)
Jun. 2021	Director of the Company (current)
External Director of WILL GROUP, INC. (current)
Jun. 2022	External Director of F.C.C. Co., Ltd. (current)

10 T sutomu Tsunashima (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 Memberof NIPPON SIGNAL CO., LTD.
External Director of Chuo Warehouse Co., Ltd.
Jun. 2016	Jun. 2021 Director of the Company (current)

9

10

11 S
 atoshi Hashimoto (February 17, 1958)
Full-time Auditor

14 Yoshikazu Kato (September 9, 1956)
Audit & Supervisory Board Member

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

12 M asashi Ochiai (September 22, 1960)
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
Division of the Company
Jun. 2020 Full-time Auditor of the Company (current)

13 Y oichi Saito (December 12, 1973)
Audit & Supervisory Board Member
Oct. 2005 Passed the bar examination
Sep. 2007	Registered as an Attorney
Member of Crime Victim Support Center ofDaini Tokyo Bar Association
Sep. 2015	Member of Discipline Committee of Daini
Tokyo Bar Association
Apr. 2016	Member of Legal Apprenticeship Committeeof Daini Tokyo Bar Association (current)
Jun. 2016 Auditor of the Company (current)

Apr. 1982	Joined the Science and Technology Agency,
Cabinet Office
Jul. 2001	Director of Research Environment andIndustrial Cooperation Division, Research
Promotion Bureau, Ministry of Education,
Culture, Sports, Science andTechnology (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 Agency
Apr. 2015	Director of Technology Division, Cabinet
Satellite Intelligence Center, Cabinet
Intelligence and Research Office,Cabinet Secretariat
Nov. 2017	Specially Appointed Counselor, Remote
Sensing Technology Center of Japan
Jun. 2018 Auditor of the Company (current)
Mar. 2021	Visiting Professor, Fukui University ofTechnology (current)
Apr. 2022	Counselor, Remote Sensing Technology
Center of Japan (current)

15 Kazuo Kitamura (February 25, 1956)
Audit & Supervisory Board Member
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 Full-time Auditor of Chibayaku Groceries, Inc.
Jun. 2020 Auditor of the Company (current)

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

73

Steps in Value Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Basic Approach to Environmental Considerations
VISION2030, established in March 2021, places the environment at the center of our corporate vision. In February 2022, weestablished four initiatives as our Eco-First Commitment: realizing a decarbonized society, realizing a recycling-oriented
society, enhancing biodiversity conservation and environmental education, and promoting initiatives in the supply chain. The
Ministry of the Environment has certified these initiatives. To achieve our vision and commitment, we will promote initiatives,
review our systems, and further enhance information disclosure.
WEB

Eco-First Commitment

Environmental Charter and Environmental Policy
The basic philosophy in the Environmental Charter weestablished in 1997 is to do our utmost to protect the
global environment. Meanwhile, the Environmental Policy
we revised in 2019 states that we will promote
environmentally conscious management to realize asustainable society that balances the environment andthe economy.
WEBT okyu Construction Environmental Charter andEnvironmental Policy

In-House Penetration and Education
Promoting Eco Certification

Education

With the aim of enhancing their environmental knowledge
and awareness, we have been encouraging employees
since FY2018 to earn Eco Certification. By FY2022, 86.7%
of our employees overall had earned this certification. We
will continue to work so that all employees earn thiscertification.

Tokyu Construction presents environmental lectures twice ayear with lecturers from outside the company. The firstlecture in FY2022 continued the previous year’s topic of
biodiversity and the second focused on efforts for arecycling-oriented society.
In the first session, held in July, 2022, Nikkei BP Senior
Editor and Tohoku University Professor Kaori Fujita spokeon “Why Biodiversity and Natural Capital are Important:
After TCFD Comes TNFD,” a concern that is expected to
become more common in the future. The second session,in March 2023, was entitled “Effective Waste Managementin the Construction Industry and Future Outlook,” with
Emeritus Professor Masaru Tanaka of Okayama University as
the invited speaker.

Number of Employees who have Earned Eco
Certification (Cumulative)
Number of employees who have earned it

Internal employees

External employees

Certification rate (%)

Internal employees

External employees

62.6
54.8
40.7

Environmental Management System
Management System
1. Central Environment Committee meeting
With the Representative Director, Executive Vice
President as the chair and with the participation of theGeneral Manager of each division in the head office,discussions are held twice a year on the feasibility anddirection of initiatives related to major matters on theenvironment in general. Results are reported to the
Sustainability Committee and then to the Boardof Directors.
2. C ompany-wide management review
With the Representative Director, Executive Vice
President as the chair and with the participation of theGeneral Manager of each division in the head office,discussions are held twice a year on the operating statusof the company-wide environmental management
system, problems, and corrective measures. Results arereported to the Central Environment Committee.

External Certification of Environmental
Management System
We introduced and obtained certification for ourenvironmental management system (ISO 14001) in 1999,
and in 2004 we shifted to a company-wide integrated
management system. We have stayed in certification
compliance with annual maintenance audits and havecompleted seven updated audits to date, thus maintaining
our certification.

Process of Evaluating and Managing
Environmental Risk
In respect to climate change, we endorse the aims of the
TCFD project. We identify transition and physical risks andopportunities for our business and act on them. We specify
matters important to the environment in general andconsider their impact on the environment and theCompany’s sustainable development in terms of both risks
and opportunities. We then adopt the results as significant
environmental aspects, incorporate them into everyday
work as targets, and make improvements within the ISO
14001 system.

36.2
30.3
19.5

1.5
1.1
0.3

11.0
7.8
2.1

1,542

Total
Total
88.7
86.7
83.1

78.0
74.4
67.4

2,225
2,052

1,389

1,454

1,104
854
663

653

771

438
218

196
27 3 3022

FY2017FY2018201
FY2019FY2020

FY2021

FY2022

Efforts to Reduce the Environmental Impact of Our Business Activities
Biodiversity Initiatives
The non-profit corporation Silva and others co-sponsor
tree-planting events twice each year, in May andNovember. We have continually participated since theautumn 2019 tree-planting event. In FY2022, a total of 529
people, including 115 employees, planted 2,511 trees of
30 different species in the May event. In November, 29
employees and 100 other people planted 1,000 trees. From2019 to now, a total of 17,073 trees have been planted.

amount was calculated for eight major categories of waste*.)We are also taking various initiatives to reduce waste.
These include in-house use of Sustar, a preceding mortar
developed by Tokyu Construction to result in less waste
and thus be more eco-friendly than ordinary preceding
mortar. (Our effective utilization rate of by-products is over90%.) Another example is our development of a floor tile
injection repair method, which makes it possible to repair
floating parts of floor tiles without peeling them off. This
reduces the amount of waste from existing tiles whenrefurbishing floors by covering the floor tiles.
* Waste plastic, mixed waste, wood waste, metal waste, paper waste, gypsum
board, glass and ceramic waste, and other debris

CDP Evaluation
We have been responding to the organization CDP on thestatus of our efforts in the area of climate change since2019 and received an A- rating for our 2022 response. For
the CDP Supplier Engagement Rating*, we were also
selected as a Supplier Engagement Leader, the highest
rating given, for the second consecutive year.

74

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

* The CDP performs the Supplier Engagement Rating (SER) on companies
responding to the CDP climate change questionnaire. The SER is anassessment of how effectively a company is working with its suppliers toaddress climate change issues. The CDP assesses the companies’ efforts
based on their answers to questions in the four areas of governance, targets,
Scope 3 emissions accounting, and supplier engagement and their score on
the CDP climate change questionnaire overall.

Initiatives to Realize a Recycling-oriented Society
We aim to reduce the final waste disposal rate to no morethan 3% by FY2030 and to zero by 2050.
We are continuing to work to reduce waste generation
through unitization and reduced packaging, and we holdwaste sorting workshops in cooperation with industrial
waste disposal companies and provide on-site guidance on
waste separation. As a result, the total amount of mixed
waste generated in FY2022 was 1,032 tons, down 2.4
percentage points from the previous fiscal year. (ThisResin Filler
Cement Filler,
Other
Bedding
MortarTOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

75

Steps in Value Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Enhancement of Quality Control Infrastructure
The products provided by the construction industry are social infrastructure that is used not only by the direct client but also

In this way, we aim to improve quality, reduce defects andby many other people over several decades. To fulfill this social responsibility, the Company has introduced and is operating
a quality management system.

prevent their recurrence, and provide products and services

Quality Policies

Internal System, Education, and Awareness Activities to Support Quality

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

1. Initiatives for Risks and Opportunities
We identify risks and opportunities that may affect productquality assurance and customer satisfaction and consider
the extent of their potential effect in order to
respond accordingly.

2. U nderstanding Needs and Expectations
To meet customer needs and expectations as well as
applicable regulatory requirements, we explore, clarify, andunderstand such needs and expectations.

3. S etting Quality Targets
We set effective quality targets for the following businessdivisions, for the purpose of assuring product quality andincreasing customer satisfaction, while supporting ourmanagement policies.
Domestic Civil Engineering Business Division
Domestic Building Construction Business Division
The support division for management establishes targets
related to the effective utilization of resources (humanresources, information and communication technology,
and other infrastructure, employee work environments,
expertise, etc.) to support the achievement of the above
departments’ targets.

4. S
 ystem Operations and Improvements
We establish, operate, and continuously improve ourquality management system.

Quality Management System (QMS) and Its Operating Status
By October 2000, our headquarters and all branches
nationwide had acquired the international standard of ISO
9001 certification. Since September 2004, we have beenregistered under the Company-wide integrated QMS. Since
2005, we have also conducted annual external audits
combined with our environmental management system(EMS). At each stage of sales, design, and construction, wethat satisfy our customers.

confirm that head office departments and branches arefollowing the manuals and implementation procedures
based on the quality management system, and we
implement continuous 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.

When quality issues occur, we analyze the causes andcontinually implement quality control improvement
activities 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
by using such venues as construction safety review
meetings, work procedure familiarization meetings, andwork meetings prior to performing the relevant type ofwork. When a construction issue arises, we proceed to thenext step after discussing the issue with our engineering
department and other departments. In addition tothoroughly implementing this process anew, we arereviewing our system to ensure that information is promptly
shared with management in the event of a construction
problem.
The Company’s engineering teams working at worksites are composed of appropriate personnel based on
experience and other 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.
We are continuously reviewing our training programs
to improve the construction management skills of managers

and middle class employees and to improve the skills andearly development of young engineers. Specifically, we areconsciously providing effective and efficient education by
conducting job rotation to give employees diverse
experience and using an OJT Master Card to record andvisualize how well employees are acquiring necessary basic
knowledge and skills.
We are working to raise employee awareness of quality
through such means as sharing examples of quality
management and responding to defects during regulartraining sessions and routine meetings, conducting SiteLearning (workplace-based study sessions); and “rollingback,” in which work arrangements are visualized andveteran employees’ experience is passed on.
Since FY2022, we have conducted awareness-raising
activities by designating November as Quality Month andthe first week of the month as a reinforcement week. During
these periods, we conduct quality inspections and holdquality lectures led by outside lecturers.
In January 2022, we expanded the scope of thewhistleblowing system to include cooperating companies,
etc., in order to prevent quality issues before they occur
and to detect and remedy them as early as possible.
We will work together Company-wide to prevent
recurrence of quality issues and improve design andconstruction quality.
*Q CDSE: An acronym for quality, cost, delivery, safety, and environment,
the five elements that form the basis of construction management.

Operation of Quality Management System

ACTManagement Review (Instructions)• Plan to prevent recurrence• Continuous improvement

Quality assurance
Opportunities for improvement
Achievement of customer
satisfaction improvement
Audit, measurement, analysis, and evaluation
Internal audit
Results ofManagement Review (Evaluation) implementation
From C C

CHECK76

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

PLAN

Quality Policies

A

Administrative Support (General Affairs and Clerical Work)C• MR response plan
• Quality targets• Quality manualA

C

Design support

P

A

•D
 esign knowledge
management
etc.

• Estimate• Technical proposal
etc.

Plan To P P

SupportP

Sales support

A

D

C

D

C

Construction support•T emporary construction planning• Procurement• Inspection• Construction supervision
etc.

P
D
P

D

Resources

Operation

DO

Operation

Sales

DesignConstruction

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

77

Steps in Value Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

Respecting Human Rights

Our Responsible Supply Chain

The Tokyu Construction Group Mission Statement is Fulfilling each individual’s dreams. Based on this mission, we consider

Tokyu Construction will work together with our business partners to build a responsible supply chain and resolve social issues.

respect for human rights to be one of our most important responsibilities in all of our activities, and we recognize that ourbusiness activities may directly or indirectly affect human rights. We have formulated our Human Rights Policy based onthese beliefs 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 tie in with the concept of respecting
human rights as demonstrated by utilizing each employee’s personality and individuality and practicing teamwork andtrust based on interpersonal relationships.
We have established a Human Rights Policy based on this philosophy and will promote efforts to respect thehuman rights of all people involved in our business activities.

1. Scope of application

4. Human rights due diligence

The Tokyu Construction Group Human Rights Policy

The Tokyu Construction Group will establish a human(below, “the Policy”) applies to all officers and employees

rights due diligence mechanism to identify, prevent, andof Tokyu Construction and its affiliates. In addition, themitigate negative human rights impacts related to its

Tokyu Construction Group expects its business partners,

business activities on an ongoing basis, integrate

including cooperating companies and suppliers, tocorrective measures into internal processes, and publicly

understand and comply with the Policy.

disclose its human rights initiatives.

2. Respect for and observance of norms and laws

5. Correction and remediation

The Tokyu Construction Group supports and respects

If it becomes clear that the Tokyu Construction Group isinternational norms on human rights, including thecausing or contributing to negative human rights impacts,

International Bill of Human Rights (Universal Declaration of

we will work to correct or remedy the situation through

Human Rights and International Covenants on Humanappropriate means. If the Tokyu Construction Group’s

Rights) and the ILO Declaration on Fundamental Principles

business partners, such as cooperating companies andand Rights at Work, and as a signatory to the UN Global

suppliers, are causing negative impacts on human rights,

Compact, we support the ten principles set forth in thewe will work with our stakeholders to make improvements

initiative. We have also established the Policy based on

to ensure that human rights are respected and not

the UN Guiding Principles on Business and Human Rights

infringed upon.

and will promote initiatives to respect human rights.

6. Education
3. Responsibility to respect human rights

The Tokyu Construction Group will reflect the Policy in the

The Tokyu Construction Group will fulfill its responsibility

necessary procedures to ensure that it takes root

to respect human rights by striving to avoid human rights

throughout its business activities and will continue toviolations against others in its business activities and byprovide appropriate education and training to all directors,

taking appropriate action if it becomes clear that its

officers, and employees.

business activities are causing or contributing to negative
human rights impacts.

Tokyu Construction enters fair contracts with our partner
subcontractors through compliance with laws andregulations, such as the Principles of Construction Contracts
stipulated in the Construction Business Act, and ourendorsement of the Declaration of Respect for Labor Cost
Estimates by the Japan Federation of Construction
Contractors. In addition, we announced the Declaration ofPartnership Building to promote value creation by solving
problems faced by the construction industry, such as securing
the next generation of construction workers and improving
productivity with cooperating companies. Our Company

engages in business activities while giving due consideration
to compliance with laws and regulations, the reduction of ourenvironmental impact, and respect for human rights.
In addition to these activities, we disclosed our
Procurement Policy as an action policy in FY2020 andformulated a Human Rights Policy in FY2022. Our aim is to
respond to the growing social demands of recent years,
such as SDGs and ESG, and share these ideas widely both
inside and outside the Company. We will continue to strive
to build a responsible supply chain based on our
Procurement Policy and Human Rights Policy.

Implementation System
The Tokyu Construction Group believes it is essential towork with our business partners throughout the supply
chain, including cooperating companies and suppliers, tofulfill our social responsibilities, achieve sustainableprocurement, and address social issues such as humanrights, health and safety, and the environment. We requestthat our business partners understand and support the
Tokyu Construction Group Supplier Code of Conduct andimplement this code. We prepared and published the Codeof Conduct in Japanese, English, Chinese, Korean,
Vietnamese, and Indonesian to promote understanding ofour diverse workforce.

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, theChairman of the Japan Chamber of Commerce andIndustry, the President of The Japanese Trade Union

suppliers and value-creating businesses in the supply chain
by encouraging cooperation, coexistence, and mutual
prosperity. The Company announced its endorsement of
the declaration in March 2021, and aims for co-existence
and mutual prosperity across our entire supply chain. We

Confederation, and relevant ministers (Cabinet Office;Ministry of Economy, Trade and Industry; Ministry of Health,Labour and Welfare; Ministry of Agriculture, Forestry and
Fisheries; and Ministry of Land, Infrastructure, Transport andTourism). The declaration is to build new partnerships withwill not only strive to optimize subcontracting transactions,but will also work together to resolve issues facing theconstruction industry, such as
securing the next generation ofworkers and improving productivity.

Engagement with Cooperating Companies

7. Dialogue and consultation with stakeholders
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 the April 22, 2022 Tokyu
Construction Board of Directors meeting.

Endorsement and Signing of the United Nations Global Compact
In April 2022, the Tokyu Construction Group signed astatement 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,

Procurement Policy

and anti-corruption.
WEBE ndorsement and signing of the United Nations
Global Compact

The future shortage of workers in the construction industry
is a serious problem, as the number of skilled workers is
aging and the number of young people entering theworkforce remains at a low level. Therefore, we recognize
the urgent need to strengthen our relationships withcooperating companies who have skilled workers andensure a stable supply of such workers.
We also recognize that the prime contractor businesswould be impossible without cooperating companies and
we are committed to engaging in active discussions with
our subcontractors to achieve mutual development.

Development of Business and Human Rights Training Videos
It is essential to encourage human rights initiatives inbusiness across the whole supply chain. As such, we
independently developed Business and Human Rights
training videos as part of our human rights awarenessefforts. These videos are currently available on our website
for subcontractor use, as we begin to roll them out directly

to our subcontractors. The Company promotes humanrights training to deepencommon sense and strives
to understand issues byconducting surveys on thecurrent conditions.
Part of a video to deepen understandingof human rights

78

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

79

Steps in Value Creation

Value Creation
Initiatives

Visits to Cooperating Companies
deliverable values and encourage these offices to further
promote initiatives. The second round of visits to major
business partners began in the second half of 2022. These
visits provide valuable opportunities with companies todiscuss the ways we have worked together to address
various changes since the start of visitation activities two
years ago. We also discuss working toward future cocreation. Tokyu Construction will continue to visit
cooperating companies as part of our efforts to lead us tomutual respect and mutual development.

Safety and Health Policies
Under the strong leadership of top management, we will cooperate with all members involved in the construction
business to ensure safe, healthy, and comfortable work environments. To so do, we implement a PDCA cycle throughthe united efforts of the head office, branches, and work sites.

1. Practicing Safety FirstWe will not tolerate dangerous conditions or situations, but

dangerous operations to review safety measures.

2. Identifying Risks
inflicted damage to our infrastructure, we work withcooperating companies to ensure its early restoration bytaking measure such as the construction of disaster relief
roads. We also cooperate with infrastructure-relatedcompanies and enter into cooperation agreements in theevent of disasters with the national government, local
governments, and other organizations.

We work to prevent accidents by identifying dangerous andhazardous factors that may be sources of work-related safety
and health.

3. Setting Priority Implementation Activities(1) Eradication of public, fatal, and major accidents(2) Reduction of accidents due to crashes and falls
 eduction of accidents involving construction machinery(3) R

System as the managing company of the Construction
Career Up System Headquarters established by the Japan
Federation of Construction Contractors. This system
distributes IC cards individual skilled workers, storing theirwork histories and qualifications in a unified industry system.

Tokyu Construction launched TQ-BUDDY, a job site forsubcontractors, in cooperation with our organization ofcooperating companies in construction work. This website
aims to support individual recruitment activities by posting
information on job openings at our key partner companies.
At the same time, it aims to deepen understanding of theappeal of the construction industry and its work, as well as
secure engineers and skilled workers through posting job
descriptions of various construction-related occupations
and testimonies of senior craftspeople.

We promote the health of all our employees and those involvedin construction work to create a stress-free workplace.

5. Complying with Laws and Regulations
We clarify and comply with laws and regulations related toindustrial safety, health, and internal regulations.

6. Operating and Improving Systems Operation
We operate the established Health and Safety management
systems and continuously make improvements.

7. W
 e make efforts for all of our employees andworkers involved in construction work.

and cranes, etc.

Safety and Health Management
Tokyu Construction strives to prevent occupational
accidents, promote workers’ health, and create acomfortable work environment based on the Construction
Occupational Health and Safety Management System(COHSMS). We also continuously enhance and improve thecompany level of safety and health by implementing the
PDCA cycle in cooperation with our stores and work sites.
Since FY2019, we have been working on the evolutionof safety management. We continue to strengthencommunication in FY2022 by conducting management-lead
workplace safety and health patrols and exchanging
opinions with top management, workplace employees,
as well as managers and safety and health managers ofcooperating companies.
We also adopted the safety index as a KPI for safety

Evolution of Our Safety Management

CDP2022 Supplier Management

1. Strengthen the safety management system byincreasing participation from the top management

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

Mental Healthand structures

Cooperating Company Recruitment Support

80

4. M
 aintaining and Improving Physical and(4) Reduction of accidents due to the collapse of buildings

Construction Career Up System

The CDP, an international environmental non-profit
organization, selected us as one of the Leader Board
companies in recognition of our efforts to manage
greenhouse gas emissions and reduce risks in collaboration

Corporate Data

Mission Statement. We also recognize that the basic premise of this statement is that all employees and other parties
involved in our business can work in a safe and healthy work environment with good physical and mental health.

will strive to prevent accidents and disasters by encouraging

Improvement of Occupational Health and Safety and BCP

Tokyu Construction works to establish an environment inwhich 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 actively
cooperate in the promotion of the Construction Career Up

Foundation for Value
Creation

Tokyu Construction works to achieve the creation of a reassuring and comfortable living environment, as mentioned in our

and warning workers to avoid danger and temporarily halting

We organized an Accident Prevention Cooperative
Association with cooperating companies engaged inconstruction and promote the smooth progress ofconstruction work through cooperation. In addition, we
conduct a variety of activities to eliminate accidents anddisasters, including the operation of a Meister certification
system for excellent foremen. In the event of disaster-

Corporate GovernanceOccupational Health and Safety

Our Supply Chain

As of FY2022, the Procurement Department has visitedcooperating companies for three years, visiting acumulative total of more than 150 subcontractors by theend of the fiscal year. Through visitations, we engage inactivities to raise awareness of the importance of theenvironment, human rights, and labor issues in addition toproviding support for labor shortages and businesssuccession issues. These efforts are in accordance with ourManagement Policy, Procurement Policy, and Supplier
Code of Conduct. We also review the status of specificinitiatives taken in our offices related to the three

Driving Force for
Sustainable Value Creation

with our partner companies. This Leader Board is forcompanies with the highest ratings in the 2021 Supplier
Engagement Rating. We will continue to work with ourcooperating companies to realize a decarbonized society.

2. Review the safety construction work cycle
3. Strengthen communication
4. Comply with the latest management systems such as
the NEW COHSMS and new risk assessments

and health activities. In FY2022, we saw the occurrence ofoccupational accidents such as crashes, falls, and accidents
involving construction machinery and cranes. The status ofthese occurrences, their causes, and countermeasures, arediscussed at a investigative meeting on the causes andprevention of recurrence. Information on the identified
recurrence prevention measures is shared within the Groupto prevent recurrence.

Trends in Accident Occurrence
FY

Safety Index*

2018

Results

0.43

2019

Results

0.09

2020

Results

0.19

2021

Results

0.14

2022

Results

0.83

2023

Target0.10 or less* The square root of (frequency rate x strength rate)
Scope: Tokyu Construction employees (domestic non-consolidated, atdomestic work sites)
Overseas work sites of Token Industry, Tokyu Renewal Corporation, andTokyu Construction’s International Division are not included in the scope.

WEB

Health and Safety Initiatives

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

81

Steps in Value Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

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

25,000331,437(t-CO2)

21,98720,000322,170
288,867

300,000

231,483(10,000 t)

60,00020,31515,000258,083

Industrial Waste Generated(Excluding General Waste)

Office45.0

45,73544,47844,329

1,955

2,016

1,657

40,00040,29539,396

935

832

40.0

10,000200,000
5,000

37.6

5,107

3,549

20,0000100,000

43,78042,461

42,67339,36038,564

37.2
34.9

35.0

35.5
32.0

(5,000)(10,000)0

2019/32020/32021/32022/3

2019/32023/3

Profit or Loss Attributable to Owners of Parent/ROE
Proﬁt or Loss Attributable to Owners of Parent(Million yen)

25,00025

25,00015,0002021/32022/302023/323,907

5.6

14,903

11,7252020/32021/32020/32021/32022/32023/3

Energy Consumed

5,245

2022/3(Fuel oil conversion: ℓ/m2)
30.00

25.33

5

94

21.50

22.65

23.84

95.6
94.0

93.3

93.5

2020/32021/3

93.9
10.00

92

(5)
(10)

23.32

20.00
96

0

(7.6)
2019/3

2019/3

98(25,000)(7,459)2,647(10,000)

2023/3100

22,79010(5,000)2022/30

15,50402021/3

(%)

7,875

15

2.6

2020/3

Recycling Rate

20

15.4

10,0005,000

30.0

2019/3

Free Cash Flow

(%)

18.1

2020/3

ROE(Million yen)

20,000(6,078)(40,928)(50,000)

2019/32023/32020/30902021/32022/3

2019/32023/32022/3

2019/32023/32020/32021/32022/32023/3

Note: Until FYE March 31, 2021: Calculated as 1- (direct final disposal volume/
total emissions) for all construction projects
From FYE March 31, 2022: Calculated for new establishments and new
construction projects using recycling data from major contractors

Dividend Per Share and Payout Ratio
Dividends Per Share

Owned Capital/Capital Adequacy Ratio
Owned Capital

Dividend Payout Ratio

(Yen)
50

72.0

(Million yen)75

120,000
100,000

40

30

(%)

36
30

20

20.6

30

50

40.1

25

0

0

2020/32021/32022/32023/3

Note: Dividend payout ratio for the FYE March 31, 2022 is not shown due tothe recording of a net loss for the year.

82

80,00060,00010

2019/3

101,215

42.9

25

21.5

10

92,633

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

Accident Frequency Rate

102,963
92,490

(%)

(%)

60

1.00

95,248 50

0.80

3,000

2,784

2,843

2019/32020/3

3,010

3,012

3,041

2021/32022/32023/3

0.60

38.9

38.2

30

40,00020

20,00010

002021/3

4,000

0.83

0.40

2020/3(Employees)

40

45.4

35.0

2019/3

Number of Employees (Consolidated)

Capital Adequacy Ratio

2022/32023/3

2,000

0.43

1,000

0.19

0.20

0.09
0.14

0

2019/32020/32021/32022/302023/3

Safety index: The square of (frequency rate x strength rate)
Note: The frequency rate indicates the frequency of industrial accidents thatcaused injury and/or death per one million total extended working hours.
The strength rate indicates the scale of industrial accidents that caused
workdays lost per thousand total extended working hours.

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

83

Steps in Value Creation

Driving Force for
Sustainable Value Creation

Value Creation
Initiatives

Corporate GovernanceFoundation for Value
Creation

Corporate Data

11-Year Financial and Non-Financial Summary
Unit

2013/3

2014/3

2015/3

2016/32017/3

2018/3

2019/32020/32021/32022/32023/3Operating Results
Orders received

Million yen

210,933

290,647

341,992

303,758

293,539

299,436

285,476

215,109

320,916

292,797294,356

Net sales

Million yen

228,570

226,164

262,815

296,393

243,618

320,711331,437

322,170

231,483

258,083

288,867

Ordinary profit or loss

Million yen

1,154

2,630

6,009

18,17817,211

21,41621,987

20,315

3,549(6,078)5,107

Ordinary income (loss)

Million yen

2,301

3,559

8,024

19,76818,83922,12822,932

21,9694,891(5,132)

5,020

Profit or loss attributable to owners of parent

Million yen

(566)

2,685

5,805

13,34013,691

16,11815,504

14,903

2,647(7,459)5,245

Total assets

Million yen

154,195

169,685

192,226

214,526

204,813249,756

264,996

235,897

226,568

237,811249,164

Total net assets

Million yen

32,48735,25844,861

54,23866,38079,17592,981

101,703

103,509

93,06496,020Interest-bearing debt

Million yen

2,444

9,047

8,967

4,886

4,803

1,721

1,638

26,55726,754

22,431

21,970Owned capitalMillion yen

32,41035,152

44,67254,002

66,151

78,94992,633

101,215

102,963

92,49095,248Cash flows from operating activities

Million yen

14,264(9,302)

2,111

39,003(23,545)

16,226

29,694(33,439)

11,62912,201

20,392

Cash flows from investing activities

Million yen(619)(2,072)(1,525)(334)(1,717)(3,383)(5,786)(7,488)(3,753)

(476)

2,398

Cash flows from financing activities

Million yen(8,569)

6,476

(675)

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

21,604(3,308)(7,531)(2,762)

Cash and cash equivalents at end of year

Million yen

23,097

18,215

18,31850,674

22,582

28,86549,14529,54934,17338,64858,714

Net income or loss per share

Yen(5.31)

25.16

54.40

125.00128.30151.05145.37139.7924.95(71.26)

49.99

Net assets per share

Yen

303.61

329.35418.59506.04619.91739.87868.87949.39983.90883.11905.99Dividends per share

Yen

0.00

5.00

13.00

25.00

26.00

31.00

30.00

30.00

10.00

25.00

36.00

Dividend payout ratio

%

–

19.9

23.9

20.0

20.3

20.5

20.6

21.5

40.1

–

72.0

%

21.0

20.7

23.2

25.2

32.3

31.61

35.0

42.9

45.4

38.9

38.2

Financial Position

Cash Flow

Per Share Indicators

Financial and Stock Price Indicators
Capital adequacy ratio
Return on equity (ROE)

%

(1.8)

7.9

14.5

27.0

22.8

22.2

18.1

15.4

2.6

(7.6)

5.6

2

Price-to-earnings ratio (P/E ratio)

Times

–

17.4

12.5

7.4

6.8

7.6

5.7

4.1

24.1

–

13.5

2

Price book-value ratio (P/B ratio)

Times

0.69

1.33

1.62

1.82

1.41

1.56

0.96

0.60

0.61

0.76

0.74

Non-Financial Indicators(Non-Consolidated)
Number of employees at end of year

Employees

2,403

2,313

2,340

2,412

2,464

2,537

2,523

2,576

2,617

2,624

2,628

(Male/Female)
Employees

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

2,314/314

%

2.16

2.07

1.84

2.22

2.26

2.30

2.46

2.52

2.46

2.39

2.69

Offices

t-CO2

1,370

1,607

1,841

1,913

1,820

1,754

1,955

2,016

1,657

935

832

Work sites

t-CO2

51,06944,39759,394

66,112

67,33351,602

43,78042,461

42,67339,36038,564

Industrial waste (excluding general waste)t

451,353490,293403,918

473,004

395,309410,245

375,815

348,827355,361

320,340

372,399

Recycling rate

%

94.7

96.8

96.1

95.9

98.4

99.4

94.0

93.3

93.5

95.6

93.9

%

1.02

1.04

0.84

0.73

0.70

0.79

0.58

0.39

0.61

0.48

0.83

ー

ー

ー

ー

ー

ー

BB

BB

BBB

BB

BB

Gender breakdown
Employment rate for persons with disabilities
CO2 emissions

3

Accident frequency rate
Employee engagement rating4

1. Tokyu Construction has adopted the Partial Amendments to Accounting Standard for Tax Effect Accounting (“the Standard”) from the beginning of FYEMarch 31, 2019, and the Standard has been retroactively applied to FYE March 31, 2018 figures.
2. Stock price indicator is calculated based on the stock price as of FYE March 31, 2022.
3. Until FYE March 31, 2021: Calculated as 1- (direct final disposal volume/total emissions) for all construction projects
From FYE March 31, 2022: Calculated for new establishments and new construction projects using recycling data from major contractors
4. Engagement rating using Motivation Cloud from Link and Motivation Inc. All employees of the Group as a whole, including subsidiaries, are subject tothe engagement rating. Rating is divided into a total of 11 stages, and the current “BB” is the fifth rating from the top after “AAA,” “AA,” “A,” and "BBB".

84

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

85

Steps in Value Creation

Driving Force for
Sustainable Value Creation

Stock Information (As of March 31, 2023)

Company Information

Basic Stock Information

Company Profile

Total Number of Shares
Authorized to be Issued

400,000,000 shares

Outstanding Shares

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

Number of Shareholders

46,181

Major Shareholders (Top 10)
Shares Held(Thousands)

Name

Listed Stock
Exchange

Prime Market of the Tokyo
Stock Exchange

Securities Code1720

1-4-1, Marunouchi, Chiyoda-ku,
Shareholder RegistryTokyo, Japan
Administrator
Sumitomo Mitsui Trust Bank, Limited

Percentage ofTotal Shares
IssuedTOKYU CORPORATION

15,362

14.46%The Master Trust Bank of Japan, Ltd. (Trust Account)

10,63510.01%

Mizuho Trust & Banking Co., Ltd. -TAISEICORPORATION retirement benefits trust account retrust trustee Custody Bank of Japan, Ltd.

4,000

3.77%

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

3,520

3.31%

Custody Bank of Japan, Ltd. (Trust Account)

3,211

3.02%

MUFG Bank, LTD.

2,550

2.40%

Sumitomo Mitsui Trust Bank, Limited.

2,110

1.99%

JPMorgan Securities Japan Co., Ltd.

2,100

1.98%

SHIMIZU CORPORATION

2,000

1.88%

KINDEN CORPORATION

1,924

1.81%

Status by Owner
Financial
Institutions
37.00%

Treasury
Shares0.50%

Foundation for Value
Creation

Corporate Data

TOKYU CONSTRUCTION CO., LTD.

Foundation

Tokyu Construction Industry Co., Ltd. was founded on March 12, 1946. (Tokyu Construction Co., Ltd. wasfounded on November 11, 1959)

Establishment

April 10, 2003

Capital¥16,354.44 million

Head Office

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

Representative

Representative Director, President Mitsuhiro Terada

Number of Employees

3,041 (consolidated), 2,628 (unconsolidated)

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

Main Business Lines

Civil engineering and building construction contracts and surveys, construction planning, geological surveys,
measurements, design, and others

OfficesHead Office, 13 branches, 11 sales offices, and others
Branches
Sapporo Branch, Tohoku Branch (Sendai City), Hokuriku Branch (Niigata City), Chiba Branch, Civil
Project East Japan Branch (Shibuya, Tokyo), Building Project East Japan Branch (Shibuya, Tokyo), Urban
Development Branch (Shibuya, Tokyo), Building Project 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)

Financial
Instruments
Dealers
4.02%

Other Companies
23.21%

Corporate Governance

Company Name

Individuals andOthers
21.51%

ForeignCompanies,etc.
13.76%

Value Creation
Initiatives

Notes 1. The percentage of total shares issued was calculated after deducting treasury shares (567,286 shares).
2. Tokyu Corporation Co., Ltd. has contributed 7.500 million shares to retirement benefit trust accounts,
including 3.520 million shares to the Custody Bank of Japan (Sumitomo Mitsui Trust Bank, Ltd. Re-trust
Account and Tokyu Corporation Retirement Benefits Trust Account).
高値・安値

Stock Price
External Evaluations and the Company’s initiatives

(Yen)

1,500
1,200
900
FTSE Blossom Japan Sector Relative Index

600

S&P/JPX Carbon Efficient Index

Digital Transformation Certification

300
02014/4

2015/1

2016/1

2017/1

2018/1

2019/1

2020/12021/12022/12023/3
CDP

Trading Volume

SBT

TCFD

Monthly Total(Thousand Shares)
40,000JCLP(Japan Climate Leaders' Partnership)

Eco First

RE100

30,00020,00010,000ZEB Planner0

2014/486

2015/1

2016/1

2017/1TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

2018/1

2019/1

2020/12021/12022/12023/3

ZEH Developer"Eruboshi"
certification

Health & Productivity
Management Organization

work with Pride2022 Gold

EcoVadis2023 Silver

TOKYU CONSTRUCTION CO., LTD. INTEGRATED REPORT 2023

87