Management Reform Initiatives of the Tokyo Gas Group in View of the COVID-19 Pandemic[PDF : 1.7MB]

Management Reform Initiatives of the Tokyo Gas

Group in View of the COVID-19 Pandemic

*This presentation is a preliminary version.

We will post the final version once it has been confirmed.

November 30, 2020

Tokyo Gas Co., Ltd.

Table of Contents

1. Introduction
2. Our Understanding of the Business Environment in View of the COVID-19 Pandemic
3. Adding Depth to Business Management with a Further Emphasis on ESG (Acceleration of Our Three Challenges)
4. E: Environment "Accelerate Initiatives to Achieve Net-Zero CO2 Emissions
5. 1. Reduce CO2 emissions on a global scale
   2. Develop and commercialize technologies related to the management of hydrogen and CO2
6. S: Society "Tackle Social Challenges through Value Co-creation"
7. 1. Create sustainable communities
   2. Provide solutions for Various Urban Lifestyle Issues

6. G: Governance "Carry Out Group Formation Reforms"

1. Carry out management reforms
2. Reform the Group's organizational structure

7. Toward the Achievement of Compass 2030

Reference 1: Progress of the 2020-2022Medium-term Management Plan

Reference 2: Initiatives during the COVID-19 pandemic

※The red line in the document is initiatives to be announced for the first time.

1

1 Introduction

The new coronavirus (COVID-19) has caused a major shock to our lives and society.

• The world is experiencing an unprecedented impact due to COVID-19, which is threatening the safety and security of our lives, which we had taken for granted.
• Under these circumstances, the Tokyo Gas Group has been making efforts to provide safety and security to customers under a belief that it must not stop the flow of energy, with maximum consideration for the prevention of infection of its customers and employees.

A rise in awareness toward a sustainable society and decarbonization will bring about a paradigm shift.

• Awareness toward a sustainable society has been rising rapidly as the continuation of our previous lives and social activities becomes difficult. In particular, the global trend toward decarbonization has gained further pace on the back of the green recovery movements, with the Japanese government announcing its goal of achieving Net-Zero CO2 emissions by 2050.
• We have hitherto contributed to the environment and society as an energy provider focusing on LNG. Going forward, we view these changes as a backdrop for our stakeholders to expect even greater contribution and roles of us, as well as an opportunity for us to broaden our business fields and geographic areas to achieve significant growth.

We will undergo a major transformation by placing further emphasis on ESG perspectives.

• To lead ourselves in this paradigm shift, we will add depth to business management that further places emphasis on ESG.
• We will position the acceleration of Net-Zero CO2 initiatives, in particular, as a priority issue that not only relates to the environment
  (E) but also to tackling social challenges (S), such as decarbonization and greater resilience. We intend to return the fruits of this initiative to our stakeholders by contributing to the realization of a decarbonized society and achieving sustainable growth of the Tokyo Gas Group through preferential allocation of resources to achieve Net-Zero CO2 emissions.
• In terms of governance (G), we will carry out a major transformation of the Group's organization structure, starting with a transition to a company with a Nominating Committee, etc., in order to achieve growth of the Group even under an uncertain business environment.

The Tokyo Gas Group is committed to grow together with the society as a whole even in an uncertain future.

• A further emphasis on ESG is nothing but an acceleration of the three challenges highlighted in Compass 2030, the Group's management vision (leadership in the effort to achieve Net-Zero CO2, establishment of a value co-creation ecosystem, and transformation of the LNG value chain).
• The Tokyo Gas Group will be committed to grow together with the society as a whole by accelerating the three challenges and contributing to the realization of a sustainable society.

2

2 Our Understanding of the Business Environment in View of the COVID-19 Pandemic

• The direction of the environmental changes (the four "D"s) that we assumed when formulating Compass 2030 and the 2020-2022Medium-term Management Plan has not changed, but the pace has accelerated due to the COVID- 19 pandemic. In particular, the global decarbonization trend is developing at a speed far outpacing our expectations.
• A change that is even more noteworthy is the rise in awareness toward a sustainable society on the back of changes in the economic base, etc.
• What the Tokyo Gas Group must achieve in this environment is to "further contribute to decarbonization and tacking social challenges" and "manage the Group so that it can achieve growth even in an uncertain environment."

changes) (accelerated Ds 4

even Changes noteworthy more

Digitalization

	Rise in inclination toward	Diversification
Sophistication of supply chains	non-face-to-face interaction
Automation of work processes	Progress of workstyle	Changes in consumer
	reforms	mindset and behavior
	Diversification of means of
	communication

DeregulationDecarbonization

Changes in competitive	Changes in energy policies
environment
Europe, etc.: Green recovery
	Japan: Net-zero CO2 by 2050
	Decentralization,
	local production for
	local consumption

Changes in economic base	Change in mindset toward
Global economic turmoil		a sustainable society
Drop in energy	Moves to	Rise in inclination	Rise in
secure cash on	toward sustainability
demand	awareness of
hand	(ESG investment, etc.)
	resilience

What the Tokyo Gas

Group must achieve

Further

contribution to decarbonization and tackling social challenges

Group management that achieves growth even under uncertain environment

3