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Tokyo Gas Group CSR Report 2016
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Top Commitment

Tokyo Gas Group is working to evolve as a total energy business and accelerate its global business development by constructing a new group formation, thereby contributing to the sustainable development of society through CSR management.
							Michiaki Hirose President Tokyo Gas Co., Ltd.

Following on the full liberalization of Japan's electricity retail sector in April 2016, it will be the gas retail sector's turn next April. In recognition of the momentous changes afoot in the industry, Tokyo Gas has adopted "Supporting you Always and bettering every day" as our new corporate slogan. This slogan encapsulates our appreciation for our customers and our unwavering determination to continue to boldly take on new challenges and fulfill our social responsibilities. Tokyo Gas Group is committed to using all our resources to contribute to the sustainable development of society in answer to the needs and expectations of our customers and all our stakeholders.

Realizing our "Challenge 2020 Vision"

In November 2011, we responded to the Great East Japan Earthquake by formulating a new vision, the "Challenge 2020 Vision," ("Vision") that maps out our public mission as an energy company and our path toward sustainable growth in the future.

This Vision calls for Tokyo Gas to further step up its existing commitment to innovation, and to transform its operating structure and broaden its business base while maintaining its core presence in the gas business and the Tokyo metropolitan area in order to be better able to contribute even more to society.

Transforming our operating structure means continuing to evolve the city gas business that has formed the core of our operations to date, while at the same time developing second and then third core businesses (such as the electricity and engineering businesses) in order to emerge as a total energy company group. To use a "mountain" analogy, we will move from a "Mount Fuji" style of management, in which our business is dominated by a single core business focused on gas, to a “Yatsugatake (mountain range with several peaks) -style of management” with multiple core businesses.

Broadening our business base, meanwhile will involve remaking ourselves into a global company group by accelerating our domestic and overseas expansion while still retaining our focus on the Tokyo metropolitan area. We will also leverage the natural gas-related technologies and expertise that the Group has cultivated in North America and Southeast Asia, where energy use is expected to expand dramatically in the future.

By pursuing these twin goals, we aim to achieve a "2:1:1" profit structure by 2020, with half of our net profits generated by the gas business, a quarter by the electricity business and other segments, and the remaining quarter by overseas business.

Transformation and broadening of operating structure and business base

Progress on Main Policies

Tokyo Gas Group is pursuing action in line with three main policies set in our "Main Policies FY2015-2017" ("Main Policies") - namely, evolution of the total energy business, acceleration of global business development, and construction of a new group formation - in order to advance us along the path toward realizing the Vision.

In fiscal 2015, the Hitachi LNG Terminal and Ibaraki-Tochigi Line entered operation and were connected to our existing three terminals in the Tokyo Bay area and high-pressure pipeline network, thereby increasing the supply stability of our entire infrastructure. In the electricity business, we expanded our competitive power generation capacity by bringing Unit 3 at the Ohgishima Power Station online, and we also unveiled rates plans and services designed to improve the lives of our low-pressure customers and raise our business value in readiness for full liberalization of the electricity retail sector. Overseas, we strengthened our U.S. operations by bolstering Tokyo Gas America Ltd. in Houston and acquiring new prime assets. As regards our midstream and downstream operations overseas, we established Tokyo Gas Asia Pte. Ltd. in Singapore to serve as a regional headquarters for our business and investment activities in Southeast Asia. We further established a new company, Tokyo Gas Liquid Holdings Co., Ltd., to oversee the liquid gas business and provide a new formation contributing to our evolution as a total energy company group.

Initiatives in Fiscal 2016

Fiscal 2016 will usher in an era of mega-competition for the energy industry, and we will respond by continuing to pursue our Main Policies for attaining our Vision.

To evolve our total energy business, we will ramp up measures to ensure the safety and stability of energy supplies. We will also prepare for the new arrangements that will come into effect when Japan's gas retail sector undergoes full liberalization next spring, and will work to strengthen ties with customers by identifying and reliably meeting their needs. The launch of our electricity business will be followed up by steady action to ensure that we remain customers' first-choice new entrant electricity supplier. To accelerate our global business development, we will start participating in overseas projects in earnest now that the foundations of our overseas network are in place. To construct a new group formation, we will formulate and put into practice growth strategies for segments that we intend to grow and cultivate alongside our city gas and electricity supply businesses, including the engineering solutions business, liquid gas business, lifestyle services business, and real estate business. At the same time, we will develop and strengthen the Group's management and structures to assist implementation of these strategies.

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Tokyo Gas Group practices CSR-based management to assist implementation of its Management Philosophy and Corporate Action Philosophy in the course of its daily business activities and to fulfill its social responsibilities and public mission. We have identified six key areas of CSR activity and specific issues ("material aspects"), and are implementing plan-do-check-act (PDCA) cycles to address them.

Key CSR Activities of the Tokyo Gas Group
Key CSR Activities of the Tokyo Gas Group
Michiaki Hirose President Tokyo Gas Co., Ltd.
CSR is crucially important to the implementation of our Main Policies and the attainment of our Vision. Tokyo Gas President Michiaki Hirose explains below in Q&A format how we are practicing CSR activities.

How is the Tokyo Gas Group tackling global environmental problems?

Social pressure for action to tackle global environmental problems continues to grow, as exemplified by last year's COP21 climate summit and its adoption of an international framework and "Intended Nationally Determined Contributions (INDC)" for reducing greenhouse gas emissions up to 2030.

For our part, we recognize that our responsibilities as an energy company will only grow as the Group expands by evolving its total energy business and accelerating its global business development. In the city gas business, increased use of cogeneration systems (which are attracting interest for their contribution to both energy efficiency and security) and the development and adoption of smart energy networks and other low-carbon systems will be promoted through the expanded use of natural gas, a low-CO2 emission source. In the electricity business, we will actively promote generation of electricity using highly efficient thermal power plants and renewable energy sources. Globally, we plan to accelerate our rollout of the Group's world-beating CO2-reducing, energy-saving technologies as part of our effort to enhance action against global warming.

We will also put into practice revised Environmental Policies and Environmental Protection Guidelines in fiscal 2016, strengthen our environmental management systems, and take even more serious action on environmental issues in accordance with global standards as we continue our efforts to raise our corporate value.

How will the Tokyo Gas Group contribute to local communities?

To help develop communities that are both environmentally friendly and disaster resilient, we will promote the adoption of smart energy networks and work with local residents to raise awareness of energy and the environmental issues.

Children are a particular focus of our community activities, as our future will depend on the kids of today. Activities already underway include school education support, operation of our corporate museums, and our participatory "HIIKU" fire education program. As regards our global expansion, we are placing a high premium on building trust with stakeholders of all nationalities, cultural backgrounds, and legal and business traditions.

We are committed to building good communications by explaining the Group's initiatives and ascertaining what our stakeholders expect from us as we work to better serve local communities.

What is your thinking and approach regarding the human resources
on which the Tokyo Gas Group depends?

Employees are the driving force of any business and are a crucial element of the Group's management base. It is essential to create an environment that allows all employees to maximize their personal potential and approach their work positively.

Tokyo Gas Group employs a vast range of individuals, including people who face time constraints due to parental and nursing care or other responsibilities, women, older people, people with disabilities, mid-career hires, and foreign nationals. They all bring diverse knowledge, skills, and experience to the table. We recognize the enormous importance of diversity, which for us means respecting one another's individuality, and we also believe that respect for diversity leads to improvements in productivity. We consider women's employment to be an important element of diversity, and we are working to establish and expand various programs, raise awareness, and cultivate an organizational culture that allows women to contribute fully in the workplace. We continue to steadily increase our promotion of women, and this year appointed our first female executive officer from within the company.

Looking ahead, we will accelerate development of human resources within the Group to assist our evolution into a total energy company and global business, and we will continue to ensure the health and safety of employees and further strengthen our people-centered business base.

What does Tokyo Gas hope to achieve through the Tokyo 2020 Olympic and Paralympic Games?

As an official partner of the Tokyo 2020 Olympic and Paralympic Games*1, Tokyo Gas will work with the Tokyo Metropolitan Government and other local governments and authorities to make the Games a success and create an appealing Tokyo. We will also contribute to society in our role as a public utility by contributing to the development of Paralympic sports.

  • ✽1Tokyo Gas is an official partner (in the Gas & Gas Utility Services category) of the Tokyo 2020 Olympic and Paralympic Games.

Could you explain the vision of the Tokyo Gas Group's CSR management?

For us, corporate social responsibility means both contributing to sustainable development and growing as a company by winning stakeholders' trust through meeting the continually changing needs and expectations of society.

In fiscal 2014, Tokyo Gas Group identified six key areas of CSR activity and material aspects on the basis of the Main Policies we had adopted previously. Sound progress was made on CSR in fiscal 2015 by following PDCA cycles. Fiscal 2016 saw not only the full liberalization of the electricity retail sector but also the finishing touches being put to preparations for the full deregulation of the gas retail sector. As we push ahead with implementation of our Main Policies, such as by commencing our participation in overseas projects in earnest and developing and strengthening our group management structures, compliance in keeping with these changes will assume even greater importance. We consider it essential to practice fair and transparent management, while further enhancing communication with all our stakeholders, sharing knowledge within the Group on customers' and society's needs, and incorporating this knowledge into our activities. In March 2016, we signed the United Nations Global Compact to help us further improve our CSR activities and approach CSR from a more global perspective, and we will continue our pursuit of more advanced CSR management and contributions to the sustainable development of society in the years ahead.

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