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Tokyo Gas Group CSR Report 2016

Governance Report
Thorough Implementation of Compliance

Basic Policies

Tokyo Gas Group is committed to being a sound business group whose executives' and employees' observance of high ethical standards as well as laws and regulations earn it the trust of society. To this end it seeks to improve compliance through the following three approaches.

1. Fostering of a compliance oriented mentality

We aim to establish values and a corporate culture in which each executive and employee practices compliance-based decision-making and actions.

Our Code of Conduct (PDF: 117KB) Click to open the PDF file

2. Compliance efforts by each business department based on the basic policies

Under the basic policies formulated by the Management Ethics Committee, each business department of our group takes specific and independent approaches closely connected to each operation.

3. Establishment of the compliance PDCA cycle

In order to execute business activities in a flexible and consistent manner in accordance with changes in operations or the legal environment, we have established a PDCA cycle that enables us to review our operations from the perspective of compliance in order to improve them.

Compliance PDCA Cycle
Compliance PDCA Cycle

Compliance Promotion Structure

Twice a year (principally in March and October), the Management Ethics Committee chaired by the President discusses and confirms matters such as the handling of inquiries and consultations by the compliance advisory service desks, monitoring of compliance awareness among employees, and results of compliance audits.

In November 2002, the Compliance Department was established as the secretariat division of the Management Ethics Committee to proactively promote compliance promotion activities. We have also established Compliance Committees in each unit to build a structure whereby compliance activities are continuously and independently promoted.

Over 300 management-level personnel have been appointed "compliance officers" and "compliance promoters" at each workplace to lead action to promote concrete compliance activities. To further stimulate action on compliance, information is shared through channels such as the Compliance Promoter Liaison Committee (convened in January in fiscal 2015, with 229 participants).

Compliance Promotion Structure
Compliance Promotion Structure

Compliance Advisory Service Desks

Tokyo Gas established the system of compliance advisory service desks for Tokyo Gas and all of our subsidiaries and affiliates in October 2004.

Employees can contact the compliance advisory service desks directly when they feel hesitant about raising a matter within their organization, and they have a choice of two routes: internal (through the Compliance Department) and external (via a law firm). Inquiries and consultations are treated in strict confidence, and discriminatory treatment of employees who use the desks is prohibited. The compliance advisory service desks also function as internal points of contact as provided for under the Whistleblower Protection Act. In line with the expansion of protection following the entry into effect of the Whistleblower Protection Act in April 2006, the coverage provided by the desks was expanded to include suppliers and customers as well as members of Tokyo Gas Group. The desks already operational at our subsidiaries and affiliates were joined in October 2010 by desks newly established at all 43 Tokyo Gas LIFEVAL ("LIFEVAL") companies.

These desks play an effective role in enabling our company to quickly discover and solve problems related to compliance, thus ensuring that our corporate self-governing actions function more effectively.

In addition, in October 2015, we implemented training sessions that followed those offered in the previous year, for staff who were responsible for operating the desks at our subsidiaries and affiliates as well as at LIFEVAL companies in order to exchange information and enhance their ability to mount effective responses.

Status of Use of Compliance Advisory Service Desks (FY2015)
Type of case Number of cases
Interpersonal relations on the job 16
Laws and regulations 5
Internal rules 21
Other 10
Total 52

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Compliance Practices

Tokyo Gas, our subsidiaries and affiliates, and LIFEVAL not only work to encourage employees to understand the contents of Our Code of Conduct, but also hold level-specific training as well as tailored training and workshops to ensure that individual employees apply the training to their specific compliance practices.

Raising Compliance Oriented Mentality through Training Sessions

Level-specific training for new employees and others is provided with the active participation of subsidiaries and affiliates, and LIFEVAL in order to raise compliance oriented mentality (1,534 employees underwent training in fiscal 2015).

Offsite training options are also provided to meet individual departmental and company needs, with training programs such as these being designed to generate synergies with companies' own independent activities (2,634 employees took part in a total of 73 such training sessions in fiscal 2015).

Workplace Workshops Using Training Resources

Collected Cases of Compliance
Collected Cases of Compliance

Workshops led by compliance promoters are held at the level of individual workplaces (23,745 employees took part in fiscal 2015).

To serve as a training resource for these workshops, we published "Collected Cases of Compliance" in 2007 to illustrate how to put Our Code of Conduct into practice. As a resource for discussion-type workshops, we have also been providing participants with specially developed "case methods" since fiscal 2012.

Sharing of Information on Compliance

「Compliance Information
Compliance Information

We equip ourselves to respond unerringly to internal and external developments by gathering up-to-date information on compliance risks associated with the changes in the business environment facing the Group, including those stemming from the revision and stricter enforcement of legislation, evolution of the total energy business, and acceleration of global business development, and by then incorporating this information into our training.

One way in which we share this information is by publishing a bimonthly newsletter called "Compliance Information" to serve as a support resource for the compliance officers and promoters who lead compliance activities at our company and our subsidiaries and affiliates, and also for LIFEVAL and some partner companies, in order to boost the timely sharing of information on changes in public expectations. These newsletters are also used, among other things, as a source of useful examples, drawn both from within and outside the company, for workplace workshops in order to strengthen compliance by raising problem-solving capabilities at the workplace level.

Rigorous Compliance with Antimonopoly, Premiums and Representation, and Subcontract Proceeds Legislation
A training session on the Antimonopoly Act
A training session on the Antimonopoly Act

Training concerning legislation such as the Antimonopoly Act is provided annually to group employees to improve understanding of legislation that the Group has to comply with.

In fiscal 2015, around 620 group employees took part in 10 training sessions on the Antimonopoly Act, the Act against Unjustifiable Premiums and Misleading Representations, and the Subcontract Proceeds Act.

During these sessions, concrete instances of legal violations are explained and practical information is provided.

  • Cases include examples of cartels and abuses of superior bargaining position (Antimonopoly Act), and misleading representation (Act against Unjustifiable Premiums and Misleading Representations).

Tokyo Gas Group Compliance Promotion

Tokyo Gas works to promote compliance by LIFEVAL, which provides services in each region on behalf of Tokyo Gas. We implement on-site training and provide educational tools adapted to the current status of each LIFEVAL company, and assist and encourage the adoption of PDCA cycles.

In addition, Tokyo Gas Merchandisers Organizations ("TOMOS") has established the TOMOS Charter of Conduct in accordance with Our Code of Conduct in order to share its principles with us.

As part of compliance promotion efforts, Tokyo Gas distributes a leaflet common to the Group called "For protection of personal information" to support on-site training sessions at the partner companies and holds lectures for partner company staff at the management level. Since fiscal 2010, we have provided opportunities for various partner companies to exchange opinions on compliance in order to share the Group's philosophy.


Prevention of Bribery and Corruption

Basic Principles

Bribery and corruption not only harm society's trust in a company, but can also impede economic growth in developing countries themselves and lead to poverty and other problems of international concern. To prevent this, Tokyo Gas requires in Our Code of Conduct that "we will maintain fair relations and do nothing questionable under applicable laws and ordinances." To keep pace with our globalization in accordance with the goals set forth in the Challenge 2020 Vision, we introduced "Foreign Public Official Anti-Bribery and Corruption Guidelines" in April 2015 that outline the basic policies to be followed in order to ensure that business is pursued in a fair and transparent manner and in accordance with high ethical standards, overseas in the international community as well as in Japan. These guidelines declare that even acts expected to create opportunities for business growth and profit are prohibited if they infringe our basic policies.

Outline of the Foreign Public Official Anti-Bribery and Corruption Guidelines

Guidelines for action

  • Bribery and corruption of foreign public officials and other individuals and spending on facilitation payments to foreign public officials and other individuals are prohibited.
  • The provision of inappropriate hospitality, gifts, donations, and the like is prohibited. All hospitality, gifts, donations, and the like made to foreign public officials and other individuals must first be approved by the procedure described in the guidelines, and must be accurately accounted for in a timely manner.
  • To prevent the bribery and corruption of agents, consultants, and similar third parties, due diligence must be performed before appointing them, clauses prohibiting bribery and corruption must be incorporated into their contracts, and other appropriate measures must be taken. The same applies to M&As with foreign firms.

Operating structure

The chief compliance officer acts as the executive officer with chief responsibility for prevention of overseas bribery and corruption. Supervisors responsible for implementing measures to prevent bribery and corruption overseas are appointed in every department and company of the Group that is subject to the guidelines in order to take responsibility for the approval of hospitality, gifts, donations, and the like, confirmation of the findings of due diligence when appointing third parties, the approval of entry into contracts, and other such matters. The Compliance Department decides on specific measures for implementing the guidelines.

Effective Application of the Guidelines to Prevent Bribery and Corruption

Tokyo Gas Group provides training for all those primarily involved with business overseas to ensure that they understand and follow the guidelines properly. In fiscal 2015, 235 personnel received this training. We have also produced an English-language version of the guidelines for locally hired employees, and have distributed the English edition of Our Code of Conduct to ensure that everyone understands its content. We also have established a system for overseas local employees to report incidents and seek advice on these issues. We follow PDCA cycles to ensure that bribery and corruption are being prevented by conducting regular internal audits and other reviews to confirm that the procedures established by the guidelines are being followed.

Verification and Audit of Penetration of Compliance

Compliance Awareness Surveys

To ascertain the effects of compliance promotion activities, Tokyo Gas conducts yearly surveys of all employees, including those at our subsidiaries and affiliates.

As shown in the figure below, the results of these surveys demonstrate that scores have been maintained at a high level over the years.

Feedback was also provided during the Compliance Promoter Liaison Committee in January 2016 and individually to our subsidiaries and affiliates between February and March in order to use the conclusions drawn from survey results to implement actions in subsequent fiscal years. These survey results and the direction of future actions are released on the intranet for the perusal of all employees of Tokyo Gas and our subsidiaries and affiliates.

Tokyo Gas Compliance Questionnaire Points (Highest score: 4 points)
Tokyo Gas Compliance Questionnaire Points (Highest score: 4 points)

Compliance Auditing

The Internal Audit Department regularly conducts audits of Tokyo Gas and its subsidiaries and affiliates focusing on the seriousness of risks and the probability of their materialization from the perspective of legislation related to the audited unit's operations, as well as corporate ethics and social norms.

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