Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

E Biodiversity Conservation
1. GovernanceCommitment to biodiversity and zero deforestation

Participating in conservation initiatives

In our Sustainability Vision 20506 plan, we have set the goal, as a challenge for 2050, of maximizing ecosystem networks through business
operations. We aim not only to achieve no net loss (to maintain the valueof ecosystems) but also become nature positive (to enhance the value of
ecosystems through our business operations). Based on this commitment,
we remain focused on the Gohon no Ki Project, a landscaping and greening project that fully considers the ecosystem, as well as FairWood sustainable wood procurement.
In particular, the issue of wood procurement is recognized as a pressing
global issue; the goal of zero deforestation by 2030 was adopted in the2014 New York Declaration on Forests. At COP26 in 2021, 140 nations,
including Japan, agreed to this goal. The Sekisui House Group supports
zero deforestation, which aligns with its FairWood procurement approach,and has declared the goal of zero deforestation Group-wide in
Sustainability Vision 2050. In the future, we also aim to achieve zero deforestation throughout our primary and secondary suppliers.

We have been an early participant in the global movement for biodiversity
conservation. At the 9th Conference of the Parties to the Convention on
Biological Diversity (COP9) in 2008, we were one of the nine major
Japanese companies to sign the Leadership Declaration of the Businessand Biodiversity Initiative.1
As a founding member of this initiative, we agreed to the three objectives of the Convention on Biological Diversity (conservation of biodiversity,
sustainable use of biodiversity components, and fair and equitable distribution of the benefits of genetic resources), and we continue to promotebiodiversity conservation2 under this policy in our business operations. We
have also endorsed the goals of the Taskforce on Nature-related Financial
Disclosures (TNFD), which was launched in June 2021. We then joined the
TNFD Forum in February 2022. In addition, we are part of the 30by30
Alliance, which was launched with the aim of achieving the global 30by30
target3 adopted at the 15th Conference of the Parties to the Convention
on Biological Diversity (COP15), and we are proactively cooperating withefforts to register OECM4 sites.
These initiatives are led and promoted by the Environmental
Subcommittee, in cooperation with each department as well as domestic
and overseas Group companies, based on the ESG management promotion system.5 We also ensure that all employees understand and are familiar with these initiatives through progress reports, feedback on issues andproposals for improvement.
1 

Business and Biodiversity Initiative: Leadership Declaration

2 

P.134 2. Strategy

3 30by30 is an international initiative to effectively conserve at least 30% of the Earth’s land and ocean area assound ecosystems by 2030 with the nature-positive goal of halting and reversing biodiversity loss by 2030.
4 Other effective area-based conservation measures, an approach to designating areas that contribute to biodiversity conservation outside of protected areas
5 

P.97 Stance and Initiatives to Promote ESG Management (Sustainability)

6 

Sustainability Vision 2050

CSR procurement
Sekisui House is committed to CSR procurement,7 based on a policy of
ensuring the best quality, robust delivery and reasonable price while also
incorporating ESG. In particular, as we use approximately 250,000 m³ ofwood annually, we have positioned the impact on biodiversity in logging
areas as an important risk to business continuity. Accordingly, we haveestablished our own Wood Procurement Guidelines, which include provisions on biodiversity, and work to promote awareness throughout the supply chain. Every year, we implement a wood procurement risk survey ofmajor suppliers that includes data for secondary suppliers and beyond.
7 

CSR Procurement Guidelines

The Gohon no Ki Project, an eco-friendly landscaping andgreening project 8
Sekisui House is Japan’s largest landscaping company, planting one million trees nationwide annually. To fulfill our responsibility as a large-scale
house builder, since 2001 we have been implementing the Gohon no Ki(“five trees”) Project, an ecosystem-conscious landscaping and greening
project, to conserve biodiversity through our housing business.
The Gohon no Ki Project is based on the approach that “three trees arefor birds, two trees are for butterflies, and all are local native tree species.”
The project proposes the use of native tree species that are beneficial tobirds and butterflies in gardens. In addition to biodiversity conservation, weare making proposals that encompass the benefits to residents of garden
visits by fauna and the other effects of garden trees. We seek to maintainand revive the ecosystem network (nature positive) by increasing theamount of richly green space in urban areas and by leveraging residential
gardens, created under the Gohon no Ki Project, to support the habitat
and activities of the fauna. Ecosystem networks enrich biodiversity at theregional and national levels, creating places where both wildlife and residents can simultaneously enjoy the richness of nature.
8 

Gohon no Ki Project (Japanese only)146

Value Report 2023

Contents

SEKISUI HOUSE

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

Biodiversity Conservation

Thanks to the cooperation of the many customers who have endorsed
the philosophy of the Gohon no Ki Project, there were 886,000 plantings(includes those outside the Gohon no Ki Project) in FY2022, with the
cumulative number of plantings since the 2001 start of the project rising to19.0 million.

is to achieve a positive impact through sustainable forestry managementthat goes beyond avoiding illegal logging by continually working on our
supply chain as one of Japan’s leading wood consumers. This also aligns
with our biodiversity conservation challenge goal of “maximizing ecosystem networks through our business.”

Updating the Wood Procurement Guidelines
Since establishing the Wood Procurement Guidelines in 2007, Sekisui
House has promoted FairWood procurement. In light of changes in social
conditions related to wood procurement, we now plan to update theWood Procurement Guidelines to better clarify our stance.

Garden Garden

Town
GardenPark

Satoyama
ForestForestSatoyama

Commitment to biodiversity in wood procurement

Satoyama network

2. Strategy
FairWood procurement and Wood Procurement Guidelines
FairWood is defined as wood that is not only legal, but also contributes tosustainability and local development. We have declared FairWood procurement as a priority in our Wood Procurement Guidelines, and we areworking to improve our level of procurement while striving to engage withFoE Japan and other international environmental NGOs and industry organizations. For example, we are constantly working with environmental
NGOs to obtain the latest information on high-risk areas and update ourrisk assessment methods.
One objective of FairWood procurement is to secure a stable supply ofsustainable and renewable resources for the Company. Another objective

The ten Wood Procurement Guidelines are shown below and shared with
our suppliers and secondary suppliers. Guidelines 2, 3, 4, 8 and 9, in particular, represent our commitment to biodiversity.
10 Wood Procurement Guidelines (2017 edition)
1.	Source wood products from areas with relatively low risk of illegal
logging.
2.	Source wood products from areas without sensitive ecosystems.
3.	Do not source wood products from areas where local ecosystems
are seriously damaged due to large-scale logging of natural forests.
4.	Do not use endangered species for wood products.
5.	Minimize CO2 emissions when producing, processing, and transporting wood products.
6.	When logging wood products, avoid conflict with local communities and refrain from unfair labor practices.
7.	Source wood products from areas of controlled logging, so as not
to exceed the rate of forest regeneration.
8.	Source wood products from domestic forests where well-planned
forest management is in place to conserve ecosystems.
9.	Source wood products from plantation forests that are managed
so as to promote conservation and ecosystem development.
10.	Use recyclable wood building materials.

3. Risk Management
Practicing due diligence in procurement
To us, due diligence1 is the process of securing sustainable timber that
supports the future of our business, and we implement sustainable woodprocurement through strict due diligence practices.
Many companies conduct due diligence only for low-risk timber fromprimary suppliers. In contrast, we also target suppliers at the secondary
level and further upstream and visit logging areas to investigate and confirm the status of any timber deemed high risk.
This is because we believe it is important to share the tracking processwith suppliers and strive for ongoing improvement in order meet growinginternational calls for zero deforestation.
1 Due diligence is the duty of care and effort that companies and others must apply as a matter of course. In
Japan, the Act on Promotion of Use and Distribution of Legally-harvested Wood and Wood Products (commonly known as the Clean Wood Act) refers to due diligence, and was enacted in response to the tightening of regulations on the handling of illegally harvested timber in Western countries. This is represented by aprocess of identifying risks of illegality by 1. collecting information, 2. assessing risk, and 3. practicing risk
mitigation. A growing number of companies are currently practicing due diligence in wood procurement
while also addressing ESG-related risks.

147

Value Report 2023

Long-Term Vision andMaterial Issues

Contents

SEKISUI HOUSE

Mechanisms andCatalysts for Creating Value

ESG Management

Mid-Term Management Plan for
Sustainable Growth

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

148

Biodiversity Conservation

Due Diligence Practices
Information
gathering

1. Initial risk assessment
Tree species at risk

Risk assessment

Logging country/
region risk

• Washington Convention• IUCN Red List, etc.
• Extent of illegal logging• Corruption index, etc.

2. Detailed risk assessment

Risk mitigation
measuresIf the probability of risk in the initial evaluation ishigh, we contact upstream suppliers and collectinformation on local forest management and logging
to determine the risk of operational illegality.
• NGO information, document confirmation, site visits, etc.

Wood Procurement Risk Survey
Sekisui House implements a wood procurement survey of its major wood
suppliers (63 companies in FY2022) according to the following process.
Annual Wood Procurement Risk Survey Process
1. Collect detailed data from suppliers on the sources of wood,
including species and producing areas
2. Quantitatively assess the data collected using the Wood
Procurement Guidelines and assign ranks(four-grade scale: S, A, B or C)

3. Provide feedback to suppliers

The ratio of Rank S and Rank A wood has been gradually increasing from
47% before the guidelines were implemented in FY2006, reaching 97.1%
in FY2022.
In order to achieve zero deforestation, a goal adopted by international
consensus, we have decided to manage the rate of zero-deforestation
lumber procurement as a new KPI. To use this KPI in next year’s reporting,
we have begun efforts to confirm detailed data through individual engagement with high-risk suppliers.

Risk assessment of environmental issues

Wood productprocurement ranking1

34 and aboveS

26 or moreA

17 or more

B

Below 17C

1 Wood product procurement ranking
Depending on their total score, purchased wood products are classified into four levels, from high to low: S,
A, B, and C. Minimal acceptable score thresholds are set for Wood Procurement Guidelines 1. and 4.,
which are especially high priority (see page 147). We aggregate and disclose these scores as part of efforts
to achieve net positive impact and no net loss.

Percentage of Wood Products by Region(FY)

For existing suppliers whose CSR evaluation results reveal environmental
risks, we conduct due diligence by monitoring them using onsite interviews, providing advice on evaluation standards and how to meet thosestandards, and confirming the current state of compliance.
In the unlikely event that a serious risk is discovered, we work with therelated divisions to determine the proper remedial action and take measures that could include cutting back on transactions with the supplier,depending on the score in the supplier assessment.

Domestic wood

2020

2021

2022

18.80%

24.72%

25.52%

East Asia2

7.20%

5.08%

8.79%

Europe33.20%

37.48%

31.95%South Pacific3

12.70%

11.78%

11.81%

North America

16.50%

10.41%

12.94%

Recycled wood4

7.90%

7.52%

7.84%

Other5

3.70%

3.01%

1.15%

2 Excluding Japan
3 Indonesia, Malaysia, etc.
4 Particle board and other building materials recycled from construction waste, etc.
5 Africa, etc.

4. Metrics and Targets
Volume of Wood Procured

Volume ofwood procured(KPI: % that is
ranked S or A)

Total score(maximum 43 points)

(FY)

2020

2021

2022

2023 Targets

250,529 m³(97.0%S or A rank)

285,722 m³(97.2%S or A rank)

247,895 m³(97.1%S or A rank)(97.4%S or A rank)

Biodiversity Conservation

(FY)

KPI

Unit

2020

2021

2022

2023
Targets

Biodiversity-friendly tree
planting6

Thousandtrees

17,10618,11619,00320,000

6 Cumulative number of trees planted under the Gohon no Ki Project

4. Encourage improvement for wood ranked B or C

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

149

Biodiversity Conservation

Big data on biodiversity has revealed the effectiveness of the Gohon no Ki
Project, and urban greening will be increasingly important going forward aspart of nature positive initiatives. In urban areas, where green space is limited, it is important to create richly green spaces. We have been providing
quality green spaces that are highly effective at conserving biodiversity
through the Gohon no Ki Project, which focuses on local native tree species.
We will propose better quality green spaces by quantitatively assessing
biodiversity using big data and through quantitative assessments for cohesive green spaces in urban areas.

Evaluating effectiveness quantitatively using big data on
biodiversity
In 2019, to comprehensively evaluate small green spaces scattered acrossJapan that could not previously be assessed, we worked with the Kubota
Laboratory in the Faculty of Science of the University of the Ryukyus tostart a joint verification analyzing the effectiveness of quantitative assessments of biodiversity conservation from a macro perspective. Using thebig data on biodiversity from the University of the Ryukyus in addition to
cumulative data on the number, species and location of trees planted by
the Company, in 2021, this analysis made it possible to quantitatively
express the effect of the Gohon no Ki Project on biodiversity in terms ofthe number of bird and butterfly species being attracted to residential
areas. We also quantitatively evaluated the effectiveness of restoring biodiversity in Japan’s three largest metropolitan areas (Tokyo, Osaka andNagoya) using an integrated diversity index and conducted simulations toassess the effect of continuing the Gohon no Ki Project through 2070.1
The results showed that the Gohon no Ki Project contributes to the restoration of biodiversity, and that the potential benefits can be amplified byexpanding the project in the future. We will widely disclose not only the
results of these assessments, but also the expertise we have accumulated
through our activities over the past 20 years, and will continue to workwith many companies and individuals to promote nature positive initiatives.

1

Results of big data analysis: Effect on birds
Gohon no Ki has the effect of attracting about
Twice as many bird species to residential areas

Birds

Average of

Nature Positive Methodology (Japanese only)3

 ews release: Reinforcing the Perspective of Urban Corporate Green SpaceN
Biodiversity Assessment (Japanese only)

4

30th Global Environment Awards (Japanese only)

55th EcoPro Awards (Japanese only)

9 species

Average of18 species

DoubleResults of big data analysis: Effect on butterflies
Gohon no Ki has the effect of attracting nearly
Five times as many butterfly species to residential areas
Without the Gohon no Ki Project
Butterflies

Average of ews release: 20 Years of Urban Biodiversity Conservation with CustomersNthrough the Gohon no Ki Project (Japanese only)2

Effects of the Gohon no Ki Project

Without the Gohon no Ki Project

Effects of the Gohon no Ki Project

1.3 species

Average of

6.9 species

5
times

Quantitative Evaluation of Nature Positive Effects
Effects of the Gohon no Ki Project
Gohon no Ki Project has achieved atenfold increase in tree species that are the foundation of biodiversity
Effects of the Gohon no Ki Project

Without the Gohon no Ki Project
Native trees

Average of

5 species

Average of(5.42 million cumulative trees)

50 species(17.09 million cumulative trees)

10
times

Simulation of changes through 2070 in three metropolitan areas(Tokyo, Nagoya and Osaka) where green space degradation is significant
Measured value Estimated value(for trees, birds and butterflies)

Urban greening

One initiative in expanding these efforts outside the Company throughwide disclosure is an assessment by the Organization for Landscape and
Urban Green Infrastructure undertaken in November 2022. The organization used Sekisui House’s Nature Positive Methodology,2 developed in collaboration with the Kubota Laboratory in the Faculty of Science of the
University of the Ryukyus, to evaluate 87 green spaces across Japan thatwere certified by the Social and Environmental Green Evaluation System(SEGES) in an effort to better understand the degree of contribution to biodiversity and the potential for biodiversity conservation at each site.3
SEGES is operated by the Organization for Landscape and Urban GreenInfrastructure with the aim of promoting biodiversity conservation and restoration in urban green spaces.
In 2022, the quantitative assessments of biodiversity based on longterm biodiversity conservation initiatives through the Gohon no Ki Project
and big data were recognized with the Grand Prize in the 30th Global
Environment Awards4 in March and the Minister of the Environment Awardin the fifth EcoPro Awards5 in September.

Integrated diversity index

5. Initiatives and Other Related Information

1970

1980

1990

2000

2010

2020

100
75.4%

59.0%
37.4%

40.9%

-12.1%-18.2%

2030

2040

2050

84.6%
41.9%
0
-23.8%
2060

2070(year)

Note: With values for 2000, just before the Gohon no Ki Project, set as the zero level, and with 1977,
the first year for which national land use data is available, set as 100
When the Company and other companies implement initiatives similar to the Gohon no Ki Project
When the Company implements the Gohon no Ki Project
When the Gohon no Ki Project is not implemented

Urban biodiversity: New developments in 2022 (Japanese only)Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

ESG Management

Financial Data, Company
Information and Share Information

G: Governance E: Environment S: Social

Biodiversity Conservation

The promise of corporate green space and OECM that cancontribute to biodiversity
On the north side of the Umeda Sky Building in Kita-ku, Osaka, where theCompany is headquartered, we created the Shin-Satoyama Garden covering 8,000 m2. This garden was renovated in 2006 with more than 500
trees based on the principles of the Gohon no Ki Project. We planted
native Japanese tree species and more than 200 species of shrubs andflowers to create thickets. In the belief that a variety of types of spaces
supports the richness of an ecosystem, we provided terraced rice paddies
and fields to reproduce a satoyama, the disappearing native landscape ofJapan, in the city center.
The growth of a wide variety of plants has increased the amount ofgreenery, and many creatures—including more than 40 species o­ f wild
birds and more than 20 species of butterflies—­visit, live and grow in thegarden. The arrival of birds of prey, which are rarely seen in the city, hasalso been confirmed. Instead of employing the conventional consumption‑­oriented management approach of removing weeds and fallen leaves
immediately, natural low-load circulatory management has been adopted
for the satoyama to enrich the soil organisms and broaden the food chain.
In this way, we have created a green space where many creatures can
now thrive.
In 2013, we completed the “Wall of Hope,” a huge greening monumenton the east side of Shin-Satoyama measuring 9 meters high and 78
meters long that was installed at the initiative of the renowned architect
Tadao Ando. In order to function as a model for the kind of vertical spatial
greening that is expanding in cities, we covered the green wall with morethan 20,000 plants ofabout 100 diverse species, focusing mainly on
the tree species selected
for the Gohon no Ki
Project. The strategic
arrangement of plants thatflower or change colors at
different time allows visitors to enjoy the varied
Shin-Satoyama and the Wall of Hope viewed from the west side

appearance of the garden as it changes with the seasons. The ShinSatoyama project has become familiar to nearby residents and office
workers as a place where one can experience the true value of theecosystem.
30by30 was adopted by the 15th Conference of the Parties to theConvention on Biological Diversity (COP15) as a major objective of the post2020 global biodiversity framework. In the area of other effective area-based
conservation measures (OECM), a key measure to achieve this objective,
Shin-Satoyama—based on the Gohon no Ki Project—is a good model for
corporate green spaces with a high impact on biodiversity conservation.

Promoting greening and environmental conservation in
condominiums for sale and urban development projects
In the condominium for sale segment, we are utilizing the principles of theGohon no Ki Project for property exteriors. In our GRANDE MAISON1 condominium brand, we maintain a constant awareness of greening, with atarget green coverage ratio (the percentage of the property’s site area thatis planted) of around 20% or more. The average green coverage of the 13
condominiums completed in FY2022 was 24.7%, representing green coverage of 7,114 m².
The outdoor areas surrounding multi-unit buildings such as condominiums also function as a place for re-establishing community among residents, which has increasingly been lost as condominium security has
tightened in recent years. The abundance of greenery soothes the spiritsof residents and enhances the value of the condominium.
1

GRANDE MAISON (Japanese only)

Urban development under the concept of keinen bika—­creating a landscape that grows more beautiful over time
Since 1977, we have been working on community developments under
the names “Common Life” and “Common City.” Designed with an awareness of the connections between neighbors and communities, the sharedspaces boast lushly green plazas and streets as symbols offering a richer
life, with a townscape that will grow more attractive over the years under
the concept of keinen bika. This approach leads to beautification and ishighly appreciated by the local residents.
Since launching the Gohon no Ki Project in 2001, we have been promoting urban development that emphasizes the quality of greenery,
keeping in mind the planting of native species in consideration of ahealthy ecosystem. In 2005, we established the Urban Development
Charter,2 which outlines our diverse expertise cultivated through urban
development, such as that acquired through the Gohon no Ki Project, withadherence to the concept of sustainability.
Skyrail Town Midorizaka (Hiroshima City)
BeforePhoto from 1997
2

Urban Development Charter

After

Photo from 2009150

Value Report 2023
SEKISUI HOUSEContents

Long-Term Vision andMaterial Issues

Mechanisms andCatalysts for Creating Value

Mid-Term Management Plan for
Sustainable Growth

Biodiversity Conservation

Domestic wood initiatives at Sekisui House

Acquiring forest certification (CoC certification)

Looking at the forest industry in Japan, while many forests are entering aperiod of full-scale use, they are not being replanted for the next generation for a number of reasons, and are not being fully utilized.
To revitalize the domestic forest industry, we believe it is necessary toachieve the seemingly contradictory goals of increasing demand to promote
the renewal of forests for the next generation and advancing branding tocreate added value. Therefore, we are shifting to the use of domestic timber,mainly for the structural materials in our SHAWOOD wooden-frame houses.
We do not simply use domestic timber, but also develop it as regional
brands. By adopting materials from the regions where our customers live,
we are contributing to local production for local consumption and the revitalization of regional economies.
Currently, we are developing cedar, cypress
and larch products under 18 brands in 17
regions nationwide. Over 7,000 buildings havenow been built with these materials. These products have grown to the point where they are an
essential element of SHAWOOD.
In response to the “wood shock” that hit theworld in 2021, we took full advantage of thedomestic timber supply network that we havecultivated to mass produce laminated beams
made of cypress. The results of these efforts
include using multiple procurement routes for key
materials to fulfill our supply responsibilities and to
put a system in place that prevents delays when
executing our business operations. As an added
benefit, by viewing the wood shock not only as asupply problem for the Company, but as anopportunity to create demand for domestic timber, we were able to demonstrate our approach
SHAWOOD posts bearing thebrand of the producing area
to providing solutions to social problems.

Currently, 58% of the Sekisui House’s wooden building materials, includinginterior fixtures, and 94% of its structural materials alone are certified
under such schemes as FSC/PEFC (including materials sourced from certified forests). For the purposes of evaluating procurement risks, we continue to calculate these figures, but we do not see them as absolute. We
believe it is necessary to consider the small-scale, thin-margin producers
who cannot obtain certification for economic reasons.
At the same time, in such areas as zero deforestation and zero land
conversion, society now demands more from companies on wood procurement. To meet these expectations, Sekisui House positions forest certification systems as a form of third-party due diligence. Accordingly, we
acquired SGEC/PEFC-CoC certification in May 2022 to promote theadoption of the FairWood procurement policy throughout the supply­
chain. Certification serves as an effective tool for supplying certified woodto the market.
In the process of acquiring forest certification, we supported the certification of several primary suppliers, working to spread the use of certified
products by acquiring certification simultaneously.

ESG Management
G: Governance E: Environment S: Social

Financial Data, Company
Information and Share Information

151