Integrated Report 2019 Daiwa House Group
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Daiwa House Group Integrated Report 2019 Daiwa House Group Integrated Report 2019 Our founder, Nobuo Ishibashi (1921-2003) 1955 Everything started with this Our Founder’s Spirit Don’t do things because they will make a profit, but because they will be of service to society. “Don’t start off from the thought: ‘What can I do that will make a profit?’ A company is a public organ of society, and we must ask ourselves what kind of product – or what kind of business – will be of use to the world around us and make people happy.” The above is what Nobuo Ishibashi, the founder of Daiwa House Industry, often used to say to the Company’s employees. This is the concept from which the Daiwa House Group started. 01 Daiwa House Group Integrated Report 2019 2005 Guided by our founder’s spirit Group’s Symbol Message Creating Dreams, Building Hearts The Daiwa House Group symbol—the Endless Heart— represents our vision of building endless emotional connections with each and every one of our customers, as well as the solidarity of the Daiwa House Group. As a group that co-creates value for individuals, communities and people’s lifestyles, we aim to think outside the box and always to create new value in each successive generation. We will con- tinue to pass on the ideals on which the Company was founded, and work to help realize a sustainable society. Daiwa House Group Integrated Report 2019 02 Developing our businesses From 1st to 5th Medium-Term Management Plan 6th Medium-Term The Management Plan Starting Point Pursue businesses 50th anniversary that are of service to people Medium-Term CSR Plan Social Medium-Term Plan (fiscal 2016-2018) (Endless Social Program 2021) Action Plan for the Environment Action Plan for the Environment (Endless Green Program) (Endless Green Program 2021) Strengthening our bases “Endless Heart” Group symbol adopted 1955 2005 2021 2019 Inspired by our founder’s spirit 6th Medium-Term Management Plan Launched Developing our businesses At the Daiwa House Group, we are not only working to realize our long-cherished target—net annual group sales of ¥10 trillion by the 100th anniversary of the founding of Daiwa House Industry—we are also working to realize a society in which people can live fulfilling lives. This is both our dream and our management vision. In pursuit of this management vision, we have identified a number of Strengthening significant issues to be addressed from the viewpoints of our business our bases operations, society, and the natural environment. To address these important issues, we have drawn up our sixth medium-term management plan, which commences in fiscal 2019 and will run for three years. This plan incorporates our basic policies for the three-year period, and takes as its starting point the approach to business laid down by Nobuo Ishibashi, the founder of Daiwa House. 03 Daiwa House Group Integrated Report 2019 Through activities of benefit to society, achieve annual net sales of ten trillion yen Our management vision 75th anniversary 100th anniversary Realize a society in which people can Challenge live fulfilling lives ZERO 2055 Strengthen Taking on the contact with our challenge of Zero stakeholders Environmental Impacts 2030 2055 Passing on the spirit of our founder Toward Realizing our Management Vision We have drawn up a set of corporate governance guidelines as well as a medium-term management plan. Our goals are: to realize our management vision, to ensure that we do not lose sight of the universal mindset centered on the attitude to business espoused by our founder, and to pass on his spirit to future generations. Going forward, we will reinforce the virtuous cycle created by developing businesses that are of service to the wider world, and strengthening our bases. By doing so, we aim to both steadily reach our performance targets and help solve medium- and long-term social problems—including the United Nations sustainable development goals—and realize sustained economic growth. In this way, we believe, we will continuously improve the Company’s enterprise value. Daiwa House Group Integrated Report 2019 04 Identifying materiality for a continuous increase in the corporate value Social issues/Megatrends SDGs Daiwa House Group can 6th Medium-Term Management Medium term 75th anniversary contribute to Plan Period (to FY2021) (to FY2025) (FY2030) u Changes in the number of u Regional depopulation, urban households in Japan population concentration Demographic trends Contracting demand for housing/ Compact cities in regions/Increasing Lower desire to own a house demand for housing redevelopment u Increase in untenanted houses u Progressively aging society with Expanding pre-owned market fewer children u Labor shortage, decline in skilled Greater social acceptance of the construction workers elderly and people requiring nursing care/ Developing our businesses Decreasing working-age population/ Increasing elderly participation in Decline in skilled construction workers/ society/ Systematic human resources Increasing demand for health and procurement (quality/quantity)/ care in work styles Raising productivity regardless of age, gender, nationality Economic & industry factors u Holding of 2020 Tokyo u Fluctuations in interest rates due to Japanese market Olympics and Paralympics financial deterioration Expanding demand for construction u Linear Chuo Shinkansen starts in Japan operation Higher materials and labor costs Enhanced competition between cities u Full-scale acceptance of u Holding of Expo 2025 Osaka/Kansai, foreign workers attracting IR to Japan u Consumption tax hikes depressing consumer confidence Changes in business environment u Intensifying social issues u Resource depletion Increase in ethical consumption/ Deregulation leading to the launch of Full-scale social impact evaluation of new markets/ business and real estate investment Diversification of the sharing economy u Greater disclosure of management u Changes in individual values information Diversifying consumption styles, lifestyles, Standardization of non-financial preferences/Diversifying work styles information disclosure by securities (employment, location, time, wages) exchanges and Financial Services u Frequent and large-scale natural disasters Agency/ Greater awareness for BCP/ Progress in sustainable finance/ Intense heat become normalized Stronger leverage of ESG engage- ment by institutional investors Strengthening our bases u Slowdown of China’s economy u Economic growth of the emerging u Increasing global population, impacts on the global economy nations China’s population peaks u Advent of the AI/IoT/ u Stronger international rules centered Much greater demand for resources, big data society on Europe energy, water, food u Progressively more advanced Increased business opportunities for Increased income in emerging Overseas markets and efficient business via solutions to deepening social issues countries digitalization/Cyber-attack typified by SDGs/Greater concern over u Encouraging generational threats/Progressive use of ICT in preventing corruption in the value chain/ changeover real estate/Spread of connected Expanded influence of international Millennials taking central roles/ homes/Further expansion of codes of conduct concerning human Rise of Generation Z i-Construction, 5G commercial rights, establishment in various countries/ services, and the e-commerce Expanded influence of institutional u Progressive social divisions market investors and UN institutions on markets Full-scale acceptance of immigrants/ u Coping with environmental impacts Expanding poorer class Greater consumer awareness of u Age deterioration of social environmental performance/Expanded infrastructure percentage of renewable energy * n indicates medium to long-term social issues receiving special emphasis 05 Daiwa House Group Integrated Report 2019 Based on our understanding of the business environment, Daiwa House has identified the materiality required to continuously increase the Group’s corporate value, according to the four management items set in our Corporate Governance Guidelines. Our goal is to resolve materiality by working on the basic policy of our Sixth Medium-Term Management Plan. Basic policy of the 6th Medium-Term Management items for improving Materiality sustainable corporate value in the Management Plan Corporate Governance Guidelines Business 1 Business Investment Further growth in the Expanding business opportunities three core businesses Securing stable deriving from social issues including Continuing and level of profits and Asu Fukaketsuno (Indispensable for Acceleration of overseas strengthening real estate maintaining or deployment investments inside and Tomorrow) and SDGs outside Japan improving growth rates Greater added value for customer assets Business 2 Financial Balance of flow businesses and stock businesses Business 3 Setting core Maintaining and Creating Sustainable Corporate Value Balance of investment Optimizing improving profitability Constructing a portfolio of businesses growth invest- domains based capital allocation ments and main- (ROE) based on an with differing life cycles on capital and collection taining financial optimal capital structure efficiency and risk periods soundness Business 4 verification Efficient management and financial soundness aware of capital costs Base 1 Action Plan for the Environment (Endless Green Program 2021) Pursuing energy conservation, new energy creation, and reduction of CO2 emissions to meet the targets set by the Lowering environmental impacts while