Toho Gas Group Initiatives 16 P27 P28 P28 P29 P31 Toho Gas Group Integrated Report 2020 Strategy 3 at home and abroad and that bring synergy effects. Taking on New Scopes venture into new business scopes venture into new business Enhance energy-related businesses Reinforcement and Use of Human Resources Improvement of Efficiency Reform of the Organizational Structure Technological Development for the Future Promotion of ESG Management Reinforcing the Business Foundation of the Toho Gas Group Strategy 2 new services. Development into Offer optimal proposals for Offer optimal proposals provide added value through provide added value through a Total Energy Provider the three different energies and the three different energies P25 P25 Grow with Energy̶Go beyond Energy beyond with Energy̶Go Grow Strategy 1 Reinforcing the business foundation of the Toho Gas Group Reinforcing the business foundation Structure / Technological Development for the Future / Promotion of ESG Management Structure / Technological Development for Further Growth of to flexibly respond to changes in the business environment, aiming to achieve sustainable growth. to flexibly respond to changes in the business the City Gas Business In addition to ensuring the stable operation of the energy business, reinforce our business foundation In addition to ensuring the stable operation Deepen relationship with customers. Deepen relationship with Reinforcement and Use of Human Resources / Improvement of Efficiency / Reform of the Organizational Reinforcement and Use of Human Resources Further strengthen cost competitiveness. Ensure safety, security and stable supply. Ensure safety, security and Strategy 3 Reinforcement and Development of Group Businesses Development of New Businesses Taking on New Scopes P23 P24 P24 Strategy 2 Provision of Added Value through New Services Strengthening of the LPG Business Expansion of the Electricity Business Development into a Total Energy Provider P17 P19 P20 P21 P21 In November 2018, the Toho Gas Group formulated a ‒FY2021). new By Medium-term implementing our Management three Plan key (FY2019 strategies while reinforcing our further business strengthen our position as an energy company that is trusted by customers foundation, and has strong roots in we will our business scope to achieve sustainable growth. local communities. We will also further expand FY2019‒FY2021 Grow with Energy ̶ Go beyond Energy Grow with Energy Toho Gas Group Toho Gas Plan Management Medium-Term

Strategy 1 Efforts to Support the Lives of People in the Region Efforts to Support Manufacturing and Businesses in the Region Expansion of Natural Gas Service Areas Stable Energy Procurement at a Reasonable Price Secure Stable Supply and Safety

Further Growth of the City Gas Business Toho Gas Group Initiatives Group Gas Toho Toho Gas Group Integrated Report 2020 15 Toho Gas Group Initiatives Strategy 1

Provide a Wide Range of Monthly charge of 305yen (tax inclusive)* Further Growth of for the following services Life Support Services 1 Emergency out-call service RakuRaku Kurashi Support 2 Gas stove cleaning and water-heater inspection (separate charges apply) the City Gas Business We are continuing to expand our living-related 3 Premium discount services service menu, in addition to RakuRaku Kurashi Water heater and built-in Support, RakuRaku Maintenance, and RakuRaku RakuRaku Maintenance stove maintenance

Lease. As an example, in coordination with Air Trunk Toho Gas Group Initiatives A lease system for a reasonably Co., Ltd., we are providing preferential use of home RakuRaku Lease priced use of various gas equipment We aim to further strengthen cost competitiveness and deepen relationships with our customers, while delivery storage services according to city gas and Application website for RakuRaku Lease solidifying the basis of our gas business, which consists of ensuring safety, security and stable supply, in electricity contracts (limited to some areas). * Current as of July 2020 For details, please see our website. order to continue to achieve growth in the city gas business. Strengthening and Expanding My House Meister Services (current as of July 2020) Efforts to Support the Lives of People in the Region Materiality 1 Housing Renovation We launched a new service for renovation, My House Meister, responding to a wide range of Awarding of T-Points Periodic inspection Daily-life 10-year extended As a partner in customers' daily lives, we will offer proposals for a comfortable and ecological life, and according to system assistance service warranty customer needs related to housing and living as contract amount for equipment provide a wide range of services tailored to the various lifestyles of customers. In addition, by leveraging a partner in the area of daily living. Easy Advance introduction Prompt response consultation to a construction the strength of the Group's "security and service system close to the community," we will enhance From minor concerns to full-scale renovation, for estimates via LINE system Meister is a one-stop solution as a general Also support in the event of a problem and continue to be a company of choice for our customers. Support for Meister membership Customer partner in customers' daily lives in the region. cashless program (awarding of referral payment discount coupons, etc.) program Propose Comfortable and Ecological Life For details, please see our website.

To further the popularization of zero-net-energy houses (ZEH*) In addition to improving power generation efficiency (from 52% Enhancement of Security and Service System Close to the Community and the like, we are promoting expansion of high-efficiency gas for the previous model to 55%), it is equipped with an IoT equipment that enhances convenience for customers. function to achieve remote control of city gas appliances. In Around-the-clock phone service for customers expanded to cover the *1Acceptance of repair requests 1 and reservations for gas and ENE FARM is a residential gas cogeneration system that addition, types that can continue power generation even during acceptance of reservations for gas and electricity connections* on top of electricity connections only dealing with requests for repair service. This is designed to enable customers' (on-site repair service is not generates electricity for household use through a chemical a power outage are also available in the product lineup. Gas appliance repair services included) reaction between hydrogen extracted from city gas and other access to Toho Gas staff 24 hours a day, 365 days a year, as part of our efforts *2Gas appliance repair services Z E H： Residential housing whose aim is to realize zero annual net to make our service more convenient and expeditious for customers while from 7:00 p.m. to 9:00 p.m. are fuels and oxygen in the air. The heat generated as a byproduct available to our gas customers consumption of primary energy by achieving dramatic energy savings *1 of this process is also effectively used for hot water supply. relieving them of any source of concern. *2 for residential gas appliances. by vastly improving insulation performance and the like and adopting For details, please see our High-quality services including a troubleshooting maintenance and repair We launched sales of the new model of ENE FARM on 2020. high-efficiency equipment systems as well as renewable energy. website. service offering on-site repair of gas equipment up to 9:00 p.m.*2, free *3For details, please see our website. inspection that includes plumbing*3, and more are provided.

Electricity Improvement in CS* ※Customer Satisfaction

Fuel ENE FARM dedicated Based upon our management policy of "Customer ◎Flow of customer feedback cell unit heater and boiler First," Toho Gas Group has a CS Promotion Management Initiatives to Gas boiler bath-room Gas boiler Power Electricity Employees improve CS Promotion heater/dryer floor heater generation Committee with members including officers and Affiliated companies operational Committee Partner associations Hot-water heater Heat department heads, where we decide upon basic activities policy for CS activities. Based upon this, the CS View and search Analysis and Hot- Remote control of Governing Board and CS organizations within each (excludes personal compilation of water Opinions information) customer feedback Stove Bath Boiler tank division, together with affiliated companies, Complaints bath-filling and Customers Praises Confirmation floor-heating ENEDO, gas engineering companies and others, Koe- of details DAS Boiler operation work together to improve work quality and service. ENE FARM type S residential fuel cell system City gas Contact Responding Customer feedback gained through contact with personnel Record of （record system Measures to division customer of customer prevent various customers is used to create a valuable feedback feedback） recurrence management resource database. In FY2019, we Request for response TOPICS received 9,516 instances of feedback, including Prompt response ●Engagement of Mao Asada in a New Series of opinions, complaints, and praise. We share these Television Commercials with related divisions for the purpose of prompt ◎Examples of Improvements Made Through Customer Feedback (FY2019) Customer feedback Response response and operational improvements. Former ice figure skater Mao Asada has been appearing in the "My I want to pay my gas bill LINE Pay added to payment slips as Also, we conduct a Customer Satisfaction Survey using electronic money. an available payment method Answer Is Toho Gas Group" series of television commercial when customers subscribe to gas, have gas Launched service to automatically I want to earn Gas-Teki Points messages as our new brand ambassador since November 2019. award Gas-Teki Points according to equipment repaired, or have our regular safety with my gas bill. gas and electricity payment amounts The "My Answer Is Toho Gas Group" messages showcase inspections. The results are reported to the Making non-Japanese customers aware that Expanded the "FOR YOUR SAFETY" combination plans for gas and electric power, lifestyles featuring relevant divisions, which leads to improvements for there are different gas appliances for city safety-awareness leaflet to provide ENE FARM, gas-equipment repair services, and more. gaining better CS. gas and for LPG gas would ease concern. information for non-Japanese.

17 Toho Gas Group Integrated Report 2020 Toho Gas Group Integrated Report 2020 18 Toho Gas Group Initiatives Strategy 1 Further Growth of the City Gas Business

Efforts to Support Manufacturing and Businesses in the Region Materiality 1 Expansion of Natural Gas Service Areas Materiality 2 3

Toho Gas proposes to customers a shift from oil-based fuels to gas, the introduction of energy-efficient gas We will expand gas pipeline networks for city gas, broaden gas supply areas, and increase the facilities, and the use of diverse energy sources. These measures enable customers to conserve energy, capacity of gas transportation.

reduce CO2 emissions, and curtail business costs. We are also committed to providing high-quality In addition, we will provide natural gas to a broader area by strengthening the supply system Toho Gas Group Initiatives services (total business support) to customers while using our advanced, up-to-date technologies. By through the active use of LNG tank trucks. doing so, we can contribute to manufacturing and other business development in our service area. Expansion of City Gas Highly Efficient and Diverse Use of Natural Gas Service Areas ③

We are promoting fuel conversion for oil Gifu District The gas pipeline network that Toho Gas has Headquarters fuel customers by proposing high-efficiency constructed heretofore has a total length of burners utilizing our combustion 30,000 km. technology. To supply city gas in a stable way, we are We are also promoting the use of city promoting improvement and expansion of the gas gas in line with customers, such as pipeline network from a medium- to long-term energy savings, CO2 savings, cost savings, perspective, expanding the area of supply and and BCP by proposing highly efficient gas increasing the amount of gas sent. air conditioning and cogeneration. In FY2019 the Taketoyo-Mihama Line was District Headquarters We are also leveraging the energy- completed, expanding the suppliable area for city Head Office related technical capabilities and gas on the Chita Peninsula. expertise that we have cultivated to We are promoting enhanced gas transportation strengthen proposals of diverse energy Gas cogeneration system with a BOS* function *Blackout start: A function to start up engine and supply electricity capacity by laying trunk gas pipelines in Chita Calorific Value utilization. Energy-saving diagnosis without using an external power supply source southeastern , together with Adjustment Center ② for an industrial furnace Yokkaichi Chita LNG Terminal expanding our service area for city gas through ④ Mikawa District Works Chita-Midorihama Headquarters line extension works in Gifu and . Works TOPICS ① ●Sales Launch for GHP XAIR III ● LNG Bunkering Main planned lines Pipeline length ① Nambu Trunk Line (Chita-Anjo) 30ｋｍ Sales began in April 2020 for he GHP XAIR III, which We conducted demonstration test at the Port of Nagoya Aichi Daimon-Sakazaki Line 10km achieves even further improvements in energy savings in November 2019 for LNG bunkering, which entails ② and other aspects of performance and functionality as a using LNG tank trucks to supply LNG-fueled marine Gifu ③ Motosu-Gifu-Minokamo Line 60km Mie District Headquarters next-generation high-efficiency gas engine heat pump ‒ a vessels with LNG. The LNG fuel was taken from the Mie ④ Inabe-Yokkaichi-Kameyama Line 50km gas air-conditioning system that achieves energy savings Chita-Midorihama Works to the Port of Nagoya by LNG and lower power consumption. tank truck, then supplied to a berth LNG-fueled tugboat. We are using the findings from the demonstration test to Aisin product product Yanmar product make an appeal for the conversion of marine vessels to LNG fuel, and devoting effort to reduce the load on

the environment. Gifu

Toho Gas city gas service area LNG bunkering demonstration test GHP XAIR III Our main planned new city gas service area(FY2020-FY2024) Aichi Service area of whole sales customers Mie Head Office Works Trunk lines Provision of Total Business Support District Headquarters Planned pipelines

We are promoting moves that include High-density Thermal Storage Material proposal of energy saving and cost saving using heat storage material by our original We developed heat-storage material Trunk line construction work technology, cost-saving proposals for with about 10 times the amount of heat storage of water. We will actively use our utility equipment other than energy, such Expand LNG Tank Supply as water treatment equipment and cogeneration system in various fields to promote energy conservation and cost compressors, and improvements in added Thermal storage Power generation to Wider Areas value by utilizing digital tools, such as cutting. For example, unused exhaust heat High density thermal Gas engine We are promoting stimulation of gas demand not only in the emergency response and maintenance of will be stored as thermal energy using the storage tank cogeneration three prefectures in the Tokai region but also in peripheral industrial furnaces. cogeneration system. Utilization of our original heat-storage material areas and the Hokuriku region by deploying LNG tank trucks. LNG tank trucks

19 Toho Gas Group Integrated Report 2020 Toho Gas Group Integrated Report 2020 20 Toho Gas Group Initiatives 22 to stoppage of

and low-pressure gas low-pressure gas only of medium-pressure B Change from stoppage Block border Block Toho Gas Group Integrated Report 2020 Material and equipment transport training with the Ground Self-Defense Forces B pipeline High-pressure Medium-pressure

governor station pipeline

High-pressure gas pipeline

Medium-pressure Low-pressure A governor (remote shutoff) B governor (remote shutoff) Medium-pressure

ter change) A pipeline A

Stoppage area

Head Office Medium-pressure (area af block valve Low-pressure Emergency Response Measures Emergency Response B block valve Strengthened Cooperation in the Event of a Disaster a the Event of in Strengthened Cooperation Medium-pressure Stoppage area contribute to quick recover of gas service as well as to disaster response made with other involved entities. more expeditious through the active arranging for gas-connection work will be accepted via the internet. use of IT. For example, * An institute whose basic objective is society resilient "realization to natural of disasters" conducting a research activities in a broad range of fields, including earthquakes, wildfires, meteorology, snow and ice, disaster-reduction studies, and social disaster mitigation. Earthquake drill with the Nagoya City Sewerage & Waterworks Bureau ●Segmentation of Supply-stoppage Blocks ●Segmentation of When an earthquake occurs we collect seismic data from approximately 250 seismometers (SI sensors) installed in supply area and perform remote gas shutoff of medium-pressure our A governors to stop the supply of gas in individual gas-pipeline preventing secondary disaster. network blocks, thereby Further, to hold the impact of supply stoppages to a minimum and help bring about quick recovery, stopping governors we B medium-pressure of cutoff for areas target are expanding the only low-pressure supply. ● In aims of hastening mutual disaster recovery, we conduct and Forces, Self-Defense municipalities, local with drills joint other gas operators and retail operators. (area before change) system equipment support system Tsunami decision screen) at a gas works Governor anti-flooding Mobile gas production Laying polyethylene piping Anti-driftage measures(tsunami Anti-driftage measures(tsunami itute Agreement on Cooperation Signed with the National Research Inst ● for Earth Science and Disaster Resilience TOPICS Advance Disaster Control Measures Control Disaster Advance Recovery Measures Facility Protection Measures Facility Protection In order to share information rapidly in the event of a disaster, with cooperation regarding agreement an into entered have we The National Research Institute for Earth Science and Disaster Resilience (NIED)*. By Toho Gas sharing information on areas where gas supply is stopped and receiving information on road damage, landslides, and the like provided by NIED, we will Measures to Protect Supply We are promoting measures to protect facilities from earthquakes, windstorms, and floods (facility protection prevent measures), secondary disasters to (emergency response measures), and strengthening systems for recovering quickly from disasters hard and soft infrastructure. in terms of (recovery measures), To heighten the effectiveness of our BCP, we conduct an annual an conduct we BCP, our of effectiveness the heighten To disaster drill in integration with partner companies, our along with conducting constant Group reviews of companies and the BCP to ensure it reflects the latest damage projections. We have also made preparations gas city of supply emergency the for to core disaster hospitals and other socially vital facilities by means of mobile gas production equipment. ●Use of IT to Speed Recovery After a Disaster We will make gas-connection work after a disaster or accident ●Measures to Protect Supply Facilities Against ●Measures to Protect Flooding Windstorms and We are promoting incorporation of anti-flooding systems into governors (pressure adjusting equipment) to ensure a supply in the event of typhoon or torrential rain. stable gas Resistance ●Gas Pipes with Superior Earthquake adoption of spread the promoting are We of gas pipe materials methods that offer and superior resistance to connection earthquakes. Polyethylene pipes have an lifespan with indefinite no risk of physical flexibility is excellent. corrosion, and ● Facilities Against Tsunami rapidly response emergency out carry To and reliably when a tsunami occurs, we are adopting a system that warning and water-level information. integrates ●Disaster Drills and Establishment of an Emergency Supply System ●Measures to Protect Manufacturing Facilities ●Measures to Protect and Tsunami Against Earthquake to designed is tanks LNG as such Equipment withstand major earthquakes, windstorms, and flooding. Tsunami screens have been installed to prevent driftage from a tsunami. damage caused by 2 2 Works LNG base Terminal Materiality Materiality Chita LNG Chita-Midorihama Emergency security center gas between tanks LNG carrier partially Diamond Gas Sakura invested by Toho Gas (between adjacent bases) Transportation of liquefied ★ Cameron LNG base Gas Pipeline Cross-Ise Bay State of Louisiana Cameron LNG Project (U.S.A.) We will establish a indexes for crude oil and for natural gas procurement in Western countries system in which manner. are combined in a well-balanced price We will volume. procurement and improve flexibility in trading work to effectively use spot and short-term the U.S.A. ［ Price indexes ］ ［ Contract types ］ U.S.A U.S.A Works We are working to establish a robust emergency Yokkaichi security system in association with the expansion of gas supply areas and strengthen damage to gas pipes caused by other construction work. measures to suppress ［ Strengthening the security system ］ FY2019 Starting from Strategy 1 Strategy RussiaRussia Australia Australia Indonesia Malaysia Malaysia Qatar Qatar Advance Security Measures Flexible Operation of LNG Receiving Bases Diversification of LNG Procurement Diversification We are advancing the replacement and repair Secure Stable Supply and Safety (Strengthening the Resilience) Secure Stable Supply and Safety (Strengthening the Stable Energy Procurement at a Reasonable Price at a Reasonable Energy Procurement Stable of plant pipework, electrical equipment, control equipment, electrical pipework, plant of equipment, etc. and pipes, including white gas pipes. replacement of aging We are working to further reduce construction work, and strengthen emergency security systems. risk, repairing very aging facilities and In the face of spreading new coronavirus infections, we will strengthen infection-prevention measures and sustain gas preventing gas pipe damage caused by manufacturing and supply systems based on our business continuity plan (BCP). other We are utilizing the Cross-Ise Bay Gas Pipeline and LNG transfer between bases, strengthening inter-base operations, and establishing and efficient operation of the terminals. flexible We have started procurement from the Cameron Project in the U.S.A, and expanded long-term the LNG number contracts to of six countries. suppliers We LNG from carriers partially invested by Toho Gas to transport under utilizing LNG In order to ensure stable LNG procurement prices, at we reasonable will continue to implement measures to diversify indexes, and contract types. procurement areas, price To ensure the stable supply of gas, safety and security, which is the mission of an energy company, we will steadily advance security measures for production and supply facilities and disaster control measures. We are promoting further diversification of procurement including procurement ensure from stable LNG new procurement at areas reasonable prices to and work to improve flexibility in procurement LNG receiving facilities. systems, including ［ Measures against aging ］ ［ Procurement areas ］ ］ ［ Procurement areas Toho Gas Group Initiatives Group Gas Toho Further Growth of the City Gas Business City of the Growth Further Toho Gas Group Integrated Report 2020 21 Toho Gas Group Initiatives 24 3 2 1 Smartphone app Electrical character “Ambear” Materiality Meiko LPG Terminal Gas-filling and delivery bases (Toho Liquefied Gas) Gas-filling and delivery bases (Toho Liquefied Group) Gas-filling and delivery bases (Yamasa Branch and service offices (Toho Liquefied Gas) Branch and service offices (Toho Liquefied Group) Branch and service offices (Yamasa base in Hamamatsu Toho Gas Group Integrated Report 2020 Hamamatsu Sales Office Main business bases of Toho Liquefied Gas Main business bases of Toho Liquefied and Yamasa Group ● ● ◆ ◆ Establishment of a sales Toho Liquefied Gas Co., Ltd. Solar power plant ona former factory site responses of responses Branch Branch 4 Nagano Nagano 1 MikawaMikawaMikawa Branch Branch Branch Head Office/Nagoya BranchHead Office/Nagoya BranchHead Office/Nagoya BranchHead Office/Nagoya BranchHead Office/Nagoya BranchHead Office/Nagoya Branch Head Office/Nagoya Branch West Aichi Branch West Aichi BranchWest Aichi Branch Takayama Takayama Service Office Service OfficeService Office East Aichi East Aichi East Aichi BranchBranchBranch East Aichi Branch Materiality Gifu Branch Gifu Branch pansion of the Adoption of Renewable Energy] Expansion of the Introduction of Renewable Energy Hokuriku Hokuriku Service OfficeService OfficeService Office Mie Branch Mie Branch Head Office/Head Office/Head Office/ Nagoya Branch Nagoya Branch Nagoya Branch In FY2019, a total of 2.7 MW (at 5 locations) of solar power testing, we are verifying the verifying are we testing, participating monitors to requests from Toho Gas to conserve electricity during and times of rising periods demand for electricity, as well as the through such power conservation. effectiveness of aimed events hold and systems power-cutting develop also will We curtailment at expediting power saving, both with the use of smartphone apps, in partnership with Nanzan University. By promoting such systems and events, which should be enjoyable for customers, we aim develop new services. to plants started operation, mainly in the three Tokai prefectures. of capacity production electricity an having plant power solar A We are actively working to secure renewable energy sources power from the perspective of meeting social customers needs with respect to reduction of carbon emissions demand and and decarbonization. [Ex operating began factory Gas Toho a of site former the on MW 1.4 in April 2020. In this and other ways, we are promoting systems power of development the using other renewable energy sources. Horinmaru No.1 non-international cargo vessel Major Data cargo vessel P64 Daiichi Horin-maru Business Deployment to Wider Areas Business Deployment Stable and Flexible Electricity Prices Procurement at Reasonable Reinforcement of the Business Foundation Enhancement of Services Verification on an experimental basis has been underway since Toho Gas has been taking part in the experimental project for We will achieve a stable, reasonably priced, and flexible power flexible and priced, reasonably stable, a achieve will We supply by taking into account customer usage conditions and optimizing the combination of procurement sources ‒ power the and electricity, for markets wholesale operators, generation Yokkaichi Power Plant. Together with implementing measures such as sales promoting are we companies, other with cooperation promotion in campaigns verification testing for construction of virtual power plants and home demand response. new service development, including We are expanding our business activity Shiga, Shizuoka, and Nagano. areas to Hokuriku, in Hamamatsu in April 2020 to expand We set up a sales base the area toward Shizuoka. We are promoting the further expansion of demand by using the and Ltd. Co., Gas Liquefied Toho both of bases business the Yamasa Group. building a virtual power plant (VPP) system (undertaken by the Ministry of Economy, Trade and utilizing technology control power of verification involves which Industry) since May 2019, multiple cogeneration systems. [Demonstration of Virtual Power Plant (VPP) Construction] June 2020 for the effects of a demand response (DR) adjustment by adjustment (DR) response demand a of effects the for 2020 June Toho Gas, which is aimed at enabling customers to save electricity continuously in an enjoyable way. Through this verification [Demonstration of Home Demand Response (DR)] We are expanding shipping facilities as delivery networks and widen involvement in distribution networks well as strengthening in cooperation with other companies, greater efficiency and stable supply. thereby achieving both procurement LPG priced reasonably and stable realize to aim We by using the non-international jointly owned with Toho Liquefied Gas Co., Ltd., and advantage by of taking Meiko LPG Terminal, one of the largest secondary terminals for gas companies in Japan. We are expanding our business activity areas from the core areas of the three Tokai prefectures foundation. and reinforce the business of customers and sales volume, to increase the number ◎Changes in Numbers of Electricity Customers Expansion into the Electricity Business Expansion into the Electricity We are steadily increase power demand and diversify procurement to ensure stable electricity procurement at reasonable prices. We are also increasing the adoption of brings about lower carbon and decarbonization. renewable energy to help further Strengthening of the LPG Business of Strengthening Electricity offered! expanding A constantly array of services (Current as of end of July 2020) City Gas Internet LPG payment over the Total Energy Provider Easy application and new energy-related services Provide added value through service 1 Description Water delivery service Child-minding Socially conscious shopping service wireless Housework service Residential Internet service Materiality service service Home security sales earmarked for donations in order to contribute to society*. In society*. to contribute to order in donations for earmarked sales July 2020, we began offering Sugu-Conne, our own independent wireless Internet service. range wide a expand to continue will we supply, energy as well As of our customers. of services to suit the tastes and various lifestyles Camera monitoring This is a periodic delivery service for mineral-added designer water dispensed from home-installed water servers. The bottles used are collected for reuse. This provides services that include everyday cleaning, cooking, ironing, and shopping, other such laundry, housework, as well as such services as house cleaning and child minding. Disinfection cleaning services were added in June 2020. This is a residential wireless Internet service provided by Toho Gas. The basic usage charge usage basic The Gas. Toho by provided service Internet wireless residential a is This is free for the first month of the contract, cancellation. No wiring installation work is required ‒ usage is simple and easy. and no penalty fees are charged for contract This is a periodic delivery service for natural water dispensed from home-installed water servers. This is a home security service that can be used with well no as installation phone, work mobile required. a With to sensors alerts send and windows and doors of opening unwarranted detect that as a security company response service (optional), this provides support for safety and security. This is a camera combination with an appliance controller (optional) makes it possible to operate appliances using a smartphone. monitoring service that can be used with no installation work required. Also, using it in This service sources products from manufacturers who endorse reducing product disposal due to such to due disposal product reducing endorse who manufacturers from products sources service This convenient and easy for customers to available them makes and dates, best-by approaching as reasons purchase. It aims to contribute to achieving SDGs through such means as reducing food loss. A portion of purchase amounts are donated to social-contribution organizations. Strategy 2 Strategy housework Peace Eye camera monitoring service Smart Room Security home security service Premium Water water delivery service Aqua Clara water delivery service Bears housework service junijuni sponsored by TOHO GAS socially conscious shopping service Sugu-Conne wireless Internet service ("JUNIJUNI" and " " are pending trademarks of Gas Co., Ltd.) Service

Provision of New Services

With smartphones as the point of contact, we are providing * An Internet website for product sales Under the concept of "providing services tomorrow's that lifestyles," satisfy the e-commerce website* was ASMITAS launched in March 2020 as a life service platform that provides services other than energy. services, and operation of online shopping sites, with part of the one-stop services that make comfortable, safe, and secure from this point on. everyday life more convenient, The first batch of services being provided is monitoring service through the installation of services, network water cameras, delivery home security through water servers, In addition to direct contact with customers, one strengths, we will steadily provide new services by enhancing digital of the Group's value beyond energy supply. channels and provide one-stop added Provision of Added Value Through New Services Provision of Added Value Through ［ASMITAS Life Service Platform] Toho Gas Group Initiatives Group Gas Toho We aim to become a Total Energy Provider that provides a one-stop service for proposals offering for the three energies̶city optimal gas, LPG and electricity̶and providing added value through services. new energy-related

a Total Energy Provider Energy Provider a Totala Total Energy Provider Energy Provider a Totala Total Development into into into Development Development Development Toho Gas Group Integrated Report 2020 23 Toho Gas Group Initiatives Strategy 3 Taking on Minato AQULS Materiality 1 3

New Scopes 【Promotion of Development of Minato AQULS】 【Smart Energy System】 Since its opening in September 2018, Minato AQULS, a smart The Energy Center that is centrally located at Minato AQULS provides town in Minato-ku, Nagoya City, has bustled with many visitors to a centralized supply of electricity, heat, and gas to the town's facilities.

LaLaport Nagoya Minato AQULS and sports facilities, and events, In addition to such distributed power sources as gas cogeneration Toho Gas Group Initiatives as well as fact-finding tours and more. In March of this year, (which enjoys high overall efficiency), renewable energy, and storage We will work to enhance energy-related businesses at home and abroad and venture into new business occupants began to take up residence in the 165 condominium batteries, by optimizing the energy of the entire town using a scopes with synergy effects, in order to expand our revenue-earning sources. units at Park Homes LaLa Nagoya Minato AQULS (main community energy management system (CEMS) that utilizes waste developer: Fudosan Residential Co., Ltd.), with 100 units heat from power generation and canal water as unused energy, at expected to be filled by this October. one year after the town's opening, we achieved a 60% reduction Reinforcement and Development of Group Businesses Materiality 1 rate in CO2 emissions (compared with 1990). In addition to the condominium units in which ENE FARM is implemented, we are We will steadily expand Group businesses, particularly focused on the four scopes: the comprehensive utility service engaged in bringing about optimized energy usage for the entire town. We are also contributing to strengthening disaster-mitigation business, the renovation business, outside sales of production and supply technologies, and the use of our owned properties. functionality in the region, including continuing to supply energy to the towns facilities together with supplying emergency electrical medium-pressure polyethylene pipes that were developed using Strengthen Comprehensive Utility Services power to the adjacent Minato Ward Office in the event of a our state-of-the-art pipeline technology called the "stream Park Homes LaLa Nagoya Minato AQULS (left and center: exterior, right: Enefarm) We will provide a one-stop service ranging from design, construction disaster, thereby achieving both low-carbon performance and method," which received an award for excellence (2020) at the In phase II development, attraction of facilities such as those related and execution to maintenance and management of energy disaster-response performance. IGRC*, and the new calorific value adjustment system that to education, health care, and welfare is planned, and foundation generation facilities including air-conditioning systems, cogeneration, ▶Local Production and Local Consumption of Energy received the Japan Gas Association's 2016 Technology Award. improvement work has begun. and hydrogen stations. We installed gas air-conditioning systems at ENE FARM type S, standard equipment in all condominium units, is in * IGRC: The International Gas Research Conference, organized chiefly by the Going forward, we will continue to promote development that can facilities in the cities of Okazaki, International Gas Union (IGU) 2020 (IGRC 2020) rated operation around the clock, with the generated electrical contribute to sustained growth together with the local community , and Yokkaichi in fiscal power used preferentially by the residence, and any surplus used by and the realization of an environmentally harmonious society. year 2019. The plan is in the entire town. In this way, we are promoting local production and response to the adoption of gas Phase II development area local consumption of energy. air-conditioning systems at many Electricity used preferentially Electricity that is not used by elementary and junior high by each household each household will be utilized Construction work for a gas air-conditioning in the entire Minato AQULS. schools in these cities. in an elementary school Stream method New calorie adjustment equipment Strengthen Renovation Business Use of Our Owned Properties P26 Electricity Toho Gas will join hands with Toho Gas Group companies and ENEDO generated by ENE FARM We are promoting development of Minato AQULS, together to steadily promote the housing renovation business. Toho Gas will Type S Surplus electricity Energy Center sold thereby play a supporting role for local people in their daily lives. with expanding leasing business utilizing properties we own We will offer renovation services in response to the diverse needs of and expanding the rental meeting-room business utilizing ▶Demand Response our knowledge from our own buildings. 【Cooperative Activities with the Region】 customers. To that end, the Toho Gas Group will be united in deploying Depending on the state of energy demand, facilities and its marketing expertise, enhancing its technological expertise, expanding [Hivi Casa Rental Apartment Complexes] The Minato AQULS Urban Development Promotion Council is residents are requested to conserve energy as needed, with devoting effort to vitalizing Minato AQULS and the local community the range of products and services to be offered, and adopting a Following on Hivi Casa Mizuho, cooperating residents receiving redeemable points that they business approach targeting a broader spectrum of customers. and engaging in urban development for safety, security, and which was completed in February can use in the town. Holding concurrent events and the like to 2020, a rental apartment complex comfort through such moves as upkeep and management of Promote the Expansion of Outside Sales encourage spending time out in the town is also planned. is under construction on the site of public spaces, creating vitality and interchange, and conducting -DR invoked of Production and Supply Technologies the former Nakamura Sales Office disaster-response and crime-prevention activities while working in -Points awarded to residents who have accept the DR We will step up the marketing of a new protective material for in Nakamura-ku, Nagoya. cooperation with the local community and administration. Hivi Casa Mizuho Energy Center

Signage Signage DR request依頼 DR compliance Event information Event information Point information, Point information, Development of New Businesses etc. etc.

Utilizing the expertise and resources of business we have cultivated heretofore, we are actively engaging in Housing-complex residents expanding energy-related business operations in Japan and abroad. Canal cleanup Disaster drill -Compliance with DR via HEMS -Participation in environmental activities P47 Domestic Energy Overseas Energy LaLaport Sports facilities

-Provision of cool spots -Provision of cool spots We are utilizing the expertise and resources of city gas, LPG, We are promoting entry into the energy-usage and LNG-terminal Public spaces -Point use by tenants -Hosting of sports classrooms, and power business operations to strengthen business businesses as well as other businesses where we can make the utmost use -Organization of events etc., for residences -Cooling effect in development such as regional electricity business of technologies and expertise in conduits and other components. plant-rich spaces Starry-sky film festival Eco-tour DR: Demand Response Demand Response Scheme installations and renewable power generation. We have also initiated overseas power generation business initiatives. Regional Shin-denryoku operations are regarded as [Joint Participation in a Gas-fired Power Project in the U.S.A.] contributing to regional economic development by Toho Gas established a new company in TOPICS ●Recipient of the 2020 Aichi Environmental Award Gold Prize promoting local production and local consumption of energy March 2020 jointly with Co., Ltd. and making active use of the profit generated through and Hiroshima Gas Co., Ltd., and acquired an Toho Gas received the 2020 Aichi Environmental Award Gold Prize in recognition for business operations. Toho Gas took part in a project for a equity stake in a gas-fired power project contributing in a major way to reducing the environmental load and forming a low-carbon Shin-denryoku facility in Okazaki City, which began supplying participated in by Corp. and Kyushu society through development of the Minato AQULS smart town. electrical power in July 2020. This follows previous Electric Power Co., Inc. in Birdsboro in the U.S. Award ceremony participation in a Shin-denryoku project in Matsusaka City. state of Pennsylvania. Birdsboro Power Plant

25 Toho Gas Group Integrated Report 2020 Toho Gas Group Integrated Report 2020 26 Toho Gas Group Initiatives Improvement of Efficiency

Reinforcing the Business Promote radical improvements in efficiency, including the use of new and digital technologies.

Foundation of the Toho Gas Group Use of New and Digital Technologies Utilization of Drones in Pipeline We are promoting teleworking and paperless operations by Construction introducing company-wide cloud-type groupware.

We are streamlining on-site surveying and design work Toho Gas Group Initiatives We are investigating how to make field work more advanced and for pipeline construction through drone-based imaging efficient by using tablets and drones. In addition to ensuring the stable operation of the energy business, we will reinforce our combined with image processing. We are also business foundation to flexibly respond to changes in the business environment, aiming to considering alternatives achieve sustainable growth. to visual inspection of gas pipelines in bridges.

Drone utilization Cloud utilization Reinforcement and Use of Human Resources P51～54 Human Resource Management TOPICS ●Joint Verification of Projected Pipeline Deterioration Using AI We are developing human resources to support the growth of the Group and realize flexible working Since August 2019, Toho Gas and Fracta (California, U.S.A.) With the aim being to raise return on investment with styles to utilize human resources. have been conducting verification testing for using artificial respect to replacement of aging gas pipes, using the data on intelligence (AI) and machine learning to predict gas pipelines and inspection results that Toho Gas has Employment and Development of Diverse Human Resources deterioration in gas pipelines managed by the Toho Gas. collected and Fracta's leading-edge AI and machine-learning This takes a piping-deterioration prediction AI algorithm technology and environmental databases, we are promoting In addition to recruiting new graduates, we are promoting recruitment and development of diverse human resources, such as employing over a thousand environmental variables and the creation of an algorithm to predict the degree or strengthening career recruitment and follow-up training. applies it to gas pipelines, and is the world's first attempt at deterioration in gas pipes. such an endeavor.

Human Resource Development Through an Internal Strategy Workshop Recruitment System Training ■ Illustration of RPA Implementation We publicly recruit new businesses for We select leader classes in each Business Process Re-engineering (BPR) young and mid-level employees, and department and develop them into We are promoting radical increases in the efficiency of business by proposers of excellent ideas will be management human resources reviewing business flow and utilizing robotic process automation transferred to the business development who can lead business structure (RPA). department to develop human resources reforms into the future through RPA was implemented in 130 operations by the end of FY2019, who can start new businesses. in-house strategy formulation Simple and Enhanced task Innovation leader training program utilizing achieving an increase in efficiency by 74,000 hours per year. complicated Proxy execution by efficiency the internal recruitment system training. indirect tasks software-based robot/automation

Realization of Flexible Working Styles Reform of the Organizational Structure We are improving the teleworking environment, the balance between work and childcare, which also contributes to enhanced working-style nursing care, and medical treatment so as to In addition to smoothly and surely taking measures to legally separate the pipeline division, we will flexibility and emergency response. promote a work-life balance for employees. In addition to promoting active participation by promote a transformation of organization so that we can flexibly respond to changes in the environment women and the elderly, we also work to support for sustainable growth. Teleworking Actions Toward Legal Separation corporate functions as an independent operating company. We are promoting steadily made preparation for spin-off of Gas Pipeline Divisions while taking into account trial execution of tasks within the We established the Pipeline Network Company in April 2020, company structure. aiming for legal separation (spin-off) of pipeline division in April 2022. Restructuring the Sales Organization

To ensure neutrality and transparency, efficient business To respond to broad-ranging customer needs in accurately operation, and ensure group governance, the Pipeline and promptly, in April 2020 we revised the structure of Network Company has the necessary internal control and the sales division, consolidating the planning functions responsible for formulating sales policy, together with FY2019 FY2020 FY2021 FY2022 reorganizing the front sales functions responsible for actual ★ Establish Pipeline Network Company ★ Legal separation operations up through providing services. Distribution Pipeline Network Company Pipeline-business Division company We will continue to enhance proposals that support lives and manufacturing in the region.

27 Toho Gas Group Integrated Report 2020 Toho Gas Group Integrated Report 2020 28 Toho Gas Group Initiatives Reinforcing the Business Foundation of the Toho Gas Group

Technological Development for the Future Materiality 4

Initiatives with Our Eyes Set on Energy Distribution and

a Hydrogen-based Society P33 Utilization of Digital Technology Toho Gas Group Initiatives

Amid hydrogen being regarded as a major energy, we are promoting the development of hydrogen supply infrastructure and We are promoting utilization of the latest digital technologies to develop new services, enhance existing services,

utilization technology. We are also promoting surveys and research into future technologies such as CO2 separation and capture from and improve efficiency.

combustion exhaust gas, and methanation utilizing CO2.

Building of Hydrogen Supply Infrastructure Development of New Services Minato AQULS Hydrogen Station We will launch operations at the fifth hydrogen station We are engaged in virtual power combination-optimization problems in Toyota City by the end of 2020. Method： Off-site plant (VPP) construction ( P24 ), to elucidate the best-condition choice We are also promoting efforts toward Features： Attached to Eco Station demonstration of demand response (DR) from among a combination of various Operation start： April 2016 cost reductions for hydrogen stations. for home use ( ),P24 demonstration choices. tests with start-up companies to utilize Nisshin Hydrogen Station quantum annealing technology, which Example of a combination-optimization performs high-speed processing ft Method： Off-site problem (shortest route) Features： Attached to Eco Station Operation start： May 2015

Toyota Ecoful Town Hydrogen Station Enhancing Existing Services Method： On-site Centrair hydrogen station Feature: Adoption of a packaged We are utilizing data such as on energy lineup of gas appliances equipped with hydrogen station from consumption and owned equipment to IoT functions, as well as support for Method： On-site overseas strengthen proposals for products and diversifying fee settlement methods by Feature: Operation of large-volume fueling Operation start： May 2015 (compatible with buses) services that meet customer needs. introducing LINE Pay and other means. Operation start： March 2019 Work underway for launching operations at the fifth hydrogen We are also promoting an augmented station in Toyota City by the end of 2020

Development of Hydrogen- Participation in Hydrogen Utilization Study Group Promotion of Efficiency P28 use Technologies in the Chubu Area We are promoting teleworking and paperless drones for route survey of new pipelines and the We are promoting development of This consists of private-sector companies (including Toyota Motor Co., Ltd.) operations through the use of digital technology, as development of a gas-pipe deterioration prediction technology to use hydrogen as fuel working on hydrogen use, and is engaged in discussing supply-chain and demand well as promoting endeavors such as the utilization of system using AI. at factories and other facilities. potential in the Chubu area and the possibility of large-scale use of hydrogen.

Participation in Keidanren's "Challenge Zero" Establishment of both advanced energy management and enhanced resilience Challenge2 for the sake of spreading renewable energy and distributed power sources The Toho Gas Group is taking part in Keidanren's Challenge Zero* project, and is promoting technical development Through feasibility evaluation of virtual power plants (VPP), we and heating equipment, we are accumulating energy oriented to future decarbonization. are working on developing technology for electricity supply and management know-how that contributes to extremely minimizing For detailed information, please visit the Challenge Zero website (https://www.challenge-zero.jp/en/member/119). demand coordination and are moving forward toward practical CO2 emissions and enhancing resilience. We will also investigate * Challenge Zero initiative by the Japan Business Federation (Keidanren), announced December 9, 2019 This initiative encourages innovation and serves as a sourcepoint for the economic sphere to take up the challenges of investment and financing viability. In this way, we will contribute to expanding the amount and research CO2 capture and utilization (CCU) technology and aiming to proactively publicize, support, and implement actions to create net-zero-carbon technology (including transitional technology) and of renewable energy installed. Also, through actual operation of combine the technology with the smart energy systems in order innovation taken by companies and organizations toward a decarbonized society. smart energy systems composed of distributed power supply to contribute to the attainment of net zero carbon.

Construction and operation of hydrogen stations and development of hydrogen Development of high-density heat storage technology that contributes Challenge１ Challenge3 usage technology for the sake of building hydrogen supply chains to the effective use of heat energy

Together with moving forward on the construction and development of hydrogen combustion technology in With the objective of working for the effective utilization of temperatures for heat storage materials and opening up operation of hydrogen stations for the sake of industrial fields. We will contribute to the attainment of net unused heat in a wide variety of applications, we are working applications for them. In this way, we will promote the decarbonization in the mobility field, we are anticipating zero carbon in multiple fields through the use of hydrogen. on developing performance improvements for high-density heat utilization of unused heat in a wide variety of fields and the building of hydrogen supply chains and working on the storage materials as well as expanding the range of usage contribute to further energy conservation.

29 Toho Gas Group Integrated Report 2020 Toho Gas Group Integrated Report 2020 30 Toho Gas Group Initiatives Reinforcing the Business Foundation of the Toho Gas Group

Promotion of ESG Management

Together with embracing international standards, we are promoting ESG management by rolling out local-community activities that contribute to achieving SDGs ( P36 ) and strengthening corporate

governance. Toho Gas Group Initiatives

Promotion of ESG Management Based on International Standards Promotion of Environmental and Social Activities P37～54

We have set goals for business activities and reducing environmental impact at customer sites, and are promoting the development of local community activities that contribute to achieving SDGs in cooperation with local governments and other entities. Identification of Key Issues (Materiality)

The Toho Gas Group, in moving toward Materiality 1 Provision of energy and related services "promotion of ESG management" as Establishment of Toho Flower Co., Ltd. Materiality 2 Ensuring safety and security, and stable supply espoused in the Medium-term Management Toho Flower was established in October 2019 with the aim of working to Plan (FY2019‒FY2021), identified social Materiality 3 Contribution to local communities encourage hiring and lasting employment for persons with disabilities, and to issues of high importance to society Materiality 4 Realization of a society in harmony with the environment achieve the Group's legally mandatory proportion of jobs for persons with (stakeholders) and the Group as materiality. disabilities in a sustainable way as well as to contribute to the local community. ( P13～14 ) Materiality ５ Reinforcement of human resources Going forward, we will promote the creation of workplaces Compliance and Governance where individuals with disabilities can thrive while developing their own personal qualities and strengths through various office-support tasks in the Group.

Toho Flower's entire workforce proposed and discussed ideas and created this graphic logo, which presents an image of gentle kindness and love that is grounded on the corporate philosophy and course of action. Endorsement of the TCFD As Efforts Addressing Climate Change P33 Toho Flower The Toho Gas Group announced endorsement in April Consortium, which was established to serve as a forum 2020 of the Task Force on Climate-related Financial for discussion by corporations, financial institutions, and Disclosures (TCFD) to promote analysis of the risks and other entities endorsing this initiative. opportunities that climate change brings to business as Recognized As a "Certified Health & Productivity Management Outstanding well as disclosure of the information this yields. Together Organization 2020 (White 500)" with this, we also became a member of the TCFD In March 2020, Toho Gas was recognized as a based on efforts to address regional health "Certified Health & Productivity Management problems and efforts to promote health that are Outstanding Organization 2020 (White 500)" advocated by the Nippon Kenko Kaigi. Toho Gas under a program administered jointly by the earned acclaim for the Health and Body Health Participation in the UN Global Compact The Ten Principles of Ministry of Economy, Trade, and Industry (METI) of Promotion Measures for Employees implemented Japan and the Nippon Kenko Kaigi. by the company to support health and security The Toho Gas Group is a signatory to and the United Nations Global Compact This program recognizes corporations that around the clock, 365 days a year. participant in the UN Global Compact advocated 〈 Principle1 〉Businesses should support and respect the practice especially excellent health management by the United Nations. protection of internationally proclaimed Human humanrights; and The UN Global Compact is a voluntary initiative Rights through which companies and organizations, 〈 Principle2 〉make sure that they are not complicit in human rights abuses. by demonstrating responsible and creative 〈 Principle3 〉Businesses should uphold the freedom of leadership, act as good members of society and Establishment of Toho Gas Forest Seto association and the effective recognition of participate in the creation of a global framework the right to collective bargaining; in Seto City, Aichi Prefecture for achieving sustainable growth. 〈 Principle4 〉the elimination of all forms of forced and Labour compulsory labour; The Toho Gas Group supports the Ten Principles To put into practice "protection of life on land," the 15th of the sustainable 〈 Principle5 〉the effective abolition of child labour; and of the United Nations Global Compact in the four development goals (SDGs) adopted at the UN summit in 2015, we opened Toho 〈 Principle6 〉the elimination of discrimination in respect of areas of human rights , labor , the environment , and employment and occupation. Gas Forest Seto in Seto City, Aichi Prefecture, in May 2020. This follows upon earlier anti-corruption , and will promote resolution of conservation initiatives in Odai, Mie Prefecture, and Mitake, . With 〈 Principle7 〉Businesses are asked to support a precautionary social issues through business activities, together approach to environmental challenges; this, we are now engaging in forest conservation efforts by means of Toho Gas with contributing to achieving Forests in all three Tokai prefectures. Environment 〈 Principle8 〉undertake initiatives to promote greater SDGs. environmental responsibility; and Going forward, we will encourage more employees and their families to experience 〈 Principle9 〉encourage the development and diffusion of the importance of nature for themselves and contribute to local communities environmentally friendly technologies. together with working to raise awareness with respect to the environment. Toho Gas Forest Seto Anti- 〈 Principle10 〉 Businesses should work against corruption in Corruption all its forms, including extortion and bribery.

Reinforcement of Corporate Governance P55～58

We are strengthening internal controls through thorough risk management and compliance, including measures for disasters and cyber-security.

31 Toho Gas Group Integrated Report 2020 Toho Gas Group Integrated Report 2020 32 Toho Gas Group Initiatives 34 2 in 2 separation, capture, and effective utilization (CCU) technology, methanation technology, etc. development relating to CO > Research and Toho Gas Group Integrated Report 2020 Main responses . Expectations are high for its use as a cogeneration a as use its for high are Expectations . （Solid Oxide Fuel Cell） （Carbon Capture and Utilization） （Net Zero Energy House） emissions. 2 ZEH A house whose aim is realize zero annual net consumption of by primary energy by achieving dramatic energy savings vastly improving insulation performance and adopting high-efficiency equipment systems as well as renewable energy. SOFC CCU emissions from sources such as thermal power plants. A solid oxide fuel cell is composed of ceramic material and is temperature power-generation high a having by characterized 1,000°C to 600 of system offering excellent energy-saving performance. and nonvolatile Technology for separating, capturing and utilizing the CO ● ● ● Promotion of technical development and spread of high-efficiency gas air Promotion of switching fuel types through application Spreading renewable energy + distributed generation Accommodating supply of hydrogen for fuel cell Promotion of technical development and spread of Reinforcement of shore protection and other high-tide measures, improved spread and expansion can be expected for natural gas, which gas, natural for expected be can expansion and spread produces low CO spread and expansion of high-affinity distributed generation systems. spread and expansion of high-affinity distributed generation air-conditioning needs accompanying rising temperatures. (FCVs) accompanying greater use of ZEVs. optimization. including for heating, and proposals for energy We will proposed high-efficiency air conditioning in response to increasing Response Response Response Response Response Response conditioning (heating and cooling), proposal of optimal energy, including for heating, etc. of fuel-related technology, promotion of bunkering, etc. using tank trucks to wider areas, promotion of LNG expanding LNG supply systems, high-level area of minimization both of energy realization technology), VPP and CEMS using networks (demand optimization energy consumption and resilience, etc. etc. vehicles, promoting improvement of hydrogen infrastructure, of proposal etc.), (SOFCs, cells fuel and cogeneration high-efficiency optimal energy, including for services, etc. heating, proposal of life support watertightness and other flood measures. Measures aimed at accelerating disaster recovery through segmentation of supply-stoppage blocks, etc. >If carbon taxes are levied indiscriminately for fossil fuels, > >We will promote efforts to spread renewable energy together with the with together energy renewable spread to efforts promote will >We vehicles cell fuel of spread the to responses promote will >We >We will promote the high-efficiency use of natural gas, readiness against increasing weather intensity >We will promote security and disaster measures for Impacts Impact on industrial/ commercial-use gas sales volume accompanying greater use of ZEVs (including FCVs) sales volume due to a shift to ZEHs and electrification sales volume manufacturing and supply equipment demand for heating and hot-water boilers demand for renewable energy - Impact on gas - Impact on gas - Impact on - Impact on - Expanded - - Changes in competitiveness - Cost increases 1 ng Climate Change) ng Climate Accompanyi Risks and Opportunities of and Responses to (Impacts Increased carbon taxes Sweeping policies for transition to renewable energy Change in customer preferences Increasing weather intensity opportunities* Major risks and Rising temperatures

Policies and regulation Market Acute Chronic （Community Energy Management System） （Fuel Cell Vehicle） （Zero Emission Vehicle） （Virtual Power Plant） 2 * LNG bunkering CEMS VPP FCV ZEV Transition risks Physical risks Supplying a marine vessel with liquid natural gas (LNG) fuel. A system of centralized management of the energy of an entire area. Controlling (utilizing) the energy resources of consumers as if they were a single power plant. various An automobile whose motor is driven using electrical energy generated by the chemical reaction of hydrogen and oxygen in a fuel cell. An automobile such as an electric vehicle (VEHICLE) or fuel cell vehicle (FCV) that produces no gas emissions.

Classification *1 indicates risk and indicates opportunity. scenario. projected to change less in comparison with the 4°C scenario is *2 Physical risk and its impact under the 2°C The Toho Gas Group conducted TCFD-recommended scenario analysis using the 2°C and 4°C climate-related scenarios*. Referencing data and 4°C The Toho Gas Group conducted TCFD-recommended scenario analysis using the 2°C from the International Energy Agency (IEA) for transition risks and data from the Japan Meteorological Agency and other ndicated below. "impacts," and "main responses" as i society in 2050 and organized "major risks and opportunities," physical risks, we modeled such sources for For "major risks and opportunities," with our basic aim being to steadily advance energy policies and responses based thereon under the 3E+S principles grounded on the 5th Energy Basic Plan with cognizance of transitions, and thereby securely achieving the 2030 energy mix, measures with our sights fixed on reducing carbon and future decarbonization. we investigated response pre-industrial above lower 2°C than more no to temperatures global in increase the hold to measures necessary the implementing of case the for scenario A scenario: 2°C * levels (RCP 2.6). scenario: A or scenario lower an above increase pre-industrial in levels. the This global is average a * temperature natural-course 4°C to scenarios 4°C in the case of no measures with respect to climate change (RCP 8.5). implementation of additional

Strategy ● ● ● ● ●

RCP8.5

RCP6.0

P38 RCP4.5 P55 P57 P37 P57 P40 RCP2.6 average 2081 to 2100 2100 compared with before the For reference countermeasures goals system system management system right for an overview. system Environmental action ・Global warming ・Global ・ ・Corporate governance ・Corporate management ・Risk ・Environmental the chart on the page at ・See management ・Risk 2050 2000 6 4 2 0 -2 （℃） Response Annual Report on the Environment in Japan 2020 Risks and opportunities climate accompanying change Management are Committee reported and Directors Board to as key business issues, with the of the Board of Directors conducting governance regarding the status of execution. We used scenario climate-change analysis risks to and identify organized response our to the opportunities. impacts of risks and Risks arising from integrated climate change into are the risk-management systems and processes of all Group companies, Group all of processes and systems Committee Management the to reported and and Board of Directors. Risks and opportunities climate change accompanying are managed sales volumes, environmental action goals, using gas etc. Under RCP 8.5, strong possibility of increase by by the end of 2.6 to 4.8°C the 21st century Under RCP 2.6, strong possibility of increase by by the end of 0.3 to 1.7°C the 21st century Industrial Revolution (1850 to 1900). Synthesis Report Summary for Policymakers Note: Changes from average temperature for 1986 to 2005* Source: * In the period of 1986 to 2005, temperature rose by approximately 0.61°C Source: Climate change 2014 Intergovernmental Panel on Climate Change Fifth Assessment Report Changes in Global Average Surface Temperature The TCFD was established by the Financial Stability Board (FSB)* at the request of the G20 G20 the of request the at (FSB)* Board Stability Financial the by established was TCFD The Finance Ministers and Central Bank Governors to climate-related information and accommodate financial study institutions. The TCFD released its how to conduct disclosure of final report in June 2017, which recommends that corporations and climate-related risks and opportunities. disclose the items shown below relating to other such entities * An international body composed of financial ministers and central banks of G20 member nations which conducts governance relating to international finance Intergovernmental fforts Addressing Climate Change Climate Addressing fforts E Identification, assessment, and management processes for the climate-related risks Metrics and targets used for assessment and management Governance for organizations involved in climate-related risks and opportunities Accommodation of the climate-related of impacts risks and opportunities Item Risk Metrics Strategy and targets Governance RCP (Representative Concentration Pathways) scenarios and the like following "RCP" represent effectiveness represent "RCP" following like the and in causing global forcing"). warming The high (called is the value, "radiative the higher greenhouse-gas concentrations are and the greater is the effectiveness in causing warming. Panel on Climate Change (IPCC) presented four scenarios for increase temperature by 2100 and indicated projections. in average The temperature global was in around projected the 2°C scenario to with the rise smallest temperature rise by (the RCP rise 2.6 greatest the scenario) having scenario and the in by 4°C about (the RCP 8.5 scenario. The values of "2.6," "8.5," The Fifth Assessment Report of the of Report Assessment Fifth The management The Toho Gas Group has heretofore actively devoted effort addressing climate change through such moves as the spread the as moves such through change climate addressing effort devoted actively heretofore has Group Gas Toho The and expansion, highly efficient use, and high-degree application of clean energy sources, such as environmentally friendly occurrence frequent the account into taking expanding, is investment ESG where markets financial in this, Amid gas. natural of natural disasters in recent years and in particular the focus of attention on the risks and opportunities accompanying Disclosures (TCFD). Climate-related Financial 2020 we endorsed the Task Force on climate change, in April Henceforth, we will contribute to realizing a low-carbon society through supplying energy, together with also devoting decarbonization. with its sights fixed on future effort to technical development Glossary ● Toho Gas Group Initiatives Group Gas Toho Reinforcing the Business Foundation of the Toho Gas Group Toho Gas of the Foundation the Business Reinforcing Toho Gas Group Integrated Report 2020 33