Tokyo Gas Group CSR Report 2018（2017.4 ～ 2018.3）

Contents

CSR Report top page Contribution to the Environment

Editorial Policy Basic Policy Targets and Performance Top Commitment Environmental Management

Special Feature Climate Change Countermeasures

The Tokyo Gas Group’s Contribution to the SDGs Addressing Climate Change As a Total Energy Group Providing the Backbone for a Sustainable Society - Addressing Climate Change

The Tokyo Gas Group Value Chain Reduction of CO2 Emissions at Customer Sites - Reduction of CO2 Emissions at Customer Sites Benefits of LNG (Liquefied Natural Gas) - Advancing and Expanding Natural Gas Use with The Tokyo Gas Group’s LNG Value Chain and Highly Efficient Residential Gas Appliances and Systems Key Initiatives Contributing to Sustainable Development - Advancing and Expanding Natural Gas Use with Highly Efficient Commercial Gas Appliances and Systems Corporate Governance - Promoting Smart Networks Corporate Governance - Reducing the Transportation Carbon Footprint Management Structure - Proposing Exemplary Energy-Saving Lifestyles Audit Structure for Customers Internal Control Risk Management Energy Savings and Reduction of CO2 Emissions in Business Operations - Measures at the City Gas Production and Supply Stages CSR at the Tokyo Gas Group - Measures in the Electric Power Business Overview of CSR Management - District Heating and Cooling Services The Tokyo Gas Group’s Key CSR Activities - Measures at Business Offices and Materiality - Other Efforts to Reduce CO2 Emissions Working Toward Better CSR Practice Stakeholder Engagement Promotion of Resource Recycling Enhancement of Energy Security Promotion of Biodiversity Conservation

Basic Policy Promotion of Environmental Technologies Development

Targets and Performance

Procurement of LNG

Overseas Business

Production of City Gas

Development of the Electric Power Business

Supplying City Gas Earthquake and Disaster Preparedness Working to Ensure Customer Safety Enhancing the Safety of Gas Appliances Efforts to Enhance Customer Satisfaction Lifestyle Services Contents

Contribution to Local Communities Disclosure of Incidents that Affected Our Stakeholders GRI/Global Compact/ISO 26000 Content Index Basic Policy Glossary Targets and Performance Major Awards and Recognitions Social Action Programs through Our Main Line of Business Major ESG Ratings Working with the International Community Questionnaire Results and Highlights of Feedback Urban Development Site Map

Respect for Human Rights

Basic Policy Targets and Performance Initiatives on Respecting Human Rights

Promotion of Compliance

Basic Policy Targets and Performance Thorough Implementation of Compliance Information Security Management

Enhancement of People-Centered Management Base

Basic Policy Targets and Performance Employment Outlook Personnel Programs and Appraisal System Personnel and Career Development Action on Diversity Engaging in Occupational Safety and Health

Supply Chain Management

Basic Policy

CSR Efforts throughout the Supply Chain

Communication with Our Suppliers (Supplier Survey)

CSR Data

Environmental Data Social Data Governance Data Third-Party Independent Assurance Report About Us Emergencies Procedures Investors Sustainability R&D Safety

TOKYO GAS TOP > CSR Report

Recent CSR News Headlines Complete CSR News Headlines List

11/16/2018 We have updated our Sustainability site. 06/29/2018 CSR information has been updated. 06/08/2018 CSR information has been updated. 01/18/2018 The Survey Indexes page has been released. The Tokyo Gas Group CSR at the Tokyo Gas Corporate Governance Value Chain Group

Enhancement of Energy Contribution to the Contribution to Local Security Environment Communities

Respect for Human Promotion of Compliance Enhancement of People- Rights Centered Management Base

Supply Chain Management

Disclosure of Incidents that GRI/Global Compact/ Editorial Policy Affected Our Stakeholders ISO 26000 Content Index

Glossary Major Awards and Recognitions Major ESG Ratings

Questionnaire Results and CSR Report (Japanese) Site Map Highlights of Feedback

Related Sites

Investor Relations Technical Development Tokyo Gas Engineering Solutions

Contact Us Site Map Terms of Use Editorial Policy

The Tokyo Gas Group believes that the foundation of its CSR activities lies in achieving its public mission and fulfilling its social responsibilities by conducting daily business activities in accordance with its Management Philosophy and Corporate Action Philosophy. To pursue its CSR activities, the Group has determined its key CSR activities, priority issues (materiality) and goals (CSR KPIs).

In addition to providing an overview of the Groupʼs CSR management, this report describes in detail its major CSR activities during fiscal 2017, organized under six key CSR activities.

In the production of this 2018 edition, we have also paid special attention to the following: 1．In view of the Sustainable Development Goals (SDGs)* adopted by the United Nations, we have included a feature on the Groupʼs approach to the SDGs and related initiatives. 2．For institutional investors and other experts requiring more detailed information, we have supplemented the description of our CSR activities with a searchable data section.

* A global framework for attaining sustainable growth that consists of 17 goals and 169 targets addressing issues such as poverty and

starvation, energy, climate change and social peace. The SDGs were adopted at the UN Sustainable Development Summit at the UN

Headquarters in New York in September 2015.

Production of this report was led by the Editorial Working Group, whose members were selected from each of the companyʼs divisions and departments. They carefully checked all the information to be published, confirmed the progress of the PDCA cycle in each area of activity, and coordinated all content with the related departments.

Editorial Working Group

Gas Resources & Energy Production Div., Pipeline Network Div., Residential Sales and Service Div., Energy Solution Div., Regional Development Div., Power Business Div., Global Business Div., Digital Innovation Div., Corporate Planning Dept., Financial Management Dept., Personnel Dept., Purchasing Dept., General Administration Dept., Environmental Affairs Dept., Compliance Dept., Internal Audit Dept., Audit & Supervisory Board Memberʼs Office

Secretariat

CSR Section, Corporate Communications Dept. Report Outline

Overview of CSR Disclosure

Period This report contains material primarily from fiscal 2017 (April 1, 2017 to March 31, 2018), with some additional information from other fiscal years.

Scope Tokyo Gas Co., Ltd. and its subsidiaries. Tokyo Gas LIFEVAL and partner companies are also included in some sections. Environmental performance data for fiscal 2017 are for Tokyo Gas and its 46 consolidated subsidiaries in Japan.

Date of Publication November 2018 (The previous report was published in November 2017. The next report is scheduled for November 2019.)

Referenced Guidelines ▶ GRI “Sustainability Reporting Standards 2016” Ministry of the Environment of Japan “Environmental Reporting Guidelines (2012 Version)” Japanese Standards Association “ISO 26000: 2010”

The environmental performance indicators, environmental accounting indicators, and social performance indicators provided in this report have been third-party assured by KPMG AZSA Sustainability Co., Ltd. (a member of the KPMG Japan group) to enhance the credibility of the data. References

Membership in Industry Associations and Advocacy Organizations KEIDANREN (Japan Business Federation) (Tokyo Gas Senior Corporate Advisor Tsuyoshi Okamoto serves as vice chair) Japan Gas Association (Tokyo Gas Chairman of the Board, Michiaki Hirose serves as chairperson) Tokyo Chamber of Commerce and Industry (Tokyo Gas Chairman of the Board, Michiaki Hirose serves as a special advisor) Japan Association of Corporate Executives (as of August 31, 2018)

Publication History

FY1994–FY2004 “Environmental Report” issued

Expanded coverage to include CSR, and issued as the “Tokyo Gas CSR Report” FY2005–FY2009 (website and booklet)

Expanded the scope of the report to include subsidiaries and affiliates (issued From FY2009 only on the website)

FY2010–FY2014 “Tokyo Gas CSR and Corporate Profile” issued (booklet)

“Tokyo Gas Group CSR Report” issued on the website (full report) and as a From FY2015 booklet (digest edition)

In principle, the website is updated upon publication of the report during the From FY2017 first half of the fiscal year and with additional information as needed. We will develop our business to a higher level and contribute to the creation of a sustainable society as a driving force in communities and daily life.

The business environment surrounding the Tokyo Gas Group is changing dramatically, including the deregulations in energy markets, a decline in the number of households, progress in reducing carbon footprints and saving energy, and digitalization. Committed to advancing Group management, we accurately respond to those changes while also continuing to expand the foundation for the future, based on our brand values of “Safety, Security, and Reliability,” so that the Group can progress rapidly in the 2020s.

Pursuing “GPS × G” to Become a Total Energy Group that Remains the Customerʼs Choice For over 130 years since the Tokyo Gas Group was established in 1885, we have been contributing to society by providing a stable supply of city gas to support the economic development of the Tokyo metropolitan area and enrich daily life. It has consistently sought to enhance its corporate value as an “energy frontier corporate group” by being the first in Japan to introduce and propagate the use of liquefied natural gas (LNG), install large-scale combined heat and power (CHP) systems, and promote the development and wider use of residential fuel cells. In April 2017, following the deregulation of the electricity market, the gas retail market was fully liberalized, which transformed the business environment at an unprecedented scale. As the energy industry faces a major turning point, we formulated the Tokyo Gas FY2018–2020 Medium-term management plan GPS 2020 in October 2017 while anticipating the coming of an era of natural gas, of single-source providers of electricity and gas, and of multidimensional innovation fueled by rapid digital evolution. We will pursue our GPS × G concept, delivering Gas, Power, and Services that meet a variety of needs to Global customers. Sustainable Development of Society Our corporate mission is to meet public demand and expectations, which become more substantial every year and are changing at an accelerating pace. The Tokyo Gas Group engages in CSR activities under a basic policy of steadfastly tackling the challenges faced by society through our business activities in order to contribute to the sustainable development of society. In March 2016, Tokyo Gas became a signatory of the UN Global Compact so that it could pursue CSR as a responsible member of the international community, and we support and practice the 10 principles in the four fields of human rights, labor, environment, and anti-corruption. With respect to the Sustainable Development Goals (SDGs) adopted by the United Nations, we have sought to align the common issues and goals of the international community with the social responsibilities of the Tokyo Gas Group to continue developing our CSR management toward achieving the SDGs.

Meeting Challenges Faced by Society through Business Activities The Tokyo Gas Group seeks to develop a sustainable society by actively pursuing initiatives that pay due consideration for the environment and promote smart networks. We are particularly aware of our significant potential for contributing to a low-carbon society. Natural gas, which constitutes the core of our business, is an energy source that generates the lowest CO2 emissions among fossil fuels and is expected to continue playing a key role in addressing climate change. We are increasing investments in renewable energy-based power generation, such as solar and wind power, and in future technologies. We are also constructing smart energy networks that generate and consume energy locally by linking heat, electricity and information networks toward making communities more energy efficient, environmentally friendly and resilient to disasters. In addition, we will continue to develop technologies to ensure the safety and security of people in their daily lives and all of society far into the future while harnessing IoT and AI to meet social needs.

Ensuring the Success of the Olympic and Paralympic Games Tokyo 2020 As a Tokyo 2020 Games Official Partner in the Gas and Gas Utility Services category, we will contribute to the success of this event as well as creating attractive urban communities by supplying energy to the Tokyo metropolitan area. We view the Tokyo 2020 Games as an opportunity to create an inclusive society based on mutual respect for one another that offers safe, vibrant and pleasant lifestyles for everyone. We will promote initiatives for realizing this vision while also ensuring that they are maintained as consistent and sustainable initiatives that will continue after the Tokyo 2020 Games.

Our corporate message of “Supporting you Always and bettering every day” expresses our aspiration to become a driving force behind daily life and society by meeting challenges and taking actions to bring about a vibrant, safe and pleasant future. To consistently fulfill this responsibility in an ever-changing society, we will address social needs and expectations from a global perspective and contribute to the creation of a sustainable society.

Takashi Uchida

Representative Director, President and CEO Tokyo Gas Co., Ltd. Special Feature

The Tokyo Gas Groupʼs Approach to the SDGs

The Tokyo Gas Group has maintained energy infrastructures as a pioneer in the city gas business. We remain ever-sensitive to the demands and expectations of the public and steadfastly pursuing CSR activities to address social issues through business activities in Japan and abroad, as stated in the Groupʼs Basic Policy on CSR. The United Nations adopted the Sustainable Development Goals (SDGs), which are based on an approach consistent with the Tokyo Gas Groupʼs Basic Policy on CSR. Confident that we can contribute to achieving the SDGs through the Groupʼs business activities, we have been reexamining the relationship of social issues to our operations in order to determine how to contribute to the SDGs in the context of our global business development. Specifically, as we strive to become a global total energy company, we will seek to facilitate the achievement of Goal 7 Affordable and Clean Energy by consistently expanding the use of natural gas and introducing renewable energy through our business energy, which we have cultivated over 130 years. A key requirement for supplying clean energy is the construction of a robust energy infrastructure. We therefore intend to contribute to Goal 9 Industry Innovation and Infrastructure by constructing highly reliable, disaster-resilient infrastructures and Goal 11 Sustainable Cities and Communities by developing sustainable communities based on highly efficient energy systems and services. By pursuing these initiatives, we will also focus on advancing the achievement of Goal 13 Climate Action. As part of its efforts to promote CSR, the Tokyo Gas Group will broaden employee awareness of SDGs, while continuously rising to the challenges posed by the SDGs toward achieving the sustainable development of society.

As we strive to become a total energy company, we will focus on contributing to Goals 7, 9, 11 and 13 through our energy business. We will also promote fundamental initiatives for enhancing compliance, diversity, work style reform and other aspects in our efforts to achieve Goals 5, 8, 10, 16 and 17. About the SDGs

The Sustainable Development Goals (SDGs) were adopted as long-term goals for the period from 2016 to 2030 by 193 member nations including Japan at the United Nations Headquarters in September 2015. The SDGs consist of 17 goals and 169 targets. The SDGs are based on the principle of realizing a world in which no one will be left behind, and companies as well as countries are expected to contribute their human resources, technologies and capital toward attaining this vision. In Japan, the cabinet decided to establish the Sustainable Development Goals Promotion Headquarters, headed by Prime Minister Abe, in 2016 and formulated a government-led action plan. The Keidanren (Japan Business Federation) has also revised its Charter of Corporate Behavior to accomplish the goals and requires practical action from companies.

To attain the global goals for creating a sustainable society, it is important to enhance energy security, improve energy efficiency and environmental friendliness, develop innovative systems and reduce costs. Smart energy networks (SENs), based on renewable energies, offer a solution for addressing these issues, and verification tests are currently underway in several regions and towns to realize this concept. The Tokyo Gas Group has spearheaded the initiative on SENs as a total energy company.

Next-generation Urban Development Underway at the Tamachi Smart Energy Park

Tokyo Gas constructs its smart energy systems around a combined heat and power (CHP) system in which heat and electricity are locally generated and consumed. The energy system is optimized to meet the needs of each community by linking heat, electricity and information in a single network, making maximum use of renewable and untapped energy and implementing energy management based on ICT. SEN is attracting significant attention as a standard for next-generation urban development that can improve energy efficiency, environmental friendliness and disaster resilience while also addressing social challenges at the community level. The northern district adjacent to the east exit of Japan Railwayʼs Tamachi Station is the site of offices, public facilities, hotels and hospitals amidst lush greenery. This is the Tamachi Smart Energy Park, built on the former site of Minato Wardʼs public facility and our research facility under the concept of creating a disaster-resilient community with a low carbon footprint in a government- private sector initiative led by Tokyo Gas Engineering Solutions Corporation, a wholly-owned subsidiary of Tokyo Gas. The area is divided into the residential center zone (Block I) and the new city center zone (Block II) based on the Community Development Vision for the area formulated by the wardʼs government in October 2007, and development has continued through various stages.

Balancing Highly Efficient Energy Use with Advanced Urban Functions

The Smart Energy Center that supplies power to the Tamachi Smart Energy Park has adopted a cogeneration system that produces heat and electricity from clean city gas while making maximum use of renewable energy as well as untapped energy, a unique source of local energy. In specific terms, water heated by solar power is used as an energy source for air conditioning and water heaters. As for untapped energy, we utilize local underground tunnel water, which is maintained at steady temperatures throughout the year, as a source of heat and as cooling water to raise energy efficiency. In addition, the Smart Energy Network Energy Management System (SENEMS®) serves as the control tower, providing centralized management over the energy needs and air conditioning systems of each building as well the energy supply and demand of the Smart Energy Center, thereby contributing to reducing energy consumption and CO2 emissions for the entire community. Even in times of disaster or emergencies such as power outages, cogeneration can secure a stable supply of heat and electricity. Plans are underway to further enhance energy security by constructing a backup system that will enable the two Smart Energy Centers to mutually supply heat and electricity in the event of a shortage in either Block I or Block II.

*1 Smart Energy Network Energy Management System

*2 CHP systems Contributing to Six Sustainable Development Goals

Smart Energy Networks not only offer direct benefits related to energy, such as cutting utility costs, but also generate added value from environmental, social and economic perspectives. This locally generated value has particular relevance to six of the 17 SDGs, and Tokyo Gas will seek to help achieve these six goals by providing SENs as a total energy company.

Contributing to Six Sustainable Development Goals

Contribute to regional economic development and job creation by generating added value for the community Support sustainable economic activity by adopting innovative technologies that make optimum use of energy

Contribute to the creation of a community that is pleasant to live in by improving disaster resilience and concentrating city functions, including energy

Contribute to reducing the communityʼs carbon footprint by incorporating local renewable energy sources

Contribute to achieving the vision and goals in collaboration with various community partners

We will contribute to achieving the SDGs by creating Voice attractive communities that society needs

From the planning stages of new SEN projects to construction, I am responsible for project management. SENs offer low carbon footprints and high resilience to disasters, which can revitalize a community and enable us to support the energy aspects of developing attractive communities that society needs and to contribute to the achievement of the SDGs. My work is highly rewarding. SENs involve the use of new technologies and Masashi Bansai unconventional methods, so it is important to enable Smart Energy Network System our customers, designers, contractors and others Department, Tokyo Gas Engineering Solutions involved in the project to fully understand the concept Corporation and realize its value. For this reason, we always begin the construction of an SEN by forming an SEN Working Group for all concerned in each project and proceed by building consensus. In communities where SENs have already been constructed, such as in Tamachi and Kiyohara, the recognition we gain from community residents and people in neighboring areas will lead to further expanding the SEN. We will continue to develop good partnerships with everyone involved through community development, emphasizing the diverse benefits an SEN delivers in terms of local environmental, social and economic aspects, and thereby contribute in various ways to achieving the SDGs. We have recently noted a rising number of collaborations between companies and local governments to meet social challenges by concluding comprehensive partnership agreements. While local communities face diverse issues, expectations have been rising for the roles that companies can play in building a sustainable society, which in turn requires that they demonstrate their capacity to take action and show solid results. The Tokyo Gas Group has consistently contributed to developing communities by fully utilizing local characteristics at each base of its operations. In March 2018, we concluded a comprehensive partnership agreement with Tsukuba City to pursue collaborative projects in six areas. This is the third city with which the Tokyo Gas Group has signed a comprehensive partnership agreement, following Fujisawa City in Kanagawa Prefecture and Kokubunji City in Tokyo.

Collaborating in Six Areas Including the Environment and an Inclusive Society

Since it supplied gas through the former Tsukuba Gakuen Gas Corporation, the Tokyo Gas Group has collaborated with Tsukuba City on various projects, including environmental protection and disaster prevention. The comprehensive partnership agreement concluded among Tsukuba City, the Tsukuba Branch Office of Tokyo and ENESTA Tsukuba (Tokyo Gas Livingline Co., Ltd.) on March 28, 2018, confirmed that the parties will seek to revitalize the community and enhance public services in the following areas: (1) environmental protection, (2) education, (3) creation of an inclusive society, (4) disaster prevention and countermeasures, (5) improvement of physical health and promotion of sports, and (6) development of a sustainable community by revitalizing the local community and enhancing public services. We have launched a new project under this agreement in which we will apply the Groupʼs expertise to community development.

Incorporating the SDG Principles to the Comprehensive Partnership Agreement

During the signing ceremony at the Tsukuba City Hall, Mayor Tatsuo Igarashi expressed his belief that incorporating the SDG perspective into the latest agreement will create a model for future comprehensive partnership agreements. Several factors led to this latest agreement prior to the ceremony. On February 19, Tsukuba City announced its Vision for a Sustainable City, which incorporates the SDGs, and the Tsukuba City Council passed a resolution during its regular March session calling for initiatives aimed at reflecting the SDG principles in the Tsukuba City administration. Moreover, the inclusive spirit of “leaving no one behind” as the basic principle of the SDGs is consistent with Tsukubaʼs vision of developing a sustainable community and closely aligns with the Tokyo Gas Groupʼs stance of addressing social issues through its business. Going forward we will help revitalize the local community and create an inclusive society by effectively utilizing the Tokyo Gas Groupʼs know-how and programs related to the environment, disaster prevention and health in order to develop projects for creating an inclusive society. These would include offering opportunities to experience para sports, projects for improving health and environmental education seminars. Areas of Collaboration SDGs

Environmental preservation

Education

Creation of an inclusive society

Disaster prevention and countermeasures

Improvement of health and promotion of sports

Other areas related to the development of a sustainable community by revitalizing the local community and enhancing public services

Collaborating with Various Stakeholders to Develop a Voice Sustainable Community

Since the days of the former Tsukuba Gakuen Gas Corporation, Tokyo Gas has worked with Tsukuba City to pursue local development activities as a company closely attuned to local needs. To further bolster our collaboration toward our goal of developing a sustainable community, a comprehensive partnership agreement was concluded among Tsukuba City, Tokyo Gas and Tokyo Gas Livingline on March 28, 2018. Under the agreement, we plan to revitalize the local community and enhance our public service by drawing Towako Sawada from the Tokyo Gas Groupʼs track record in the Manager, Planning and Management Section, environment and health improvement as well as its Policy Innovation Department, expertise on popularizing para sports. City of Tsukuba In June, Tsukuba City was selected as a “FutureCity” under an SDG initiative of the Japanese government, which recognized the city for its stance on developing a sustainable community in collaboration with various stakeholders, including private companies such as Tokyo Gas. Looking ahead, Tsukuba City will promote pioneering initiatives for attaining the SDGs. Sustainable community development cannot be accomplished by municipal governments alone; it requires involving companies, organizations and individuals in initiatives that engage the entire community. To do that, we will start by raising citizen understanding of SDGs by taking advantage of our latest comprehensive partnership agreement. The Tokyo Gas Group Value Chain

For more than 40 years since it first introduced LNG to Japan in 1969, the Tokyo Gas Group has worked to establish and advance its LNG value chain in an effort to spread and expand the use of natural gas, which excels in environmental soundness and supply security. The benefits of using LNG as a feedstock for city gas are as follows.

Benefits of LNG as Feedstock for City Gas

About LNG

LNG is produced by cooling natural gas, which is primarily composed of methane, to its liquid state. Methane is a gas at zero degrees Celsius under one atmospheric pressure and changes into a liquid when cooled to 162 degrees below zero Celsius, its cubic volume diminishing by six hundred times. Using this property to transport natural gas in the form of LNG on carriers allows for the transport and use of massive volumes of natural gas in regions where it cannot be delivered via pipelines.

Low Pollution LNG is a clean source of energy without any hazardous substances such as SOx. When burned, it produces 20% to 40% less CO2 compared to oil, coal and other fossil fuels.

Comparison of Emissions during Combustion (Coal = 100)

Source: Agency for Natural Resources and Energy, Energy White Paper 2013

Link ▶ Environmental Advantages of City Gas in Terms of Lifecycle CO2 Emissions Supply Security The abundance of natural gas reserves around the world ensures a stable supply of raw material, which is fundamental to providing a long-term supply of city gas to customers. Also, the calorific value of city gas produced from LNG today is 2.15 times* higher than that of the gas initially produced and supplied by Tokyo Gas. This has increased our transport and storage capacity, enabling us to respond efficiently to any rise in demand. *Calorific value of gas produced by Tokyo Gas

Calorific value of current city gas based on LNG: 45 MJ/m3 (10,750 kcal/m3)

Calorific value of gas initially produced by Tokyo Gas: approx. 21 MJ/m2 (5,000 kcal/m2)

Economic Advantages of Production City gas using LNG as feedstock is produced by pouring seawater to vaporize LNG stored in a tank at minus 162°C and adjusting the calorific value. The process does not require large-scale manufacturing facilities, thereby keeping production costs down.

High Efficiency of Transport After natural gas is vaporized to produce city gas at the LNG terminal, it is directly delivered to the point of consumption through pipelines, thus causing no loss due to energy conversion or transportation. The Tokyo Gas Group Value Chain

The Tokyo Gas Groupʼs LNG Value Chain

Long-term Contracts In order to source natural gas to meet demand flexibly and competitively, we work with diverse players in Japan and abroad while diversifying our procurement sources, contract conditions, LNG networks and other factors. LNG Procurement Volume

Key Initiatives Contributing to the Sustainable Development of Society

LNG procurement to ensure stable and affordable supply Reduction of GHG emissions from gas fields and liquefaction facilities of LNG suppliers Conservation of biodiversity in the vicinity of LNG sources Darwin LNG Project

LNG Carriers Owned and The Tokyo Gas Group owns and operates its own fleet of Operated by Tokyo Gas LNG carriers, allowing LNG to be shipped swiftly and flexibly.

Key Initiatives Contributing to the Sustainable Development of Society

Reduction of GHG emissions from transport of LNG by carriers Conservation of biodiversity through control of ballast Energy Horizon water discharged from LNG carriers Storage Capacity of LNG Terminals Power Generation Capacity (Own Stake)

By receiving LNG and constantly producing We operate high-efficiency combined cycle city gas, the Group contributes to energy natural gas-fired power stations utilizing our security in the Tokyo metropolitan area. Our LNG procurement capabilities and LNG four LNG terminals at Negishi, Sodegaura, terminals, pipelines and other facilities. In Ohgishima and Hitachi function as mutual addition, we generate electricity using wind backups for each another, ensuring power and other renewable energy uninterrupted city gas supplies even in the resources. event of a power failure or other incidents.

Key Initiatives Contributing to the Key Initiatives Contributing to the Sustainable Development of Society Sustainable Development of Society

Augmentation and development of LNG Augmentation and development of capacity terminal storage capacity to ensure stable to ensure stable power supply supply Soil pollution control Prevention of production problems due to Reduction of GHG emissions from power natural disasters and other causes stations and conservation of biodiversity Reduction of GHG emissions from city gas production, promotion of resource saving and recycling and conservation of biodiversity

Ohgishima Power Station Kawasaki Natural Gas Power Generation Co., Ltd.

Sodegaura LNG Terminal Ohgishima LNG Terminal

Tokyo Gas Yokosuka Power Tokyo Gas Baypower Co., Co., Ltd. Ltd.

Negishi LNG Terminal Hitachi LNG Terminal

Wind power facility at Sodegaura LNG Terminal

Note: Our pipeline network is shared with gas retailers. Note: Power is transmitted via a grid operated by general power Total Length of Pipelines transmission utilities.

We are further developing our pipeline network and using LNG tanker trucks and coastal tankers to ensure the safe and uninterrupted delivery of city gas. In addition, we are expanding our wholesale distribution of gas to other gas suppliers.

Key Initiatives Contributing to the Sustainable Development of Society

Development of pipeline network and safety measures to ensure stable supply Prevention of supply problems due to natural disasters and other risks Reduction of emissions of excavated soil during gas pipeline construction and promotion of resource saving and recycling

High-pressure pipeline LNG tanker truck

Gas Sales Volume We develop energy solutions by combining distributed energy systems such as fuel cells and combined heat and

power (CHP) systems* that reduce CO2 emissions, energy 3 Residential 3,570 million m consumption and peak load, with the wider use of Commercial 2,722 million m3 environmentally friendly gas appliances and renewable Industrial 7,290 million m3 sources of energy. Alongside selling energy in the form of Wholesale 1,985 million m3 gas and electricity, we offer new value and services that enrich the lives of customers. Number of City Gas Customers

*Gas engine-based CHP systems generate electricity and recover waste heat generated as a by-product.

Electric Power Sales Volume Key Initiatives Contributing to the Sustainable Development of Society

Ensuring safety at customer sites Number of Electricity Customers Reduction of GHG emissions and promotion of resource saving and recycling at customer sites Contributing to meeting challenges in local communities Protecting the personal information of customers Ensuring quality and customer satisfaction Residential Commercial Industrial and other Wholesale purposes

Note: Data for long-term contracts and for LNG carriers owned and operated by Tokyo Gas are as of the end of May 2018. Data on LNG procurement volume is the actual result for fiscal 2017. All other data are as of the end of March 2018.

Overseas Upstream Operations and Midstream/Downstream Operations

Overseas Business Expansion In addition to sourcing gas from large-scale LNG projects and acquiring participating interests, we are diversifying and expanding our sources and upstream projects overseas through involvement in unconventional gas such Major Projects as shale gas, and in small- and medium-scale LNG projects. We also leverage the Groupʼs technologies and expertise in the total energy business to develop energy infrastructure and energy solutions for customers expanding their overseas operations, particularly in Southeast Asia and North America. By extending our LNG value chains overseas, we seek to contribute to both the flexible procurement of LNG for Japan and stable supplies of energy in the countries where we operate.

Key Initiatives Contributing to the Sustainable Development of Society

Development of energy infrastructure Prevention of bribery and corruption of foreign public officials Contributing to meeting challenges in local communities Note: Data are as of the end of March 2018.

Key Initiatives Relevant to the Entire LNG Value Chain to Contribute to the Sustainable Development of Society

●Enhancement and Strengthening of Corporate Governance ●Respect for Human Rights ●Promotion of Compliance ●Ensuring of Information Security ●Promotion of Employeesʼ Occupational Safety and Health Activities ●Development of Global Human Resources ●Development of Technologies Contributing to Safety and Environmental Friendliness Corporate Governance

Corporate Governance Systems

Basic Policy on Corporate Governance As an “Energy Frontier Corporate Group” focused on natural gas, Tokyo Gas shall actively contribute to the creation of pleasant lifestyles and an environmentally friendly society and work to ensure continued development while consistently earning the trust of customers, shareholders, and society. Under its management philosophy, Tokyo Gas seeks to fulfill and bolster its corporate governance in order to increase its corporate value by ensuring legality, soundness and transparency of management. Simultaneously, it engages in appropriate, prompt decision making, efficient business operations, enhancement of the audit and supervisory functions, and clarity of responsibility of management and operations.

Outline of Implementation System of Corporate Governance To increase the speed and effectiveness of management decision-making, we significantly reduced the number of directors and invited outside directors to serve on the Board of Directors to improve transparency as well as to reinforce the supervision of business operations. Our Board of Directors now has eight members, including three outside directors. Furthermore, we have established the Advisory Committee, comprised of two outside directors, one outside Audit & Supervisory Board member, the chairman and the president to select candidates for officers in a fair and proper manner in response to an inquiry by the Board of Directors. It also deliberates on the salaries of officers, based on the Basic Policy on Officer Remuneration, and submits decisions to the Board of Directors. Our audits are conducted based on stringent standards by five Audit & Supervisory Board members, with three of them being outside members. The Corporate Executive Meeting, which is held once a week in principle, deliberates on matters requiring approval from the Board of Directors as well as important management-related issues to achieve accurate, prompt decision making and efficient business execution. In business execution based on the resolution of the Board of Directors, by introduction of an executive officer system, the Board of Directors delegates substantial authority to executive officers in their designated criteria of responsibility by resolution. On the other hand, the directors supervise those executive officers in an appropriate manner and in accordance with a report they receive on the status of business execution by executive officers, if needed, which is submitted to the Board of Directors. (The term of office of directors and executive officers is set at one year to clarify management and executive responsibilities.) We have established the Management Ethics Committee, chaired by the president, and other in-house committees to address key management issues such as compliance, risk management, customer satisfaction and safety, and to promote transparent management and create a flexible and open corporate culture. These committees facilitate the sharing of information within the Group as well as deliberations and adjustments regarding the Groupʼs overall direction. Tokyo Gas has adopted and established a highly objective and transparent governance systems to invite outside directors and Audit & Supervisory Board members to create multiple layers in its audit and supervisory functions. System for Promoting Corporate Governance (as of June 28, 2018)

Corporate Governance Overview (as of June 28, 2018) Director 3

Audit & Supervisory External 3 Board Member (3) 13 Board of (independent Directors officers) Director 5

Internal Audit & Supervisory 2 Board Member

Director 2

Audit & Supervisory External 1 Board Member 5 Advisory (1) Committee (independent members officers) Director, Chairman of the Board 1

Representative Director, 1 President and CEO

Representative Director, 1 11 President and CEO Corporate Executive Executive Vice President 2 Meeting Senior Managing Executive Officer 2 members Managing Executive Officer 6

Audit & Supervisory 3 External Board Member 5 Audit & (3) Supervisory (independent Board officers) members Audit & Internal Supervisory 2 Board Member Compliance with Japanʼs Corporate Governance Code Tokyo Gas has formulated the “Basic Policy on Corporate Governance” in compliance with Japanʼs Corporate Governance Code for listed companies. To achieve sustainable growth and increase its corporate value over the medium- to long-term, we will collaborate with our stakeholders, ensure appropriate information disclosure and transparency, and fulfill the commitment of the Board of Directors, and at the same time, we will pay due consideration to communicating and gaining the understanding of stakeholders including shareholders. Our response to each of the principles of Japanʼs Corporate Governance Code as of June 2018 is summarized below.

Location of Disclosure

Basic Policy Corporate Principles on Website Governance Corporate Report Governance

Principle 1-4 Cross-Shareholdings Article 20 ●

Related Party Principle 1-7 Article 21 ● Transactions

(1) Management Philosophy, strategies and medium- and ● long-term management plans

(2) Basic views and guidelines on Article 2 ● corporate governance

Principle 3-1 (3) Policy and procedures Full Disclosure for determining officer ●Article 15● remuneration

(4) Policy and procedures for election Article 6 ● (nomination) of Article 11 officers

(5) Reasons for election and nomination of ● individual officers

Scope of Matters Delegated to Supplementary Principle 4-1-1 Article 4 ● Management by the Board of Directors

Independence Standards Principle 4-9 and Qualification for ●Article 6● Independent Directors

Article 4 View on the Board of Supplementary Principle 4-11-1 Article 5 ● Directors as a Whole Article 6

Concurrent Posts Held by Directors and Audit & Supplementary Principle 4-11-2 ● Supervisory Board Members

Analysis and Evaluation of Supplementary Principle 4-11-3 Effectiveness of Board of Article 8 ● Directors as a Whole Policy for Training of Directors and Audit & Supplementary Principle 4-14-2 Article 16 ● Supervisory Board Members

Policy for Constructive Principle 5-1 Dialogue with Article 19 ● Shareholders

Links ▶ Corporate Governance Report (PDF︓308KB) ▶ Basic Policy on Corporate Governance (PDF︓117KB) ▶ Annual Reports ▶ Independence Standards for Outside Officers (PDF︓59KB) ▶ Basic Policy on Officer Remuneration Corporate Governance

Board of Directors

In 2002, we significantly reduced the number of directors to increase the speed and effectiveness of management decision-making. In addition, we have adopted an executive officer system and invited outside directors to serve on the Board of Directors to improve transparency and reinforce the supervision of business operations. As of June 2018, the Board of Directors had eight members, including three outside directors. Their respective terms of office are set at one year.

Officer Remuneration System

In April 2005, we formulated the Basic Policy on Officer Remuneration not only to clarify their management responsibilities for Company performance but also to ensure objectivity and transparency regarding remuneration (the policy was updated in February 2012, with some expressions revised). Under this policy, we reexamined the officer remuneration system, centering on the abolishment of allowances for retirement benefits for officers and the introduction of a performance-linked remuneration system. To reflect shareholdersʼ perspectives in management, all directors excluding outside directors are required to purchase Company stock every month and maintain ownership of this stock during the term of their service in accordance with the Guidelines for Stock Purchases.

Total Value of Remuneration by Type (Million Yen) Total Value of Number of Types of Directors Remuneration Base Stock Retirement Bonuses Directors Subject (Million Yen) Salary Options Allowance to Remuneration

Directors (excluding outside 464 386 - 78 - 10 directors)

Audit & Supervisory Board members 74 74 - - - 3 (excluding outside members)

Outside directors 34 26 - 8 - 3

Outside Audit & Supervisory board 32 32 - - - 4 members

Note 1: Total remuneration above includes payments to two directors and two Audit & Supervisory Board members (including 1 outside member) who retired at the conclusion of the 217th Ordinary General Shareholderʼs Meeting.

Note 2: The total basic monthly salary for all directors, including outside directors, approved at the 205th Ordinary General Shareholderʼs Meeting, is to be a maximum of 50 million yen per month, and total bonuses for all directors approved at the 206th Ordinary General Shareholderʼs Meeting is to be a maximum of 90 million yen per year.

Note 3: The total basic monthly salary for all Audit & Supervisory Board members, including outside members, approved at the 190th Ordinary General Shareholderʼs Meeting, is to be a maximum of 12 million yen per month. Executive Officer System

By adopting an executive officer system, we have delegated substantial authority over business operations in individual business departments to the corresponding executive officers and established clear lines of responsibility. Executive officers are assigned to ensure that Company decisions on business matters are executed quickly and reliably. These officers work to maximize Group value in accordance with policies determined by the Board of Directors. To ensure clear accountability, executive officers are appointed for terms of one year.

Advisory Committee

We have established the Advisory Committee, which comprises five members with outside members in the majority. These members are appointed by the chairman, president and Board of Directors. In response to inquiries from the Board of Directors, the committee deliberates on issues such as the appointment of officer candidates and officer remuneration, thus ensuring management transparency and objectivity.

Corporate Executive Meeting

The purpose of the Corporate Executive Meeting is to deliberate on measures pertaining to corporate management issues. It is composed of 11 executive officers with operational responsibilities. In addition, two full-time Audit & Supervisory Board members attend the committee meetings.

In-house Committees

Important management issues concerning the Companyʼs overall policies require investigations, studies and arrangements spanning multiple business departments, subsidiaries or business domains, and to that end we have established cross-divisional in-house committees to enhance the consistency, effectiveness and cohesiveness of our policies. These committees are chaired either by an executive officer with operational responsibility or, in the case of the three most important committees responsible for ethics, safety, and customer satisfaction, by the president. The matters considered by each committee are reported as necessary to the Corporate Executive Meeting.

Links ▶ Corporate Governance Report (PDF︓555KB) ▶ Basic Policy on Corporate Governance (PDF︓153KB) ▶ Independence Standards for Outside Officers (PDF︓59KB) Corporate Governance

Mutual Collaboration among the Audit & Supervisory Board Audit, Internal Audit, and Independent Auditors' Audit

In order to enhance the effectiveness of three-way auditing (Audit & Supervisory Board Audit, Internal Audit, and Independent Auditorsʼ Audit) as well as to improve the quality of audits as a whole, Tokyo Gas strives to strengthen the mutual collaboration between each audit in areas such as the reporting of audit plans and results as well as exchanges of opinions and witnessing of audits, as shown in the diagram below.

Audit & Supervisory Board

The Audit & Supervisory Board consists of five members, including three outside auditors, and the Audit & Supervisory Board Office was established to provide support independent from business execution with five dedicated staff members (as of March 31, 2018). In line with the Corporate Auditorʼs Audit Standards, the members attend the Board of Directors, the Corporate Executive Meeting, and other important meetings. They also state their opinions relating to legality and other perspectives as necessary, conduct research into the state of operations at the head office, major business offices, subsidiaries, and hold discussions with the Representative Director to exchange opinions on a regular or ad-hoc basis. The Audit & Supervisory Board members cooperate closely with the Internal Audit Department and independent auditors and strictly audit the execution of duties by the directors to enhance and strengthen high-quality corporate governance systems. Internal Audit Department

Our company has established the Internal Audit Department as an internal audit body (with 35 assigned staff members as of April 1, 2018, including those in charge of operations in response to the Internal Control Reporting System) with a structure that can effectively implement specialized audits from the perspectives of accounting, operations, compliance, information systems, and risk management, among others.

Procedures and Status of Internal Audits

Internal audits are made of Tokyo Gas and its subsidiaries, which are completed over a three- to six- year cycle based on the annual audit resolved by the Board of Directors. The results of these audits are reported not only to the president, Corporate Executive Meeting, Board of Directors, and Audit & Supervisory Board but also to the managers of all audited offices. Offices are required to submit their responses to recommendations arising from these audits, and progress on implementing these responses is followed up and reported to the Corporate Executive Meeting the following year. In fiscal 2017, five divisions of Tokyo Gas and four subsidiaries were audited, four divisions and six subsidiaries were given follow-up audits, and issue-specific audits were conducted on the state of internal control at overseas subsidiaries. In principle, the appropriateness of our internal audit procedures is assessed by external experts once every five years.

Collaboration on Audits within the Group

In the Tokyo Gas Group, Audit & Supervisory Board, Audit & Supervisory Board of subsidiaries, and the Internal Audit Department periodically exchange opinions. We have established a system that ensures efficient and effective audit activities across the Group through close ongoing coordination and liaison meetings. In fiscal 2017, we held four liaison meetings. Corporate Governance

Internal Control System

To secure the soundness and transparency of our management and realize our management philosophy, Tokyo Gas has formulated the Basic Policy on Development of Corporate Structures and Systems for Ensuring Appropriateness of Operations (Internal Control System) for Tokyo Gas Group and is applying this policy in an appropriate manner.

Link ▶ Basic Policy on Development of Corporate Structures and Systems for Ensuring Appropriateness of Operations (Internal Control System) for Tokyo Gas Group

Compliance with the Internal Control Reporting System

To comply with the Internal Control Reporting System under the Financial Instruments and Exchange Act, Tokyo Gas follows the internal controls basic framework presented in Financial Services Agency standards, arranges and administers internal controls related to financial reporting, assesses their status and improves them as necessary. In the internal controls report for the previous fiscal year prepared under this system, which found our internal controls regarding financial reporting to be effective, the auditors expressed the opinion that all the material points were represented appropriately. Corporate Governance

Business risks are becoming more diversified with the rapid social changes underway. Tokyo Gas has established a risk management system to identify and minimize the impact of potential risks that could affect our business operations. Also, we are developing a crisis management system so that we can continue operations and quickly resume normal business activities even during unforeseen circumstances such as natural disasters and pandemics.

Risk Management System

Enterprise Risk Management System Tokyo Gas has set up an enterprise risk management (ERM) system and identified major risks in its Risk Management Regulations. The Risk Management Committee, established to advance our ERM, periodically checks on progress regarding the establishment and operational status of the ERM system, reports results to the Corporate Executive Meeting and obtains the necessary approvals. Under this framework, around 150 risk management promotion officers are deployed in the business departments of Tokyo Gas and its subsidiaries to promote ERM. Each year, we assess risks and the implementation and improvement status of countermeasures. This system facilitates the steady implementation of the ERM-PDCA cycle.

Enterprise Risk Management System Crisis Management System Since the Company provides public services that are essential lifelines, it has for many years also operated a crisis management system that serves as a response system in the event of an accident or other risk-related incidents. Specifically, we formulated the Emergency Response Regulations, with which the Emergency Response Organization will respond accordingly and immediately in the event of a crisis,including major natural disasters such as an earthquake, production or supply disruptions arising from major accidents at LNG terminals or pipelines, influenza outbreaks, terrorism, failures in mission-critical IT systems, and compliance problems. The Company periodically conducts training on major risk response measures. We have also formulated a business continuity plan (BCP), which outlines how the Company will respond in the event of a major earthquake of the magnitude assumed by Japanʼs Cabinet Office, major accident disrupting gas supply, widespread power blackout, influenza outbreak, or large-scale mission-critical IT system stoppage. This plan is in place to reinforce our risk management system.

Emergency Response Organization

Promoting Risk Management

Provision of Risk Management Training The Tokyo Gas Group provides training programs to promote risk management. In fiscal 2017, we held training for Risk Management Promotion Officers and newly appointed general managers and managers (newly appointed mid-level managers) in each department of the Company, and for subsidiaries so that they could appropriately perform necessary risk management in their respective positions and enhance their risk management capabilities.

Escalation Rules To further enhance a corporate and organizational culture that encourages appropriate responses to managing risks, we established our clearly defined Escalation Rules, which require that information on any apparent major risk, such as accidents and disasters, be reported to the appropriate supervisory staff in a timely and appropriate manner.

Link ▶ Major Group-wide Risks CSR at the Tokyo Gas Group

The Tokyo Gas Group believes that promoting CSR is synonymous with practicing its Management Philosophy and Corporate Action Philosophy and intends to contribute to society through its daily business activities, thereby achieving its public mission and fulfilling its social responsibilities as an energy company.

Basic Policy on CSR

Tokyo Gas Group believes that the foundation of its CSR lies in fulfilling its public mission and social responsibilities by practicing the Management Philosophy and Corporate Action Philosophy in its daily operations. We aspire to achieve continuous corporate growth by winning the unwavering trust of customers, shareholders and society, and we strive to contribute to the sustainable development of society by consistently meeting societal demands and expectations in Japan and abroad while steadfastly tackling social challenges through our business activities.

Promoting CSR and Implementing Our Management Philosophy and Corporate Action Philosophy

Management Philosophy

As a leading energy company with focus on natural gas business, the Tokyo Gas Group shall actively contribute to create a pleasant lifestyle and environmentally friendly society, maintain and enhance its trust from our customers, shareholders, and society. Corporate Action Philosophy

1． We will continue to grow while maintaining awareness of our companyʼs public mission and social responsibilities. 2． We will provide quality products and services, and always endeavor to improve customer satisfaction. 3． We will hold ourselves to high ethical standards, and fairly and transparently conduct corporate activities while observing both the letter and the spirit of related laws and ordinances. 4． We will contribute to alleviating global environmental problems as a leader in environmental management. 5． We will remain keenly aware of our obligations to be a good corporate citizen and work towards the betterment of society by contributing to community activities. 6． We will pursue continual innovation to promote a cost effective business approach that is both flexible and resilient. 7． We will aspire to build organizations that are based upon the full exercise of and respect for the talents, desires, and creativity of each and every employee.

Link ▶ Tokyo Gas Groupʼs Management Philosophy, Corporate Action Philosophy and Our Code of Conduct

The Tokyo Gas Groupʼs Vision of CSR Management The Tokyo Gas Group strive to achieve its public mission and fulfill its social responsibilities through its daily business activities as the foundation of its CSR. We also seek to maintain the security and safety of peopleʼs lives by providing a stable supply of energy, which is the foundation of daily life and industry, and to play our part in building a sustainable society by supplying energy that excels in terms of both environmental consideration and cost. As for our CSR, we have identified key CSR issues, or materiality, in accordance with standards such as the ISO 26000 international standard on social responsibility and international guidelines on information disclosure such as the GRI Guidelines. We signed the UN Global Compact*1 in March 2016 to add a global perspective to our CSR activities as a responsible member of the international community, and we will work to achieve the Sustainable Development Goals (SDGs)*2 as we elevate our standards of CSR management. *1 A global framework for attaining sustainable growth that consists of 10 principles in the four areas of human rights, labor, environment, and anticorruption. *2 17 goals and 169 targets to be met by 2030, adopted at the UN Sustainable Development Summit in September 2015.

Link ▶ Challenge 2020 Vision (PDF: 2,511 KB) ▶ The Tokyo Gas Group FY2018–2020 Medium-term management plan GPS 2020 (PDF: 6,848KB)

CSR Promotion System

Tokyo Gas established a CSR promotion system in October 2004 by setting up a CSR Promotion Committee chaired by an executive officer responsible for CSR. In December of the same year, the committee was reorganized into the Corporate Communications Promotion Committee under the CSR Section of the Corporate Communications Department. The committee, which is responsible for promoting CSR management, consists of a chairperson and 18 general managers drawn from associated departments. It discusses and shares information on important CSR matters throughout the Group, including the revision of key CSR activities, identification of materiality in light of internal and external changes, and the status of CSR efforts. Committee proceedings are reported to the Corporate Executive Meeting and the Board of Directors for deliberation and authorization as necessary. The Corporate Social Responsibility Section acts as the committee's secretariat to encourage action across the Group to meet society's expectations as determined by public information and consultation activities, such as stakeholder dialogues and publication of CSR reports. It also plans and organizes training sessions to raise awareness and knowledge of good CSR practice while promoting the understanding and realization of our basic CSR policy of serving society through daily business activities to cultivate a shared vision and sense of the Groupʼs direction among employees.

CSR Promotion System

CSR Management PDCA Cycle

We maintain a keen awareness of the evolving demands and expectations of society to discern the materiality of our CSR activities. In accordance with the direction of our business strategy, we set CSR KPIs and pursue them in the course of our business operations. Progress reports on our CSR initiatives and feedback gathered from stakeholders is then incorporated into our business activities to continue the cycle as our contribution to the sustainable development of society.

PDCA Cycle Link ▶ The Tokyo Gas Groupʼs Key CSR Activities and Materiality

Signing of the UN Global Compact

The Tokyo Gas Group engages in its CSR activities under the basic policy of contributing to the sustainable development of society by consistently meeting societal demands and expectations and steadfastly tackling social challenges through its business operations in Japan and abroad. In March 2016, Tokyo Gas declared its support for the UN Global Compact so that it could pursue CSR management from a global perspective as a responsible member of the international community. We will continue to support and practice the 10 principles in the four fields of human rights, labor, environment, and anti-corruption in our CSR management toward realizing a sustainable society.

Ten Principles of the UN Global Compact*

Principle 1 Businesses should support and respect the protection of internationally Human Rights proclaimed human rights. Principle 2 Make sure that they are not complicit in human rights abuses.

Principle 3 Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining.

Principle 4 Labor The elimination of all forms of forced and compulsory labour. Principle 5 The effective abolition of child labour.

Principle 6 The elimination of discrimination in respect of employment and occupation.

Principle 7 Businesses should support a precautionary approach to environmental challenges.

Principle 8 Environment Undertake initiatives to promote greater environmental responsibility.

Principle 9 Encourage the development and diffusion of environmentally friendly technologies

Principle 10 Anti-Corruption Businesses should work against corruption in all its forms, including extortion and bribery.

Link ▶ Ten Principles of the UN Global Compact

*UN Global Compact

The UN Global Compact was launched by then UN Secretary-General Kofi Annan at the World Economic Forum in 1999 and officially inaugurated by the United Nations in New York in 2000. As an international initiative designed to achieve “sound globalization” and “sustainable societies,” it calls on companies to implement their business strategies and activities in adherence to 10 principles in the four fields of human rights, labor, environment, and anti-corruption. Action on the Sustainable Development Goals (SDGs)

The UN Sustainable Development Summit held at the United Nations Headquarters in September 2015 was attended by the leaders of more than 150 member states and resulted in the adoption of “Transforming Our World: The 2030 Agenda for Sustainable Development.” This plan of action for people, the planet, and prosperity, consists of a declaration, 17 Sustainable Development Goals (SDGs), and 169 targets that businesses are also expected to sign up for and voluntarily work toward achieving. In light of the adoption of the SDGs, we reviewed the relationship between our business activities and global social challenges and determined our stance on contributing to the SDGs. The Tokyo Gas Group will continue to help tackle the challenges faced by society though its business activities.

Link ▶ The Tokyo Gas Groupʼs Contribution to the SDGs as a Total Energy Group Providing the Backbone for a Sustainable Society CSR at the Tokyo Gas Group

The Tokyo Gas Groupʼs Key CSR Activities and Materiality

The Tokyo Gas Group sets targets for each materiality of its CSR activities through its business and seeks ongoing improvements. Key CSR activities and materiality are revised each year based on a review that incorporates stakeholder comments.

Link ▶ Identifying New Materiality

Overview of Materiality Analysis Map and Key Activities Up to fiscal 2017, we promoted our CSR activities under the main policies for fiscal 2015–2017 for realizing our Challenge 2020 Vision, pursuing key CSR activities determined to meet social demands and expectations, and priority issues (materiality). Reasons for Designation of Materiality, and Scope of Impact

Scope of Impact

Major Stakeholders Government agencies and locals governments locals and agencies Government Universities and researchinstitutes Shareholders and Investors Local communities Business partners Group employees Customers Key Activities Materiality Tokyo Gas Group

Stable supply The pursuit of safety Provision of better products 1. and services Enhancement of 〇 〇〇〇〇〇〇〇 energy security Reasons for designation: ▶ Targets and Performance

Global warming countermeasures Promotion of resource saving Promotion of biodiversity 2. conservation Contribution to Promotion of environmental 〇 〇〇〇〇〇〇〇 the environment technologies development

Reasons for designation: ▶ Targets and Performance

Building communities and a way of life that is safe and secure Building a society and a way 3. of life that is good for the Contribution to environment 〇 〇×〇〇〇〇〇 local Enriching our life and culture communities

Reasons for designation: ▶ Targets and Performance

4. Respect for Human rights due diligence 〇 〇〇〇〇〇×〇 human rights Reasons for designation: ▶ Targets and Performance

Permeation and rigorous practice of compliance Prevention of bribery and corruption 5. Protection of personal Promotion of information 〇 〇〇〇〇〇〇〇 compliance

Reasons for designation: ▶ Targets and Performance

Promotion of diversity Development of human 6. resources Enhancement of Occupational safety and people-centered health 〇 〇〇〇× × ×〇 management base Reasons for designation: ▶ Targets and Performance

Process of Identification and Review of Materiality

■Comprehensively identify the issues by consulting the GRI G4 Sustainability Reporting Guidelines, GRI sustainability reporting standards, ISO 26000 and other relevant international guidelines on the social responsibilities of organizations as well as the SDGs and other social needs. ■Determine the level of impact associated with CSR-related social issues based on the business characteristics, strategies and scope of impact of each stage in the Tokyo Gas Groupʼs LNG value chain and narrow the issues down according to their material aspects.

■Examine the material aspects identified in Step 1. Assessment of stakeholder perspective based on questionnaire findings and other feedback. Determination of provisional priorities by relevant business departments. ■Map the results of the materiality assessment from the perspectives of stakeholders and the Tokyo Gas Group. Identify the material aspects to be addressed by the Group on a priority basis through internal consultations.

■Confirm the validity of material aspects that were identified based on an assessment by experts in relevant fields. ■Review the Groupʼs key CSR activities and define the materiality of each activity based on its material aspects. ■Finalize materiality by obtaining approval from the Corporate Communications Promotion Committee, the body driving CSR. ■Work with relevant business departments to determine targets (“CSR KPIs”) corresponding to the materiality identified through the process.

■Assess activities with respect to materiality based on CSR KPIs and disclose the results in the CSR Report. ■Conduct a review for each fiscal year based on the results of internal and external questionnaires, views of outside experts and SDGs and other international goals and guidelines. ■Utilize the results to review materiality and CSR KPIs toward incorporating them into business and improving the quality of reporting.

Link ▶ Expert Opinions (FY2015–FY2017)

Identifying New Materiality

In October 2017, we formulated the Tokyo Gas Group FY2018-2020 Medium-term management plan GPS2020, which led to identifying our new materiality. Starting in fiscal 2018, our PDCA cycles will be driven by assessing and improving initiatives based on our new materiality.

Major Changes from Our Materiality up to Fiscal 2017 1． We categorized our materiality into strategic issues and fundamental business issues. 2． We repositioned governance and compliance into our management base. 3． We determined the relevance between our materiality and the SDGs to which the Tokyo Gas Group contributes.

Contributing to SDGs through Initiatives on Materiality The Tokyo Gas Group will focus on SDGs 7, 9, 11 and 13 through its strategic initiatives, and SDGs 5, 8, 10, 16 and 17 through its fundamental initiatives. We will contribute to the SDGs through CSR management by determining their relevance to our new materiality. New Materiality and CSR KPIs

Materiality

Key Areas CSR KPIs

Goals to be attained by FY2020 Goals to be attained by FY2018

Stable supply of gas and electricity

・Maintain zero occurrence of serious ・Serious supply disruptions at supply disruptions at customer customer sites: 0 cases sites

・Maintain stable operations at Provide ・Stable operations at power plants power plants stable supplies Stable procurement of LNG of energy ・・Achieve stable, low-cost LNG Achieve stable, low-cost LNG in Japan procurement by pursuing procurement by pursuing and diversification in the areas of diversification in the areas of abroad sourcing, contract terms and LNG sourcing, contract terms and LNG Strategic networks networks Initiatives Construction of energy infrastructure in developing countries

・Provide support for the natural gas ・Provide support for the natural gas value chain in Southeast Asia value chain in Southeast Asia

Safety and disaster prevention

・・Earthquake-proofing ratio target Earthquake-proofing ratio target Construct for main and branch gas pipelines: for main and branch gas pipelines: a robust 88.25% or higher 87.55% energy platform Development of sustainable communities and comfortable living standards

・・Increase the cumulative total of Increase the cumulative total of regional development projects regional development projects ・・Provide services that ensure safety Provide services that ensure safety and comfort in daily lives and comfort in daily lives

Climate change countermeasures

・・Promote the use of natural gas and Promote the use of natural gas and introduce highly energy efficient introduce highly energy efficient gas appliances and systems to gas appliances and systems to reduce CO2 emissions at customer reduce CO2 emissions at customer sites by 8 million tons from FY2011 sites by 4.3 million tons from levels FY2011 levels

・Energy usage intensity at LNG ・Energy usage intensity at LNG terminals*1: 250 GJ/million m3 terminals: 220 GJ/million m3

・Heat sales intensity for district ・Heat sales intensity for district heating and cooling centers*2: 1.19 heating and cooling centers: 1.19 GJ/GJ GJ/GJ

・Energy usage at Tokyo Gas offices, ・Energy usage at Tokyo Gas offices, Reduce etc.*3: 1.71 GJ/m2 etc.: 1.69 GJ/m2 carbon for ・Consistently implement ・Reduction of CO2 emission factor society Environmental Sustainability at the electricity retail level as a Guidelines whole through ・Promote sales of products and services based on renewable energy ・Promotion of the wider use of energy, supply renewable energy supply renewables and initiatives including smart energy networks

Resource saving and recycling

・・Maintain industrial waste recycling Industrial waste recycling rate: rate at 95% or higher 95% or higher

・Maintenance of zero emissions at production plants (final disposal ・Final disposal rate: less than 1% rate of less than 1%)

Biodiversity conservation

・Promotion of biodiversity ・Consistently implement conservation activities along the Environmental Sustainability LNG value chain Guidelines

Creation of a lively organization

・Reduce to zero the number of employees working overtime in ・Reduce the number of employees excess of 80 hours per month and working overtime in excess of 60 reduce the number of employees to 80 hours per month by 25% working overtime in excess of 60 from FY2017 levels (Tokyo Gas Co., to 80 hours per month by 50% Ltd.) from FY2017 levels (Tokyo Gas Co., Ltd.) Fundamental Initiatives ・Promote flexible work styles by ・Enhance teleworking program and creating a teleworking expand eligibility (Tokyo Gas Co., environment for all employees by Ltd.) FY2020 (Tokyo Gas Co., Ltd.)

・Maintain ratio of employees ・Maintain ratio of employees receiving health checkups at 100% receiving health checkups at 100% as the foundation for health as the foundation for health management management

Sound stakeholder relationships ・Improve customer convenience based on the use of digital ・Promote operational improvements technologies and enhance based on customer feedback and customer service at direct contact customer satisfaction surveys points

・Engage in dialogue with ・Engage in dialogue with shareholders and investors in shareholders and investors in accordance with the Japanese accordance with the Japanese Corporate Governance Code Corporate Governance Code

・Develop and implement social ・Develop and implement social action programs aimed at solving action programs aimed at solving social issues social issues

Achievement of our public mission as an energy company

・Respond appropriately to trends in ・Respond appropriately to trends in personal information protection in personal information protection in Japan and overseas Japan and overseas

・Reflect CSR survey results in ・Conduct a CSR survey for supply implementing the PDCA cycle for chain management and analyze supply chain management the results

*1 Energy consumption per unit of gas produced.

*2 Energy consumption per unit of gas sold.

*3 Energy consumption per total floor area.

Expert Opinions

Mariko Kawaguchi Chief Researcher, Daiwa Institute of Research, Inc.

On the Newly Defined Key CSR Activities and Materiality “Stable supplies of energy” is a significant key phrase for the Companyʼs business, and “disaster” and “accidents” are aspects of particular concern to consumers that require special attention when considering materiality. While not generally well known, the ability of Tokyo Gas to deliver a stable supply of energy is supported by measures for dealing with earthquakes and preventing gas leaks and explosions. The Company should recognize these measures as a corporate strength and incorporate them into its materiality. It could also focus on its ability to combine the use of district heating and cooling systems, solar- based thermal energy and smart meters to supply stable and clean energy to cities and local communities as another strength. By supplying gas to consumers, Tokyo Gas directly supports bathing and cooking as well as housekeeping and parenting in general. In this regard, the Company could encourage male employees to take childcare leave, for example, as it may lead to the secondary benefit of discovering potential customer needs and developing new business. Breaking away from gender stereotypes in daily life may ultimately benefit the Companyʼs business. Tokyo Gas is uniquely positioned to support diversity within its own organization as well as across society as a whole. Another promising idea is to add “food education” to its materiality. “Sustainable procurement” is a key phrase of the Olympic and Paralympic Games Tokyo 2020. As an Official Partner, Tokyo Gas should work to enhance sustainability and traceability in procurement for the Games. One example would be to secure an appropriate working environment for staff involved in construction work and services as part of its supply chain management in Japan as well as from the standpoint of human rights. Actions Required in the Future From here on, Tokyo Gas will be expected to move beyond identifying and disclosing its materiality to incorporating it into its management strategy and medium-term plans. Natural gas has a competitive advantage as a low-carbon source of energy compared to coal or oil, which are currently in the international spotlight. However, the Company must present its vision of how it will remain in business when society begins to demand zero-carbon strategies after 2030. As for SDGs, the Company should do more than simply linking them to its materiality; it should instead pursue initiatives focused on the outcome, the positive impact on society of its business activities.

Toshihiko Goto CEO, Sustainability Forum Japan

On the Companyʼs SDG Initiatives There are three stages in pursuing SDG initiatives: (1) Identify the linkages between existing corporate initiatives and the SDGs; (2) Compare the Companyʼs materiality issues with the SDGs and consider the business opportunities; and (3) Recognize the SDGs as social issues and reflect them in the Companyʼs business activities and management. Linking business activities to the SDGs only for the sake of creating the appearance of contributing to them is called “SDG washing,” which is certainly not appreciated. The key is to demonstrate the Companyʼs level of contribution to the SDGs in terms of social impact. I have great expectations for the future efforts of Tokyo Gas. While a world without poverty is an essential goal of the SDGs, most of Japanese companies have not yet addressed this aspect. Many people are oblivious to the level of poverty in Japanese society, which is in reality a widespread and serious issue. I would like to see Tokyo Gas at least indirectly contribute to the goal of eliminating poverty by considering ways to respond strategically to the 169 targets and offering ideas for business solutions.

Actions Required in the Future It is important that top management is committed to materiality issues and the SDGs. Indeed, in its Charter of Corporate Behavior, Keidanren (Japan Business Federation) strongly encourages top management involvement in the SDGs. What is also important is having a vision of the Company in 2050. There is currently little movement in this direction in Japan, but even so, I recommend that Tokyo Gas begin considering this point. The future vision and goals to be disclosed to the public need not be viewed as binding targets. It is more important to have the policies and spirit of challenge toward attaining the Companyʼs ideals.

Makiko Akabane Director of CSR Asiaʼs Japan Office

On the Revision of Key CSR Activities and Materiality “Preventing environmental accidents” and “ensuring safety and preventing disasters” are especially important for materiality. Safety is a value, and security is an asset. Gas explosions and leaks will have a major impact should they occur, and significant effort is required to prevent such explosions over a long period. The efforts made by Tokyo Gas and its expertise on training staff, developing safe appliances, educating consumers on how to use gas appliances and conducting inspections are all Company strengths. Bribery and corruption are frequently cited CSR issues associated with the supply of energy in developing countries in Southeast Asia and other regions, so the Company is advised to disclose more precise information disclosure on preventive measures. Engagement with local residents is important for entering the Southeast Asian market. The Company should start by listening carefully to local voices and intensify its CSR efforts in its overseas projects. It may also be useful to further disseminate the CSR mindset of the Tokyo Gas Group among its employees. On the subject of risks associated with water, while it is the norm in Japan to use seawater for indirect purposes such as cooling, other countries more commonly use freshwater. Although we may take it for granted the use of seawater actually helps limit the use of freshwater, and as in this example, there may be ideas the Company could introduce overseas.

On the Companyʼs SDG Initiatives In regard to SDGs, it seems to me that many Japanese companies confine themselves to the superficial gesture of simply linking the 17 Goals and 169 Targets to their own business activities. It would be better for the Tokyo Gas Group to identify and communicate what it can do to achieve the fundamental principle of the SDGs: leaving no one behind. For example, it would be effective to send a message that connects the perspective of universal access to energy with GPS. As deregulation in the electricity and gas markets progresses, I believe that maintaining the supply of energy even to regions offering little profit in terms of business would be one way to fulfill the social responsibility for achieving the principle of leaving no one behind. CSR at the Tokyo Gas Group

Initiatives for Better CSR Practice

The Tokyo Gas Group strives to raise CSR awareness among employees so they can understand how to practice CSR in the course of their daily business. We do so by organizing training programs, distributing booklets and displaying posters summarizing the Groupʼs CSR and key activities and by providing CSR-related information via the intranet and internal newsletters.

Booklet on the Tokyo Gas Poster showing employees at work Groupʼs CSR in key activities

CSR Training Level-specific training, workplace-based training, and other forms of training are all used as opportunities to raise CSR awareness. In March 2011, we jointly developed a CSR training card game called “CSR Every Day”* with NPO Plus Arts, which is used during training for each fiscal year. Employees who have participated in “CSR Every Day” in their workplace have offered comments such as: “I was able to deepen my understanding of CSR in an enjoyable way” and “I understood how my daily business activities and the Company are closely related to society.” * The CSR training card game “CSR Every Day” is designed to encourage individual participants to think about and express in their own words how to meet society's expectations through their daily activities.

CSR training card game “CSR Every Participating in the card game Day”

Workshop on the FY2017 CSR Report

In December 2017, about 200 Group employees and executives attended a workshop on the FY2017 CSR Report, which included an explanation about the report, examples on how the report is being used, lectures on ESG trends by outside experts and time for an exchange of views. We will continue to offer opportunities for employees to participate, think about and familiarize themselves with CSR. Workshop on the FY2017 CSR Report Lecture by an outside expert

Group employees share their overseas experiences

Training on the SDGs

As a first step toward addressing the SDGs, we offer quizzes via the intranet and organize training designed to raise awareness of SDGs among each employee in an ongoing effort to spread the concept throughout the Group.

Training Programs in FY2017 Participants Frequency/location

For first-year employees, third-year employees and Level-specific newly promoted managers (organized by the 26 times training Personnel and Compliance Depts.)

Workplace- Workplaces that request training (planned and 4 times (including once at specific training provided by the CSR Section) a subsidiary) CSR at the Tokyo Gas Group

Stakeholder Engagement

The Tokyo Gas Group pursues diverse forms of engagement based on its Stakeholder Engagement Policy. Moreover, we receive opinions from our wide-ranging stakeholders and actively adopt valuable suggestions for our business.

Stakeholder Engagement Policy

Basic Policy

The Tokyo Gas Groupʼs business brings it into contact with a wide range of stakeholders. Guided by our Corporate Action Philosophy and Code of Conduct, all Group executives and employees have sought to develop good relationships with stakeholders and work together with society toward achieving sustainable growth.

Purpose of Engagement

In conducting our operations, we must understand stakeholder expectations for the Tokyo Gas Group and how they evaluate Group performance as well as our own responsibility for stakeholders. That knowledge must then be applied to decision-making and business operations to maximize value creation and minimize negative impacts. We also emphasize developing sound relationships and partnerships with stakeholders and enhancing the transparency of our business activities. We engage with our stakeholders through two-way communication to achieve these goals.

Identifying Our Stakeholders

Our stakeholders are individuals and organizations who are interested in the decision-making and business activities of the Tokyo Gas Group. To further increase the significance of engagement with stakeholders, we associate them with the following categories: (1) those who could be directly or indirectly impacted by our operations, products or services, or who could impact our operations; (2) those with whom we maintain an economic, social or environmental responsibility; and (3) those who can provide a diverse perspective on our operations, products or services.

Methods of Engagement

The division or site that is most closely related to stakeholders serves as the contact point and takes responsibility for establishing two-way communication with them. Toward making further improvements, the results of engagement are shared within the relevant division, as well as with the Corporate Communications Promotion Committee as necessary. Information is disclosed through such means as our website and CSR reports to maintain our PDCA cycle. Also, we raise employee awareness of stakeholder engagement through training and other activities.

Customers Expectations and Requests

• Stable supply of energy • Ensuring safety and quality of energy and products • Provision of appropriate information on products and services • Provision of information on environmental protection and environmentally friendly products and services • Improvement of customer satisfaction

Tokyo Gas Groupʼs Responses Engagement and Communication Efforts

• Periodic safety inspections of gas equipment • Meter readings • Gas appliance repair • Receipt of applications, feedback and inquiries • Local service outlets (Tokyo Gas LIFEVAL, • Improvements based on feedback Enesta, Enefit) • Customer Center (phone and email) • Customer feedback cards • Customer satisfaction surveys

• Provision of information and promotion of understanding concerning measures to ensure • Tours of LNG terminals and disaster stability of city gas supply and prevent prevention facilities disasters

• Provision of information on energy, the environment, household facilities, appliances, etc. • Gas Science Museum • Provision of information and promotion of • Gas Museum understanding regarding the Groupʼs • Shinjuku Showroom and Yokohama environmental activities Showroom • Provision of opportunities to experience • Cooking studio Kitchen Lands environmental activities • Gas exhibitions • Proposal of comfortable home and lifestyle • Events and seminars solutions • Offering of cooking classes

• Provision of information on energy, facilities, • Tokyo Gas website appliances, and services • Email newsletters • Provision of tips for everyday life on cooking, • Facebook conserving energy and saving money, etc. • myTOKYOGAS

Shareholders and Investors Expectations and Requests

• Maintenance and improvement of corporate value • Fair distribution of returns to shareholders • Timely and appropriate information disclosure

Tokyo Gas Groupʼs Responses Engagement and Communication Efforts

• General shareholderʼs meetings • Financial results briefings • Briefings for individual investors • Disclosure of information on performance and • One-on-one meetings with institutional finances investors • Explanation of the state of Group activities and • Facility tours for individual shareholders plans • Annual Report and Investorsʼ Guide • Newsletter for shareholders • Disclosure of investor relations information on the Tokyo Gas website

Local Communities Expectations and Requests • Contribution to solving social issues in individual countries and regions • Support for educating the next generation

Tokyo Gas Groupʼs Responses Engagement and Communication Efforts

• Provision of information and awareness-raising concerning the Groupʼs disaster prevention activities • Provision of information contributing to safety • Local activities and peace of mind in everyday life • Monitoring of views/demand and incorporation into activities

• Support for para sports • Activities as an Official Partner of the • Provision of opportunities for the active Japanese Para-Sports Association engagement in sports through soccer • Junior soccer coaching sessions coaching, tournaments, etc.

• Provision of information and awareness-raising • Disaster prevention events cohosted with on disaster prevention NPOs

• Support for the environmental and the social contribution activity: Mori Sato Umi Tsunagu • Support for environmental protection activities (Connecting Forests, Villages and the Ocean) Project

• Support for school education (teaching, teacher training, and provision of information via out-of-school learning activities, • Provision of information, education and educational materials and an e-learning site) opportunities for directly experiencing energy • Donguri (acorn) outdoors environmental and the environment education project • Hands-on HIIKU fire education program for the next generation

• Support for regions affected by the Great East • Volunteer activities by Group employees and Japan Earthquake their families • Collection and donation of used stamps, cards and spoiled postcards

• Support activities as an Official Partner (Gas & • Support for the Olympic and Paralympic Gas Utility Services category) of the Olympic Games Tokyo 2020 and Paralympic Games Tokyo 2020

Government Agencies and Local Governments Expectations and Requests

• Tax payments • Compliance with laws and regulations • Cooperation in public policy and programs to solve social issues

Tokyo Gas Groupʼs Responses Engagement and Communication Efforts

• Development of smart towns in accordance with government plans • Participation in urban development through • Urban revitalization and housing complex our main line of business regeneration • Development of smart energy networks through redevelopment projects

• Disaster prevention events organized by local • Promotion of disaster prevention activities governments

• Provision of information to resolve social issues • Seminars on energy, the environment and and promote policy implementation community development • Participation in central and local government • Membership of environmental councils and committees and workshops other bodies Business Partners Expectations and Requests

• Fair and equitable business transactions • Practice of CSR procurement • Development of better partnerships and information sharing

Tokyo Gas Groupʼs Responses Engagement and Communication Efforts

• Online publication of Principles and Standards • Provision of fair and equitable business of purchasing practice and Purchasing opportunities through disclosure of standards, Guidelines for Suppliers policies, etc. • Briefings for business partners

• Surveys of CSR activities by business partners • Monitoring status of CSR practice • Dialogue and consultation with business partners

• Improvement of quality and appeal of products • Recognition of business partners at the in collaboration with business partners Business Partner Appreciation Awards

• Provision of events and opportunities to • Organization of facility tours for business promote understanding of our operations partners

• Consultations with suppliers of LNG and other • Consultations to ensure fair business relations supplies and confirmation of transaction details

Universities and Research Institutions Expectations and Requests

• Engagement in solving social issues and contributing to better lifestyles and community development

Tokyo Gas Groupʼs Responses Engagement and Communication Efforts

• Joint research contributing to safety, meter reading, safety services, etc. • Joint research contributing to environmental • Surveys and research to address challenges protection, disaster response, prevention of faced by society and contribute to better lives health hazards and the revitalization of and community development through our regional economies business activities • Joint research contributing to energy conservation and health • Joint research contributing to better lives in a super-aging society

Group Employees Expectations and Requests

• Creation of a comfortable work environment • Promotion of diversity • Development of human resources • Occupational safety and health • Provision of information and awareness-raising on environmental protection

Tokyo Gas Groupʼs Responses Engagement and Communication Efforts

• Development of the Overarching Commitment to Diversity and Basic Policy Regarding • Promotion of opportunities for diverse human Promotion of Diversity resources • Seminars and lectures on promoting diversity • Introduction of a home working system • Communication of messages from the president • Sharing of information and promotion of • Plenary meetings and briefing sessions to understanding within the Group report on conditions at Group companies • Workplace communication activities • Group newsletter and intranet

• Development of employee skills • Regular interviews with supervisors • Counseling for career planning • Various training

• Handling of consultations on compliance, • Consultation desks human rights, etc., within the Group • Employee opinion surveys • Monitoring of employee attitudes

• Provision of information and awareness-raising on occupational safety and health • Meetings and training on safety and health • Actions for mental health and prevention of • Actions to maintain and improve health lifestyle-related diseases

• Sharing of information on Group environmental • Group environmental contribution award activities system • Provision of information and awareness-raising • Training, study tours and seminars for Group on environmental protection employees

• Development of good labor-management • Labor-management dialogue and consultation relations

Contact Points for Stakeholders

Shareholders and investors Investor Relations

Inquiries: Personal (residential) customers Tokyo Gas Customer Center Local service outlets Local communities Tokyo Gas showrooms Fax service (for customers with hearing or speech impairments) Online inquiries

Government agencies Department responsible for the field in question

Business partners Purchasing Department service desk

Employees Tokyo Gas Labor Union, consultation desks

Stakeholder Dialogue

We aim to be a corporate group that achieves continuous growth by diligently fulfilling our social responsibilities. To realize this, we will communicate and engage in dialogue with our stakeholders, listening to their opinions and requests regarding the overall business activities of the Tokyo Gas Group, and relaying what we learn into improving our daily business activities. We received diverse comments during the year on various aspects of our daily business from people in a wide range of social positions. We will continue with our efforts to incorporate the voices of our stakeholders into our business activities to the greatest extent possible.

Stakeholder Dialogue 2016

Our responsibilities are broadening as we expand our operations as a total energy company and pursue regional expansion on a global scale. Practicing good supply chain management in cooperation with our business partners is consequently becoming ever more important as a means not only of managing quality and prices, but also of addressing issues in such domains as the environment, human rights, and working conditions. For our key stakeholder dialogue event of fiscal 2016, we invited in Hidemi Tomita, Senior Project Principal at Lloydʼs Register Quality Assurance Limited, to discuss the perspectives that Tokyo Gas Group needs to adopt and the challenges it must address in order to incorporate good CSR practices into its procurement operations, paying particular attention to the sourcing of LNG and materials that forms the core of Tokyo Gasʼs procurements.

Date: Wednesday, July 6, 2016 Location: Tokyo Gas Co., Ltd. Head Office Participants: Outside expert: Hidemi Tomita Senior Project Principal Lloyd's Register Quality Assurance Limited

Facilitator: Yoshihiko Yamabuki Director of Communications Innovation Cetus & General Press Inc.

Participants from Tokyo Gas Satoru Sawada Takayuki Genma Akihiro Saito Senior Executive Officer General Manager of General Manager of General (executive in charge of CSR) Regasification & Power Administration Department Generation Department

Motoyuki Okade Kentaro Kimoto Hiroshi Hanada General Manager of Customer Executive Officer, General General Manager of Corporate Service Department Manager of Gas Resources Communications Department Department

Hisashi Noguchi Kazuyoshi Sawada Tsuneaki Nakamura General Manager of Residential General Manager of IT General Manager of Sales Marketing Department Application Department Environmental Affairs Department

Shinya Nishigata Shinichi Sasayama Yoshio Sorimachi General Manager of Energy Executive Officer, General General Manager of Compliance Sales & Service Planning Manager of Corporate Planning Department Department Department

Yoichi Shibata Keiichi Hasebe Shuichi Hanada General Manager of Regional General Manager of Personnel Chief Manager of CSR, Development Planning Department Corporate Communications Department Department

Fumihiko Hara Shunichi Koike Executive Officer, General General Manager of Purchasing Manager of Strategy Planning Department Department

Note: The company names / titles are the ones at the time. Hidemi Tomita Mr. Tomita graduated from the Faculty of Engineering at the University of Tokyo and obtained his Master from Princeton University. He was executive manager of Sony Corporationʼs CSR department for some 10 years from its inception, and was later appointed a task group convenor for the ISO 26000 Working Group. Since the development of the ISO 26000 standard, he has been an active member of ISO 26000 PRO-SAG. He is also a member of the GRI Global Sustainability Standards Board (GSSB) for the development of new disclosure standards, and Japan expert for the ISO 20400 standard for sustainable procurement.

Expectations of Tokyo Gas Group Two key goals of Tokyo Gasʼs Challenge 2020 Vision are the transformation of the Groupʼs business structure and broadening of its business base. Given the uniqueness of the gas business and the diverse lines of business that it pursues, Tokyo Gas needs to conduct risk analyses of its supply chains in each area of business. Although not shown in the figure opposite depicting the steps toward CSR-sensitive procurement, risk management is of the utmost importance and should be made the first step in supply chain management by the Group. In addition, although various initiatives are currently being pursued from the bottom up by each business division, it is possible that important issues may not be properly addressed when viewed from an overall perspective unless action is pursued in an integrated manner in accordance with a company-wide policy. It would best to pursue these initiatives as a company-wide effort while sharing information among all departments. As each sector of the energy industry and each utility has its own distinctive features and challenges, Tokyo Gas should work as far as possible in collaboration with other companies in the same sector to improve efficiency, rather than simply using pre-existing schemes.

Tokyo Gas Groupʼs Current Situation and Issue Awareness We currently procure LNG for making city gas from five countries under long-term contracts. To take the example of our Australian projects, which account for the bulk of our procurements, we meet requirements by performing to a high standard in areas such as concern for the environment, local employment, provision of vocational training, sensitivity to human rights, and communication with local communities. As our sources will diversify further in the future, we will be paying even greater attention to the factors that should be taken into consideration in supply chain management.

Mr. Tomitaʼs Analysis In order to practice good supply chain management, Tokyo Gas first needs to consider what policies to pursue as a group, and then make these policies known to its business partners and keep track of conditions at those business partners. It is important that Tokyo Gas be proactively involved in this process. In the case of new development projects, it needs to first conduct proper preliminary surveys and, if using existing assessment tools, it should properly determine that they are in fact compatible with the Groupʼs policies.

Tokyo Gas Groupʼs Current Situation and Issue Awareness While our Basic Requirements for Purchasing demand good practice in regard to compliance, environmental conservation, risk control, and consideration for labor and human rights, we recognize that these requirements need to be rethought from an international perspective. We currently take a PDCA approach to managing procurements by surveying our business partnersʼ actions on compliance, the environment, and so on, as well as their business profiles, and providing feedback on our findings. We value building trust with our business partners. We give them tours of various facilities and engage in dialogue to give them greater insight into the gas business. We also visit our business partnersʼ manufacturing facilities. As we cannot visit them all, however, we need to find better ways of keeping track of overall conditions.

Mr. Tomitaʼs Analysis As Japanese firms are also now globalizing and thus face evolving challenges depending on the global situation, they need to take international standards as well as Japanese standards into account when surveying suppliers. There is also much that cannot be discovered from surveys alone. It is surprisingly difficult to get proper answers, due for example to the giving of inaccurate responses or failure to understand the point of a question. It is important not only to ascertain conditions on the spot, but also to provide opportunities for information to be shared. Communication with business partners should be continuously maintained. It is not presently necessary to expend too much effort trying to visit all business partners. Tokyo Gas should instead survey a sample of the places that pose the greatest risks so as to study and identify overall trends, and then follow up with audits and other investigations. It is often not possible to get to the heart of a problem just by surveying large, primary suppliers. The Group should therefore identify where the risks lie and decide where to survey by ascertaining how its supply chains are structured. It needs to determine, in other words, what kinds of things it purchases and by what processes they are made.

Tokyo Gas Groupʼs Current Situation and Issue Awareness In the years ahead, we aim to shift from what we call the ”Mount Fuji-style of management” dominated by a single core business, namely the city gas business, to what we have named the ”Yatsugatake (mountain range with several peaks) -style of management” with multiple core businesses. This will require us to think of our supply chains holistically from the point of view of the governance of the Group as a whole, and we recognize that how we go about doing so will be a key management question.

Mr. Tomitaʼs Analysis Recent years have seen the emergence in various industries of schemes for joint supply chain management and one possible approach would be to draw on these examples. As supply chain concerns differ depending on the line of business, it would be important in this case to analyze the features of each area of business the Group is engaged in to ensure that schemes of this kind are applied properly. Another possible approach is to consider also adopting assessment indices that are suited to Tokyo Gas while drawing on practice by leaders in the field overseas in order to identify likely risks. There is not necessarily any need to strain too hard to adopt tools and frameworks.

Steps toward CSR-Sensitive Procurement

Source:Envisioning the Desired Form of CSR Procurement. A Vision of Desirable CSR Activity in the Supply Chain

- A Proposal from the Supply Chain Working Group -

Global Compact Network Japan Supply Chain Working Group In Response to Mr. Tomitaʼs Analysis

While our business divisions are each pursuing various measures, todayʼs dialogue served as a powerful reminder that companies face a dramatically changing environment, that the time has come to take serious action to make CSR an integral part of supply chain management, and that it is vital that we determine what direction our management should take. With the Group globalizing as a total energy company, we believe that we need to ground our actions in a greater awareness of world trends Satoru Sawada than we have hitherto. Senior Executive Based on the advice received, we will consider what action we should Officer take in the context of the governance of the Group as a whole, and we will proceed to take steady action one step at a time, bearing in mind practice at other companies and the demands of society.

Communication to Improve Our CSR Activities Stakeholder Dialogue 2015 Date: July 2015

Having adopted evolution of the total energy business, acceleration of global business development, and construction of a new group formation as its Main Policies FY2015-2017, the Group continues to review its key CSR activities in line with these policies as it works to further raise the standard of group-wide CSR. As part of these activities, we invited Toshio Arima, Executive Advisor at Fuji Xerox Co., Ltd., to speak at our key ”Stakeholder Dialogue” event in fiscal 2015. He addressed perspectives and challenges that global businesses should consider in order to practice good CSR, and the event provided many useful insights that will help guide the Groupʼs future CSR activities.

Executive in charge of CSR (Director, Senior Executive Officer); Executive Officer, General Manager of Corporate Planning Department; Executive Officer, General Manager of Gas Resources Department; General Manager of Personnel Department; General Manager of Compliance Department; General Manager of Environmental Affairs Department; General Manager of Purchasing Department; General Manager of Business Development Department; General Manager of Overseas Business Planning Department, Tokyo Gas Engineering Solutions Corporation; Executive Officer, General Manager of Corporate Communications Department; Chief Manager of CSR, Corporate Communications Department

Link ▶ Stakeholder Dialogue 2015（PDF︓861KB)

CSR Workshop

We hold a CSR workshop for our employees to help them gain a flexible grasp of changes in public expectations and to learn to perceive social issues as issues that concern them personally. CSR Workshop 2016

Date: February 2017 Participants: 60 Tokyo Gas Group employees This workshop was prompted by the expansion of our business base driven in particular by the Groupʼs accelerating globalization, and it took as its theme the Sustainable Development Goals (SDGs), which will be a shared challenge for all the world in the years up to 2030. Learning through a game format, the participants looked at the mountainous environmental and poverty-related challenges faced by both developed and developing countries, and energetically discussed how Tokyo Gas Group can play its part in the international community by helping to tackle these challenges. Participants observed that many of the challenges that will be faced leading up to 2030 will also present business opportunities.

CSR Workshop 2015

Date: February 2016 Participants: 20 Tokyo Gas Group employees We asked Makiko Akabane, Director of CSR Asiaʼs Japan office, to lead a CSR workshop for our employees to help them gain a flexible grasp of changes in public expectations and to learn to perceive social issues as issues that concern them personally. Ms. Akabane introduced a number of examples of the social issues now arising in Asia and elsewhere, together with the initiatives being pursued by companies around the world to address them. During the group work session, the participants actively discussed the issues raised by several hypothetical projects (such as how to provide support for a rural community with no infrastructure). Afterwards, the participants commented that the workshop had demonstrated to them the importance of seeing things from the point of view of what society expects of a company, and how utilizing a companyʼs own strengths to solve social issues can also create new business opportunities.

Participants captivated by the intense workshop Enhancement of Energy Security

Basic Policy

In the face of rising expectations for the role of natural gas after the 2011 Great East Japan Earthquake as well as major changes in the energy-related environment in Japan, such as full deregulation of the gas and electricity retail markets, the Tokyo Gas Group acknowledges the publicʼs expectations of securing a stable and low-cost energy supply, ensuring customer safety and providing better services. Moreover, we are accelerating the pace of our business expansion overseas and establishing our LNG value chain at home and abroad to contribute to a stable energy supply and energy infrastructure while offering energy solutions in Japan and other countries in which we do business. Enhancement of Energy Security

Stable Supply

Why Is this Materiality?

To serve society by providing stable and low-priced supplies of energy amid heightened expectations for natural gas following the Great East Japan Earthquake and during the ongoing transformation of the Japanese energy industry brought about by reforms in the countryʼs electricity and gas systems.

To maintain a safe and stable supply by developing competitive power sources and expanding electricity sales to provide optimal energy solutions that not only combine gas and electricity but also add value.

To contribute to the development of local energy services and energy infrastructure in our overseas operations by applying the accumulated technologies of the Tokyo Gas Group.

FY2017 Results and Evaluation Criteria for evaluating KPIs Target achieved (100% or above) Target not achieved but improved from the previous fiscal year Target not achieved

Note: Qualitative indicators with no evaluation axis are assessed on the basis of whether progress has been made since the previous fiscal year.

Target FY2017 Results Evaluation (CSR KPIs)

LNG procurement ■ Further diversification of LNG procurement to ensure stable April 2017: Began studying the possibility of forming a strategic and affordable partnership on LNG procurement with Kyushu Electric Power supply Co., Inc., and reached an agreement to pursue collaboration for achieving flexible and agile reductions in LNG procurement costs and enhancing stability of supply. Built four economically efficient LNG tankers, capable of transiting the Panama Canal, to start receiving LNG from Cove Point in the U.S. from 2018. March 2018: Concluded a new LNG sales and purchase agreement with Malaysia LNG Sdn. Bhd. LNG under long-term contracts: 12 projects in 5 countries (as of end March 2018) Contract volume: approx. 14.24 million tons (FY2017) Proven global natural gas proved reserves: 193.5 trillion m3 Source: BP Statistical Review of World Energy 2018

Link ▶ LNG Project Contract Volume Diversification ■ Promotion of overseas business in Southeast Asia and North and expansion of America overseas business May 2017: Tokyo Gas America Ltd. acquired 30% of the shares of Castleton Resources LLC to participate in the natural gas development business in the U.S. July 2017: Tokyo Gas Asia Pte. Ltd. acquired 24.9% of the shares of PetroVietnam Low Pressure Gas Distribution Joint Stock Company and concluded a strategic alliance agreement. October 2017: Tokyo Gas Asia Pte. Ltd. formed a joint venture with the Development Bank of Japan Inc. to acquire 33% of the shares of PT Panji Raya Alamindo, a gas distributor in Indonesia.

Infrastructure ■ Development of natural gas infrastructure based in the northern development to Kanto area accommodate Installed an additional vaporizer and tank lorry loading facility at wider use of the Hitachi LNG Terminal. natural gas Continued preparations for construction of a second LNG tank at the Hitachi LNG Terminal, scheduled for completion in 2020. Development of trunk lines Completed construction of the Koga-Moka Line that connects to our existing network. Formulated plans for construction of the Ibaraki Line between Hitachi and Kamisu, scheduled for completion in FY2020.

Expansion of competitive ■ Expansion in scope of business related to solar power generation power generating August 2017: Established Prominet Power Co., Ltd., based on a capacity and capital and business partnership with Shizen Energy Inc. electric power sales

Key Initiatives for FY2018 and Beyond We reviewed the Tokyo Gas Groupʼs key CSR activities and materiality in fiscal 2017. Please visit the related link to view the latest information on our materiality and CSR KPIs.

Link ▶ Identifying New Materiality

The Pursuit of Safety

Why Is this Materiality?

To provide for customers after major earthquakes and ensure that they can use gas safely.

To enhance the energy security that supports safe and secure living.

To contribute to energy system innovation to support energy conservation and CO2 emissions reduction.

FY2017 Results and Evaluation Criteria for evaluating KPIs Target achieved (100% or above) Target not achieved but improved from the previous fiscal year Target not achieved

Note: Qualitative indicators with no evaluation axis are assessed on the basis of whether progress has been made since the previous fiscal year. Target FY2017 Results Evaluation (CSR KPIs)

Promotion of ■ Promotion of measures against earthquakes, tsunamis and other earthquake, disasters to ensure greater disaster resilience and a safe supply of tsunami and gas other disaster June 2017: Subdivided the low-pressure service network of the measures head office area, from 252 blocks into 261, for a more precise remote shutting down of the gas supply in order to prevent disaster.

Promotion of ■ Promotion of safety measures including upgrading aging gas pipes maintenance Informed users during safety inspections and by other means of measures for advice on replacing aging underground house pipes other than aging pipes and those already replaced in FY2015 and performed upgrades upon other request. infrastructure

Improvement ■ Promotion of switching to safer appliances of disaster Expanded the adoption of cooking stoves equipped with safety resilience sensors for auto shut-off to prevent overheating and flame failure, with 1.75 million units sold to date (as of March 31, 2018). Promotion of Encouraged customers using appliances such as water and bath switching to boilers lacking safety devices to prevent imperfect combustion to safer appliances switch to safer appliances through direct mail and providing information during periodic safety inspections.

■Periodic safety inspections Paid 3.931 million visits for periodic safety inspections of gas equipment in fiscal 2017 and completed 3.555 million inspections, excluding times when customers were not at home. Initiatives for more frequent contact with customers Conducted voluntary safety inspections in addition to legally mandated inspections during periodic inspections to facilitate reliable risk conversations with customers. Specific information on voluntary inspections was published via a comparison site for voluntary safety measures of gas retailers by an operator under consignment from the Ministry of Economy, Trade and Industry. Tokyo Gas efforts were rated top class.

Key Initiatives for FY2018 and Beyond We reviewed the Tokyo Gas Groupʼs key CSR activities and materiality in fiscal 2017. Please visit the related link to view the latest information on our materiality and CSR KPIs.

Link ▶ Identifying New Materiality

Provision of Better Products and Services

Why Is this Materiality?

To deliver better products and services based on proactive communication and customer feedback, thereby enabling customers to use energy safely, securely, and comfortably in keeping with the intent of electricity and gas system reforms. FY2017 Results and Evaluation Criteria for evaluating KPIs Target achieved (100% or above) Target not achieved but improved from the previous fiscal year Target not achieved

Note: Qualitative indicators with no evaluation axis are assessed on the basis of whether progress has been made since the previous fiscal year.

Target FY2017 Results Evaluation (CSR KPIs)

Provision of ■ Response to full liberalization of the electricity retail market products, March 2018: Number of applications for electricity service (ongoing) services, and reached approximately 1.13 million. We sought to win more related contracts by publicizing the electricity and services offered by Tokyo information Gas, largely through direct promotion by LIFEVAL and Enesta, and by pursuing initiatives for expanding partnerships.

■ Promotion of the wider use of ENE-FARM (“EF”) residential fuel cells We sold 18,500 EF units in FY2017, bringing the cumulative total of units sold since FY2009 to approximately 98,000.

■ Expansion of use of combined heat and power (CHP) systems*1, commercial gas air conditioners and other systems

We developed and sold the following devices: A high-efficiency GHP chiller, which is about 20% more efficient than conventional models, was commercialized in December 2017. Smart Multi*2, an addition to the lineup of air conditioners that combine a gas heat pump (GHP) and electric heat pump in a single refrigerant system, was commercialized in October 2017. ENESINFO*2, a remote control system that saves energy and cost by optimizing the operational ratio between a GHP and electric heat pump. *1 CHP systems generate electricity and recover waste heat generated as a by-product.

*2 Smart Multi and ENESINFO received the Environmental & Equipment Design Award from the

Association of Building Engineering and Equipment.

Reference CHP systems developed in FY2017: 90,000 kW (cumulative stock: 2,070,000 kW) Commercial gas air-conditioning systems developed in FY2017: 120,000 RT (cumulative stock: 4,010,000 RT)

■ Initiatives by Tokyo Gas LIFEVAL Acted as a one-stop source of home-related services, including periodic safety inspections of gas equipment, meter reading, opening and closing of gas valves and processing of applications for gas and electricity services in general, as well as the sale, repair and installation of gas appliances, and renovation work for the kitchen, living room and plumbing.

■ Better use of customer feedback and initiatives for business improvement Total number of customer comments: 16,460; 1,260 expressions of gratitude (7.7%), 1,358 complaints (8.2%), and 13,842 system requests (84.1%) Customer feedback was used to identify and analyze issues and improve operations related to rates, customer inquiries via phone and website, and patrols. Examples of improvements were published on our website. ■ Provision of useful information to customers October 2017: Began providing “Heat Shock Forecasts” to raise awareness of accidents caused by heat shock while taking baths in the winter. October 2017: Began offering a service that gives users centralized control of information related to their gas and household appliances through a collaboration between the “Torisetsu” smartphone app and myTOKYOGAS. July 2017: Launched the “Furomimi” service to present a new lifestyle of enjoying audiobooks while taking a bath.

Key Initiatives for FY2018 and Beyond We reviewed the Tokyo Gas Groupʼs key CSR activities and materiality in fiscal 2017. Please visit the related link to view the latest information on our materiality and CSR KPIs.

Link ▶ Identifying New Materiality Enhancement of Energy Security

Further Diversification of LNG Procurement

We are committed to further diversifying our procurement of LNG to safeguard the stable delivery of affordable supplies of LNG. As Asia leads the expansion in global demand for LNG and deregulation increases the likelihood of greater volatility in LNG demand in Japan, we must be more price competitive and flexible in our LNG transactions. In the years ahead, we will seek to increase the flexibility of LNG procurement through measures such as raising the ratio of short-term spot procurement while taking advantage of our partnerships in Japan and overseas to enhance the efficiency of transportation and adjust inventory in our transactions.

●Triple Initiatives for Diversification

1. Procurement sources We will broaden our procurement sources from conventional sources mainly in Asia and Australia to a wider range of regions around the world, including North America.

2. Contract conditions We will seek to diversify contract conditions from being primarily linked to crude oil prices to incorporating multiple benchmarks such as the Henry Hub price and gain greater destination flexibility by eliminating destination clauses.

3. LNG network We will seek to acquire gas fields, power stations, etc., on a global basis. Developing an LNG network linking Asia, North America and Europe will lead to reducing regional disparities in market prices and create an environment for more flexibly adjusting supply and demand.

Since Tokyo Gas began procuring LNG from Alaska in 1969, our LNG imports have steadily risen to meet growing demand. The company currently imports LNG under long-term contracts with 13 projects in 6 countries, including Russia (Sakhalin) and other countries in the Asia-Pacific region such as Malaysia, Australia and Brunei. In March 2016, we entered into a new contract for an additional purchase of approximately 200,000 tons per year of LNG from the Cameron LNG project in the U.S. Combined with the approximately 520,000 tons of LNG that we had previously committed to purchase from the same project and our contract for 1.4 million tons per year from the Cove Point project in the U.S., we now have access to several sources of LNG at prices linked to the Henry Hub Natural Gas Spot Price in the U.S. natural gas market. Furthermore, we are strengthening our partnerships with a variety of LNG buyers and other companies. Overseas sources include PetroVietnam Gas in Vietnam, Korea Gas Corp., and Centrica LNG in Europe, while partnerships in Japan include utilities such as Kansai Electric Power and Kyushu Electric Power. We are striving to ensure the stable, low-priced procurement of LNG by diversifying our sources and contract terms and by forming partnerships with buyers in Japan and overseas. LNG Project Contract Volume (as of April 2018) Contract volume Start of Project name (Unit: 10,000 Period operation tons)

20 + 20 + 10 years (until Brunei 100 1973 2023)

Malaysia I (Satu) 50 2018 6 + 7 years (until 2031)

Australia (Western Australia) 53 1989 20 + 8 years (until 2024)

Malaysia II (Dua) 90 2015 10 years (until 2025)

Qatar 35 1998 24 years (until 2021)

Malaysia III (Tiga) 34 2004 20 years (until 2024)

North West Shelf (NWS) 107 2004 25 years (until 2029) Expansion

Darwin (Australia) 100 2006 17 years (until 2022)

Sakhalin II 110 2009 24 years (until 2031)

Pluto (Australia) 150 2012 15 years (until 2025)

Queensland Curtis (Australia) 120 2015 20 years (until 2035)

Gorgon (Australia) 110 2016 25 years (until 2039)

Cove Point (U.S.A.) 140 2018 20years

2018 Ichthys (Australia) 105 15years (planned)

Approx. 52 Cameron (U.S.A.) 2020 Approx. 20 years (8 cargoes)

Approx. 20 Cameron (U.S.A.) 2020 Approx. 20 years (3 cargoes)

Enhancement of LNG Transportation Arrangements

Through our wholly owned subsidiary Tokyo LNG Tanker Co., Ltd., we efficiently manage our own fleet of carriers, which transport LNG under long-term contracts from Malaysia, Australia and Sakhalin in Russia. Four LNG carriers with a highly economic design are being built to transit the Panama Canal, which will be used to ship LNG mainly from Cove Point in the U.S.

Energy Horizon Enhancement of Energy Security

Strengthening Overseas Business

We effectively use the increased number of overseas facilities and personnel and intend to stabilize and boost earnings. We are striving to maximize the value of our projects, primarily in Southeast Asia and North America, and join new projects while considering the development of businesses in new sectors and locations.

Overview of Our Business Abroad

Business Development in Southeast Asia

Demand for natural gas is projected to grow in Southeast Asia, where we are forming partnerships with leading local companies to expand business particularly in the midstream and downstream sectors. We plan to promote and expand the use of eco-friendly LNG and build up relevant infrastructure especially in developing countries, where energy demand is rising, with the use of Tokyo Gas technologies and expertise.

Business Development in North America

We plan to establish a revenue base in North America, with ample opportunities for market entry, through participation in the planning of upstream and power generation projects. The development of shale gas and other types of natural gas, in addition to LNG, is increasingly taking place in North America. We can contribute to reducing the environmental load by expanding our natural gas business in North America.

Categories of Overseas Business

Overseas Projects in FY2017 (Project Name, Country, Business Category)

(Upstream business: Gas field development and other resource development, LNG procurement, gas transportation, etc.) East Texas tight sand and shale gas (U.S.A.: Natural gas production, sales)

(Midstream/downstream business: pipeline business, power generation, energy service, etc.) Birdsboro (U.S.A.: natural gas-fueled power generation) PVGD (Vietnam: gas distribution) PRA (Indonesia: gas distribution) GWHAMT (Thailand: gas distribution)

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Promising Initiatives on Energy Resource Procurement

In May 2017, Tokyo Gas America Ltd. acquired a 30% equity interest in Castleton Resources LLC (CR) to develop gas in Texas. This is the third gas development project in which Tokyo Gas has participated and the first capital investment in a U.S. gas developer. CR owns a leasehold in Texas where it develops shale gas and tight sand gas, which show promising potential as new sources of energy, through an affiliated operating company. We believe that our latest investment will contribute to the sustainable and stable supply of energy.

East Texas tight sand and shale gas development project

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Developing Business in Southeast Asia Based on Proprietary Resources

Vietnam In July 2017, Tokyo Gas Asia Pte. Ltd. acquired a 24.9% equity interest of PetroVietnam Low Pressure Gas Distribution Joint Stock Company (PVGD), a Vietnamese gas distributor, and concluded a strategic alliance agreement. Tokyo Gas had signed a comprehensive cooperation agreement on developing an LNG value chain with PVGDʼs parent company PetroVietnam Gas Joint Stock Corporation in March 2012, and our latest agreement resulted from continuous negotiations on the substance of cooperation. The acquisition of PVGD stock is the second case in which we have expanded our business domain in Vietnam under a comprehensive cooperation agreement. In the years ahead, we will strive to enhance the value of PVGDʼs business by applying the Tokyo Gas Groupʼs know-how on developing demand and energy- saving technologies.

Indonesia Tokyo Gas Asia Pte. Ltd. established a joint venture with Development Bank of Japan Inc. in October 2017 to acquire a 33% equity interest of PT Panji Raya Alamindo (PRA), a gas distributor and subsidiary of PT Rukun Raharja Tbk, the largest private gas company in Indonesia. This is Tokyo Gasʼs third investment in an overseas gas distributor. Indonesia is experiencing remarkable economic growth, and demand for energy Representatives at a signing ceremony in the industrial and commercial sectors is expanding rapidly. We will seek to raise the value of PRAʼs business by making use of the Tokyo Gas Groupʼs know-how and human resources. Tokyo Gas Overseas Operations Map

Projects Joined by Tokyo Gas

Host Participation Project Name Business Description Interest Country Year

Production, liquefaction Bayu-Undan/Darwin LNG Australia 2003 3.07% and sale of natural gas

Pluto LNG Australia Same as above 2008 5%

Gorgon LNG Australia Same as above 2009 1%

Production: Same as above 1.25% Queensland Curtis (QC) LNG Australia 2011 (coalbed methane) Liquefaction: 2.50%

Ichthys LNG Australia Same as above 2012 1.575%

Production and sale of Barnett shale gas U.S.A. 2013 25% natural gas (shale gas)

Production and sale of Eagle Ford shale gas U.S.A. 2016 25% natural gas (shale gas)

Production and sale of East Texas tight sand and shale U.S.A. natural gas (shale gas, 2017 30% gas tight sand gas)

Gas Malaysia Malaysia Gas distribution 1992 14.8%

Natural gas-fueled Bajio Mexico 2004 49% power generation

MT Falcon Mexico Same as above 2010 30%

T-Power Belgium Same as above 2012 26.66%

Liquefaction of natural Cove Point LNG U.S.A. 2013 49% gas and sale of LNG

Procurement and sale LNG Vietnam Vietnam of LNG, construction 2016 10% and operation of LNG receiving terminal

Natural gas-fueled Empire U.S.A. 2016 25% power generation

Bang Bo Thailand Same as above 2016 28%

Birdsboro U.S.A. Same as above 2017 33.33%

PVGD Vietnam Gas distribution 2017 24.9％

PRA (RAJA Group) Indonesia Same as above 2017 33％

GWHAMT Thailand Same as above 2018 17.5％

Eagle Ford shale gas Bang Bo

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Tokyo Gas Engineering Solutionsʼ Overseas Projects

Tokyo Gas Engineering Solutions Corporation (TGES) provides engineering solutions in Japan and abroad on the basis of its proprietary usersʼ know-how acquired in receiving LNG and designing, constructing, operating and maintaining primarily city gas production and supply facilities. With its highly regarded advanced technology, the company won a contract from PTT LNG Company Limited in fiscal 2017 for project management consultancy for the construction work of the Nong Fab LNG Receiving Terminal (7.5 million tons/year) to be built in Thailand. The construction is part of plans by PTT Public Company Limited, the parent firm of PTT LNG, to boost its capacity for receiving LNG by 2023 and helps establish an energy infrastructure in the Southeast Asian country. TGES is committed to actively expanding its overseas operations for the supply of natural gas and other environmentally sound energy sources. Enhancement of Energy Security

Amid heightened expectations for natural gas following the Great East Japan Earthquake and due to the major changes in the Japanese energy industry, such as full liberalization of the retail electricity and gas markets, we will continue to produce city gas, recognizing that the public expects the Tokyo Gas Group to consistently ensure a stable supply of energy.

Stable Production of City Gas and Stringent Quality Control

Stable Production of City Gas Our four city gas production terminals mutually back up each other so that we can continue to deliver a stable supply of gas to customers, even in the event of power outages or other problems. Highly reliable power receiving systems with core facility redundancy are also in place to ensure steady production of city gas. Each terminal is equipped with highly reliable facilities, and we are enhancing our safety measures by steadily upgrading aging facilities and strengthening earthquake resistance for even greater stability in production.

Compliance with Statutory Requirements for Controlling Calorific Value, Combustibility and other Properties To ensure delivery of high-quality city gas to customers, we daily inspect calorific value, combustibility and other properties, as stipulated by law, and strive to improve quality further by conducting independent monitoring regularly while also maintaining and managing facilities though periodic maintenance and daily inspections.

Strategic Development of Production Facilities We are strategically developing our production facilities from a long-term perspective that emphasizes economic performance, applying a comprehensive approach as we consider issues such as projected future demand for city gas. To encourage the broader adoption of natural gas, a goal under our Challenge 2020 Vision, we began commercial operations at the Hitachi LNG Terminal in March 2016 to meet expanding demand in the northern Kanto region. The Hitachi LNG Terminal has a big jetty capable of receiving large LNG carriers and a 230,000 kl aboveground LNG tank, the largest of its kind in the world. In April 2018, we began constructing a second tank, scheduled to start operating in fiscal 2020, to keep pace with the growing demand for natural gas.

Hitachi LNG Terminal

Initiatives for Handing Down Skills The Tokyo Gas Group actively manages knowledge by sharing and utilizing the valuable learnings, technology and skills it has acquired over many years of operating terminals in order to deepen each employeeʼs understanding and thereby enhance their performance and abilities. We are also systematically developing human resources to ensure that skills are smoothly transferred to each succeeding generation. Enhancement of Energy Security

The Tokyo Gas Group is developing its electric power business in the belief that providing a stable source of energy at low cost is a vital public expectation as demand for natural gas is rising after the Great East Japan Earthquake and the domestic environment surrounding energy is undergoing major changes, such as full liberalization of the retail electricity and gas markets.

Expansion of Competitive Power Sources

Building an Optimal Portfolio of Power Sources Tokyo Gas recognizes that it is more important now than ever before to provide a stable source of electricity, taking into account major changes in the energy-related environment, such as power and gas system reforms, and growth in our sales stock. The stable acquisition of power sources is thus absolutely necessary, and we are building an optimal power source portfolio centered on natural gas-fueled thermal power generation combined with other power sources such as electricity generation using alternate fuels and electricity supplied by other companies with a strategic alliance.

Securing Additional Power Sources We have the largest power source capacity among new entrants into the retail electricity market. We will establish a system for stable electricity supply by expanding our own power source capacity from the current level of about 1.6 million kW to 3 million kW in 2020. To construct natural gas- fueled power stations, which we are promoting as the foundation for the electric power business, we are committed to ensuring stable supply in the following ways. First, we will construct power stations close to areas of demand. Second, we will use highly efficient combined cycle power equipment to reduce environmental impact. And third, we will locate power stations near our LNG terminals to benefit synergies and enable efficient and stable management. With the commencement of the commercial operation of the Ohgishima Power Stationʼs Unit 3 in February 2016, the Tokyo Gas Groupʼs power sources comprise Tokyo Gas Baypower Co., Ltd., a wholly owned subsidiary with a total output of about 100,000 kW, Tokyo Gas Yokosuka Power Company, Ltd., a 75% owned unit with 240,000 kW, Kawasaki Natural Gas Power Generation Co., Ltd., a 49% owned unit with 840,000 kW, and Ohgishima Power Company, Ltd., a 75% owned unit with 1.22 million kW. In addition, we have decided to receive the entire output of about 1.24 million kW of the Moka Power Station, which Kobelco Power Moka Inc., a wholly owned subsidiary of Kobe Steel, Ltd., is building in Moka, Tochigi Prefecture, with supply by the first unit to start in the second half of 2019 and that by the second unit in the first half of 2020. In May 2015, we established Chiba-Sodegaura Energy Co., Ltd. with Idemitsu Kosan Co., Ltd. and Kyushu Electric Power Company Inc. to explore development of coal-fired power plants. Tokyo Gas Groupʼs Electricity Supply Infrastructure (as of June 2018)

Stable Power Generation The Groupʼs thermal power stations are fueled by natural gas produced at our LNG terminals. The stations maintain a stable supply of electricity through their operational and control activities as well as daily checks and periodic inspections. Capitalizing on expertise acquired in the gas service business, we will do our best to ensure safety and stable supply while addressing environmental concerns and also supply electricity at lower cost, in our efforts to meet social demand and expectations as a total energy business company.

Link ▶ Measures in the Electric Power Business Enhancement of Energy Security

We have been developing our natural gas pipeline network to ensure long-term stable gas supply in line with growing demand for city gas and the expansion of our service area.

Pipeline Network Development to Meet Demand and Service Area Expansion

To accomplish its FY2018–2020 medium-term management plan GPS2020, Tokyo Gas is efficiently building up its gas pipeline network and working to ensure the stable supply of gas for a rise in the total number of customers, including household users, thanks to the potential growth in demand primarily from industrial users in the Kanto region. In the course of developing our high-pressure pipeline network, we completed the Saito Line in October 2015, the Ibaraki-Tochigi Line in March 2016 and the Koga-Moka Line in October 2017, and we connected the Hitachi LNG Terminal with our three other LNG terminals on Tokyo Bay, improving supply stability mainly in the northern Kanto region. We started the construction of the Ibaraki Line in fiscal 2017 to improve supply stability and expand transmission capacity through a looped network of high-pressure trunk lines. The construction work is continuing toward completion in fiscal 2020. In fiscal 2018, we continued working to ensure stable supply, through such steps as conducting tighter inspections of key supply facilities, such as high-pressure pipelines, key medium-pressure lines and facilities for receiving gas from other companies and strengthening our emergency backup system and conducting emergency drills.

Tokyo Gas Groupʼs Energy Supply Infrastructure

Plan for Main Supply Infrastructure Buildup Purpose Line Section Scheduled Opening

Expansion of regional infrastructure Ibaraki Line Hitachi City-Kamisu City Fiscal 2020 Initiatives at the Supply Control Center

The Supply Control Center centrally monitors and controls the operational status of city gas production and supply facilities in the Tokyo metropolitan area, 24 hours a day and 365 days a year. It accurately guides the adjustment of gas output at LNG terminals, pressure at governor stations and storage and withdrawal at gas holders to ensure the stable transmission of city gas in the context of regular checkups and maintenance work at LNG terminals and on high-pressure trunk lines. In the event of a natural disaster, the center collects information, assesses the extent of the damage and handles first-response work for preventing secondary disasters, such as a suspension of gas supply. In cooperation with the Cabinet Office and Tokyo Metropolitan Government, it works to prevent the damage from worsening by sharing information through dedicated communications terminals and discussing responses through teleconferencing.

Supply Control Center

Transportation Service for New Entrants into the Liberalized Retail Gas Market

We operate the Transportation Service Center, which was opened in response to Japanʼs complete liberalization of its retail gas market. The center helps new entrants operate smoothly, receiving their applications to use our gas pipelines for consignment supply and setting up a billing system for after the start of the service. We treat all gas retailers fairly and maintain neutrality by physically isolating the centerʼs relevant office to ensure appropriate management of information on gas retailers and banning the use of information related to the service for other purposes.

Working on Aging Gas Pipes and Other Facilities

Replacement of Aging Cast-iron and Other Pipes We are accelerating efforts to ensure the safety of gas pipes, including adequately upgrading and improving equipment such as aging cast-iron pipes and other old pipes. Each of our pipeline network centers in charge of gas pipelines works out and properly implements annual plans for examination and inspections as well as replacement and upgrading in light of priorities. Workers replacing an aging gas pipe

Replacement of Aging House Pipes House (galvanized) pipes at customer sites are subject to corrosion underground. We are proceeding to replace them with polyethylene or other corrosion-free pipes. We explain to individual customers the need to replace house pipes at buildings requiring high security and carry out upgrading work on request. For other buildings, we inform customers of our replacement initiative during such occasions as regular checkups and conduct the necessary work on request.

Regular Gas Leakage Checks In accordance with the Gas Business Act, we conduct regular gas leakage checks for the early detection of gas leaks on streets and immediately perform repairs at the identified sites. We follow regulatory and administrative guidelines and notices whenever we plan, conduct and manage a regular checkup. Besides the legally mandated regular checkups, we plan and constantly carry out our own gas leakage inspections in order to build customer confidence in our services.

Patrolling High-pressure Gas Trunk Lines

High-pressure gas trunk lines are the arteries for transmitting city gas from our four LNG terminals to the Tokyo metropolitan area and the rest of the Kanto region. We go to great lengths to ensure the safe transmission of city gas and use the latest equipment for maintaining and managing these trunk lines. One important effort is to patrol these lines. During the patrols, we check whether other companies carry out construction work without asking Tokyo Gas in advance about the locations of nearby gas pipes. Also, we watch for any road damage such as cracks or depressions that may affect gas pipes. The patrols also include inspecting gas supply equipment and confirming that pressure regulators that adjust gas pressure and valves which shut off gas flows operate without vibration or noise. Daily patrols for these extensive inspections ensure operation safety.

Patrol for inspecting gas pipeline Transmitting Gas Safely

Technologies that Sustain City Gas Business As a gas supplier, we must maintain basic and expert knowledge and technologies associated with gas, supply equipment and gas appliances at a more thorough level than anyone else to support customers in the safe use of gas. We intend to create and refine a system for developing and passing on basic technologies that are indispensable for customer safety and security. In developing our expertise, we focus our research and development on technologies related to combustion, heat transfer and fluid analysis, which are required for the highly efficient and safe use of gas; technologies for assessing materials and seismic capacity required for the safety of infrastructure, such as pipeline networks; and gas analysis technologies for maintaining the high quality of the gas supplied to customers. In the event of an accident caused by a natural disaster or faulty gas appliances, engineers specialized in relevant fields respond quickly to investigate the cause and take necessary measures to prevent the recurrence of a similar accident or equipment failure. We work to develop and improve methods for pipeline construction, maintenance and management to continually improve the safety and performance of pipeline construction work. As an industry pioneer, we will contribute to improving the safety of gas pipelines and develop the entire gas industry by introducing the fruits of our efforts to other gas utilities.

Research on Earthquake and Disaster Preparedness of Gas Supply Infrastructure We conduct research and development on ways to protect pipelines and other gas supply infrastructure from earthquakes and other disasters so customers can use gas safely. Testing with the aid of a 3D shaking table, which simulates ground motions from an earthquake as strong as the 7.3-magnitude Great Hanshin-Awaji Earthquake in 1995, allows us to assess the safety of various items of equipment that comprise the gas supply infrastructure. We use numerical analysis simulation, which simulates real-world phenomena on computers, to conduct seismic performance assessments that take into account the complex movement of underground pipelines. The results of the research have been applied to our own measures to protect the gas supply infrastructure against earthquakes as well as similar efforts across the entire gas industry. Looking ahead, we will continue conducting research to strengthen the earthquake resistance of the gas industry as a whole.

Testing seismic resistance with a 3D Numerical analysis simulation for the shaking table assessment of pipeline movements Enhancement of Energy Security

Tokyo Gas addresses earthquake and disaster preparedness under the three pillars of prevention, emergency and restoration so that customers can use gas safely and conveniently at any time, 24 hours a day and 365 days a year. In the event of a disaster, we strive to minimize the impact on customers.

Prevention

Highly Earthquake-resistant Facilities

We employ multiple layers of safety in addition to reinforcing city gas production and supply equipment and facilities. Important facilities are designed to withstand earthquakes as powerful as the 7.3-magnitude Great Hanshin-Awaji Earthquake in 1995 and the 9.0-magnitude Great East Japan Earthquake in 2011.

LNG Tanks Tanks used for storing imported LNG are designed to maintain high structural integrity that can fully withstand major earthquakes. There have been no incidents of LNG leakage from any major earthquake.

High-pressure and Medium-pressure Gas Pipelines These gas pipelines, connecting LNG terminals and district pressure regulators, are made of strong, flexible materials that can withstand the impact of ground movement caused by earthquakes.

Gas Holders These containers hold the gas supplied in response to demand and feature a robust structure of multiple steel plate layers.

Low-pressure Gas Pipelines A low-pressure gas pipeline comprises about 90% of the total length of a gas pipeline, and newly installed low-pressure gas pipelines are made of polyethylene to minimize damage caused by earthquakes.

Sodegaura LNG Terminal High-pressure gas pipeline

Gas holder Low-pressure gas pipes Emergency

Quick Shutdown of Gas Supply to Prevent Secondary Disasters

Our system is capable of remotely shutting down gas supply to individual buildings as well as to entire zones in the event of a major earthquake. In addition, the gas pipeline network is separated into regional blocks to minimize the inconvenience of a gas supply suspension.

How Gas Supply Is Shut off to Individual Houses In each house, intelligent gas meters are equipped with a safety device that will automatically cut off gas supply to individual buildings when it detects earthquakes measuring 5 or greater on the Japanese seismic scale or an abnormal gas flow. Moreover, multiple layers of safety, including safety features of gas cocks and appliances, are in place to completely safeguard homes. Emergency shut- off valves at underground malls and skyscrapers can be remotely controlled from their disaster management center or building manager office to suspend gas supply to the entire facility.

Gas meter

Underground mall/room Skyscraper

*In case of a fire, regardless of whether an earthquake strikes, Tokyo Gas cuts off gas supply to individual buildings, and employees can

close shut-off valves to further guarantee safety. These valves cannot be operated by customers.

Shutting off Gas Supply to Entire Districts Severely Impacted by a Disaster In our service area, about 4,000 district pressure regulators, which convert medium-pressure gas to low-pressure gas, are equipped with seismographs to automatically shut off gas supply when a major earthquake is detected. Gas supply can also be cut off remotely. One seismograph is located in every square kilometer, an unprecedented density in the world, for monitoring the safety of each district.

Topic

Our SUPREME earthquake and disaster preparedness system uses densely installed seismographs. The system is capable of collecting earthquake data at about 4,000 locations, remotely shutting down district pressure regulators, and estimating damage on gas pipelines in order to monitor district safety. Within about five minutes after a major earthquake, the system identifies damage based on data gathered by seismographs. In about ten minutes, the system swiftly ensures safety by remotely operating district pressure regulators and suspending gas supply to areas where major damage is expected.

Locations of Seismographs in the Tokyo Gas Service Area and Temblor Strengths in the Southern Kanto Region during the Great East Japan Earthquake on March 11, 2011

Restoration

Safe and Swift Restoration of Gas Supply We strive to restore gas supply as soon as possible to end the inconvenience in districts where service has been suspended, by effectively using equipment and systems made available during routine preparations and maintenance work, while closely cooperating with other gas utilities. Furthermore, we began introducing a system for remotely operating district pressure regulators in fiscal 2014 toward realizing same-day gas supply resumption in districts with no earthquake damage. We are working to apply this system to all such regulators.

Post-disaster Relief and Support System We drew lessons from relief activities after the 1995 Great Hanshin-Awaji Earthquake and 2007 Niigata-ken Chuetsu offshore Earthquake and deployed mobile gas generation equipment (large PA-13A) to high-priority customers such as hospitals to serve as relief and support equipment for those facilities as kitchens. Mobile equipment was used in the wake of the Great East Japan Earthquake in 2011. To promote support measures carried forward from fiscal 2017, we will update customer information and provide education and training that use actual equipment in fiscal 2018. We have arranged with gas utilities in Japan via the Japan Gas Association to provide personnel and equipment to each other in the wake of a major disaster. The Tokyo Gas Group resumed its service in the aftermath of the Great East Japan Earthquake to some 30,000 of its customers in about a week and dispatched support personnel to six other gas utilities for about two months (up to 1,950 members a day). After the 2016 Kumamoto Earthquake, we engaged in gas pipe repair and restoration work with other gas utilities nationwide to achieve the resumption of gas supply to all affected customers in about two weeks. We are committed to rapidly achieving post-disaster service restoration.

Mobile gas generation equipment

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Relief Response to Northern Osaka Prefecture Earthquake

After a 6.1-magnitude earthquake struck northern Osaka Prefecture on June 18, 2018, the Tokyo Gas Group supported work to restore the city gas service. We set up a local restoration task force within the day and dispatched about 1,200 personnel for restoration work with Osaka Gas Co., Ltd. and other gas utilities. As a result, gas service resumed for all customers in areas where it was needed, on June 24, six days after the quake. During the restoration period, the entire Tokyo Gas Group rendered support, including subsidiaries and affiliates such as ENETRUST, a gas pipeline construction company, Tokyo Gas LIFEVAL, Enesta and a drawing company. The entire Group is ready to do everything possible to restore service in response to future disasters.

Workers engaged in restoring gas Personnel working in a shelter to collect service data on valves opened after the shut-off

Routine Disaster Preparedness

Tokyo Gas has established a business continuity plan (BCP) and routine disaster preparedness system against the risk of a major earthquake in the Tokyo metropolitan area.

Development of a Business Continuity Plan (BCP) To cut off gas supply to prevent secondary disasters while continuing to safely supply gas in less affected areas, Tokyo Gas reviews all of its more than 600 operational procedures to prioritize business activities in times of a disaster. When the supply of gas has been interrupted in certain areas, a company-wide effort is made to promptly restore service through such measures as assigning staff responsible for operations in the suspended areas to recovery work.

Establishment of Backup Centers Our systems are housed in a data center that meets high seismic standards. We have also established a backup center in case of a major disaster to maintain access to equipment and data primarily for safeguarding systems related to customer information and emergency safety operations so that we can swiftly restore services. In addition, emergency drills are regularly conducted, and redundancy is built into power supply and communication systems to minimize impact on customers during an emergency.

Comprehensive Disaster Prevention Drills We have conducted comprehensive disaster prevention drills annually since 1983 to raise the level of the Tokyo Gas Groupʼs response to disasters. The drills are intended to confirm and verify that every team from the Emergency Response Organization is capable of acting in accordance with the guidelines to provide an initial response, facilitate transition to recovery, and ensure reliable collaboration with gas retailers that are new to the market.

Comprehensive disaster prevention drill

Disaster Recovery Systems Tokyo Gas operates an integrated system for monitoring the real-time status of our disaster response, which enables employees to share accurate information and swiftly take appropriate action to minimize damage. Earthquake data collected by our SUPREME system is sent to employeesʼ mobile phones within minutes of an earthquake and can also be used to confirm their safety and deliver instructions on reporting for duty during an emergency. Our earthquake data is also used by local authorities and government agencies.

The “Disaster Information Station” site on the Tokyo Gas intranet Enhancement of Energy Security

Safety Management System

The Tokyo Gas Group has strengthened its safety management system in recognition of its fundamental mission as an energy company for whom safety represents a material issue that requires the direct involvement of top management. In August 2006, we established the Safety Committee, chaired by the Representative Director, President and CEO, to coordinate and promote safety measures. Under the Safety Committee we also set up the Safety Promotion Committee, chaired by the Chief Executive of the Pipeline Network Division, as well as several permanent subcommittees, to ensure we are fully capable of promptly responding to various safety issues.

Safety Management System

Security System

Tokyo Gas maintains a 24-hour, 365-day emergency response system to prepare for gas leaks and other contingencies. To ensure customer safety, we operate a thorough security system in preparation for any incident.

Tokyo Gas Security System Security Command Center Any report of a gas leak to a Tokyo Gas facility such as the Customer Center is transferred to the Security Command Center. This center closely follows up on the situation and provides safety advice to the informant. Gaslight 24 personnel, instructed by the center, immediately rush to the emergency response site from their respective base. We also have established police and fire department hotlines to facilitate cooperation.

Security Command Center

Gaslight 24 Gaslight 24 teams are 24-hour emergency dispatch bases capable of responding immediately to a gas leak or other emergency. Personnel specialized in emergency safety response are stationed in the service area. They are on call around the clock and respond swiftly in accordance with instructions from the Security Command Center.

Gaslight 24 emergency vehicle

Periodic Safety Inspections of Gas Equipment

Under the Gas Business Act, we periodically inspect gas equipment at all customer sites at intervals mandated by law. As a general gas pipeline operator, we check for gas leaks on customer premises. As a gas retailer, we visit customers to inspect gas appliances as well as air supply and exhaust systems. Also, as necessary, we recommend the installation of gas and carbon monoxide alarms and provide contact information for occasions when an industrial ventilation alarm goes off. To assure customers that they can safely use gas, we continue to maintain and improve the quality of our work through continued education for inspectors and other measures.

Improving the Quality of Gas Equipment Installation Work and Passing on Skills

While we certainly care about the comfort and convenience of using gas appliances, we also offer customers greater value through safety, security, and reliability. As part of this effort, we have continuously held emergency safety techniques and skills exhibitions for enhancing the quality of our emergency safety operations and passing on skills to the next generation of employees. At these exhibitions, installation teams representing Tokyo Gas and subcontractors demonstrate their techniques and skills for daily operations in order to inspire each other and further hone their skills. In fiscal 2017, 308 people were attended, including those from other gas service companies and new entrants in the gas retail business, with whom we need to cooperate in emergency safety operations. At the event site, many techniques and skills were vividly demonstrated. For example, participants competed in gas pipe repairs, during which new repair methods were explained, and role-played an initial response to a gas leak. The participants enthusiastically exchanged information, commenting on how the event increased their awareness of safety, security, and reliability. Through these efforts, we endeavor to raise awareness and ensure safety, security and reliability for customers.

Skills exhibition Enhancement of Energy Security

To make sure customers are able to safely use our gas equipment and appliances, we conduct thorough, legally mandated periodic safety inspections of gas equipment and provide customers and appliance manufacturer information and training on safe use from the perspective of hardware and software.

Launch of Voluntary Action Plan on Product Safety

In response to the revised Consumer Product Safety Act, which came into force in May 2007, we drew up the Voluntary Action Plan of Tokyo Gas Concerning Product Safety as a company that repairs, installs and sells residential gas appliances, with the intention of ensuring product safety and fostering a culture of product safety. Under the plan, we strive to ensure and improve safety to meet social demands and expectations. Moreover, in our drive to promote a culture of gas appliance safety, we post important notices on the use of residential gas appliances on our website to enable customers to find accurate information quickly on the correct use of our products as well as recalls and reported problems. The entire Tokyo Gas Group is committed to acting quickly and effectively in order to ensure safety and improve the quality of gas appliances under our three pillars of safety, security, and reliability.

●Voluntary Action Plan of Tokyo Gas Concerning Product Safety Launched on November 7, 2007 Tokyo Gas defines the following Voluntary Action Plans to ensure product safety and establish a culture of product safety, thereby strengthening our group values of “Safety, Security, and Reliability” in our role as a company that sells, repairs and installs home gas appliances.

1. Compliance with laws We shall comply with laws and regulations concerning product safety, formulate in-house voluntary standards for repair and installation work, and strive to ensure product safety.

2. Establishment of a product safety promotion system We shall improve our companyʼs product safety promotion system to ensure product safety.

3. Risk reduction of product-related accidents We shall contribute to reducing the risk of product-related accidents by sending feedback on product-related accidents and problems that come to our attention to the manufacturers and importers of gas appliances.

4. System for collecting and transmitting information on product-related accidents Whenever we learn of a product-related accident we will promptly forward the information to senior management and related departments in the company, as well as to manufacturers and import companies.

5. Maintenance and enhancement of product safety We shall promote awareness and disseminate information to our customers on the proper use of gas products, follow-up on questions from customers on product safety and commit to the cultivation of a culture of product safety.

6. Cooperation with manufacturers and importers Whenever manufacturers or importers recover products due to recalls or other reasons, we shall cooperate with them to efficiently facilitate product recovery. Improvements for Safer, User-friendly Gas Appliances

Measures to Improve the Quality of Gas Appliances We address gas appliance failures or accidents at a section dedicated to quality in order to quickly identify the causes and determine effective responses. A new section was created in April 2011 to strengthen these efforts. In the event of any gas appliance accident or gas appliance failure that requires the identification of a technical cause, we strive to ease customer concerns by immediately investigating the cause and taking the necessary actions in cooperation with manufacturers. We share the results of any investigations of gas appliance failures along with the expertise gained through the analysis of past repair data with other gas utilities and gas appliance manufacturers to prevent similar failures in new products and improve product quality. As an example of success of these efforts, all balanced-flue bath boilers have been equipped since April 1, 2011, with safety devices to prevent irregular ignition caused by improper handling and also prevent the boiler from being left on. Some models remind the user through an alert light or error message on a remote control to have the equipment undergo a checkup when its use exceeds its design life. This is another example of our ongoing efforts to advance safety measures.

All Kitchen Stove Burners Fitted with Sensors To improve the safety of gas kitchen stoves, the gas industry, including gas suppliers and gas appliance manufacturers and sellers, enforced self-regulating standards that require the installation of safety devices on all burners of residential gas kitchen stoves manufactured in April 2008 and later, except single-burner tabletop stoves. Every applicable burner must be fitted with sensors to prevent overheating of cooking oil and to detect flame failure and device to shut off after certain amount of time. The industry refers to these kitchen stoves as Si-sensor-equipped cooking stoves to raise public awareness of kitchen stove safety. Japanʼs revised Gas Business Act, which came into force in October 2008, mandates overheating prevention sensors and flame control devices. In March 2008, before the application of industry standards and revision of the law, Tokyo Gas required that all kitchen stoves sold by the company, except single-burner tabletop units, be Si- sensor-equipped cooking stoves and achieved cumulative sales of 1.75 million units*1 by the end of March 2018. Recent high-end models have more advanced safety features, such as pan detection that automatically lowers the flame when a pan is removed from the burner. *1 Excluding single-burner tabletop stoves.

Development of More Advanced Alarms We develop home-use combination alarms for fire, gas and carbon monoxide detection as well as home-use fire alarms so that customers can use gas safely and securely. Since 1999 we have been selling combination alarms, which detect a fire, gas leak or carbon dioxide from incomplete combustion and give out warning sounds and messages. We are also broadening our lineup of alarms. In February 2010, we launched an indoor fire alarm powered by a battery with a life of 10 years and also launched a system of wirelessly networked fire alarms, in which activation of one alarm sets off the other alarms. Research and development into low-power gas sensors began in 2006, and in October 2015 we launched a residential, battery-operated gas and carbon monoxide alarm with ultra-low power consumption.

Fire, gas, carbon monoxide combination alarm Development of a Residential Ultrasonic Gas Meter and Wide-area Wireless Communications Device Residential gas meters that measure customer gas consumption and monitor gas usage are called microcontroller meters*2. We jointly develop ultrasonic gas meters with Osaka Gas Co., Ltd., Toho Gas Co., Ltd. and appliance makers. These meters use ultrasonic sensors to measure gas flow and are utilized as microcontroller meters primarily for household use. Since ultrasonic gas meters have a simple structure with no mechanical moving parts, they are much lighter than conventional diaphragm gas meters, or about one-third the volume and half the weight, while performing the same functions. Therefore, they have a better appearance and offer users more leeway in deciding where to locate them. We developed a PHS communications device that works for at least 10 years on three lithium batteries (2,400 mAh, 3V) as a wide-area wireless communications device for our Residential Monitoring Services, which serves as a remote gas shut-off and monitoring service for household customers. Using PHS devices enables us to provide stable services without relying on customer fixed-line telephone connection. Additionally, we are currently considering using a next-generation LTE wide-area communications device. We launched a first-generation ultrasonic gas meter with communications and conventional safety capabilities in July 2005 and a second-generation model with a more advanced communications capability at the end of 2010. A pilot third-generation model made at significantly lower cost was introduced in the second half of fiscal 2016 and adopted officially in the second half of fiscal 2017. As a result, about 850,000 ultrasonic gas meters were in use as of the end of March 2017. In addition, about 200,000 PHS communication devices, which were first installed in December 2012, were in use as of the end of March 2017. Under our plan to install smart meters for all household customers, we are developing technologies to increase added values while reducing the costs of the meters, communications devices and installation. The Introduction of smart meters will provide more precise services based on measured data in addition to improving operational efficiency. *2 Gas meters with embedded microcontroller-based safety devices

Ultrasonic gas meter (top) PHS terminal (bottom)

Development of a Multi-hop Relay Device Along with Osaka Gas Co., Ltd., Toho Gas Co., Ltd. and appliance makers, we are jointly developing a multi-hop relay device for connecting residential gas meter readings and other data via multiple gas meters. The device applies intermittent rather than continuous transmission, sending and receiving signals every five seconds to save power consumption, and operating for 10 years despite being battery-powered. Current wireless devices allow transmission only within an area that can be served by radio waves and are only usable in buildings of up to five stories, within the reach of radio waves transmitted by ground-based meter checkers. They also require long transmission times. The new device, capable of multi-hop relays, allows wirelessly checking meters in commercial buildings and condominiums six or more stories high. We started using the new devices to check gas meters at our corporate housing for employees in May 2014. In April 2017, the devices were incorporated into our My Tsuho notification service for owners of apartment houses and condominiums. The devices reliably collect gas meter readings and other data even at houses where PHS reception signals are weak. Moreover, they allow us to provide the service at large apartment houses and condominiums. Multi-hop relay device

Network overview

Promoting Switchover to Safer Appliances

We have been encouraging the switchover to safer appliances since January 2007. We recommend by direct mail or on the occasion of periodic safety inspections of gas equipment that customers who use water heaters or bath boilers not equipped with devices to prevent incomplete combustion to replace them with safer equipment as soon as possible. In fiscal 2017, we continued to promote the replacement of such appliances̶small water heaters, wire mesh stoves, conventional flue-type water heaters and bath boilers, and forced exhaust-type water heaters (with downdraft diverters). This has helped to bring down the number of such appliances in our service area from about 160,000 at the start of the replacement campaign to 16,809 at the end of March 2018. We will continue supporting this effort and steadily work to improve safety so that customers can safely use gas appliances.

Progress in Switchover to Safer Appliances Number of units Air supply and targeted for Number of units at Target appliances exhaust method replacement at end of FY2017 campaign start

Open-type gas Small water heaters 37,000 2,395 appliances Wire mesh stoves 4,200 448

Conventional flue-type water heaters and bath boilers / Semi-closed-type forced exhaust-type water 120,000 13,966 gas appliances heaters (with downdraft diverters) Measures to Ensure the Safety of Commercial Equipment

To ensure the safe, comfortable use of commercial gas appliances in locations such as restaurant kitchens, we recommend the replacement of old-type gas outlets and rubber tubes and the installation of gas alarms and automatic gas shut-off devices. Since November 2006, we have installed commercial ventilation alarms free of charge to prevent carbon monoxide poisoning accidents, targeting about 180,000 restaurants and other facilities that use gas appliances in commercial kitchens. A cumulative total of 500,000 units have been installed as of August 2017. (Customers using commercial-grade gas equipment are eligible for free installation.) The alarms are replaced with new ones before the expiration of their six-year certification.

Business-use ventilation alarm

Numbers of Commercial Ventilation Alarms Installed Free of Charge*1, 2 Fiscal Year Alarms Installed

2006 No data available

2007 24,000

2008 100,000

2009 142,500

2010 153,292

2011 157,977

2012 166,095

2013 171,623

2014 177,092

2015 180,406

2016 183,692

2017 178,719

*1 Data in fiscal 2009 and earlier are estimates.

*2 Numbers as of the end of March each year. Enhancement of Energy Security

Customer-oriented System and Activities

Customer-oriented CS Mindset To remain the customerʼs first choice, the Tokyo Gas Group believes that delivering customer satisfaction is more important than simply delivering a product or service. With this understanding, we set the CS Mindset as stated in Tokyo Gas Group Our Code of Conduct. Additionally, we intend to be a customer-oriented enterprise by instilling a mindset that guides our judgments and activities throughout Group personnel.

Concept of the CS Mindset

System for Promoting Customer Satisfaction We seek feedback from customers through calls to our Customer Center, direct contact and various surveys. The opinions and requests we receive are shared within the company all the way up to top management. They are incorporated into our daily activities as we make improvements and enhance quality. Customer Satisfaction Promotion System

Customer Satisfaction Promotion Committee Providing customers with greater satisfaction is high on our management agenda. Since fiscal 2004, we have been convening the Customer Satisfaction Promotion Committee, which comprises Corporate Executive Meeting members and is chaired by the president. The committee discusses solutions to issues deemed too difficult for individual workplaces or departments to solve as well as issues requiring response by the company as a whole. We also maintain a CS Improvement Promotion Subcommittee, primarily composed of the leaders of departments that come into frequent contact with customers, to promote various measures aimed at enhancing customer satisfaction.

CS Meetings in Each Department Every department and workplace holds CS meetings to listen to customers and quickly respond to their needs. The meetings offer opportunities to receive new feedback from customers, discuss and implement improvements, and consider and share CS measures.

Service Quality Surveys We apply the results of surveys to our efforts to meet diversified customer needs.

Survey Results in Fiscal 2017 HDI-Japan Benchmark survey

Electricity retail industry customer service ☆☆☆3 Stars

Electricity retail industry portal support ☆☆☆3 Stars

JCSI(Japan Customer Satisfaction Index)

Electricity retail 1st place in customer satisfaction

Measures at the Customer Center The Tokyo Gas Customer Center receives a wide range of inquiries by phone as the Groupʼs first point of contact for customers. Toward providing faster and more accurate responses, the center continually strives to improve its service by preparing detailed forecasts for inbound call traffic, optimizing shift work schedules, and creating a new system for receiving inquiries about retail electricity and other new services. Making the Best Use of Customer Feedback

Using a Database to Identify Problems

We direct customer feedback received by the Customer Center and other points of contact as well as sales personnel to relevant sections so that they can take prompt action if necessary. Information obtained through these processes is stored in our customer feedback database toward recognizing and analyzing customer expectations for the Group and to identify problems that need to be addressed.

Breakdown of Customer Feedback

We received 16,460 items of customer feedback in fiscal 2017, of which 1,260, or 7.7%, expressed gratitude, 1,358, or 8.2%, stated complaints and 13,842, or 84.1%, provided opinions or requests about our system. The Customer Center will continue to broadly collect customer feedback, mainly views on our system.

Breakdown of Customer Feedback

Basing Business Improvement on Customer Feedback

Each department uses customer feedback to make improvements. We report back to customers on some of these efforts through our corporate website.

Improvement Example 1

I didnʼt realize it was a combined bill for electricity and gas, and the Customer feedback breakdown is hard to read. The electricity fee is printed too small. I want to see the breakdown for the electricity bill. Please clearly indicate the amount and period of electricity use.

We improved our meter reading slip. 1. The new slip separates the “Total amount” from the “Breakdown” sections. 2. Items such as usage and billing amount are shown in larger letters. 3. Customers can review the details of their electricity contract and breakdown of fees as well as their gas contract.

Improvements made Improvement Example 2

I want Tokyo Gas to provide answers that are easier to understand in Customer feedback the FAQ section of its website.

Improvements ・After reviewing the FAQs, we added images and video clips to make our made responses easier to understand. Note: The FAQs below are the translation of the Japanese website. Please click here for English website.

・We created more specific and relevant answers by providing additional filtering options. If “Yes.”

If the response is “No” or “There are no other gas appliances.”

Proactive Information Disclosure to Customers

We proactively and appropriately disclose information in addition to providing community-based customer support to ensure the safe, secure and comfortable use of energy by customers.

Tokyo Gas Website The Tokyo Gas website receives applications for gas and electricity services and provides useful information to customers, such as on how to respond in the event of an earthquake, gas leak or other emergency, as well as lifestyle and living guides. We provide information for both individual and organizational customers and disclose corporate information. We also operate a membership website for customers of our electricity and gas services. Residential customers can refer to the myTOKYOGAS membership website to confirm monthly gas and electricity usage and exchange points earned through their patronage for points offered by tie-in partner companies, various member privileges, environmental activities or contributions to the Japanese Para-Sports Association. The myTOKYOGAS Business site provides commercial and industrial customers with a service that visualizes monthly gas and electricity usage.

myTOKYOGAS residential membership website

Heat Shock Forecasts Tokyo Gas has been providing Heat Shock Forecasts, jointly developed with the Japan Weather Association, on the JWAʼs tenki.jp website since October 2017. The service displays heat shock potential calculated from indoor temperature differences on the basis of weather prediction information and is intended to highlight the need to take baths safely in the winter. On the myTOKYOGAS membership website for residential customers, we provided personalized heat shock forecasts tailored to specific indoor conditions after having the customer enter information such as the type and age of their house. Our information on bath use patterns of customers and expertise on housing and air-conditioning equipment contributed to the development of the heat shock forecast service.

Unified Management of Information on Gas and Electronic Appliances We have been providing a free-of-charge service since autumn 2017 that allows for the integrated management of information on gas and electronic appliances at home through the integration of the Torisetsu user guides through the smartphone app of TRYGLE Co., Ltd. with myTOKYOGAS. A customer simply enters their myTOKYOGAS login ID into Torisetsu to automatically register their major gas appliances. Customers can easily obtain user guides for gas appliances and contact information about nearby LIFEVAL and Enesta service outlets in the event of an emergency. The Web version of Torisetsu will have additional functions starting in summer 2018 so that it can be useful for more customers. Service Overview

Audiobook Service Furomimi In July 2017, we launched an audiobook service that allows users to listen to books read aloud while taking a bath. Furomimi was jointly developed with OTOBANK Inc. and QUANTUM Inc. with the concept of aural refreshment. Using waterproof smartphones, users can enjoy taking a bath with Furomimi, which provides original content such as stretching exercises for use in the bathroom as well as voice training and books.

Furomimi service

Facebook Tokyo Gas has an official Facebook page to offer instant access to our information. We post our seasonal information, recipes and other useful information for everyday life, including entertainment content such as Pacchoʼs (Tokyo Gasʼs mascot character) Diary and disaster preparedness information on the safe use of city gas.

Ensuring Proper Information Provision

Proper Information Provision under Law, and Self-imposed Criteria

Despite the Tokyo Gas Groupʼs continued efforts to ensure the proper provision of necessary information on products and services, the commissioner of the Consumer Affairs Agency in July 2017 issued a cease and desist order against an event flyer that allegedly violated the Act against Unjustifiable Premiums and Misleading Representations. The Group has taken the incident seriously and is redoubling its efforts to ensure compliance with the law and properly advertise and label products and services. We will continue our efforts to provide proper information in cooperation with legal affairs personnel in the production of flyers, catalogs and pamphlets. We remain committed to ensuring the proper provision of information and labeling in accordance with the Japanese Industrial Standards (JIS), guidelines of such bodies as the Japan Gas Appliances Inspection Association, our in-house regulations and other rules, so that consumers can confidently use Group products and services. To ensure that customer can safely use our products and services, we also abide by the guidelines for appropriate information provision and other matters that the Ministry of Economy, Trade and Industry has set forth in concert with the full deregulation of the electricity and gas markets.

Training session on labels for related managers and staff Enhancement of Energy Security

Tokyo Gas Groupʼs Community-based Service System

To meet specific needs and foster a close relationship with each customer, the Tokyo Gas Group set up the Tokyo Gas LIFEVAL network as a one-stop shop for products and services that improve the quality of life. As of April 1, 2018, the network consisted of 32 corporations in 62 regional blocks. Tokyo Gas LIFEVAL performs a number of tasks, such as periodic safety inspections of gas equipment, meter readings, opening and closing of gas valves, the sale, repair, and installation of gas appliances, and processing of applications for gas and electricity services. In addition, they provide information related to energy and daily life, such as plumbing renovations, energy conservation and power generation, to help local residents enjoy safe, environmentally friendly, comfortable lives. We also actively hold fun, experience-oriented events such as cooking classes featuring up-to-date kitchen equipment that participants can enjoy seeing, touching and using. We provide a variety of training for LIVEVAL personnel in accordance with their objectives and occupational positions to improve their technical and customer service skills. In addition to supporting human resource development, we strive to offer better services and proposals through a system for collecting and sharing customer feedback on LIVEVAL. The Tokyo Gas Group operates the Enesta and Enefit service outlets, in addition to LIVEVAL, to provide various services for supporting comfortable lives.

An employee talking with a customer at Installing equipment the LIVEVAL event

Always Reliable Services

What we call “Always Reliable Services” are intended to give customers peace of mind in using gas appliances while addressing a range of daily needs. In our efforts to provide customers with a sense of security, we broadened the lineup of Emergency Home Assist, Gas Fixture Troubleshooting Support and Residential Monitoring with the addition of Electricity Troubleshooting Support and Gas Fixture Special Support in April 2018.

Gas Fixture Troubleshooting Support*1 In the event that a city gas water heater or kitchen stove of a gas service customer*2 breaks down, we visit and repair the appliance without charging travel expenses.*3

*1 Customers must satisfy certain conditions to receive Gas Fixture Troubleshooting Support. Please visit the Tokyo Gas website for details. Some models are not covered by this service.

*2 Those in the service areas of TOSAI GAS, Inc. and Higashinihon Gas Corporation and in the Moka district served by NIPPON GAS CO., LTD. are not eligible for this service. *3 Customers bear travel-related holiday and overtime wages as well as repair fees (technical fees and parts costs) and other expenses (diagnostic fees, parking charges, etc.). Emergency Home Assist Services*4 We respond around the clock to problems with plumbing, house door locks and windows. Customers who receive Tokyo Gas gas and electricity package discounts are exempted from the monthly fees*5 for this service. Users have expressed their gratitude for the quick response to plumbing problems and free-of-charge service.

*4 Customers must satisfy certain conditions to receive Emergency Home Assist Services. Please visit the Tokyo Gas website for details.

*5 Although travel expenses and labor fees up to 30 minutes by one worker are not charged for the initial response, there may be extra charges such as for parts and special work fees. Customers fully bear second response fees such as equipment replacement.

Residential Monitoring Services*6 Tokyo Gas remotely shuts off gas supply on behalf of a customer in response to a personal call or website request from outside the home about a failure or possible failure to turn off gas equipment. We also call customers if we notice unusual gas usage such as an extended period of non-use. Moreover, if no gas is used by a customer between 0:00 and 24:00, we email family members registered in advance. This is helpful for in terms of caring for family members who live far away. In October 2017, this service added an optional contract for emergency support through a business cooperation agreement with security service company SECOM CO., LTD .

*6 We may not be able to provide this service, depending on specific circumstances. For information, please visit the Tokyo Gas website or call 0120-117744 between 9 a.m. and 5 p.m., except on Sundays and holidays.

Overview of Residential Monitoring Service

Electricity Troubleshooting Support*7 We respond to problems associated with electric equipment or power distribution failure without charging fees for up to 60 minutes of labor needed to investigate the cause and perform temporary repair as well as worker travel expenses*8. The service is available for customers of the Tokyo Gas electricity service.

*7 Electricity Troubleshooting Support is available under certain conditions. Please visit the Tokyo Gas website for details.

*8 Customers bear parts costs, special work fees and fees for labor exceeding 60 minutes as well as secondary response expenses such as for equipment replacement associated with electric equipment failure or damage. We may not provide on-site service if the specific problem is not covered by this program, the problem is solved by guides over the phone or the problem concerns an extraordinary natural disaster or accident. In an emergency, such as a fire, please call the fire department and other authorities to ensure customer

safety. Tokyo Gas does not report to the customerʼs site under these circumstances. Gas Fixture Special Support*9 For monthly fees of 500 yen including tax, we perform free-of-charge on-site repairs on home-use city gas appliances*10 and hot-water terminal equipment for unlimited times. We subsidize part of gas appliance purchase costs for replacement.*11

*9 Gas Fixture Special Support is available under certain conditions. Please visit the Tokyo Gas website for details.

*10 ENE-FARM, ECOWILL, HEATS and commercial-use equipment are not covered.

*11 Repair or replacement may not be possible. Please visit the Tokyo Gas website for information on equipment covered by the service and terms of service. Contribution to the Environment

Environmental Policy and Environmental Sustainability Guidelines

The Tokyo Gas Group pursues environmental management through a concerted effort and has established its Environmental Principle based on its Management Philosophy and Corporate Action Philosophy, and its Environmental Sustainability Guidelines to define concrete initiatives and quantitative targets. The president of Tokyo Gas releases a message every June, timed to coincide with Japanʼs Environment Month, to remind all Group employees of the need to continuously address environmental issues and strive for a sustainable society as part of an enterprise that leads in environmentally friendly corporate management through the Environmental Philosophy.

Links ▶ Contribution to the Environment Targets and Performance ▶ Supply Chain Management Basic Policy

Chronology of Environmental Activities

Tokyo Gas has supplied energy to customers since its founding in 1895. It introduced eco-friendly LNG (liquefied natural gas) to Japan for the first time in 1969 and now uses it for city gas as well as power generation. In 2005, it obtained Group-wide certification for the ISO 14001 international standard and is actively engaging in environmental protection. The company will continue to promote eco-friendly corporate management toward creating a low-carbon society and a recycling- based society and developing a society that coexists with nature. *1 ESCO (Energy service company): service to provide a package of necessary solutions to save energy, such as technologies, equipment, human resources and funds. *2 SRIMS: Tokyo Gas original waste collection and recycling system, which collects waste during the delivery of gas appliances and parts and piping materials to partner companies.

Note: Lawsʼ enactment years are shown. Links ▶ Chronology of Environmental Activities（PDF︓192KB） ▶ Benefits of LNG (Liquefied Natural Gas) as Feedstock for City Gas ▶ Environmental Advantages of City Gas in Terms of Lifecycle CO2 Emissions Contribution to the Environment

FY2017 Targets and Performance

Why Is this Materiality?

Climate Change Countermeasures

To fulfill our responsibility as an energy company that minimizes impact of climate change in response to growing demand for low-carbon solutions in the wake of the Paris Agreement. In the city gas business, we have set targets prioritizing reductions in CO2 emissions at customer sites, which release greater volumes of CO2 emissions than the Tokyo Gas Group.

Promotion of Resource Saving

To help create a recycling-based society by practicing the 3Rs of reduction, reuse, and recycling of waste to encourage resource recycling and thereby mitigate the social impact of waste and excavated soil generated by our business activities and at customer sites.

Promotion of Biodiversity Conservation

To promote biodiversity conservation by reducing the impact of our business operations on the ecosystem and by engaging in social contribution activities based on our awareness that creating thriving ecosystems is an important foundation of our business.

Promotion of Environmental Technologies Development

To address global environmental issues for the future as a total energy enterprise.

FY2017 Performance and Evaluation Criteria for evaluating KPIs Target achieved (100% or above) Target not achieved but improved performance from the previous fiscal year Target not achieved

Note: Qualitative indicators with no evaluation axis are assessed on the basis of whether progress has been made since the previous fiscal year.

Environmental Target Materiality FY2017 Results Evaluation Protection Guidelines (CSR KPIs)

Climate change Customer sites: ■Reduction in CO2 countermeasures Reduction of CO2 emissions at customer emissions at sites: 4.04 million tons. ○ customer sites by 3.9 million tons (from FY2011 levels)

Electric power ■Promoted the business: procurement of ○ Reduction of CO2 electricity generated by emission factor at high efficiency thermal the power and renewable electricity retail level energy sources.

Business activities ■Energy usage intensity 1: at LNG terminals:209 Energy usage GJ/million m3 ○ intensity at LNG terminals: 220 GJ/million m3 *1

Business activities ■Heat sales intensity for 2: district heating and Heat sales intensity cooling centers: 1.22 ○ for district heating GJ/GJ and cooling centers: 1.33 GJ/GJ*2

Business activities ■Energy usage at Tokyo 3: Gas offices, etc.: 902 Energy usage at thousand GJ ○ Tokyo Gas offices, etc.: 920 thousand GJ

Promotion of a wider ■Continued to make use of renewable maximum use of energy renewable and unused energy sources in various Smart Energy projects. ○

■485 thousand m3 of biogas derived from food waste was fed to city gas distribution pipes.

Promotion of resource Industrial waste 1: ■Final waste disposal saving Maintenance of zero rate at production emissions at plants: 0.6% ○ △ production plants (final disposal rate of less than 0.1%)

Industrial waste 2: ■Recycling rate of Maintenance of construction waste: ○ construction waste 97.7% △ recycling rate at 98% or higher

Industrial waste 3: ■Recycling rate for Recycling rate for industrial waste ○ industrial waste generated at offices: △ generated at offices: 86.5% 88% or above

General waste 1: ■Recycling rate for Recycling rate for general waste: 74.2% ― ✕ general waste: 75% or above

General waste 2: ■Copy paper usage: 1.21 Reduction in copy million sheets ― paper usage by 8% to 1.32 million sheets or less than FY2012 levels

Pipeline ■Soil excavated during construction: gas pipeline Soil excavated during construction: limited ○ gas pipeline below 21% ✕ construction: maintain at 16% or lower

Promotion of Promotion of ・Surveyed the status of biodiversity biodiversity biodiversity conservation conservation consideration at source activities along the gas fields and LNG value chain confirmed that there were no problems. ・Managed ballast water discharged during LNG transport, conducted habitat surveys at green areas inside the three LNG terminals, and implemented ○ conservation activities. ○ ・Practiced the 3Rs (reduction, reuse, and recycling) on soil discharged when laying gas pipes to reduce the impact caused by excavation of pit sand on the ecosystem. ・Implemented forest conservation activities and habitat surveys at the Nagano Tokyo Gas Forest.

Promotion of ・Provided information on environmental the Groupʼs activities communication and suggested ways to save energy in everyday life through a variety of channels, including participation in environmental events organized by local governments, organizing lectures and tours, and sharing information at our ー museums and on our ○ website. ・Activities to support school education (total attendance: 1,102,087, as of March 31, 2018) ・Activities that contribute to the environment and society, including neighborhood cleanup activities at each site and the “Mori Sato Umi Tsunagu” (Connecting Forests, Villages and Ocean) Project ・Development of environmental awareness through internal educational programs such as a study group on environmental regulations and presentation of the Environmental Program Promotion Award

Promotion of Promotion of ・Operated three environmental development of low- hydrogen stations. technologies carbon technologies ・Applied technological development innovation to combined heat and power (CHP) systems*3 to achieve the highest power generation efficiency of 42.5% in our 1,000 kW-class systems and ○ ○ total efficiency of 80.1%. ・Began investing in venture capital firms and venture businesses specializing in energy technologies in order to incorporate innovative technologies from around the world.

*1 Energy consumed per unit of gas produced.

*2 Energy consumed per unit of gas sold.

*3 CHP systems generate electricity and recover waste heat generated as a by-product.

Link ▶ Environmental Policy and Environmental Sustainability Guidelines

Key Initiatives for FY2018 and Beyond

We reviewed the Tokyo Gas Groupʼs key CSR activities and materiality in fiscal 2017. Please visit the related link to view the latest information on our materiality and CSR KPIs.

Link ▶ Identifying New Materiality Contribution to the Environment

Continual Improvement to the Environmental Management System

The Tokyo Gas Group has practiced effective and efficient environmental management under the leadership of top management since establishing its Group-wide environmental management system (EMS) in 2005 to comply with the ISO 14001. In fiscal 2017, we started operating an EMS that meets the revised ISO 14001:2015. Precisely following the PDCA cycle in the EMS allows us to ensure legal compliance and reduce environmental impact, preserve biodiversity and strengthen environmental partnerships, making our environmental protection activities both systematic and substantive. We operate Group company environment management systems, as described below, to strengthen the Tokyo Gas Groupʼs environmental governance and steadily and efficiently pursue environmental management as a concerted effort. Additionally, 95% of all EMSʼs in the Group have obtained ISO 14001 certification for sales.

Environmental Management Structure

Chairperson: Executive Officer in charge of the environment Members: General managers of related divisions Environmental Objective: The committee is stipulated in environmental management Committee rules. It primarily discusses the Groupʼs environmental policy and environmental protection plans for their concerted and effective implementation.

Status of Tokyo Gas Group Operations Related to Environmental Management Systems (as of August 2018) Name of Organization Type of Management System

Tokyo Gas Co., Ltd. ISO14001 Capty Co., Ltd. ISO14001

Tokyo Gas Living Line Co., Ltd. Living Engineering Co., Ltd. Residential Sales and Tokyo Gas Remodeling Co., Ltd. Service Division Tokyo Gas Lease Co., Ltd. Other environmental Tokyo Gas Customer Support Co., Ltd. management system*1 Tokyo Gas Lifeval Nishi-Ota Co., Ltd. Tokyo Gas Lifeval Chiba Co., Ltd. Tokyo Gas ST Comunet Co., Ltd.

Other environmental Energy Solution Division Tachikawa Toshi-Center Co., Ltd. management system

Nagano Toshi Gas Co., Ltd. ISO14001

Regional Development Tokyo Gas Yamanashi Co., Ltd. Division Washinomiya Gas Co., Ltd. Other environmental Shoei Gas Co., Ltd. management system Showa Unyu Co., Ltd.

Capty Tech Co., Ltd.*2 ISO14001 Kawasaki Gas Pipeline Co., Ltd.*3 Pipeline Network Division Other environmental Tokyo Gas Pipeline Co., Ltd. management system

Tokyo Gas Baypower Co., Ltd. (Sodegaura Power Station)*3 ISO14001 Gas Resources & Energy Tokyo LNG Tanker Co., Ltd.*3 Production Division Tokyo Gas Yokosuka Power Co., Ltd. Other environmental Ohgishima Power Co., Ltd. management system

Power Business Division Nijio Co., Ltd.*3 ISO14001

Other environmental IT Division Tokyo Gas i Net Corp management system

Tokyo Gas Urban Development Co., Ltd.*4 ISO14001 Tokyo Gas Facility Service Co., Ltd.*5

Tokyo Gas Liquid Holdings Co., Ltd. Tokyo Gas Real Estate Holdings Co., Ltd. Tokyo Gas Site Development Co., Ltd. Tokyo Gas Living Holdings Co.,Ltd. Tokyo Gas Engineering Solutions Others Corporation Tokyo Gas Communications, Inc. Other environmental Tokyo Gas Chemicals Co., Ltd. management system Tokyo Oxygen And Nitrogen Co., Ltd. Tokyo Carbonic Co., Ltd. Tokyo Rare Gases Co., Ltd. Park Tower Hotel Co., Ltd. Tokyo Gas Energy Co., Ltd. Enelife Carrier Co., Ltd. Tokyo Auto Gas Co., Ltd. Tokyo Gas LPG Terminal Co., Ltd.

*1 Tokyo Gas developed its own EMS for subsidiaries

*2 Included in the EMS activities of Capty Co., Ltd.

*3 Included in the EMS activities of Tokyo Gas Co., Ltd.

*4 ISO registration covers business activities related to a building rental at Shinjuku Park Tower (excluding the hotel).

*5 ISO registration covers the head office and management division of the Park Tower. Internal Audit Results The internal audit in fiscal 2017 found that the EMSʼs in all our sections complied with the requirements specified by the ISO 14001: 2015 and that the EMSʼs were effectively operated.

Compliance with Environmental Laws, and Imposed Fines The Group was not cited for any violations or fines with respect to environmental laws and regulations in fiscal 2017.

Management of Chemical Substances

While the Group uses only small quantities of hazardous chemicals in gas production and supply processes, it will continue to manage them effectively and in accordance with prevailing laws and regulations and reduce their release.

Compliance with PRTR Law The Group handled the following amounts of chemicals subject to reporting requirements under the pollutant release and transfer register law* in fiscal 2017. We had no subsidiaries for which reports were legally required in fiscal 2017. *The act on confirmation, etc., of the release of amounts of specific chemical substances in the environment and promotion of

improvements to their management

Tokyo Gas Handled amount Release Transfer Substance Note (kg) (kg) (kg)

Xylene 3,619 0.1 0.0 Refueling

1,2,4-Trimethylbenzene 1,754 0.1 0.0 Refueling

Toluene 7,219 0.9 0.0 Refueling

N-hexane 3,113 2.6 0.0 Refueling

Measures to Address Fluorocarbons Tokyo Gas inspected products specified by the Act on Rational Use and Proper Management of Fluorocarbons (commercial air conditioners, refrigerators and freezers) that it manages and is legally required to check as of the enforcement of the law in April 2015. In fiscal 2017, we submitted a report to the competent ministries because the leakage calculated by the specified formula exceeded the 1,000 t-CO2 threshold for a subsidiary, although Tokyo Gasʼs leakage was below this level. As a registered operator for fluorocarbon refill and recovery, we collected and appropriately handled fluorocarbons that were removed during inspections and maintenance of products with global warming potential (GWP). The electric chillers we have introduced over the past several years use low-GWP fluorocarbons, and we continue to adopt low-GWP chillers.

Leakage Calculated as Manager: Tokyo Gas

Substance Calculated Leakage (t-CO2 equivalents)

HCFC 79.9

HFC 135.2

Total 215.1 Leakage Calculated as Manager: 1 Subsidiary

Substance Calculated Leakage (t-CO2 equivalents)

CFC 8,720.0

Total 8,720.0

Refill, Recovery and Destruction as a Registered Fluorocarbon Refill and Recovery Operator. In fiscal 2017, we did not engage in any refill or recovery as a registered operator for fluorocarbon refill and recovery.

Anti-VOC Measures Tokyo Gas has since fiscal 1991 strived to reduce volatile organic compounds (VOCs), which are released from such operations as painting gas holders. Also, we have recently shifted to a painting method that uses weak solvent paint (a low-VOC painting method) and aim to reduce VOC emissions further.

Gas holder painting work

Hazardous Waste Management We appropriately store and manage polychlorinated biphenyl (PCB)-containing hazardous waste in our possession and process it by the required deadlines in accordance with the Act on Special Measures concerning Promotion of Proper Treatment of PCB Wastes. In fiscal 2017, we processed no such waste.

Measures to Counter Environmental Risks

Mitigating Environmental Risks In our business operations we place a high priority on responding positively to environmental issues. We assess potential environmental risks to business activities and appropriately mitigate them. We also review and disclose information on environmentally hazardous substances and pollution from our operations in the past and are taking swift steps to deal with them. If a serious environmental risk materializes, we will follow the Emergency Response Organization Regulations and swiftly implement measures to prevent a recurrence in light of emergency steps or risk levels and ensure that we avoid any secondary risks.

Climate Change Mitigation and Adaptation

The Group recognizes concerns that climate change may affect our business activities in the following ways and is responding appropriately.

Climate Change Countermeasures (Climate Change Mitigation) To reduce greenhouse gas emissions, which are associated with rising global temperatures, the Group has drawn up the Guidelines for Global Warming Countermeasures. Also, it is working to reduce emissions from city gas production facilities, power plants, district heating and cooling centers and offices as well as from customer sites, which account for the largest share of CO2 emissions in the LNG value chain. Our efforts to combat climate change also include the development and dissemination of low-carbon systems.

Links ▶ Climate Change Countermeasures in Business Operations ▶ Climate Change Countermeasures at Customer Sites

Natural Disaster Response (Adaptation) Climate change-induced disasters, such as localized torrential downpours and storm surges, may damage city gas production facilities and delay or halt LNG transport. We have formulated disaster preparedness plans at production, supply and other facilities as well as business continuity plans (BCPs) to prepare for a major accident, large-scale power outage or outbreak of disease caused by a major typhoon. In addition, we believe that diversifying the suppliers of LNG, which is used to produce city gas, will help minimize the risk of supply chain disruption when any single source is affected by a natural disaster.

Responding to Stricter Regulations to Fight Climate Change Regulations such as emissions trading and carbon taxes may rein in the use of fossil fuels. Nevertheless, we are committed to contributing to the creation of a low-carbon society by pushing for a shift from oil and coal to natural gas, the cleanest fossil fuel, expanding the use of highly energy-efficient appliances and systems such as combined heat and power (CHP) systems*, promoting renewable energy use, and making more efforts to build smart energy networks. *Gas engine-based CHP systems generate electricity and recover waste heat generated as a by-product.

Managing Water Risk

The Group addresses water as a business risk and manages its use of tap water, industrial water and seawater, conserves fresh water and controls water discharge.

Water Risk Assessment We have taken steps to protect LNG terminals and gas pipeline-related facilities from flooding caused by localized torrential downpours and storm surges, which are linked to climate change. In the face of increasing water risks, we carry out comprehensive assessments and analyses on current risks (water demand, flooding, public health and biodiversity) and future risks (effects of climate change and securing water resources). Since fiscal 2016, we have used such international indicators as the WWF-DEG Water Risk Filter (Map) in addition to the WRI Aqueduct and WWF-DEG Water Risk Filter to supplement each other. We conducted assessments and analyses at eight LNG terminals and overseas bases in fiscal 2017 and found no problems. Finding it necessary to collect more information on environmental risks on the part of suppliers, we plan to distribute questionnaires to them in addition to our own in-house survey.

Status of Water Resource Use In fiscal 2017, we used a total of 5,180 thousand m3 of freshwater at LNG terminals where city gas is produced, district heating and cooling centers, power plants using LNG, offices and other facilities in Japan. We are working to reduce process water consumption at LNG terminals, district heating and cooling centers and power plants through such means as optimizing boiler operation, reducing steam loss and replacing chillers with more efficient electric turbo types. To reduce our use of tap water at offices and similar facilities, we are increasing our use of recycled water, installing water- saving toilets and encouraging employees to conserve water. Regarding waste water, we measure discharges and manage water quality through the use of indicators, such as pH, COD*, and nitrogen and phosphorus concentrations, in accordance with national laws and regulations, local government ordinances, agreements and other rules. We use seawater mainly at LNG terminals and power stations as a heat source and then return the entire amount to the sea.

*Chemical Oxygen Demand

Water Resource Inputs of the Tokyo Gas Group (Tap and Industrial water)

Combating Soil Pollution

Since fiscal 1999, we have been conducting soil tests and groundwater surveys on land currently or previously owned by Tokyo Gas, such as former plant sites, with potential soil pollution and taking the necessary measures when pollution has been confirmed. We proactively disclosed information through reports to relevant authorities, explanations to nearby residents and press releases. Depending on specific circumstances, we have paved over or excavated and removed contaminated soil to prevent its dispersal. Also, we have installed impermeable walls or pumped out contaminated underground water to stop it from spreading. We continue to control soil pollution, reporting excavation work to authorities and conducting surveys in accordance with the Soil Contamination Countermeasures Act and relevant ordinances. Furthermore, we ensure that contaminated dirt is not dispersed and that excavated soil is handled properly. With the revision of the act in 2010, we have taken action to address soil pollution caused by natural factors or landfill with the same commitment as legally mandated interventions for pollution associated with our business operations.

Link ▶ Disclosure of Incidents That Affected Our Stakeholders

Providing Group Employees with Environmental Education and Commendations

Environmental Education for Group Employees Our environmental education comprises stratified training aimed at deepening the basic understanding of environmental issues as well as our Groupʼs environmental measures and EMS education for workplace leaders to gain the knowledge they need for environmental management. Additionally, we have offered eco-driving training to develop skills for green and safe driving, a class for eco-cooking instructors to learn eco-friendly diets, and other practical programs that are helpful in reducing environmental impact and facilitating environmental communication. We encourage employees to learn at their convenience through the corporate intranet about climate change-related issues and developments in and out of the company and considerations for handling waste. Main Environmental Education Programs in Fiscal 2017 Number of Type Period participants

Trading for new employees April 648 Stratified Trading for mid-career employees August– training 154 （e-learning） November

Training for new leaders for environmental April–June 9 management

EMS education Training for EMS promoters May 65

Study group on environmental laws and January 146 regulations

Eco-driving course September, 114 ▶ Promotion of eco-driving October

Class for eco-cooking instructors 8 times a year 41

Environmental Program Award We recognize workplaces and partner companies for efforts such as reducing environmental impact, increasing brand value and contributing to communities as models for the Tokyo Gas Group. We strive to invigorate and improve the entire Group by sharing best practices. Under the commendation system launched in fiscal 1999, we granted awards for 10 of 28 applications (3 eco-friendly business promotion awards, 4 eco-office activity awards, and 3 eco- citizen activity awards).

Award winners at the fiscal 2017 The eco-citizen activity award recognizes efforts to presentation ceremony. beautify and clean up the area around the Hiranuma office.

Environmental Awareness Survey

We have conducted employee surveys since fiscal 2001 to ascertain their environment awareness, environmental behavior and understanding of our environmental activities, and we use the results as basic information for formulating the plans for the following yearʼs activities. The fiscal 2016 survey gathered 9,890 valid answers for a response rate of 58% and found that about 90% of the respondents had expressed interest in environmental issues. We make use of survey results to reinforce measures to raise the environmental awareness of the Group employees and improve educational programs. Contribution to the Environment

Addressing Climate Change

Addressing Climate Change

Reduction of CO2 Emissions at Energy Savings and Reduction of Customer Sites CO2 Emissions in Business Operations Reduction of CO2 Emissions at Customer Sites Measures at the City Gas Production and Advancing and Expanding Natural Gas Use Supply Stages with Highly Efficient Residential Gas Measures in the Electric Power Business Appliances and Systems District Heating and Cooling Services Advancing and Expanding Natural Gas Use with Highly Efficient Commercial Gas Measures at Business Offices Appliances and Systems Other Efforts to Reduce CO2 Emissions Promoting Smart Networks Reducing the Transportation Carbon Footprint Proposing Exemplary Energy-Saving Lifestyles for Customers Contribution to the Environment ▶ Climate Change Countermeasures ▶ Addressing Climate Change

Addressing Climate Change

The Tokyo Gas Group determined that addressing climate change is a material issue, due to our responsibility as an energy company. We have set the Guidelines for Global Warming Countermeasures, which have concrete numerical targets, not only for our business operations but also for customer sites where CO2 emissions are highest. In light of the Paris Agreement adopted at the COP21 conference as well as movements against climate change in Japan, we have been actively pursuing low-carbon initiatives. These include implementing a wider use of natural gas, which has a lower CO2 emission factor, developing and expanding Smart Energy Networks (SENs) that combined heat and power (CHP) systems* and other highly efficient equipment with advanced energy management and embracing digitization technologies and innovation. In our electric power business, we will develop an optimal power source portfolio with eco-friendly natural gas-fired power plants, renewable energy and so on. Furthermore, in our overseas business we will deploy technologies that excel in reducing CO2 emissions and energy consumption across our LNG value chain as a contribution to global efforts to address climate change. *Gas engine-based CHP systems generate electricity and recover waste heat generated as a by-product.

Greenhouse Gas Emissions along the LNG Value Chain (FY2017)

*Source: “Study of Life Cycle Greenhouse Gas Emissions of LNG and City Gas 13A” (Proceedings of the annual meeting of Japan Society of Energy and Resources 35, pp. 23–26, 2016) SCOPE1: Businessʼs own direct emissions of greenhouse gases.

SCOPE2: Indirect emissions from consumption of electricity, heat, and steam supplied by others.

SCOPE3: Indirect emissions other than covered in SCOPE2 (emissions by other parties involved with businessʼs activities).

Link ▶ Benefits of LNG as Feedstock for City Gas ▶ The Tokyo Gas Group Business Activities and Material Balance Topic

Environmental Advantages of City Gas in Terms of Lifecycle CO2 Emissions

Greenhouse gases are released not only when fossil fuels are burned but also when they are extracted, processed and transported. Therefore, it is important to take into account emissions throughout the fossil fuel lifecycle. From the lifecycle perspective, natural gas generates the lowest CO2 emissions of any fossil fuel.

Source: “Future Forecast for Life Cycle Greenhouse Gas Emissions of LNG and City Gas 13A” (Japan Society of Energy and Resources, presentation report 28 (2), pp. 51–56, 2007) Contribution to the Environment ▶ Climate Change Countermeasures ▶ Reduction of CO2 Emissions at Customer Sites

2

Reduction of CO2 Emissions at Customer Sites

The Tokyo Gas Group is endeavoring to reduce CO2 emissions at customer sites, the final consumption stage for city gas, where CO2 emissions are highest. Specifically, we promote the use of natural gas, for example by a fuel shift, help familiarize people with distributed power generation utilizing cogeneration systems, promote the buildup of smart energy networks and the provision of services for saving energy, and support the use of renewable energy. Additionally, we propose exemplary energy-saving lifestyles for customers.

Sponsoring Energy-related and Environmental Seminars We have been sponsoring seminars on energy, the environment and community development since 2000, targeting local government policy planners. We invite experts to provide information on such issues as climate change mitigation and natural disaster prevention, with the number of participants reaching about 300 every year. Contribution to the Environment ▶ Climate Change Countermeasures ▶ Reduction of CO2 Emissions at Customer Sites

Tokyo Gas develops and promotes kitchen stoves fitted with highly efficient burners, highly efficient water heaters that recover latent heat, and residential power generation systems that utilize exhaust heat.

Popularization of Highly Efficient Eco-JOES Water Heaters

While standard conventional residential gas water heaters have a maximum heating efficiency of 83%*1, the Eco-JOES highly efficient, home-use water heaters are equipped with an exhaust heat and latent heat recovery system that boosts this figure to 95%*2. Assisted by the industry-wide “Eco-JOES Adoption Campaign” to promote the introduction of Eco-JOES, the number of residential installations is rising every year. As of the end of March 2017, shipments reached about 7.24 million units for the industry as a whole. Due to their efficient use of heat, the Eco-JOES water heaters reduce releases of CO2 into the air and help reduce CO2 emissions and combat global warming. Their remote controls incorporate the EneLook*3 function, which displays gas and hot water usage, a visualization feature that helps users save water and energy. *1 For RUF-A2405AW(A), a conventional water heater.

*2 For RUF-E2405AW(A), an Eco-JOES model.

*3 Some remote controls do not support EneLook. Note: Calculations for both *1 and *2 were made using the JIS S 2109-stipulated methods. (However, heating efficiencies depend on the conditions of use.)

How the Eco-JOES Highly Efficient Water Heaters Work

Residential CHP Systems

Residential power generation employs combined heat and power (CHP) systems* that had been primarily used at large plants and buildings. This energy-saving system extracts two types of energy from one energy source, generating electricity and heat for effective use. The system also generates a sense of delight through the value of generating power at home. At the same time, it helps reduce energy consumption and CO2 emissions. We offer the fuel cell ENE-FARM systems for residential power generation. *Gas engine-based CHP systems generate electricity and recover waste heat generated as a by-product.

Saving Energy and Curbing CO2 Emissions through Residential Power Generation Energy that can be directly collected in nature is primary energy, while energy such as electricity, generated through the use of primary energy, is secondary energy. Properly assessing energy conservation and measures to fight global warming requires taking into account changes in primary as well as secondary energy. Since residential power generation takes place where electricity is also consumed, exhaust heat can be used for such purposes as heating water, which is not possible at thermal power stations.

Residential Power Generation (the ENE-FARM System)

Note: Backup heat source equipment is used to generate hot water used for space heating.

ENE-FARM Residential Fuel Cell CHP System In May 2009, we introduced the worldʼs first fuel cell combined CHP system for detached housings, called the ENE-FARM, and co-developed the product with Matsushita Electric Industrial Co., Ltd. (now Panasonic Corporation). Tokyo Gasʼ estimate for a standard case shows that the ENE-FARM CHP system reduces annual CO2 emissions by about 1.3 tons, compared to conventional systems, and is touted as the key to mitigating climate change using a residential system. The remote control panel in a kitchen or a bathroom features easy-to-understand displays of the amounts of power generated and used. It also shows, on a daily basis, how much the system has helped the environment in terms of familiar things in order to foster environmental awareness among family members. A network access service started in August 2017 allows users not only to see how much energy is consumed at home but also to obtain information on ways to use energy efficiently, using a dedicated smartphone application.

Remote Control Panel Showing the State of Remote Control Screen on CO2 Emission Solar Photovoltaic Power Generation Reduction App Screen Showing Enepa appʼs message The ENE-FARM residential fuel cell CHP system Electricity, Gas and window (for detached houses, manufactured by Panasonic Hot Water Usage Corporation)

Assumptions for Estimates of CO2 Emissions (g-CO2) (1) CO2 emission factor: 0.65 kg-CO2/kWh for electricity (average factor for thermal power in FY2013 according to the governmentʼs Plan for Global Warming Countermeasures (May 2016)), 2.29 kg-CO2/m3 for gas (Tokyo Gas data) (2) Annual load: 16.6 GJ for hot water, 1.3 GJ for bath reheating, 2.2 GJ for cooking, 6.4 GJ for AC (cooling), 12.7 GJ for floor heating, 5.5 GJ for AC (heating), 12.5 GJ for lighting, etc. (for a four-person family living in a detached dwelling with a total floor area of 120 m2) (3) Electricity demand for a dwelling supplied with both gas and electricity (using conventional systems): 4,223 kWh (including power consumed by gas water/space heater) (4) Equipment used: Conventional system gas water/space heater, gas hydronic floor heating (living room), gas stove, electric AC used for cooling and heating in other rooms ENE-FARM, gas hydronic floor heating (living room), gas stove, electric AC used for cooling and heating in other rooms

*Figures may not sum due to rounding.

Active Utilization of Solar Energy For household use, Tokyo Gas proposes dual power generation, which combines solar photovoltaic power generation and the ENE-FARM, and the SOLAMO, which combines solar heating with the Eco- Joes highly efficient water heater. Each combination significantly reduces a householdʼs environmental impact and includes the kind of backup system required to actively utilize solar energy, which necessitates an unstable output of secondary energy.

Dual Power Generation by Solar Power and the ENE-FARM

Note: The solar photovoltaic power generation system is not a product of Tokyo Gas.

Water Heating System Using Solar Heat Contribution to the Environment ▶ Climate Change Countermeasures ▶ Reduction of CO2 Emissions at Customer Sites

Development and Promotion of Air Conditioning Systems

In the commercial air conditioning equipment business, we are promoting installations of the GHP XAIR II gas heat pump air conditioning system, which reduces annual energy consumption compared to conventional systems, and natural chillers, which use natural refrigerants. We also proactively recommend restaurants and hotels to introduce Suzuchu cool kitchen systems, which lower kitchen heat and reduce environmental impact.

Promotion of Highly Efficient Gas Heat Pump Air Conditioners Tokyo Gas emphasizes the promotion of the GHP XAIR II series among its gas heat pump (GHP) air conditioners, which save both electricity and energy. The series reduces 20% of annual primary energy consumption, the highest level of efficiency, compared to the previous XAIR, by improving efficiency. This is achieved by slowing down engine rotation during low load operation, which accounts for a significant portion of their running hours.

Annual Energy Consumption Compared with XAIR

*Energy consumption reductions from the model 15 years ago and XAIR are based on actual performance, while comparisons between the

conventional XAIR and XAIR II are based on Tokyo Gas estimates.

Smart Multi Hybrid Air Conditioner, ENESINFO Optimal Control Service*

The Smart Multi is a hybrid air conditioning system jointly developed with Osaka Gas Co., Ltd., Toho Gas Co., Ltd. and Panasonic Corporation and introduced into the market in April 2016. The system boasts the worldʼs first integration of a GHP and an electric heat pump (EHP) into the same refrigerant line and is optimally operated by remote control. Joining Panasonic, Aisin Seiki Co., Ltd., Daikin Industries, Ltd. and Yanmar Energy System Co., Ltd. began sales of the system in April 2017. The ENESINFO is our originally developed service to ensure optimal operation of the Smart Multi by remote control. The service effectively balances GHP and EHP operation to reduce energy costs, confirming the status of their operation, energy demand and supply situations and energy prices, which vary by season and time of day. It helps to save energy and reduce CO2 emissions by adjusting the operation ratio of the GHP to the EHP to minimize energy consumption and CO2 emissions in accordance with the customerʼs pattern of system use. Looking ahead, we intend to adapt the service as we anticipate changes in power demand and supply and in electricity prices associated with such factors as the increasing use of solar and wind power and other renewable energy as well as the liberalized retail electricity market. We will also respond to requests for saving electricity in the face of a tight demand and supply balance as our contribution to society as a whole. *Smart Multi and ENESINFO are registered trademarks of Tokyo Gas Co., Ltd.

ENESINFO Optimally Controlling the Smart Multi

Optimal Control by ENESINFO

Active Use of Solar Energy

In our support for renewable energy use, and for commercial use, we propose a solar cooling system that applies solar thermal energy for air conditioning. This is in addition to the SOLAMO system, which combines solar heating with an Eco-Joes highly efficient water heater.

Popularization of Air Conditioning to Use Water Evaporation Heat Natural chillers cool air inside rooms by producing cold water in a cycle of water evaporation, absorption, recovery and condensation. The system uses water as a refrigerant and a lithium bromide*1 water solution as an absorbent that does not include fluorocarbons. *1 An absorbent absorbs water, and a lithium bromide water solution exhibits the properties of saltwater. How Natural Chillers Work

Natural chillers can effectively use renewable energy such as solar heat and low-temperature untapped energy sources such as sewage water, river water, seawater and groundwater as well as exhaust heat from combined heat and power (CHP) systems*2, thereby achieving additional reductions in energy use and CO2 emissions. Moreover, an unstable renewable energy supply can deliver stable performance backed up by city gas. The latest green models*3 boast a higher efficiency than conventional ones. Using these models as replacements ensures significant cuts in energy use and CO2 emissions. *2 Gas engine-based CHP systems generate electricity and recover waste heat generated as a by-product.

*3 Green models are the most eco-friendly and reliable gas-using natural chillers and natural chillers that use waste hot water from CHP systems, selected by Tokyo Gas, Co., Ltd., Osaka Gas Co., Ltd. and Toho Gas Co., Ltd.

Combining Natural Chillers with CHP Systems

Combining natural chillers with CHP systems allows for the effective use of exhaust heat and reduces gas consumption, which leads to further energy savings.

Example of Combination

Cool Kitchens to Reduce Air Conditioning Load We recommend equipment that reduces kitchen heat. The so-called “cool kitchen equipment” reduces air conditioning load by 30%* compared to conventional kitchen equipment, and this helps to improve the kitchen environment while saving energy and cutting CO2 emissions. Air Conditioning Load Reduction Rate with Cool Kitchen Equipment

Simulation Conditions Calculation is based on a school lunch kitchen with a floor area of 1.8 × 8.5 meters and a height of 2.5 meters Displacement ventilation method is used Air supply amount comes to 40 kQ Equipment (5 rotary pans, 4 multistory rice cookers, 1 oven, 1 gas table), equipment specifications are the same *Source: Presentation materials of Nishikawa and Omori at Society of Heating, Air-Conditioning and Sanitary Engineers of Japan (Sept.

2009)

Development and Popularization of High-performance Industrial Furnaces and Steam Systems

The industrial sector dramatically reduces CO2 emissions by switching away from the use of fuels such as oil and LPG to natural gas and installing more efficient industrial burners and furnaces.

Promotion of Highly Efficient Burners for Industrial Furnaces Regenerative burner systems capture heat from exhaust gas into a heat storage unit and use it to preheat an air feed. They boast extremely high combustion efficiency and low nitrogen oxides (NOx) emissions. Also boasting energy savings up to 50%, they have been drawing attention as the ultimate industrial furnaces for reducing CO2 emissions.

Regenerative burner system

Reducing CO2 Emissions by Switching to Natural Gas, and Using it More Efficiently

Switching from fuels such as oil and liquefied petroleum gas (LPG) to natural gas reduces CO2 emissions by about 25%. Emissions can be curbed even more by switching to more efficient equipment and systems and making more sophisticated use of natural gas. Development and Popularization of CHP Systems

CHP systems are distributed energy systems that generate electricity by natural gas-fueled highly efficient engines, turbines or fuel cells and supplies steam or hot water produced with the use of the waste heat from power generation. The systems are eco-friendly, help strengthen energy security in an emergency and contribute to reducing power consumption.

Environmental Friendliness of CHP Systems CHP systems achieve high energy efficiency because they generate power close to electricity users in distributed generation with no transmission loss and effectively use waste heat from power generation. Using waste heat in centralized power generation is difficult because electricity is transmitted from remote areas and 60% of the generated electricity remains unused. Heat source equipment that uses waste heat is suitable for a wide range of uses, such as production processes at plants, hot water or steam supply at hotels and hospitals, air conditioning, and warming baths or swimming pools. The pursuit of power generation efficiency in research and development allows most CHP systems to achieve an efficiency rate that exceeds the average rate of conventional power generation and supply systems (on the demand side at substations, including transmission loss) and to significantly save energy and reduce CO2 emissions.

Using Energy Effectively and Reducing CO2 Emissions with CHP Systems* Note: Estimated by Tokyo Gas

*1 On a lower heating value (LHV) basis. The heat efficiency and total loss at thermal power plants were calculated on the basis of the operating performance of Japanʼs nine major power utilities plus power wholesalers in fiscal 2003 (Subcommittee on Classification Standards for Plants and Other Facilities, September 2005).

*2 Efficiency of CHP systems is on an LHV basis using the recommended configuration.

*3 Emission factor of the nine power utilities: 0.66 kg-CO2/kWh (average factor for fiscal 2030 in thermal power generation in the governmentʼs Plan for Global Warming Countermeasures announced in May 2016).

Status of Diffusion of CHP Systems CHP systems with a total output of 2,074,000 kW (excluding household units) are in operation in our service area. They are increasingly adopted across a wider range of fields, such as small- and medium-scale consumer use beyond residential use, owing mainly to the development of small models with an output of one kW to tens of kW, in addition to models chiefly designed for plants and commercial facilities with large heat loads.

Diffusion of CHP Systems

Promotion of Energy Saving and Reduction of CO2 Emissions through Energy Services

The Tokyo Gas Group strives to solve energy-related issues of customers and promotes efforts to save energy and reduce CO2 emissions. To this end, we provide services to learn how customers use energy and identify the problems they experience, introduce advanced equipment, visualize energy use and provide services to improve equipment operation.

Supporting Energy Savings with Package Contracts We strive to provide one-stop solutions for customer issues related to energy. Concluding package contracts that cover finance, designing and construction work, equipment ownership, energy procurement, maintenance and other matters allows us to address those issues and meet customer needs in order to save energy and cut CO2 emissions so that we can provide an environment in which customers can focus on their business operations.

Energy-saving Services for Plants We provide various solutions to plants that not only save energy but also reduce CO2 emissions and costs. Our TG Miru-Net Service visualizes energy use with online measurement and analyses of equipment in order to save energy, and the Steam fit service, which provides comprehensive, ongoing support for steam systems from design to operation. We meet the needs for saving energy, cutting CO2 emissions and reducing cost with a variety of approaches. Contribution to the Environment ▶ Climate Change Countermeasures ▶ Reduction of CO2 Emissions at Customer Sites

Creating a sustainable society strongly requires society as a whole to address issues such as saving power and ensuring energy security in addition to the long-sought effort of reducing CO2 emissions. As a means of solving these issues, the Tokyo Gas Group promotes the development of smart communities that wisely use energy in a heat and power supply network connecting buildings. The Group also pursues efforts to introduce smart energy use for entire buildings, including the conversion of office buildings and plants.

Promoting Community-Wide Smart Energy Use

To create smart energy communities, we construct smart energy networks that optimize energy demand and supply through a heat and electricity network and energy management making use of information and communication technology (ICT). A smart energy community combines a combined heat and power (CHP) system*, which generates and consumes heat and electricity locally, with the use of renewable or unused energy sources and adjusts energy demand so that the community can reduce the peak load. The region-wide economical use of heat and electricity increases energy efficiency of the entire community and sustains business activities and everyday life in the event of a power outage while enhancing the value of urban living. Development of smart energy communities is increasing in the Tokyo area in line with national and local government policies. *Gas engine-based CHP systems generate electricity and recover waste heat generated as a by-product.

Link ▶ Building Communities and a Way of Life that Is Safe and Secure

Smart Meters

Communications-enabled gas meters allow for measuring and controlling the flow of gas. Besides their incorporation into home energy management systems, they are used for externally confirming whether gas appliances have been turned off and remotely shutting off gas. We are conducting tests and developing technologies so that they can be introduced into every home. The introduction of smart meters is intended to increase customer convenience and provide added value through the use of measured data, in addition to improving operational efficiency. Promoting Visualization at Office Buildings

Office Building Visualization

TG Green Monitor to Visualize Energy Use The TG Green Monitor service measures energy use at customer sites and visualizes the usage of gas and electricity as well as the status of equipment operation. The service allows customers to view data shown in simple graphs on a special website designed for each customer so they can easily track energy consumption and effectively save energy and costs.

TG Green Monitor Screenshot

Building Communities and a Way of Life that Is Safe and Secure

Putting CHP Systems at the Core of Smart Energy Communities Tokyo Gas takes into account community characteristics in building smart energy networks. The disaster-resilient supply of low-carbon energy contributes to developing sustainable communities with superb environmental protection as well as disaster preparedness and management.

Developing a SEN in the Northern District Adjacent to the East Exit of Tamachi Station

The Group is constructing a smart energy network (SEN) in the Northern District adjacent to the East Exit of Tamachi Station*1 in Tokyo in collaboration with Minato Ward. We first built the Smart Energy Center in the Block I and started providing heat and energy to Minato Park Shibaura, a public facility, Aiiku Hospital and a child welfare facility in November 2014. This was the first project in Japan to introduce a SEN as part of the development of a new community. We have also introduced a SEN at msb Tamachi in the Block II-2 (West area), which was partly opened in April 2018. We built the Block II Smart Energy Center in step with this development of a business complex at a Tokyo Gas-owned site. We hope to reduce CO2 emissions in the entire North District by 30% below 2005 levels through the coordinated operation of the two Smart Energy Centers. *1 The SEN project received the Minister of Economy, Trade and Industry Award in the Successful Case of Energy Conservation category at

the Energy Conservation Grand Prize awards in fiscal 2016. Main Features of a SEN in the Northern District Adjacent to the East Exit of Tamachi Station Linkages among multiple facilities Public facility, hospital, office, commercial facility, etc. with different purposes

Maximum adoption and effective Use of solar heat and heat of underground tunnel water for air use of renewables, untapped conditioning (first application in Japan for district heating) energy, etc.

Capable of uninterrupted power supply to disaster management base (Minato Park Shibaura) and uninterrupted Contribution to BCPs heat supply to Aiiku Hospital during power outages Power, air conditioning used in an office common space, etc., for a certain duration

Optimal supply/demand control by Optimization for area-wide heat and power according to SENEMS*2 outside air conditions and energy usage (first in Japan)

Smart Energy Network in the Northern District Adjacent to Tamachi Stationʼs East Exit

*2 SENEMS: Smart Energy Network Energy Management System Contribution to the Environment ▶ Climate Change Countermeasures ▶ Reduction of CO2 Emissions at Customer Sites

Reducing the Transportation Carbon Footprint

Tokyo Gas has been working on popularizing the use of natural gas vehicles (NGVs), which are clean and feature low CO2 emissions. Along with this effort, we are now laying the foundation for hydrogen supply, including technology development, in the hope of also popularizing fuel cell vehicles.

Diffusion of NGVs About 47,000 NGVs were in use in Japan as of March 2018. In our service area, 451 NGVs, mainly freight trucks and garbage trucks, were introduced in fiscal 2017, and 17,188 NGVs were in use as of the end of March 2018. A total of 73 natural gas stations operate in our service area, including 13 dedicated for collection and delivery vehicles.

Diffusion of NGVs (Our Service Area)

Environmental Friendliness of NGVs NGVs, fueled by natural gas instead of diesel or gasoline, emit only small amounts of nitrogen oxides (NOx) and little particle matter (PM) and sulfur oxides (SOx). They release about 10%–20% less CO2 emissions than gasoline vehicles and are touted for their environmental friendliness.

NGV Exhaust Performance

*Diesel limits are for diesel vehicles weighing over 3.5 tons GVW.

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New Long-Range, Heavy-Duty CNG Truck Launched (Isuzu Motors Limited)

The environmental friendliness and superior energy security of NGVs make them a highly viable alternative to gasoline vehicles, and freight trucks, buses, garbage trucks, vans and other NGVs are already in widespread use on urban roads. With fuel diversification required for long-distance, inter-city trucking, Isuzu Motors Limited released a new heavy-duty compressed natural gas (CNG) truck in December 2015 and expanded its product line. Efforts are going on throughout the logistics sector to reduce CO2 emissions and diversify fuels. Contribution to the Environment ▶ Climate Change Countermeasures ▶ Reduction of CO2 Emissions at Customer Sites

Proposing Exemplary Energy-Saving Lifestyles for Customers

We offer lifestyle proposals, including the visualization of energy use and approaches to saving energy, to help our customers make better use of energy in their everyday lives.

Visualizing Energy Use

Meter readings slips distributed to customer sites every month, which enables them to compare monthly gas and power consumption with the previous year and month. After registering for the free myTOKYOGAS online service, they can also view their monthly gas and electricity bills and consumption with easy-to-understand graphs on a computer or smartphone. They can also access information, such as advice and alerts, to support energy conservation. The EneLook remote control also visualizes energy usage, showing gas and water used by home hot water equipment. Tokyo Gasʼs highly efficient Eco-JOES latent heat recovery hot water system comes with a standard EneLook remote control, and all new Eco-JOES models feature eco-friendly operation to help users save water and energy. Our smartphone app for the ENE-FARM residential fuel cell combined heat and power (CHP) system* allows users to enjoy visualized content on energy and encourages them to continue saving energy and reducing CO2 emissions. *Gas engine-based CHP systems generate electricity and recover waste heat generated as a by-product.

EneLook remote control App for smartphones Contribution to the Environment ▶ Climate Change Countermeasures ▶ Energy Savings and Reduction of CO2 Emissions in Business Operations

Measures at the City Gas Production and Supply Stages

Natural gas extracted abroad is liquefied at -162°C and transported by tanker as LNG (liquefied natural gas), with a volume that is one-600th of the gaseous form. Tokyo Gas produces city gas at the Negishi, Sodegauwa, Ohgishima and Hitachi LNG terminals, and we supply city gas by ensuring the terminals back each other up. Since little energy is used, the energy efficiency in producing city gas from LNG stands at 99% or more. Energy loss is also extremely slight in city gas supply because it is transmitted directly through pipelines to consumption areas. We are making further efforts to save energy, such as by using LNG cold energy.

Ohgishima LNG Terminal

Using LNG Cold Energy

Using cold energy of -162°C LNG at various temperatures, we engage in cryogenic power generation, operate cold storage warehouses and produce dry ice. The Negishi LNG Terminal depends on cryogenic power generation for about 38% of its power consumption. In fiscal 2017, it generated 32,024 MWh of electricity, using cold energy of LNG, and reined in CO2 emissions by about 22,000 tons.

Cold Energy Use (FY2017) Purpose LNG Used for Cold Energy (1,000 tons)

Supplied to subsidiaries 820

Electricity generated using cold energy 787

BOG*, other 1,283

Total 2,890

*Boil-off gas is generated by evaporation of LNG due to heat entering tanks. Measures to Reduce Methane Emissions

Methane accounts for less than 1% of the Tokyo Gas Groupʼs greenhouse gas emissions. It is released mainly during city gas production and gas pipeline construction work. The Group strives to further reduce methane emissions by, for example, cutting the amount of sampling gas used in analyzing produced gas, preventing venting during the shutdown of a calorific value adjustment system, planning pressure reductions to curb methane emissions into the atmosphere during pipeline construction work, and developing gas absorption and recovery systems. Contribution to the Environment ▶ Climate Change Countermeasures ▶ Energy Savings and Reduction of CO2 Emissions in Business Operations

The Tokyo Gas Group has contributed to mitigating climate change by promoting the use of renewable energy sources, such as wind power, for electricity generation in addition to its natural gas-fueled thermal power generation, which is highly efficient and has a low impact on the environment. Since the full liberalization of Japanʼs electricity retail market, Tokyo Gas, as an electricity retailer, has been promoting electricity procurement chiefly from highly efficient thermal power plants and renewable energy power generators while working to curb CO2 emissions at the retail stage. The company partners with other power utilities to create a low-carbon society via the Electric Power Council for a Low Carbon Society, in which it has been a member since its foundation.

Most Advanced, Highly Efficient Natural Gas-Fired Thermal Power Plant

Tokyo Gas-affiliated power plants are operated by Tokyo Gas Baypower Co., Ltd. (100,000 kWh, wholly owned by Tokyo Gas, 50% maximum efficiency on a lower heating value, or LHV, basis at the generating end), Tokyo Gas Yokosuka Power Co., Ltd. (240,000 kW, 75% owned by Tokyo Gas, 51% maximum efficiency), Kawasaki Natural Gas Power Generation Co., Ltd. (840,000 kW, 49% owned by Tokyo Gas, 58% maximum efficiency), and Ohgishima Power Co., Ltd. (approximately 1.2 MkW, 75% owned by Tokyo Gas, 58% maximum efficiency). In addition, we decided to receive the entire output (approximately 1.24 MkW) of the Moka Power Station, which Kobelco Power Moka Inc. (a wholly owned subsidiary of Kobe Steel, Ltd.) is building in Moka city, Tochigi Prefecture. (The plantʼs first unit will be completed in the second half of 2019, and its second in the first half of 2020.) These plants are all highly energy-efficient natural gas-fueled power plants that generate electricity by using cutting-edge gas turbine combined cycle technology. Using the electricity generated by these newly built highly efficient power plants in place of electricity produced by the less efficient existing thermal power plants will help reduce our CO2 emissions by the difference between the existing and new plants in CO2 emissions per unit of generated electricity.

Ohgishima Power Station

Gas Turbine Combined Cycle Technology Combined cycle power plants that use LNG (liquefied natural gas) as fuel achieve higher power generation efficiency as they convert water to steam with the heat from gas turbines and collect the steam to run steam turbines to generate power.

Combined Cycle Power Generation

Promoting Renewable Energy

The Group promotes the procurement of electricity from renewable energy sources with the aim of helping to create a low-carbon society. Electricity generation costs have recently dropped at wind power plants mainly due to their large- scale operations, and expectations are growing for them to emerge as major producers of renewable energy. We have engaged in wind power generation since 2005 at a plant with an output of 1,990 kW in our Sodegaura LNG Terminal. The Sodegaura plant called for the revocation of its certification under the Act on Special Measures Concerning New Energy Use by Operators of Electric Utilities in March 2013 and obtained certification under the Act on Special Measures Concerning Procurement of Electricity from Renewable Energy Sources by Electricity Utilities. In addition, we sell generated electricity to ENNET Corporation, an electricity retailer.

Wind power equipment at the Sodegaura LNG Terminal

Our second venture into the wind power business began with the announcement in April 2011 of our investment in Shonai Wind-Power Generation Co., Ltd. Shonai Wind-Power Generation now operates two wind power plants in Yamagata Prefecture, including the Yuza Wind Power Plant (in operation since December 2010), with a combined power generating capacity of 16,360 kW.

Yuza wind power plant

On January 2015, we signed a power purchasing agreement with Kuroshio Furyoku Hatsuden K.K., and we have been purchasing approximately 12,000 kW of electricity under this agreement since April 2015. This electricity is generated by two plants operated by Kuroshio Furyoku Hatsuden in the Kanto region: the Choshi Takada-cho Wind Power Plant, which entered service in 2006 with one 1,990 kW turbine, and the Shiishiba Wind Power Plant, which entered service in 2009 and has five 1,990 kW turbines. We intend to expand the use of renewable energy by promoting capital and business tie-ups as well as other collaborations in order to conduct business operations with integrated expertise. In February 2017, we entered a capital and business partnership with Shizen Energy Inc., a developer of solar farms and other renewable energy power systems, and we set up Prominet Power Co., Ltd. We carry out joint development work toward achieving 60 MW of photovoltaic power generating capacity as soon as possible. In May 2018, Prominet Power Co., Ltd. and Kyudenko Corporation acquired part of Tokyo Century Corporationʼs stake in a wholly-owned company, SKF Power Co., Ltd., in order to integrate their expertise for the development and operation of the solar power business. In June 2018, we signed an agreement with PHOTON JAPAN LLC to cooperate for three years in a solar power generation business and announced that the two companies would pursue joint development. During that period, Tokyo Gas plans to develop a solar power plant with an output of 30,000 kW. In our efforts to create a low-carbon society, we will continue to explore the possibilities of acquiring electricity generated by various renewable energy sources, such as wind power, biomass, which assures a high capacity factor, and solar power with high potential capacity. Contribution to the Environment ▶ Climate Change Countermeasures ▶ Energy Savings and Reduction of CO2 Emissions in Business Operations

District Heating and Cooling Services

The Tokyo Gas Group operates district heating and cooling services, including small-scale heat supply, in 54 districts. We supply steam and hot and cold water with combined heat and power (CHP) systems* that use natural gas, absorption chillers and boilers. We work on fine-tuning the machines to increase energy efficiency and improve their operational efficiency as well. *Gas engine-based CHP systems generate electricity and recover waste heat generated as a by-product.

Makuhari District Heating and Cooling Center

Makuhari District Heating and Cooling Center We have updated heat source equipment at the Makuhari District Heating and Cooling Center and converted it into a regional energy center for power generation and heat supply that promotes region-wide reductions of energy use and CO2 emissions, from a conventional district heating and cooling center that supplied only heat. We have optimally mixed the use of the latest highly efficient large-scale CHP system with a total capacity of 15.7 MW, an electric turbo chiller, a boiler and an absorption chiller while also reducing fuel consumption by 19% and CO2 emissions by 19% (fiscal 2015).

Operational Chart of the Makuhari District Heating and Cooling Center

*Only when the CHP system cannot meet demand. The Makuhari New City area is provided with district air-conditioning and heating services. Contribution to the Environment ▶ Climate Change Countermeasures ▶ Energy Savings and Reduction of CO2 Emissions in Business Operations

Using Energy Effectively by Combined Heat and Power (CHP) Systems

Using Energy Effectively by Combined Heat and Power (CHP) Systems Tokyo Gas started its energy saving efforts early with the introduction of a CHP system*1 at the Hamamatsucho Head Office Building in 1984. We upgraded the system to one employing the most advanced technology*2 and started using the new system in April 2009. The replacement allowed the building to reduce its annual CO2 emissions by about 1,400 tons. In the face of tight power supplies in the summer 2011 after the Great East Japan Earthquake, we saved electricity use significantly by putting all the Groupʼs CHP systems to work. *1 Gas engine-based CHP systems generate electricity and recover waste heat generated as a by-product.

*2 Upgraded CGS: Two 930 kW-class gas engines, total efficiency of 72% (38% power generation, 32% waste heat capture).

Making Old Buildings Both Energy-Saving and Environmentally Friendly

Tokyo Gas introduced the Design Guidelines that care about energy conservation, seismic safety and durability in 2010 as part of its activities taking the environment into consideration. We follow the new guidelines in drawing up plans to reconstruct buildings owned by the Group.

The TG Hiranuma Building That Received Environment Ministerʼs Award for Global Warming Prevention Activity The TG Hiranuma Building is a middle-scale, energy-saving and eco-friendly office building (5 stories above ground, about 7,200 m2). The building completed in March 2013 was the first reconstructed building based on the 2010 Design Guidelines. The building has a solar cooling system, which uses solar energy and exhaust heat from its CHP system, significantly reduces mainly daytime CO2 emissions from regular air-conditioning and heating loads. Individual, selective air conditioning by the GHP XAIR, a highly efficient gas heat pump air conditioner, deals sensitively with air-conditioning and heading loads, which vary according to the time of day and the number of people inside. The building also uses such equipment as solar power generators and other renewable energy equipment and natural ventilation systems. Without sacrificing internal comfort, it uses about 30% less energy than other office buildings of similar scales. The building was selected as a Leading Project for CO2 Reduction*1 by the Ministry of Land, Infrastructure, Transport and Tourism in fiscal 2011. It was given the Environment Ministerʼs Award for Global Warming Prevention Activity (Early Adopter of Solution Technology category) in December 2015. In fiscal 2016, it obtained the BELS*2 certification for buildings that meet the governmentʼs energy-saving criteria. (The assessment was four stars; top assessment is five stars.) The Group works to promote the wider use of energy-saving and CO2-cutting technology adopted in the TG Hiranuma Building, aiming for a zero-energy building (ZEB)*3. *1 The government gives subsidies for leading housing and construction projects for CO2 emission reduction after publicly soliciting applications.

*2 The Building Energy-Efficiency Labeling System. In the system, a third-party evaluation body assesses and certifies the energy-saving capabilities of green buildings under the Act on the Improvement of Energy Consumption Performance of Buildings (Building Energy Efficiency Act). *3 A zero-energy building (ZEB) aims to achieve zero net primary energy consumption, or the equal balance between total energy used and renewable energy generation, on an annual basis. The government is promoting such buildings, putting the initiative into its basic energy program.

TG Hiranuma Building

Earth Building Tachikawa (TG Tachikawa Building) Given Top CASBEE Certification The Earth Building Tachikawa (TG Tachikawa Building), rebuilt because of aging, was completed in July 2015 as a middle-scale office building (five stories above ground, about 10,600 m2). Aiming for a ZEB, we give environmental consideration, such as the use of renewable energy and highly efficient equipment and appliances, in operating the Earth Building Tachikawa. The building also excels in ensuring business continuity in case of an earthquake with its system that combines seismic isolation and vibration suppression equipment. The building received the top S certification in CASBEE*4 for buildings, the first for a Tokyo Gas building. In fiscal 2016, it acquired BELS certification (The assessment was four stars, the top assessment is five stars). *4 CASBEE stands for the Comprehensive Assessment System for Built Environment Efficiency, which assesses environment performance of buildings and gives ratings on a scale of five.

TG Tachikawa Building

Earth Port as ZEB We started to take improvement measures at the Tokyo Gas Kohoku New Town Building, dubbed Earth Port, in 2010 to achieve zero net primary energy consumption on an annual basis by 2030 by making equipment more efficient and optimizing energy use at a number of buildings. Measures including renewable energy use, such as solar thermal and photovoltaic power generation, and optimum operation of its CHP system allowed the building to reduce its primary energy consumption by about 49% and CO2 emissions by about 54%.

Earth Port (after refurbishment) Saving Energy through Better Use of Equipment, Facilities

Saving Energy through Better Use of Equipment, Facilities We hold an energy-saving committee at each building where we lease an office, among the buildingʼs owner and equipment administrator and the relevant section of ours. The committee helps examine energy use, optimize temperature and humidity and arrange energy conservation patrols, encouraging each of our employees to promote energy-saving activities. The Tokyo Gas Group as a whole engages in energy conservation though campaigns in the summer and winter, when power use peaks. In capital spending, we promote the introduction of more efficient lighting equipment at our offices and facilities, such as LED and high frequency-ballast fluorescent lights, to increase energy saving.

Example of visualization at Poster for an energy conservation Hamamatsucho head office campaign building

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Buying Renewable Energy with Non-Fossil Fuel Certification

The Gas Science Museum started to purchase electricity from ENNET Corporation under its Green Menu*1 electricity program. This is the Tokyo Gas Groupʼs first electricity purchase through non-fossil fuel certification in the FIT*2 program. The museum covers about 70% of is power consumption with electricity generated by highly efficient fuel cells using natural gas. This time, the museum has decided to shift its electricity procurement that covers the rest of about 30% to the purchase from ENNET. The shift is estimated to reduce CO2 emissions in fiscal 2018 at the museum by 17%*3 from fiscal 2017 to 75 tons.

Chart on Power Provision to Gas Science Museum

*1 An ENNET program featuring a CO2 emission factor of zero. Of electricity provided under the program, Tokyo Gas purchases electricity from renewable energy sources by using non-fossil fuel certification in the FIT program. *2 The feed-in tariff program, in which the government assures that power companies purchase electricity from renewable energy, such as sunlight, wind power, hydraulic power, geothermal heat and biomass. *3 The estimate assumes energy consumption at the museum remains the same from fiscal 2017. Contribution to the Environment ▶ Climate Change Countermeasures ▶ Energy Savings and Reduction of CO2 Emissions in Business Operations

2

Other Efforts to Reduce CO2 Emissions

Promotion of Eco-driving We train employees in green and safe driving skills in September and October every year. These annual practice sessions are led by outside trainers who have been certified as eco-driving instructors and draw about some 100 participants. We also designate November as eco-driving month, and each employee selects one special interest from a list of 10 eco-driving tips for being an eco-driver. In fiscal 2017, we reduced CO2 emissions from corporate business vehicles by 6.1% from the previous year.

Briefing a trainee on the key points of eco-driving

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Introducing Fuel Cell Vehicles

We encourage the use of low-emission, fuel-efficient vehicles to reduce emissions of nitrogen oxides (NOx), particulate matter (PM) and CO2. As of the end of March 2018, Tokyo Gas has been operating 26 corporate fuel cell vehicles.

Forest Conservation Activities at Nagano Tokyo Gas Forest Tokyo Gas owns a 194-hectare forest in the town of Miyotamachi in Kitasaku-gun of Nagano Prefecture and engages in conservation activities to help stop global warming, such as planting and thinning trees under a forestry management plan. We use the forest as an ideal site for providing environmental education to Group personnel.

Nagano Tokyo Gas Forest Employees participating in an environmental workshop Link ▶ Biodiversity Conservation Activities at Nagano Tokyo Gas Forest

Mori Sato Umi Tsunagu (Connecting Forests, Villages and Ocean) Project*1 Mori Sato Umi Tsunagu (Connecting Forests, Villages and Ocean) Project is intended to help develop sustainable communities and lifestyles through activities to fight global warming and preserve biodiversity offered in an area in which rivers connect forests, villages and the ocean. In fiscal 2017, Mori (forests) activities consisted of forest- care efforts in partnership with local governments and other organizations. The Sato (village) program engaged local nonprofit organizations in conserving thickets, while the Umi (ocean) program had employees join local teams in restoring eelgrass, which provides shelter for small fish and other marine creatures, in the spring and autumn to help clean up the sea and reduce CO2 emissions. Customers who supported this project joined through their Paccho (Tokyo Gasʼs mascot character) point*2 contributions, which are channeled to donations for organizations engaged in social contribution activities involving forests, villages, the ocean and rivers. We hope that broadening these connections will contribute to achieving the SDGs through both business operations and social activities.

A Sato (village) conservation activity as Participants work in the sea in an Umi part of the Tokyo Metropolitan (ocean) program jointly undertaken with Governmentʼs Tokyo Greenship Action the Amamo (eelgrass) Restoration program Collaboration in Kanazawa-Hakkei, Tokyo Bay Area.

*1 For this project, we set up the Mori Sato Umi Tsunagu (Connecting Forests, Villages and Ocean) Project Committee in cooperation with the Japan Philanthropic Association to discuss and decide which subsidies and contributions are in the public interest and fair.

*2 This reward point program is for myTOKYOGAS members and therefore requires prior registration. Members earn Paccho points by using various Tokyo Gas services and participating in campaigns. The points can be exchanged for original goods or points for the loyalty programs of tie-in companies. Topic

Joining Carbon Offset Programs of the G-7 Ise-Shima Summit, Intercity Baseball Tournament, and J.League

Tokyo Gas uses the J-Credit Scheme*, which the government operates to certify greenhouse gas emission reductions and contribute to the environment, and participates in internal and external carbon offset programs. We provided carbon credits equivalent to 1,190 tons of emissions to offset greenhouse gas emissions at the Group of Seven Ise-Shima Summit in May 2016, Japanʼs annual nonprofessional Intercity Baseball Tournaments, held from 2016 to 2018, home games of the professional soccer team F.C. Tokyo during the 2017 and 2018 seasons, and our own events. *Under this scheme, the Japanese government certifies credits for greenhouse gas emission reductions and absorption and sinks that are achieved by using energy-saving equipment, forest management and other activities. The credits are used for various purposes, such as carbon offsets and efforts to achieve the goals of business circlesʼ action plans for a low-carbon society. Contribution to the Environment

Creating a Recycling-oriented Society

The Tokyo Gas Group strives to create a recycling-based society by implementing its Guidelines for Promoting Resource Saving and Recycling and rigorously practicing the 3Rs of reduction, reuse and recycling of waste across the Group. Specifically, we seek to achieve zero waste emissions at production sites, reduce the amount of soil excavated during gas pipeline construction, reuse old gas meters and recycle used gas pipes at every stage of our business activities.

Total Volume of Generated Waste, and Recycling Rate

Group offices produce various types of industrial waste, such as plastics from containers and packaging and waste from technological development and training as well as maintenance work at customer sites. The Group is strongly committed to waste separation and strives to recycle and properly handle waste. We promote efforts at offices to reduce the use of copy paper, generate less paper waste and recycle used paper.

Industrial Waste (FY2017) Amount Recycling Final disposal Generation Final disposal Item recycled rate rate （t） （t） （t） （％） （％）

Industrial Waste 160,419 156,064 1,823 97 1

Production Plants*1 617 354 4 57 1

Construction Work*1, 2 155,510 151,997 1,469 98 1

Business offices, 4,292 3,713 350 86 8 etc.*1

Tokyo Gas Co., Ltd. 5,950 4,638 981 78 16

*1 Production plants includes data at facilities that make products, including city gas, and district heating and cooling centers as well as power plants. Construction Work includes data on construction work won by Group companies, while Offices, etc. includes data on other undertakings. *2 Includes construction work at the sites of Group company customers. General Waste (FY2017)

Amount Recycling Generation Item recycled rate （t） （t） （％）

General Waste 2,818 2,090 74

Tokyo Gas Co., 1,010 806 80 Ltd.

Paper waste 1,722 1,570 91

Tokyo Gas Co., 719 680 95 Ltd.

Promoting the 3Rs

Working to Reduce Waste

Efforts Concerning Excavated Soil

Gas pipeline installation work produces excavated soil and asphalt concrete lumps. We lay pipes shallowly in narrow trenches and use the non-open-cut construction method to reduce the volume of excavated soil, re-bury excavated soil and make more use of improved soil and recycled road surface materials under our 3R efforts. When we re-excavate the same location, we use newly developed materials and construction methods, such as Eco-balls, an innovative temporary backfill. Reducing excavated soil leads to less use of mountain sand and lower CO2 emissions from transport vehicles.

Eco-ball temporary backfill Gas pipeline installation work using Eco-balls

Link ▶ Promoting Biodiversity Conservation Measures in Our Value Chain

Measures at Production Plants

We take steps to reduce waste toward achieving zero emissions (a final disposal rate of less than 0.1%) at LNG terminals, which include city gas production plants, power plants and district heating and cooling centers. In fiscal 2017, we produced 617 tons of industrial and other waste, and 4 tons were subjected to final disposal for a final disposal rate of 0.6%*. *Calculation excludes hard-to-recycle industrial waste such as asbestos. Initiatives for Reuse

Reuse and Recycling of Gas Meters

Tokyo Gas began reusing gas meters immediately after their initial introduction, ahead of other gas service companies and companies in other industries. Although gas meters installed at customer sites are typically replaced before the expiration of their 10-year certified life, we collect retired gas meters, replace consumable parts, recalibrate them and reuse them for up to three cycles, or 30 years. In fiscal 2017, we reused 392 thousand gas meters, thereby avoiding the generation of 1,632 tons of potential waste. Gas meters reused for three cycles have been recycled through our own channel and reused by electric furnace makers and other companies as material for new products.

Gas meter Disassembled gas meter Recycling Initiatives

Recycling of Used Gas Pipes

In fiscal 1994, we established a system for recycling used gas pipes, which are removed during gas pipeline installation work and achieved an annual recycling rate of 100%. Polyethylene (PE) pipes* are reprocessed into such items as gas meter tags that show how to restart them after shut-off in the event of an emergency. Steel and cast-iron pipes are 100% recycled into raw materials by electric furnace makers and other companies. *PE pipes have been in widespread use since the Great Hanshin-Awaji Earthquake in 1995 because of their earthquake resistance and anticorrosive property.

Recycling Rate for Used Gas Pipes FY2013 FY2014 FY2015 FY2016 FY2017

PE pipes 100％ 100％ 100％ 100％ 100％ Gas pipes Steel and cast-iron pipes 100％ 100％ 100％ 100％ 100％

Recycling Process of Used Gas Pipes (PE Pipes) Recycling of Paper

We follow our Guidelines for Promoting Resource Saving and Recycling and strive to reduce the use of copy paper at all workplaces by holding paperless meetings and promoting double-sided printing. Moreover, we recommend using Forest Stewardship Council (FSC)-certified paper made from sources with proven consideration for the environment, such as forest conservation and support for the sustainable use of forests. In fiscal 2003, we started collecting used documents and waste paper and purchased and used recycled paper as Tokyo Gas Recycled Paper. In fiscal 2017, we purchased 247 tons of paper recycled in this way and used it for CSR reports, marketing pamphlets and other publications. Unlike the ordinary recycling of waste paper or purchases of recycled paper, we provide materials for Tokyo Gas Recycled Paper and purchase the paper as an independent effort to green the paper- related product chain. Furthermore, we have received cooperation from a wide range of companies, from waste paper haulers and waste paper wholesalers to paper wholesalers and paper manufacturers, in terms of the waste paper distribution and recycled paper production stages, and also from production and printing companies at the printing stage. Internally as well, all of our employees carefully separate waste to make it possible for us to provide high-quality waste paper for recycling.

Recycling used paper for Tokyo Gas Recycled Paper Dealing with Waste at Customer Sites

We promote the 3Rs at customer sites by controlling waste generation through considerations at the design stage, reducing container and packaging waste, and collecting used appliances.

System for Collecting and Recycling Waste such as Used Gas Appliances (SRIMS) We have operated our own Saving & Recycling Innovative Model System (SRIMS) since August 1994 to collect waste when we deliver gas appliances, parts and piping materials to partner companies. Through this system, which allows us to reduce environmental impact while also cutting costs, we collect used gas appliances and waste that comes from replacement by customers and gas installation or home renovation work. In fiscal 2017, we collected 8,140 tons of waste and recycled 7,693 tons.

Saving & Recycling Innovative Model System (SRIMS)

Helping Recycle Home Electric Appliances The so-called A Group led by Panasonic Corporation and Toshiba Corporation collects and recycles Tokyo Gas-brand household gas air conditioners and clothes dryers. These are eligible for recycling under the Act on Recycling of Specified Kinds of Home Appliances (Home Appliance Recycling Law). In fiscal 2017, 90% (compared to at least 80% legally mandated) of our air conditioners collected and 87% (82% legally mandated) of our clothes dryers collected were recycled in terms of gross weight.

Recycling under the Home Appliance Recycling Law (FY2017) Item Unit Air conditioners Clothes dryers

Collected at specified places Number 12,115 6,138

Transported to processing plants Number 12,104 6,152

Recycled by number of units Number 12,081 6,030

Recycled by weight t 498 244 Recycling Recycled products by weight t 450 215

Recycling rate ％ 90 87

Collected kg 7,865 - Fluorocarbons Destroyed kg 1,105 - Reducing Waste of Containers and Packaging We make it a rule to collect discarded containers and packaging when partner companies sell and install gas appliances to reduce waste at customer sites. Collected containers and packaging are recycled in the Saving & Recycling Innovative Model System (SRIMS). In fiscal 2017, approximately 575 tons of corrugated cardboard and 15 tons of polystyrene foam were recycled. In addition, we work to reduce the quantity of containers and packaging for gas appliances. These efforts include reducing cushioning through the redesigning of cardboard packaging, cutting back on the use of cardboard through shrink wrapping in plastic film, and adopting returnable packaging, in which packaging materials are collected and reused.

Cardboard boxes designed to Shrink wrapping Returnable packaging require less cushioning (repeatedly used containers)

Dealing with Waste from Other Business Activities

Dealing with Waste from Construction Work The Group deals with waste from gas equipment installation work under direct contracts with gas utilities, gas pipe work at customer sites, installation of air-conditioning, heating and hot water systems, and home renovation work. This waste is mainly construction rubble and sludge, scrap metal and woodchips.

Working to Reduce Waste in Gas Equipment Renewal Work

We have adopted the prefabrication and precut method for piping work for the Tokyo Gas Eco- System (TES) used at condominiums. Pipes and joints as well as other materials are processed at manufacturing plants and supplied as piping sets in time for the work at each house. The only work necessary at the worksite is connecting and fixing the pipes to appliances. Since advance processing reduces waste, we promote this method in cooperation with manufacturers and installation contractors.

Working to Achieve Zero Mixed Waste in Gas Equipment Renewal Work

Replacement of equipment or pipes at condominiums using our HEATS gas central air-conditioning and heating system requires dismantling and removal work. At a relatively small scale, this often used to require the disposal of mixed waste because the work period and space did not allow waste separation. We have therefore established out a waste separation protocol at the planning stage of construction work in coordination with relevant parties. Thanks to measures such as worker training in waste separation, we have achieved zero mixed waste from construction work and reduced the volume of landfill waste disposal. Contribution to the Environment

Biodiversity Conservation Activities

Promoting Biodiversity Conservation and Sustainable Use Human activities are believed to have taken many species to the brink of extinction, rapidly upsetting the balance of ecosystems. Recognizing richly diverse ecosystems as a foundation of its business, the Tokyo Gas Group has drawn up the Guidelines for Promoting Biodiversity Conservation to preserve biodiversity and its sustainable use and ensure the continuity of our business. Specifically, we monitor the status of each segment of the value chain and work to mitigate the impact on ecosystems while also engaging in forest conservation efforts at our Nagano Tokyo Gas Forest along with other activities.

Carrying Out Environmental Impact Assessment Extracting natural gas and constructing LNG (liquefied natural gas) terminals or power stations have a far from negligible impact on the landscape and natural environment. The Tokyo Gas Group has reviewed the state of biodiversity conservation at natural gas wells abroad and confirmed that consideration is given to local ecosystems. In Japan, we conduct the required environmental assessments for the construction of LNG terminals and power plants and cooperate with nongovernmental organizations to undertake such activities as managing green spaces with due consideration for ecosystems. Taking into account the growing risks facing watersheds, we assessed the impact of drainage on ecosystems at all our LNG terminals with the use of the Integrated Biodiversity Assessment Tool, and we did not find problems.

Link ▶ Impacts on Biodiversity and Responses along the LNG Value Chain（PDF︓237KB）

Measures in Our Value Chain

We are working to conserve biodiversity by accurately understanding the impact of each segment of our value chain, from natural gas procurement to transportation, production and supply.

Procurement

Measures at LNG Suppliers

In gas fields from which Tokyo Gas procures LNG, our suppliers implement measures to conserve biodiversity, such as protecting endangered species and forests as well as by engaging in afforestation and protecting marine ecosystems. In our LNG project in Indonesia, for example, we are striving to protect an endangered species of painted terrapin called the sea tuntung and restore mangroves. Our LNG project in Qatar involves relocating coral reefs from a pipeline construction area to a new environment. We have also been able to confirm that the coral reefs were successfully transplanted to that new location and have showed signs of regrowth. In our LNG project in Australia, we provide the Industry-Government Environmental Meta-database (IGEM), which comprises oil and gas business operators, the government, research organizations and others such as investors, with data collected in monitoring surveys and other activities as a means for sharing environmental knowledge.

Immature Sea Tuntung terrapins Source: KOMPAS.COM-Pertamina dan YSCLI Selamatkan Tuntong Laut dari Kepunahan

Measures during LNG Transport

Concerns have been raised that the discharge of ballast water (seawater taken into a vessel as a counterweight to maintain stability after LNG is unloaded) adversely affects ecosystems by introducing foreign aquatic organisms into areas where they are not typically found. Although we have already taken some steps, such as discharging ballast water on the high seas, we are also installing ballast water treatment equipment on LNG carriers that we own and operate, including those under construction, to reduce the impact on ecosystems, under the International Convention for the Control and Management of Shipʼs Ballast Water, adopted by the International Maritime Organization, that went into effect in September 2017.

LNG carrier Hard clams not previously found in Japanese waters

Production We are greening the sites of the Sodegaura, Negishi, Ohgishima and Hitachi LNG Terminals by only partially mowing grass fields and curbing the use of herbicides, and our staff also plant trees. In addition, we collaborate with the Jumoku Kankyo Network Society, a nonprofit organization, in conducting research on birds, insects and plants. Thinning trees on the basis of proven research and stacking eco-piles of rotting timber and other matter helps areas with diverse species of flowers with a positive impact on insects. We have confirmed that Japanese rice fish, an endangered species, can breed naturally in artificial ponds at our LNG terminals.

Staff members plant trees at an LNG Japanese rice fish in our artificial pond terminal

Supply While we previously used pit sand to refill sites excavated for gas pipeline work, reducing the use of pit sand mitigates environmental destruction around quarries and reduces the number of sand- carrying vehicles and CO2 emissions. The Tokyo Gas Group lays pipes in shallower, narrower trenches than conventional installations and adopts a non-open cut construction method, which does not dig up roads, to reduce the volume of excavated soil. Also, we are increasing the use of improved soil and recycled road surface materials as well as a new temporary backfill for refill work to reduce the amount of pit sand used. Workers using a shaft to thrust a gas Pipeline work using Eco-balls, a new kind pipe into place of temporary backfill

Recycling Excavated Soil

Pipeline work using Eco-balls, a new kind of temporary backfill

Link ▶ Promoting 3R Efforts Concerning Excavated Soil

Offices We plant trees on rooftops and create green curtains at our offices and corporate museums. We have greened the rooftop of the Gas Science Museum and point to this example in communicating with customers as well as local elementary schools and other community groups. At the TG Kumagaya Building, plants growing against the walls and near the windows provide shade to lower indoor temperatures.

Greened rooftop of the Gas Science Museum

Plants growing against the walls and windows at the TG Kumagaya Building Other Measures to Conserve Biodiversity

We participate in forest preservation at the Nagano Tokyo Gas Forest, which opened in 2005, and the Mori Sato Umi Tsunagu (Connecting Forests, Villages and Ocean) Project, which started on June 1, 2017, to examine the connections among forests, villages and the sea through environmental activities, the Donguri (Acorn) Project in partnership with customers and the Watashi no Mori (My Forest) Project. These are all part of our efforts to address climate change and conserve biodiversity.

Biodiversity Conservation Activities at Nagano Tokyo Gas Forest We have been monitoring the environment at the Nagano Tokyo Gas Forest since 2007 together with a local nonprofit organization as an effort to conserve biodiversity. We have confirmed a total of 428 species of living organisms in the forest (324 plants, 26 mammals and 78 birds). Looking ahead, we will apply information on ways to take care of trees and address the rise and fall of animal populations as part of future forest preservation and biodiversity conservation plans.

A hare in the Nagano Tokyo Gas Forest A wren

Link ▶ Other Measures to Reduce CO2 Emissions, Forest Conservation Activities at Nagano Tokyo Gas Forest

Environmental and Social Contribution Activities in the Mori Sato Umi Tsunagu (Connecting Forests, Villages and Ocean) Project

Link ▶ Other Measures to Reduce CO2 Emissions, Support for the environmental and the social contribution activity: Mori Sato Umi Tsunagu (Connecting Forests, Villages and Ocean) Project Contribution to the Environment

Pursuing the Effective Use of Biomass

We are developing technologies that make use of biomass in a bid to reduce greenhouse gas emissions. Biomass is a generic term for plant and animal-derived organic resources*1 (excluding fossil resources) that can be recycled into energy or material. Burning biomass releases CO2, but CO2 absorbed from the atmosphere by plants during photosynthesis offsets this release. This is the greatest advantage of using biomass. It can be used as an energy source in a number of ways, such as obtaining heat or electricity with the use of steam generated by burning it, and using biogas acquired from fermented biomass for combined heat and power (CHP) systems*2. We plan to promote the wider use of biomass and its diffusion by working on the biogas utilization technologies we have developed through combustion of city gas and biogas as well as technologies for extracting biogas through more reasonable and efficient methane fermentation of biomass, such as food waste, and upgrading biogas to a higher quality gas. *1 Examples are rice straw, farm, forestry and fishery products like livestock excrement, food waste, sewage sludge and wood chips.

*2 Gas engine-based CHP systems generate electricity and recover waste heat generated as a by-product.

Developing Biogas Utilization Technologies The Tokyo Gas Group possesses technologies for converting biomass such as food waste and sewage sludge into gas for use as fuel for boilers and power generation and uses biogas that builds up at customer sites mainly as fuel for cogeneration equipment. As biogas is a lean fuel comprising about 60% of CH4 and 40% of CO2, specific power generators are needed. We were the first in Japan to begin to refine biogas from food waste, adjust its calorific value and odorize it so that it could be injected into city gas pipelines. In fiscal 2017, we received 485 thousand m3 of biogas derived from food waste (equivalent to about an 827-ton reduction in CO2 emissions).

How Biogas Is Fed into Gas Pipelines

We have been carrying out joint research with the city of Yokohama since fiscal 2013 on ways to expand the use of biogas from sludge at a sewerage facility in northern Yokohama. We set up test equipment for refining biogas at the North Yokohama Sludge Recycling Center and are developing technologies for removing CO2 in sewage sludge biogas using a separation membrane to concentrate methane. Test equipment for refining biogas at North Yokohama Sludge Recycling Center

Establishing a Foundation for Hydrogen Supply

Construction and Operation of Hydrogen Stations We construct and operate hydrogen stations to popularize fuel cell vehicles (FCVs) and help establish the infrastructure for supplying hydrogen. We want to create a hydrogen society that makes use of zero-emission hydrogen energy. CO2 emissions for which FCVs are liable do not differ significantly from those for electric vehicles in terms of mileage, and the use of FCVs helps to reduce environmental impact. Japanʼs energy self-sufficiency rate stood at only 8.4%*1 in 2016, a relatively low international ranking. The nation is often affected by international developments because of its dependency on fossil fuels imported from abroad for power generation. Since burning such fuels produces a significant amount of CO2, energy diversification is required. The Japanese government is pursuing the goal of putting about 800,000 FCVs into use and establishing roughly 900 hydrogen stations by 2030. As of the end of January 2018, about 2,400 FCVs were in use and around 101 hydrogen stations were in operation. In February 2018, we jointly established Japan H2 mobility, LLC (JHyM) with 10 other companies*2, including infrastructure businesses, automobile makers, financial investors and other companies, to accelerate the pace of developing hydrogen stations. The worldʼs first collaboration of this kind will pursue an initiative for the strategic development and efficient operation of hydrogen stations. The objective is to establish a virtuous circle between FCVs and hydrogen stations, that is, increasing convenience for FCV users, boosting the number of FCVs, making hydrogen stations business profitable and building more hydrogen stations. Tokyo Gas will construct and operate hydrogen stations as an infrastructure company in collaboration with JHyM. Looking ahead, we will continue to pursue efforts to create a sustainable hydrogen society in collaboration with other companies. *1 Source: Agency for Natural Resources and Energy

*2 Three automobile makers: Toyota Motor Corporation, Nissan Motor Co. Ltd. and Honda Motor Co. Ltd.; five infrastructure businesses: JXTG Nippon Oil & Energy Corporation, Idemitsu Kosan Co. Ltd., Iwatani Corporation, Toho Gas Co. Ltd. and Air Liquide Japan Ltd.; and two others including financial investors: trading company Toyota Tsusho Corporation and financial firm Development Bank of Japan Inc.

Establishment of Japan H2 mobility, LLC

Chronology of Hydro Station Construction and Operations Hydrogen Supply Time Outline Method*3

May 2003 Senju Hydrogen Station opened in a pilot R&D project On-site

December Haneda Hydrogen Station opened in a pilot project. (Japanʼs On-site 2010 first hydrogen station with a natural gas stand (until 2015)

December Nerima Hydrogen Station opened as the first commercial Off-site 2014 station in the Kanto region January 2016 Senju Hydrogen Station converted into a commercial facility On-site

February Urawa Hydrogen Station started commercial operations On-site 2016

February Tokyo Gas set up JHyM with other companies to promote 2018 hydrogen stations

*3 Hydrogen stations supply hydrogen produced on location from city gas (on-site method) or hydrogen produced elsewhere (off-site method).

Nerima Hydrogen Station Senju Hydrogen Station Urawa Hydrogen Station

How City Gas Is Changed into Hydrogen (On-site Hydrogen Station)

Tokyo Gas produces hydrogen through the conversion of city gas, which emits only a limited amount of CO2 and has a low impact on the environment.

Process of Hydrogen Production in the On-site Method

*A device for cooling hydrogen to prevent the temperature in an FCV fuel tank from rising during refueling.

Development of Hydrogen Technologies Tokyo Gas conducted research and development on hydrogen stations for supplying hydrogen to fuel cell vehicles as a participant in a New Energy and Industrial Technology Development Organization (NEDO) project on research and development of hydrogen utilization technology from fiscal 2013 to fiscal 2017. As NEDO is expected to carry this project forward, we will continue exploring ways to control the quality of hydrogen fuel injected into FCVs, assess the accuracy of hydrogen injection quantity measurement and inject hydrogen into FCVs other than passenger cars, such as buses and motorcycles. In addition, we will help formulate industry guidelines for these methods in the hope of incorporating them into international standards. We are further exploring efficient ways to run commercial hydrogen stations and reduce their maintenance costs.

Technological Innovations in CHP Systems

Improvement of Power Generation Efficiency and Total Efficiency CHP systems boast significantly better power generation efficiency, approaching 50% for large-scale systems with an output of 5,000 kW or higher and exceeding 40% for medium-size systems with an output of 300 kW to 1,000 kW. This has resulted from technological development, such as the mirror cycle method*1 and fine, cylinder-wise control of combustion. We improved the performance of the 1,000 kW-class GS16R2 CHP system, launched in fiscal 2014, and achieved a power generation efficiency of 42.5%, the highest for this class, as well as an overall efficiency of 80.1%. We rolled out the improved model in April 2017 and have benefited from a growing sales volume. CHP systems have raised customer expectations from the perspectives of eco-friendliness, energy conservation and business continuity planning, and they are predicted to be in wide use in line with improvements in economy and energy security. In the future, the use of solid oxide fuel cells (SOFCs) that operate in higher temperatures should realize even more efficient CHP systems. In partnership with manufacturers, we tested commercial SOFCs with an output of several to hundreds of kilowatts at the Senju Techno Station. By installing this equipment in facilities for different industries, we were able to assess their durability as well as their potential for saving energy and cutting CO2 emissions under actual conditions and confirmed energy savings in all cases. As a result, we commercialized a 3 kW-class SOFC system for business use, which features a power generation efficiency of 52.0% and total efficiency of 90.0%. *1 The focus of this method is on improving heat efficiency by making the cylinder expansion ratio greater than the compression ratio through a change in the cam profile shape in order to delay the timing of valve closing, unlike the conventional Otto cycle, in which the cylinder compression ratio and expansion ratio are the same.

Power Generation Efficiency (LHV) of CHP Systems

Topic

Testing a 5 kW-Class Commercial Fuel Cell at a Public Facility in Arakawa Ward

As of March 2018, we are continuing to test a 5 kW-class commercial fuel cell installed at the Arakawa Sogo Sports Center in Tokyoʼs Arakawa Ward. The test under actual conditions of 5 kW-class commercial fuel cells is being conducted under an agreement concluded between Arakawa and Tokyo Gas at the end of 2015. This is the first test of its kind at a public facility in Japan. Electricity generated by a commercial SOFC powers first-floor lighting at the center, while waste heat is used to produce some of the hot water for locker room showers. During the test, a monitor displays the amount of electricity generated by the SOFC, and visitors can experience the hot water. The project is intended to raise awareness of fuel cells and the contribution they can make to the creation of a low-carbon society.

Attendant explaining how a 5 kW-class commercial fuel cell is tested Topic

Worldʼs First 65%-Level Power Generation Efficiency Achieved by a 5 kW-Class Fuel Cell

We have developed technologies to improve the efficiency of SOFC power generation and confirmed the worldʼs first 65%-level*2 power efficiency rate on a lower heating value (LHV) basis by a small-output, 5 kW-class fuel cell hot box. We combined three technologies̶building double fuel cell stacks, recycling fuel and achieving thermal self-sustainability with unused fuel̶and verified their effectiveness. With these technologies, we will accelerate research and development to build a prototype so that we can contribute to creating a low-carbon society upheld by the advanced use of city gas with a marginal impact on the environment. *2 Excluding the energy to operate the fuel cell when it is incorporated into a power generation system, and on a direct-currency transmission-end efficiency basis for use by customers; with an auxiliary loss of 6% and DC-AC inverter loss of 5%.

Hot box

SOFC Technology for Using More Injected Fuel for Power Generation

Source: Tokyo Gas Co., Ltd. Topic

Breaking 80% Power Generation Efficiency Barrier: Successful Development of a Theoretical Design for an Innovative Concept to Dramatically Improve SOFC Efficiency

In a joint study, Kyushu Universityʼs Next-Generation Fuel Cell Research Center (NEXT-FC) and Tokyo Gas have successfully developed an innovative concept to improve dramatically the electrical efficiency of solid oxide fuel cells (SOFCs) to over 80% on a lower heating value (LHV) basis and improving the mechanism, for the first time in the world. This achievement was published in July 2015 in Scientific Reports, Natureʼs sister online publication. Super-efficient energy conversion from fossil fuel to electricity is expected to make a major contribution to reducing CO2 emissions and provide the core energy technology for creating a highly environmentally sound, smart energy society. In addition, super-efficient power generation systems are potentially far more adaptable to market demand because they produce so little waste heat during the power generation process that they can eliminate the need to use waste heat.

Innovative Technology to Increase Power Generation Efficiency

Contributing to the Creation of a Low-Carbon Society through Innovation

The Tokyo Gas Group has consistently developed technologies for reducing energy consumption and CO2 emissions. However, to further bolster efforts to create a low-carbon society, we must move beyond our proprietary technologies and embrace innovative ideas and technologies from around the world. To that end, we are promoting open innovation style research and development. In fiscal 2017, we set up two specialized companies in the United States, Acario Investment One LLC and Acario Innovation LLC, and began investing in venture capital firms and venture businesses that specialize in energy technologies. We will seek closer collaboration with startup ventures and companies that have innovative business models toward meeting the demands of a low-carbon society. Contribution to Local Communities

Basic Policy

The Tokyo Gas Group, through its business, is closely aligned with the energy needs of local residents. In light of the growing demand to develop communities that exist in harmony with the environment and are more resilient to disasters, we will work hand in hand with those residents to raise awareness of energy, the environment and disaster prevention. Firmly upholding the spirit of serving the community as a good corporate citizen, we will maintain our relationship with local residents and strive to create a prosperous society. Contribution to Local Communities

Building Communities and a Way of Life that Is Safe and Secure

Why Is this Materiality?

To contribute as an energy company to the development of disaster-resilient and more accessible communities toward creating a sustainable society.

FY2017 Performance and Evaluation Criteria for evaluating KPIs Target achieved (100% or above) Target not achieved but performance improved from the previous fiscal year Target not achieved

Note: Qualitative indicators with no evaluation axis are assessed on the basis of whether progress has been made since the previous fiscal year.

Target FY2017 Results Evaluation (CSR KPIs)

Strengthening Constructed a Smart Energy Network in the northern district initiatives to enrich near Tamachi Stationʼs east exit. society Promoted smart networks by supplying energy in the Nihonbashi Muromachi areas, including town blocks.

Provision of ■ We shared information on disaster prevention through disaster information on preparedness events at our branches, branch offices and disaster prevention corporate museums in each region. measures Organized the “Iza! Kaeru Caravan!” experiential event at the Gas Science Museum. This was a segment of the TOYOSU BO- SAI EXPO2017 for disaster preparedness of Tokyoʼs Toyosu area. Our service branches, branch offices and corporate museums in each region communicated information on disaster prevention through demonstrations on local disaster prevention drills and events.

■ We forged closer ties with local communities by enhancing self-help and mutual-help capabilities against disasters and by participating in environmental beautification activities, to contribute to the development of disaster-resilient and more accessible communities. Held the HIIKU Festival 2017 at the Gas Science Museum as part of our interactive HIIKU fire education program aimed at enabling participants to survive a disaster and lead more comfortable lifestyles by learning about the characteristics of fire and the best way to handle it, as well its power and benefits. Produced a new program related to emergency toilets as well as practical and creative tips for surviving a disaster. We also organized disaster preparedness events involving this experiential program.

Key Initiatives for FY2018 and Beyond We reviewed the Tokyo Gas Groupʼs key CSR activities and materiality in fiscal 2017. Please visit the related link to view the latest information on our materiality and CSR KPIs.

Link ▶ Identifying New Materiality

Building a Society and a Way of Life that Is Good for the Environment

Why Is this Materiality?

To contribute as an energy company to the development of a sustainable global environment by taking action to address climate change, conserve biodiversity, and raise the environmental awareness and engagement of local residents.

FY2017 Performance and Evaluation Criteria for evaluating KPIs Target achieved (100% or above) Target not achieved but results improved from the previous fiscal year Target not achieved

Note: Qualitative indicators with no evaluation axis are assessed on the basis of whether progress has been made since the previous fiscal year.

Target FY2017 Results Evaluation (CSR KPIs)

Promotion of ■ We engaged in activities to address climate change, conserve activities to biodiversity, and raise the environmental awareness and raise energy engagement of local residents to contribute as an energy company and to the development of a sustainable global environment. environmental Examples of activities awareness Participation in and cooperation with environmental events, the interactive Donguri (Acorn) Project, forest preservation activities, management of the Gas Science Museum, activities to support education in schools: 1,263 projects Activities to support school education

Special classes taught by employees Total to date FY2017 (from FY2002 to FY2017)

Number of classes 727 36,562

Number of participants 22,687 1,102,087

Training for teachers Total to date FY2017 (from FY2008 to FY2017) Number of sessions 49 531

Number of participants 610 10,195

Key Initiatives for FY2018 and Beyond We reviewed the Tokyo Gas Groupʼs key CSR activities and materiality in fiscal 2017. Please visit the related link to view the latest information on our materiality and CSR KPIs.

Link ▶ Identifying New Materiality

Enriching Our Life and Culture

Why Is this Materiality?

To fulfill the Tokyo Gas Groupʼs responsibilities as a provider of services that are closely aligned with local needs by pursuing activities that leverage our strengths to resolve issues affecting everyday life and by supporting para sports and other activities to help make an inclusive society that is more diverse and fulfilling.

Performance in FY2017: Overview and Evaluation Criteria for evaluating KPIs Target achieved (100% or above) Target not achieved but performance improved from the previous fiscal year Target not achieved

Note: Qualitative indicators with no evaluation axis are assessed on the basis of whether progress has been made since the previous fiscal year.

Target FY2017 Results Evaluation (CSR KPIs)

Promotion of ■ Proposed solutions that make smart use of energy to create communication more fulfilling lifestyles and provided support to para sports activities with local and other activities to help make an inclusive society that is communities to more diverse and fulfilling. enrich the quality of Examples of activities life Participation in and cooperation with local events and volunteer activities, program of interactive activities (HIIKU fire education, food education, eco-cooking, cooking classes, etc.), support for youth education through sports (para sports, youth soccer and baseball workshops, etc.)

Key Initiatives for FY2018 and Beyond We reviewed the Tokyo Gas Groupʼs key CSR activities and materiality in fiscal 2017. Please visit the related link to view the latest information on our materiality and CSR KPIs.

Link ▶ Identifying New Materiality Contribution to Local Communities

Concept of Social Action Programs

The Tokyo Gas Group works together with local communities to implement activities based on the following guidelines for creating a sustainable society.

Social Contribution Guidelines 1. Basic Policy At the Tokyo Gas Group, we seek the attainment of a sustainable society where all people can live diverse, comfortable and fulfilling lives. To that end we will work together with local communities to resolve social issues as a company that people will continue to trust and make their first choice, engaging in those activities that Tokyo Gas Group is uniquely positioned to implement.

2. Three Key Fields (1) Building communities and a way of life that is safe and secure (2) Building a society and a way of life that is good for the environment (3) Enriching our life and culture

Building Communities and a Way of Life that Is Safe and Secure

We are working together with local communities to build neighborhoods in which people can live safely and securely.

Promoting Earthquake Countermeasures at Disaster Prevention Events Our branch offices and the companyʼs museums provide information on disaster countermeasures at disaster prevention events to enable us to efficiently coordinate with local authorities and communities in the event of a disaster. For example, during disaster prevention drills organized by municipal governments, we explain how to reset gas meters that have shut off during an earthquake with a seismic intensity of 5 or more. We also provide other useful information to enhance the safety and security of our customers in their daily lives. Since 2006, we have further developed our own disaster prevention events for families to enhance the disaster prevention capabilities of local communities. These events, called “Iza! Kaeru Caravan!”, are jointly organized with Plus Arts, an NPO, and held at our Gas Science Museum. In fiscal 2017, 5,990 customers visited these events and learned skills and knowledge that may be needed in the event of an earthquake. Participating in a disaster preparedness event

Emergency Toilet Program for Preparation against Disasters As an activity for protecting safety and security in daily life and saving lives, we began in fiscal 2017 to widen the reach of an emergency toilet program developed from our experience of restoring gas in disaster-affected areas. We hope to nurture self-help and mutual-help capabilities for survival of disasters in local communities.

Participants at an interactive event

Building a Society and a Way of Life that Is Good for the Environment

To contribute solutions for global environmental issues as an energy company, we work to raise energy and environmental awareness and suggest a variety of ways for people to save energy and protect the environment in their daily lives.

Eco-cooking Eco-cooking is an environmentally sound activity that begins with the familiar daily activity of cooking. Energy and resources are consumed throughout the process from production to tidying up. Eco- cooking*1 puts into practice environmental considerations at each stage in which we are directly involved, from shopping and cooking to eating and cleaning up. *1 Eco-cooking is a registered trademark of Tokyo Gas Co., Ltd.

Demonstration by a lecturer during a cooking class

Contributing to the Next Generation with Activities that Support School Education Children are our future, which is why we are committed to teaching them about the importance of energy and the environment and helping to cultivate a “zest for life” as the goal of school education. We organize training workshops for teachers that incorporate facility tours and group work to provide them with information about energy in general, including city gas, and environmental issues that they can use in their own instructional plans. We held 49 such workshops in fiscal 2017, with 610 teachers in attendance. Moreover, we have been dispatching Tokyo Gas employees to teach classes in schools since 2002. As of the end of March 2018, 36,563 classes had been held with a total of 1,102,087 children attending. Two of our visiting lecture programs, “How city gas is delivered to homes” and “Nurturing eco-eating (eco-cooking),” have been approved by the Tokyo Organizing Committee of the Olympic and Paralympic Games as part of the “Yoi Don! (Get set, Go!)” Tokyo 2020 educational programs, to support children in experiencing a better future. We also provide a variety of other educational resources, such as our “Odoroki! Naruhodo! Gas World” (“The Amazing and Interesting World of Gas”) educational website that makes learning about energy and the environment fun for both children and grown-ups alike while motivating children to learn on their own. The Gas Science Museum makes learning about energy and the environment fun. It is used as a venue for out-of-school learning, and provides educational support by hosting school social studies trips and organizing workshops. In fiscal 2017, the museum received 266,448 visitors.

Fourth-grade class on energy and the environment

Donguri (Acorn) Environmental Education Program for Young People The Donguri (Acorn) Project*2 is an environmental education program for young people that grew out of the Donguri Arbor Festival, which was launched in 1993 to counter the decline of broadleaf forests. In 2005, we moved our conservation work to Nagano Tokyo Gas Forest in Miyota, Nagano Prefecture, and Donguri (Acorn) Project events began to be held there three or four times a year. By taking part in forest conservation work and experiencing a variety of outdoor programs that engage all five senses, participants learn about forest ecology and the role that forests play in our everyday lives. The hope is that these experiences will encourage people to lead more environmentally friendly lifestyles. In fiscal 2017, during two events in May and November, 56 participants learned about the ecology of the semi-cultivated Satoyama area by taking part in nature craft and forest maintenance. This included clearing undergrowth in the Sayama Hills in Saitama Prefecture. *2 “Donguri (Acorn) Project” is a registered trademark of Tokyo Gas Co., Ltd.

Gaining experience in clearing undergrowth

Diverse Partnerships We are actively developing partnerships with government agencies, other firms, and outside organizations involved in environmental issues to raise environmental awareness in society as a whole. Enriching Our Life and Culture

In light of the challenges posed by the aging population and its declining birthrate, we organize community-based activities for maintaining fulfilling lifestyles through a smart use of energy.

Cooking Classes to Promote the Benefits of Cooking with Gas As a company that supplies the energy needed to cook day in and day out, we encourage people to fully benefit from the use of gas flame in everyday life. Launched over a century ago in 1913, our cooking class offers a variety of subjects tailored to different participants and needs, such as “Kids in the Kitchen,”*3 which teaches children how to cook for themselves in an environmentally friendly manner using all their five senses, and “La Cucina Espressa,”*3 which shows how gas is uniquely suited for quickly cooking multiple dishes at one time. All of our cooking classes incorporate an environmentally conscious approach to eating habits that we call “eco-cooking.”*3 These classes draw 80,000 participants each year. We also train instructors to teach eco-cooking, with a current total of about 3,700 instructors nationwide. Going forward, we will continue to enhance customer lifestyles and eating habits. *3 Kids in the Kitchen, La Cucina Espressa, and eco-cooking are registered trademarks of Tokyo Gas Co., Ltd.

Class with gas cooking stoves equipped with useful functions

HIIKU Fire Education about the Power and Benefits of Fire As part of our next-generation youth education initiative, we have been working since 2012 to expand our participatory HIIKU fire education program for children of elementary school age and older. The program is intended to give youngsters an opportunity to learn about fire and develop their ability to survive disasters and enrich their own lives by experiencing the various benefits of fire and the correct way to handle it. The program attracted 3,750 participants in fiscal 2017.

Learning how to light a match safely

Creating an Inclusive Society by Supporting Sports

Supporting Para Sports to Build an Inclusive Society Tokyo Gas became an official partner of the Japan Para-Sports Association (JPSA) in 2013 and began offering its support to para sports. Group employees have volunteered to organize sports competitions and held viewings and supporting events. We have also partnered with local governments to provide opportunities for experiencing para sports. We believe that these activities will cultivate a better understanding of people with disabilities and serve as an opportunity to develop a barrier-free mindset. Through the activities, Tokyo Gas aspires to realize an inclusive society in which people respect and support each other and lead vigorous lives in safety and comfort.

Experiencing sports prosthetics

Donating Paccho Points to the Japanese Para-Sports Association In March 2018, for the second consecutive year, Tokyo Gas donated an amount equivalent to the Paccho points collected by customers to the JPSA. Paccho points are awarded to customers according to the level of their gas or electricity payments and can be exchanged for a donation to the JPSA. An amount equivalent to the points provided by customers and matched by Tokyo Gas is donated to a social contribution project jointly selected by the Tokyo Gas Group, in its desire to create an inclusive society, and its customers. In fiscal 2017, 173 customers provided 95,900 points, enabling the general manager of the Corporate Communications Department of Tokyo Gas to present a total of 191,800 yen to Managing Director Yamada of the JPSA at a ceremony.

Presentation ceremony

Voice Interview with a Tokyo Gas Athlete

I have devoted myself to training as an athlete at Tokyo Gas to achieve my dream of winning a Paralympic gold medal.

In fiscal 2017, a number of events took place to mark the three-year countdown and 1,000 Days to Go to the Tokyo 2020 Paralympic Games, and I felt the growing public excitement for the Tokyo 2020 Paralympic Games.

Tokyo Gas sponsored events in Toyosu and Shinjuku, and I was able to convey the appealing, interesting Keiichi Kimura aspects of Paralympic sports to lots of children. Para-swimmer We are now two years away from the 2020 Games. The Paralympic Games in Tokyo will present a golden opportunity to see first-hand the para-athletes take on the challenge of demonstrating their potential. I hope you will come out to watch these games. Also, keep in mind that watching as many para- sports as possible and learning the game rules and backgrounds of each athlete beforehand will make watching the games even more exciting. I hope that watching the many para-sports events in 2018 will greatly increase overall awareness of the events. As an athlete, I will compete while giving it all Iʼve got to earn your support.

Tokyo Gas is an official partner of the Japanese Paralympic Committee in the Gas & Gas Utility Services category.

Profile Born in Shiga Prefecture in September 1990, Keiichi lost his sight at the age of two due to illness. He began swimming in fourth grade and developed into a major swimming talent after moving to Tokyo and joining the swimming club at the University of Tsukubaʼs School for the Blind (the current Special Needs School for the Visually Impaired).

Career highlights to date (S11/SB11/SM visual impairment classes) 2008 Competed at the Beijing 2008 Paralympic Games.

Won silver in the 100-meter breaststroke and bronze in the 100- meter butterfly at the London 2012 Paralympic Games. 2012 Set a world record for the 200-meter butterfly at the German Open. (Chosen as flag bearer for the Japanese team at the London 2012 Paralympic Games.)

Won gold in the 100-meter breaststroke and 100-meter butterfly, 2015 silver in the 50-meter freestyle, and bronze in the 200-meter individual medley at the IPC Swimming World Championships.

Won silver in the 50-meter freestyle, bronze in the 100-meter breaststroke, silver in the 100-meter butterfly, and bronze in the 2016 100-meter freestyle, and placed fourth in the 200-meter individual medley at the Rio 2016 Paralympic Games.

Supporting the Tokyo 2020 Games to Create an Inclusive Society

Events Marking 1,000 Days before the Games Last year Tokyo Gas held a multi-day Universal Festa on October 28 and 29 in Toyosu, and then on November 17 and 18 in Shinjuku to mark the 1,000 days before the start of Olympic and Paralympic Games Tokyo 2020. The event offered a wealth of opportunities to deepen understanding of the concept by recreating the sights, sounds and feelings of the upcoming sports competitions from panel discussions with athletes and experts on universal society and community development to activities allowing participants to directly experience para sports and using wheelchairs. The two sites attracted 4,000 visitors during the event's four days. Since February 2017, we have been organizing field trips for schools to learn about para sports. Students were able to try on sports prosthetics at the Shin-toyosu Brillia Running Stadium to gain an understanding of competing with disabilities and developed a greater interest and understanding in para sports. Support for the Tokyo 2020 Games and Beyond Tokyo Gas is an Official Partner of the Olympic and Paralympic Games Tokyo 2020 scheduled to take place in 2020 in the Gas & Gas Utility Services category. As a company that has supplied the Tokyo metropolitan area with energy and sustained daily life for over 130 years, we view the Tokyo 2020 Games as an opportunity for contributing to the success of the event and realizing our goal of creating an inclusive society. In particular, we will engage in activities in the areas of supporting para sports, providing services to improve the quality of life and to support communities, engaging in social issues, ensuring stable and secure energy supplies, and implementing advanced energy initiatives the Athletesʼ Village and the venues in the hope of contributing to the success of the games. Moreover, we intend to continue our activities beyond the Tokyo 2020 Games by making use of the knowledge we acquire in our business. We believe that this will allow us to better meet the needs of an aging population and globalized society toward realizing greater prosperity and comfort in our daily lives and communities, leading to the creation of an inclusive society and contributing to regional development.

Interview with the General Manager of the Tokyo 2020 Voice Olympic and Paralympic Department Reaching for a Future that Lies beyond the Excitement

In the United States, where I spent time as a student, people with disabilities were taken very good care of, even in the smallest towns that lagged behind in barrier-free infrastructure. In Japan, where progress has been made ahead of the Tokyo 2020 Games in terms of physical access, such as barrier- free facilities, there is still room for improvement in terms of awareness or public understanding toward people with disabilities.

Tokyo Gas will work toward the success of the Tokyo 2020 Games and support them as an Official Partner. Yumiko Yao In addition to providing infrastructure, we will strive General Manager, Tokyo to instill a barrier-free mindset for everyone. 2020 Olympic and Paralympic Department. Supporting the Paralympic Games and para sports is the first step for Japan in becoming a highly mature society that embraces diversity. The Tokyo 2020 Games represents a great opportunity for Japan to transform itself. In anticipation of 2020 and beyond, Tokyo Gas will make its best effort to contribute the creation of an inclusive society.

Corporate Emblem We added “sustainability” to the other six messages we wish to convey through our official partnership with the Tokyo 2020 Games as seven flames. The emblem will be used in our activities related to the Tokyo 2020 Olympic and Paralympic Games up to 2020 as well as in all of our initiatives for creating a cohesive society. We hope to carry this baton of flames to shine a light on the future.

Yellow: Caring about our customers Orange: Remaining close by Light blue: Valuing diversity Light green: Serving society actively Green: Valuing sustainability Red: Rising to the challenge Blue: Delivering safety and reliability

Support for Employee Volunteer Activities

The Tokyo Gas Group provides employees with opportunities to engage in volunteer activities working alongside local communities in tackling social issues.

Disaster Recovery Efforts: Earthquake Relief Volunteers Since launching our volunteer work program in June 2011, 1,980 employees and their families have, at 43 times, taken part in support activities tailored to the needs of the areas affected by the Great East Japan Earthquake. In fiscal 2017, volunteers took part in volunteer activities to support the restoration of farmland in Higashi-Matsushima City, Miyagi, and the Fukushima Organic Cotton Project in Iwaki City, Fukushima. The purpose of the project is to reclaim the large swathes of farmland abandoned in the wake of the 2011 earthquake to grow salt-tolerant cotton, which is harvested, processed into products, and sold. In April 2017, 280 new employees at Tokyo Gas visited Iwaki to help reclaim farmland for the project as part of their training.

Growing organic cotton Harvested cotton

Volunteer Work for Organizing Para Sports Events As part of our support for para sports, we have been providing volunteers to organize para sports competitions since 2015, help set up and clear venues, staff receptions, and serve as interpreters. To date, 101 Group employees have participated in 9 events.

Volunteers clearing a sports venue

Topic

Volunteering to Collect Spoiled Postcards and Used Stamps

The Tokyo Gas Group began collecting spoiled postcards since fiscal 2003 and used stamps and cards since fiscal 2017. Used stamps and cards are delivered to the Minato Council of Social Welfare in Tokyo to promote welfare and volunteer activities in local communities. The spoiled postcards are donated to the Darunee Scholarship Fund, administered by EDF-Japan (MINSAI Center), we are contributing to the education of children overseas. Specifically, the proceeds are used to fund an international foster parent program, which enables underprivileged children in Vietnam, Thailand, Myanmar, Laos and Cambodia to continue their education. As Darunee Scholarship certificate of autumn 2016, we are supporting three junior high school girls in Laos. Contribution to Local Communities

Tokyo Gas Southeast Asia Japanese Language Education Support Program

The Tokyo Gas Southeast Asia Japanese Language Education Support program is operated through activities of language programs organized by the Japan Foundation Overseas. Tokyo Gas seeks to expand its midstream and downstream operations in Southeast Asia in the years ahead. Also, by nurturing the younger generation with an interest in Japan, we intend to contribute to the development of sustainable societies, strengthen our ties with local communities, and develop our profile as a business group that can be trusted and counted upon.

Vietnam

In Vietnam, we have been supporting Japanese language education since April 2017 at the Ba Ria- Vung Tau University in Vung Tau City, Ba Ria-Vung Tau Province. In the Faculty of Oriental Studies, School of Languages-Cultures-International Relations, we operate a program for students who are majoring in Japanese language. We also conduct classes for second- and third-year students, offering guidance for participants in speech contests and providing assistance on graduation theses. And we support Japanese language education for students in science and engineering courses.

Japanese language majors in Ba Ria-Vung Tau Universityʼs Faculty of Oriental Studies attending class

Thailand

In Thailand, we conducted lectures for three hours on March 24, 2017 for about 40 students taking Japanese language courses at Kohn Kaen University in the northeast region. The program was attended by graduate students in science and technology courses and undergraduates in the engineering and environmental science departments. The lectures introduced the overseas business of Tokyo Gas while also explaining the application of basic technology and future outlook for a hydrogen-based society and other developments.

Lecture at Kohn Kaen University Contribution to Local Communities

Tokyo Gas Group Community Development

Expanding Smart Energy Networks

The Tokyo Gas Group focuses on smart energy networks (SENs) that capitalize on the advantages of combined heat and power (CHP) systems* to optimize local generation and consumption of energy by linking heat, electricity and information networks toward making communities more energy efficient, environmentally friendly and resilient to disasters. With CHP systems at the core, SENs raise energy efficiency by making maximum use of renewable and underused energy sources, which are integrated with information and communications technology (ICT) to construct an optimal energy system for accurately managing supply and demand. This also improves disaster resilience and so meets BCP (business continuity planning) needs while enhancing the value that cities offer. SENs are now being developed in redevelopment zones and other areas in the Greater Tokyo Area. One is the Tamachi SEN, which was awarded the Minister of Economy, Trade and Industry Award for joint projects in the Successful Case of Energy Conservation category at the Energy Conservation Grand Prize Awards in fiscal 2016. *CHP systems generate electricity and recover waste heat generated as a by-product.

Developing a SEN in the Northern District Adjacent to the East Exit of Tamachi Station The Tokyo Gas Group has been collaborating with Minato Ward in Tokyo to develop a low-carbon, disaster-resilient community in the northern district adjacent to the east exit of Tamachi Station. The project is intended to optimize energy demand, save energy and enhance disaster resilience by building a SEN. In 2014, construction of the Block I Smart Energy Center was completed and began supplying heat and electricity to the Minato Park Shibaura, a public facility, a hospital and child welfare facility in the Life Zone. Then, in May 2018, the Block II Smart Energy Center began operations within the New Urban Zone and started supplying energy to office buildings and a hotel. This public-private project is also intended to optimize energy management across the entire area by having the two SENs supply heat to each other, thereby reducing CO2 emissions by 30% below 2005 levels.

SEN for the Northern District Adjacent to the East Exit of Tamachi Station

*1 Smart Energy Network Energy Management System

*2 CHP systems

SEN Development in the Toyosu Wharf District The Tokyo Gas Group is pursuing urban development with the potential to extend deep into the 22nd century in a redevelopment area located around land the Group holds in the Toyosu wharf district of Tokyoʼs Koto Ward. Under this project, “Tokyo Smart City TOYOSU 22,” we are undertaking futuristic urban development guided by the three concepts̶“smart energy,” “smart green,” and “smart community,”̶from a long-term perspective looking beyond the Tokyo 2020 Olympics and Paralympics, as a high-quality development to raise the value and appeal of the area.

TOYOSU 22 Urban Development Concept

In May 2016, we completed construction of a smart energy center in Zone 4 (see figure below), owned by Tokyo Gas Site Development Co., Ltd., in preparation for development of a SEN in the Toyosu wharf district. This is the second SEN to be developed by Tokyo Gas in an urban redevelopment district, the first being in the northern district adjacent to Tamachi Stationʼs east exit. The newly completed smart energy center will be equipped with one of the worldʼs most efficient CHP systems, which will supply electric power to the Toyosu wholesale market while waste heat is used to power equipment at the center. Environmental friendliness will be enhanced by adopting gas pressure differential power generation*1 using gas supply pressure. By applying CHP systems with blackout start specifications*2 to construct the systems, laying independent power lines*3 and employing disaster-resistant medium-pressure gas pipelines, we will create a system capable of an uninterrupted supply of heat and electricity, even during power outages or other emergencies, thus enhancing the districtʼs resilience to disaster. The network will also have a “SENEMS”*4 for centrally managing and controlling energy throughout the district using ICT. SENEMS will instantly analyze and process real-time information on supply and demand, weather conditions and specific characteristics associated with each day of the week in order to automatically optimize energy demand and supply for the area. We plan to progressively expand the heat and power network as development of Zones 4 and 2 progresses. *1 Power generation based on the use of gas supply pressure.

*2 Process of independently restarting the generator during a power outage.

*3 Power lines laid independently by an operator. They can be used at a customer's discretion when grid power has been interrupted.

*4 Smart Energy Network Energy Management System.

Toyosu Wharf District Development Area

Tokyo Gasʼs Toyosu Smart Energy Center

Kiyohara Smart Energy Center In October 2016, Tokyo Gas and Tokyo Gas Engineering Solutions began constructing the Kiyohara Smart Energy Center. This is based on a 30 MW-class cogeneration system that will supply electricity and heat in the form of steam and hot water to seven plants operated by three companies in the Kiyohara Industrial Complex on the outskirts of Utsunomiya City in Tochigi Prefecture. The project will supply a combination of electricity and heat to multiple plants in different industries as Japanʼs first integrated energy-saving project serving multiple plants*1 in an inland industrial park. Also, the project will incorporate an energy management system*2 to concentrate data on electricity and heat (steam and hot water) usage for multiple plants in different industries with distinct demand depending on the time and season. By efficiently meeting those needs, we expect a reduction of approximately 20% in energy consumption*3 and CO2 emissions,*4 respectively. In addition to the effects of reducing environmental impact, blackout start specifications*5 will be adopted to supply electricity and heat (steam and hot water) to each plant in the event of a prolonged power outage or a disaster, thereby enhancing security. The centerʼs construction is compatible with Tochigi Prefectureʼs energy strategy and Utsunomiya Cityʼs action plan on addressing climate change, formulated by referencing the governmentʼs reduction targets for greenhouse gas emissions and other goals. It is therefore expected to serve as a model for other regions in Japan. In fiscal 2016, the project was selected to receive a subsidy from the Ministry of Economy, Trade and Industry for supporting energy conservation at plants and other worksites. *1 Project for saving energy by integrating production lines and sharing utilities between multiple plants to facilitate the mutual use of energy and products.

*2 System for realizing optimal operation and control of CHP systems by visualizing the energy use of each company and predicting electricity and thermal load trends.

*3 Rate of reduction compared to the combined electricity and gas usage data in fiscal 2015 for seven plants operated by Calbee, Inc., Canon Inc. and Hisamitsu Pharmaceutical Co., Inc.

*4 Rate of reduction compared to the combined CO2 emissions data in fiscal 2015 for seven plants operated by Calbee, Inc., Canon Inc. and Hisamitsu Pharmaceutical Co., Inc.

*5 Process of independently restarting the generator during a power outage. Capable of an uninterrupted supply of heat and electricity even during a power outage or another emergency by laying independent power lines and employing disaster-resistant medium-pressure gas pipelines.

Overview of Electricity and Heat (Steam and Hot Water) Supply

Kiyohara Smart Energy Center

Japanʼs First SEN to Serve Neighboring Facilities in Nihonbashi Muromachi A large high-efficiency CHP system has been installed in the redevelopment zone in Nihonbashi Muromachi 3-chome to serve as an independent distributed power source. The system will supply electricity and heat to office buildings and commercial facilities in the surrounding area as well as within the redevelopment zone, making it the first such project in Japan. New projects of this kind will encourage the area-wide adoption of smart energy technologies and contribute to the development of cities that are much more resilient to disasters. The project is being run by Mitsui Fudosan TG Smart Energy, Inc. (a joint venture formed by Mitsui Fudosan and Tokyo Gas) and is expected to be completed in March 2019. Participation in Yokohamaʼs Tsunashima-Higashi Smart Town Project The Tokyo Gas Group is pursuing a number of projects, including development of an energy center, in Tsunashima Sustainable Smart Town, a next-generation urban smart city that will be developed on the former site of a Panasonic factory in the Tsunashima-Higashi district of Kohoku Ward in Yokohama, Kanagawa Prefecture. The first energy services came on stream in December 2016, and they are now being gradually expanded. The plan is to develop energy supply systems based on an advanced model for sharing heat and power supplies to diverse facilities over a more compact area than in the past. We will improve supply continuity by installing a CHP system in the town energy center and using multiple power sources and disaster-resistant medium-pressure gas lines. The use of more efficient equipment and area-wide energy utilization will also improve environmental friendliness. The delivery of energy services will ensure the financial viability of these improvements in supply stability and environmental friendliness.

Artist rendering of the town energy center Respect for Human Rights

Basic Stance on Respecting for Human Rights

The Tokyo Gas Group recognizes respect for human rights as a prerequisite for all Group business operations toward achieving sustainable development in an increasingly global society. We consequently established Tokyo Gas Group Human Rights Policy in April 2018 based on the United Nations Guiding Principles on Business and Human Rights and other global standards to guide Tokyo Gas Group, comprising Tokyo Gas Co., Ltd. and its consolidated subsidiaries, in promoting human rights and fulfilling our obligations.

Initiatives on Respecting Human Rights Tokyo Gas Group Our Code of Conduct, which sets forth the standards of conduct for all employees, includes a pledge to respect human rights. Starting with the creation of vibrant workplaces that promote human rights, we provide training at each location to raise awareness and take action with a focus on respect for human rights, including international human rights issues. The code of conduct also includes a pledge to respect clients and suppliers as business partners and to conduct business in good faith. We continuously ensure that our Purchasing Guidelines for Suppliers are thoroughly understood and followed and that subcontractors involved in our business with corporate partners also comply with them. In addition, we implement human rights due diligence and steadfastly ensure respect for the human rights of diverse stakeholders throughout our business activities.

●Tokyo Gas Group Human Rights Policy Approved by the Board of Directors of Tokyo Gas Co., Ltd., on February 23, 2018. Introduction The Tokyo Gas Group (Tokyo Gas Co., Ltd. and its consolidated subsidiaries) strives to fulfill its public mission and social responsibilities through its energy business, with the belief that creating a society that respects human rights is essential. We are aware that respecting human rights therefore becomes a prerequisite for all our business activities. We established the Tokyo Gas Group Human Rights Policy (hereafter “the Policy”) based on the United Nations (UN) Guiding Principles on Business and Human Rights to guide our Group-wide efforts to promote human rights and fulfill our obligations. The Policy is directly linked to the Groupʼs Management Philosophy and Corporate Action Philosophy and was determined with the approval of the Board of Directors of Tokyo Gas Co., Ltd. to stand as our public commitment to respect human rights.

1. Our Commitment to Respect Human Rights The Tokyo Gas Group upholds and respects international norms on human rights, including the UN International Bill of Human Rights, which stipulates the basic human rights of all persons, the OECD Guidelines for Multinational Enterprises, and the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy. Moreover, we strive to implement the UN Guiding Principles on Business and Human Rights in our daily operations. We comply with all applicable laws and regulations in each country and region in which we operate. Where we face conflicting internationally recognized standards of human rights and national or regional laws and regulations, we seek ways to honor the principles of international norms on human rights. 2. Scope of the Policy The Policy applies to all officers and employees of the Tokyo Gas Group (Tokyo Gas Co., Ltd. and its consolidated subsidiaries).

3. Respect for Human Rights in Our Value Chain 3－1 We will seek to prevent or mitigate adverse impacts on human rights caused by stakeholders throughout our value chain, encompassing all processes involved in our business activities. 3－2 We respect our employees and those with whom we work, and we create a healthy and inclusive working environment. 3－3 We will sincerely deal with customers and strive to ensure safety and improve quality. 3－4 We will pay due respect to human rights in our business relationships. Where our business partners or entities in our value chain are causing or contributing to adverse impacts on human rights that are directly linked to our operations, products, or services, we will require the relevant entities to respect human rights and avoid infringing upon such rights. 3－5 We will seek to understand how our business activities may impact local communities and strive to cooperate with local communities.

4. Human Rights Due Diligence We will identify and assess any actual or potential adverse human rights impacts and take action to prevent or mitigate human rights risks through an ongoing effort to develop and exercise due diligence to ensure respect for human rights.

5. Relief and Remediation Where we confirm that we have caused or contributed to adverse human rights impacts, we will provide relief and remediation through legitimate processes.

6. Dialogue and Consultation We are committed to engaging in dialogue and consultation with relevant stakeholders on measures for addressing potential and actual human rights impacts.

7. Human Rights Education We will provide appropriate education and develop human rights awareness to ensure that the Policy is understood and embedded throughout our business activities so as to be effectively implemented.

8. Information Disclosure We will disclose information on our human rights initiatives through various means, including our corporate website and CSR report.

Signing of the UN Global Compact Tokyo Gas signed the UN Global Compact in March 2016 to demonstrate its commitment to protecting and respecting human rights and labor standards. Respect for Human Rights

Human Rights Due Diligence

Why Is this Materiality?

Human rights awareness provides the foundation for employees to achieve their full potential and for strengthening relationships with stakeholders.

Additional efforts to address human rights concerns are essential for implementing our GPS2020 management plan.

FY2017 Results and Evaluation Criteria for evaluating KPIs Target achieved (100% or above) Target not achieved but improved from the previous fiscal year Target not achieved

Note: Qualitative indicators with no evaluation axis are assessed on the basis of whether progress has been made since the previous fiscal year.

Target FY2017 Results Evaluation (CSR KPIs)

Promotion of ■ We held various training with level-specific training at its core, human rights with 17,070 participants, to ensure that every Tokyo Gas compliance Group employee respect human rights and to create a vibrant management workplace.

■ Initial training for human rights promotion leaders and booster training for leaders were conducted at each workplace, with 353 participants.

■ Addressed 104 cases through internal and external consultation desks set up to provide support for communication and human rights issues in the workplace.

■ Held a workshop on persons with disabilities to address key human rights issues in March, with 350 participants.

■ Established Tokyo Gas Group Human Rights Policy, which came into effect in April 2018, to define the respect for human rights required of a global company.

Key Initiatives for FY2018 and Beyond We reviewed the Tokyo Gas Groupʼs key CSR activities and materiality in fiscal 2017. Please visit the related link to view the latest information on our materiality and CSR KPIs.

Link ▶ Identifying New Materiality Respect for Human Rights

As an energy company, the Tokyo Gas Group is committed to engaging in responsible business activities and respecting the human rights of all people, including its employees. For us promoting human rights starts with the establishment of fair human resource selection procedures and the creation of a vibrant workplace, and we are pursuing various measures as a group to achieve these goals. In addition, we will continue to address human rights issues such as the promotion of diversity and prevention of harassment toward advancing our medium-term management plan GPS2020.

Human Rights Promotion System

System for Raising Awareness The Tokyo Gas Group has set up the 16-member Central Human Rights Promotional Committee chaired by the chief compliance officer and consisting mainly of the general managers responsible for personnel matters in each department. The committee meets once a year for a central human rights promotional meeting to confirm the Groupʼs overall understanding of human rights issues, results of training, and action plans for raising awareness for the next fiscal year. Subcommittees called District Human Rights Promotional Meetings, chaired by the general managers responsible for personnel matters in each department, are established under the committee, and district secretariats and human rights promotion leaders organize human rights training and related activities in each workplace. Since 1995 we have trained 15 cohorts of human rights promotion leaders to lead efforts in each workplace to create a vibrant workplace, and 225 leaders, including those at subsidiaries, have served as instructors during workplace workshops and as advisors for consultation desks on human rights.

System for Raising Human Rights Awareness

Central Human Rights Promotional Training session for human rights Meeting promotion leaders

Training Topics for Human Rights Promotion Leaders The relationship between CSR and human rights Reasons why businesses take action on human rights Action taken by Tokyo Gas on human rights Exploring Dowa*issues Discrimination awareness The international community and human rights Various human rights issues (women, children, older people, people with disabilities, foreign nationals in Japan, LGBT issues, etc.) Harassment issues (sexual harassment, workplace bullying, alcohol-related harassment, etc.) Mental health in the workplace Communication skills (anger management and assertive communication) Fieldwork in various locations (National Hansenʼs Disease Museum, History Museum of J-Koreans, etc.) Counseling practice *Owing to forms of discrimination rooted in social structures that developed over the history of Japanese society, some segments of the Japanese population have been forced over the years to endure a lower status economically, socially and culturally and remain subject to various types of discrimination in their daily lives to this day.

Initiatives on Human Rights Due Diligence The Tokyo Gas Group strives to practice human rights due diligence in order to identify, prevent and mitigate human rights issues that arise along our value chain. We have consistently engaged in the following major actions and will continue to strengthen our efforts in accordance with Tokyo Gas Group Human Rights Policy, formulated in February 2018.

Major Actions on Human Rights Issues Stakeholder Major Actions

Address human rights issues through the consultation desks Conduct training for human rights promotion leaders who serve as lecturers in human rights workshops and advisors to those seeking consultation Organize seminars for raising human rights awareness toward creating a Employees vibrant workplace Conduct compliance surveys to identify potential risks Engage in occupational safety and health activities for the prevention of issues associated with working environments

Business Monitor the status of response to human rights issues at business partners partners based on CSR surveys.

Customers Monitor the status of personal information management.

Consultation Desks for Human Rights Issues Consultation desks have been established both inside the Company in the Compliance Department and outside the Company at a comprehensive consultation service to handle workplace issues on communication and compliance, including human rights. In fiscal 2017, we received 104 consultations, which were addressed appropriately depending on content. First and foremost, we seek to protect the person who is seeking consultation from being placed at a disadvantage. And we address issues through face-to- face consultations whenever possible in an effort to help create a safe and secure working environment by collaborating with employees.

Training System

Tokyo Gas provides training for employees with the objective of creating a vibrant workplace. Through training we seek to understand the latest trends in human rights surrounding companies and to sharpen our sensitivity by learning about the significance of supply chain management as a social responsibility required of a global company as well as human rights issues, including the Dowa issue, harassment and communication in the workplace. We have adopted a participatory approach in many of our training programs to encourage participants to develop a personal awareness of issues. For example, we compiled workplace situations that make employees uneasy from a human rights perspective. These case studies are used as learning material in our level-specific training. In addition, we try to make our training as realistic as possible by having participants take a personal interest in a case study and discuss it with each other.

Human Rights Awareness Training in FY2017* Number of Type Outline Participants

Four levels of training provided: upon entry to the (1)Level-specific training company, during the third year, and during 1,527 qualification promotions (two levels)

Practical training on topics selected by each (2)Workplace workshops 15,543 workplace

(3)Training programs and First-time leader training (one year) and follow-up follow-up for human 353 training for current leaders rights promotion leaders

(4)Human rights Presentations for middle management by outside 350 presentation speakers

*Training sessions with 20 participants were also given by instructors dispatched on request by government authorities.

Level-specific human rights awareness training

Respecting Human Rights throughout the Supply Chain As part of our initiatives for respecting human rights throughout our supply chain in Japan and abroad, we present our suppliers with the Purchasing Guidelines for Suppliers and engage in management activities such as CSR surveys. With respect to the Tokyo Gas Group employees, we seek to ensure understanding of these guidelines and stringent adherence to Tokyo Gas Group Our Code of Conduct. Furthermore, we monitor the status of response to human rights issues by conducting surveys of suppliers.

Link ▶ Supply Chain Management

Human Rights Lectures In March 2018, we held a human rights lecture on workplace tips for creating an inclusive society alongside people with disabilities. The lecture was attended by 350 participants, including members of the Central Human Rights Promotional Committee and human resources staff of Tokyo Gas, human rights education staff at subsidiaries, managers and heads of general administration departments of LIFEVAL companies, managers of Tokyo Gas Merchandisers Organization (TOMOS) members, and human rights promotion leaders. Lecture on human rights

Initiatives for Human Rights Week During Human Rights Week from December 4 to 10, we collect slogans for raising human rights awareness from employees and their families. In fiscal 2017, we received 11,317 entries, and posters of the best entries were displayed at each office. Promotion of Compliance

Basic Policies

The Tokyo Gas Group is committed to being a sound business enterprise, in which management and employees earn the trust of society by observing the highest ethical standards and exceeding public expectations in both the spirit and the letter of prevailing laws and regulations. To this end, the Group ensures compliance in accordance with established basic policies.

Coordinated Promotion of Compliance by Business Departments Based on Basic Policies Recognizing the importance of flexible and sustainable business activities in order to continuously adapt to changing business content and legal environments, the Tokyo Gas Group promotes collaborative cross-departmental efforts to strengthen compliance based on basic policies formulated each year by the Management Ethics Committee. Under these basic policies, each department of the Tokyo Gas Group establishes and follows a PDCA cycle to review and improve its operations from the perspective of compliance. In addition, we pursue compliance by sharing the values and standards of conduct as stipulated in Tokyo Gas Group Our Code of Conduct.

PDCA Cycle to Promote Compliance

Revision of Tokyo Gas Group Our Code of Conduct This code sets forth the values and standards of conduct for everyone who works at the Tokyo Gas Group. From fiscal 2003 to fiscal 2016, the code spelled out seven pledges. In fiscal 2017, however, the code was revised in the form of 11 pledges that incorporate international standards such as ISO 26000, the Olympic Charter, legal amendments and other key developments. ● Tokyo Gas Group Our Code of Conduct

Purpose and vision 1．“Our Code of Conduct” sets forth the values and standards of conduct that everyone who works in the Tokyo Gas Group is expected to share and follow in order to implement our Management Philosophy and Corporate Action Philosophy and ensure a focus on compliance in business. 2．By following this Code of Conduct, we will contribute to the creation of an affluent society through the Tokyo Gas Groupʼs growth and development as a corporate group that people will continue to trust and make their first choice.

1．We will constantly think and act responsibly as individual members of this “energy frontier corporate group” so that people will continue to trust our group and make it their first choice. （1）Continual innovation We will pursue continual innovation, unfettered by convention and ever sensitive to the expectations of customers, shareholders, and society. We will create the maximum outputs working in partnership with one another, while being fully aware of our individual roles and responsibilities and committed to self- improvement. （2）Doing more for the customer We will put the customer at the heart of everything we do. （3）Everyone is a brand builder Day in and day out, we will strive to build the “security,” “safety,” and “trust” that underpin the Tokyo Gas Groupʼs brand value.

2．We will constantly conduct business in a clear-cut and fair manner. （1）Legal compliance We will constantly conduct business in compliance with laws, internal rules and regulations, and socially accepted rules. We will act swiftly to resolve issues where infringements of laws, internal rules and regulations, or socially accepted rules have occurred or may occur. （2）Separation of professional and private spheres We will not use our professional position for personal gain. We will not use company property for private purposes. （3）Active disclosure of information We will enhance the transparency of business activities and actively and promptly disclose accurate information to customers, shareholders, communities, and other stakeholders in order to earn their trust. （4）Firm stand against antisocial forces We will stand firm against illegal and improper demands made by sokaiya racketeers, organized crime groups, and other antisocial forces. We will not, under any pretext, give benefits to or otherwise accommodate the demands or interests of antisocial forces.

3．We will deal with customers, business partners, shareholders, and all our stakeholders sincerely and equitably. 3-1. Customers （1）Satisfaction beyond expectations We will provide high value-added products and services that customers will make it their first choice. We will always put ourselves in the customerʼs shoes in order to deliver the best possible work that exceeds customer expectations. In the event of a customer complaint or accident, we will respond swiftly and in good faith to prevent a recurrence. 3-2. Business partners （1）Fair business dealings We will respect business clients and suppliers as business partners and do business with them in good faith. We will comply with the Antimonopoly Act and other applicable laws and ordinances, and will practice fair dealings in accordance with the principles of free competition. We will not exploit our position or authority to obtain undue benefit or make unreasonable demands. （2）Maintenance of proper relations We will always be conscious of social point of view in our interactions with business partners, and will never commit any act that might cause misunderstanding or distrust from inside and outside the company. We will maintain fair relations and do nothing questionable under applicable national and local laws and ordinances in our dealings with government and other public officials and employees. （3）Understanding and observance of the Purchasing Guidelines for Business Partners We will promote understanding and observance of the Purchasing Guidelines for Business Partners by our business partners and others along our supply chains, and we will require partner businesses involved in transactions with those companies to observe the same standards. 3-3. Shareholders We will facilitate the appropriate exercise of shareholdersʼ rights through fair, timely, and appropriate disclosure and constructive dialogue.

4．We will respect diversity and individuality among our colleagues and create an inclusive working environment. （1）Respect for human rights We will respect human rights, prohibit child labor and forced labor, and not discriminate or harass anyone on the basis of race, nation, religion, gender, age, origin, nationality, disability, education, social status, sexual orientation, gender identity, or other such grounds. We will respect one anotherʼs positions and treat everyone equally, irrespective of form of employment, gender, title, or any other differences. We will not commit sexual harassment, workplace bullying, pregnancy discrimination and other types of harassment, discrimination against employees who take family care leave, or any other acts that infringe the dignity of the individual. We will also not allow to condone such acts. （2）Attainment of excellent record of occupational safety and health We will enforce compliance, including adherence to all related laws and regulations, and make every effort to eliminate the risks of disasters and accidents in order to establish an excellent safety and health. （3）Creation of a cheerful workplace We will create a lively workplace where everyone can realize their full potential and individual differences are respected. We will create an open workplace where everyone can share necessary information and engage in free expression and discussion. （4）Promotion of diversity We will accept one anotherʼs values and various work styles, and get the best from our own knowledge, abilities, and experience. We will also all work to raise productivity and meet the diversifying needs of society.

5．We will act for the protection of the global environment. （1）Promotion of environmental protection As a leader in environmental management, we will reduce our environmental footprint and endeavor to make sustainable use of natural resources in every aspect of the Tokyo Gas Groupʼs business activities. We will promote use of highly eco-friendly energy sources centered on use of natural gas, and provide high-efficiency systems and equipment that have a low environmental impact. We will work with local communities to make peopleʼs lives more environmentally friendly.

6．We will contribute to local communities and society as a good corporate citizen. We will respect and contribute to local communities, building trust with them through active dialogue and cooperation, and making effective use of our business resources. We will contribute to local communities as good citizens, recognizing that we ourselves are all members of communities. 7．We will handle information appropriately. （1）Prevention of information leaks We will handle confidential information obtained in the course of business properly and will not divulge such information during or after our employment at the Tokyo Gas Group. （2）Compliance with the Act on the Protection of Personal Information We will obtain and manage the personal information of customers, employees, and others by appropriate methods and use such information only insofar as permitted for legitimate purposes. We will not disclose personal information to third parties except where permitted by law. （3）Appropriate use of information systems We will use information systems, including email systems and the Internet, in accordance with strict rules on proper use. Company information systems will not be used for non-business purposes. （4）Respect for intellectual property We will respect patents, trademarks, copyrights, and other intellectual property rights, protect and use rights held by our company, and not infringe the rights of others.

8．While conducting business globally, we will not only comply with national and local laws and regulations and respect international standards on human rights and similar issues, but also engage in business activities in a manner that is sensitive to different cultures, customs, and stakeholdersʼ concerns.

9．We will act with integrity and decency as members of society, and maintain high ethical standards in our private lives. In our private lives, too, we will comply with all applicable domestic and foreign laws and regulations, be aware of changes in social expectations, and always be mindful of how we should behave as a model citizen. （1）Compliance with regulations on insider trading We will not engage in insider trading, such as the purchase or sale of shares and other such transactions, using information obtained in relation to business. We will not communicate information or recommend transactions to other parties to enable them to make a profit or avoid a loss. （2）Prohibition of annoying or disturbing behavior In our private lives, we will not injure or deceive others, commit indecent acts, or engage in any other annoying or disturbing behavior. （3）Responsible drinking and compliance with traffic rules (including not driving under the influence of alcohol) We will be careful to drink responsibly and will never drive under the influence of alcohol. We will always stop anyone who attempts to drive while drunk, and we will not encourage anyone who is driving a vehicle to drink and will not provide a vehicle to anyone who has been drinking. We will also obey all other traffic rules. （4）Prohibition of possession and use of illegal drugs We will not possess or use illegal drugs, and we will not be involved in any way in their manufacture, purchase, sale, distribution, or other such acts. （5）Prohibition of gambling We will never engage in any acts of gambling, including the betting of even small amounts of money on golf, mahjong, or sporting events. （6）Compliance with rules on use of social media If communicating information via social media, we will not commit any act, even as individuals, that might harm the reputation or property of the company. （7）Compliance with other laws, regulations, social norms, and standards of ethical conduct, and prohibition of acts that outrage public decency

10．If we transgress this Code of Conduct or learn of a transgression, we will immediately report the matter to our workplace and rectify it.

11．Executives and managers will lead from the front and take action themselves. （1）Awareness of position and conduct as executives and managers Executives and managers will themselves provide models of compliance with this Code of Conduct and encourage understanding and practice of the same throughout the workplace. Executives and managers will lead from the front in working to resolve any problem that may arise and ensure organization-wide action to prevent a recurrence. Executives will take strict action (including against themselves) where necessary.

Tokyo Gas Group Our Code of Conduct Promotion of Compliance

Permeation and Rigorous Practice of Compliance

Why Is this Materiality?

The Tokyo Gas Group must practice fair and transparent management with a strong emphasis on compliance as a foundation for sustainable operations.

FY2017 Results and Evaluation Criteria for evaluating KPIs Target achieved (100% or above) Target not achieved but improved from the previous fiscal year Target not achieved

Note: Qualitative indicators with no evaluation axis are assessed on the basis of whether progress has been made since the previous fiscal year.

Target FY2017 Results Evaluation (CSR KPIs)

Promotion of ■ In order to promote compliance through PDCA cycles, the compliance Management Ethics Committee, chaired by the president, has met twice a year to formulate Company-wide policy and Steady confirm and discuss matters such as the handling of inquiries implementation of and consultations by the consultation desks, monitoring the PDCA cycles permeation of compliance awareness and the results of compliance audits.

■ Permeation of the revised edition of Tokyo Gas Group Our Code of Conduct. Held study sessions and seminars to permeate Tokyo Gas Group Our Code of Conduct, which was revised to reflect global standards, the Olympic Charter and legal amendments, and came into effect in fiscal 2017.

■ Fostering of a compliance oriented mentality The following activities were implemented in accordance with annual plans.

Workplace workshops: Workplace workshops and other events featuring recent cases of compliance practice held to embed Tokyo Gas Group Our Code of Conduct: 28,726 participants. Use of training: Level-specific training and training provided by instructors dispatched to meet individual department and company needs: 27 sessions with 614 participants. Information provision: Shared timely information on compliance within the Tokyo Gas Group on 6 instances. Consultation desks: Cases handled by the consultation desks while protecting the privacy of users: 104 Promotion of PDCA cycles: Promotion of improvements and incorporation into plans for the next year in response to observations raised by compliance audits of Tokyo Gas and its subsidiaries, which were conducted by the Internal Audit Department, and annual surveys of compliance awareness.

Key Initiatives for FY2018 and Beyond We reviewed the Tokyo Gas Groupʼs key CSR activities and materiality in fiscal 2017. Please visit the related link to view the latest information on our materiality and KPIs for CSR.

Link ▶ Identifying New Materiality

Prevention of Bribery and Corruption

Why Is this Materiality?

In light of the expansion in the Tokyo Gas Groupʼs overseas operations, reducing the risk of bribery and corruption involving foreign public officials is important, especially in countries where there is a high risk of corruption.

FY2017 Results and Evaluation Criteria for evaluating KPIs Target achieved (100% or above) Target not achieved but improved from the previous fiscal year Target not achieved

Note: Qualitative indicators with no evaluation axis are assessed on the basis of whether progress has been made since the previous fiscal year.

Target FY2017 Results Evaluation (CSR KPIs)

Promotion of ■ Revision of the Basic Policy On Promoting Overseas Business sincere and Revised in accordance with newly-established Tokyo Gas Group equitable activities Human Rights Policy. in accordance with At the time of its establishment, the Basic Policy was primarily Tokyo Gas Group focused on preventing bribery and corruption involving foreign Our Code of public officials. The latest revision includes provisions on Conduct human rights as well as provisions clarifying the Basic Policyʼs relevance to the environment, labor practices and relationship with local communities, which are required for pursuing global operations.

■ Training was provided to employees primarily involved in business overseas to ensure proper compliance with the guidelines (344 participants).

■ Established a system to enable Group employees working overseas to report and seek advice. Appointed supervisors responsible for implementing measures to prevent bribery and corruption overseas to ensure proper enforcement of the guidelines. Key Initiatives for FY2018 and Beyond We reviewed the Tokyo Gas Groupʼs key CSR activities and materiality in fiscal 2017. Please visit the related link to view the latest information on our materiality and KPIs for CSR.

Link ▶ Identifying New Materiality

Protection of Personal Information

Why Is this Materiality?

Properly protecting and handling the personal information pertaining to the Tokyo Gas Groupʼs 11 million-plus customers is of the utmost importance.

FY2017 Results and Evaluation Criteria for evaluating KPIs Target achieved (100% or above) Target not achieved but improved from the previous fiscal year Target not achieved

Note: Qualitative indicators with no evaluation axis are assessed on the basis of whether progress has been made since the previous fiscal year.

Target FY2017 Results Evaluation (CSR KPIs)

Practice of safety ■ Rigorously enforced rules on management and use of personal management in information accordance with Awareness raising incorporated into level-specific training our policy on provided upon joining the company, in the third year, and protection of during qualification promotions (two levels): 1,527 personal participants. information Awareness raising included in training, provided by instructors sent to individual departments, for 614 participants.

■ Action to comply with the revised Act on the Protection of Personal Information Details of a required fresh action, including the clarification of personal information and requirements regarding anonymized information, were publicized throughout the Tokyo Gas Group and action was taken in response.

■ Provided e-learning based training for all Tokyo Gas Group employees (21,342 participants) to familiarize them with the requirements of the revised Act on the Protection of Personal Information.

Key Initiatives for FY2018 and Beyond We reviewed the Tokyo Gas Groupʼs key CSR activities and materiality in fiscal 2017. Please visit the related link to view the latest information on our materiality and CSR KPIs.

Link ▶ Identifying New Materiality Promotion of Compliance

Compliance Promotion Structure

The Management Ethics Committee, chaired by the president, meets twice a year, in principle during March and October, to formulate Company-wide policy and confirm and discuss matters, such as the handling of inquiries and consultation by the consultation desks and the results of the monitoring of compliance awareness among employees. We have also established Compliance Committees in each unit to consistently and proactively engage in initiatives for promoting compliance. Over 300 management-level personnel have been appointed as compliance managers and compliance promoters at each workplace to lead in promoting 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 2017, with 280 participants).

Compliance Promotion Structure

Consultation Desks Tokyo Gas has set up consultation desks internally through its Compliance Department and externally through a law firm and communication support center. All individuals working at the Tokyo Gas Group, including officers, regular and temporary staff members as well as the employees of our suppliers can directly contact these desks by phone or email whenever they feel uncomfortable raising a matter within their organization. The Compliance Department also handles consultation for our suppliers. These consultation systems for employees and suppliers serve as internal points of contact, as stipulated in the Whistleblower Protection Act. Under the operational guidelines of the consultation desks, advice and solutions are provided to employees who make inquiries or request consultation. The requests are treated in strict confidence, and the employees are protected against any discriminatory treatment for using the desks. In fiscal 2017, 104 employees used the service for various consultations, including interpersonal relationships in the workplace and other employment matters. Independent advisory services have also been established at all subsidiaries and Tokyo Gas LIFEVAL (“LIFEVAL”) companies. In November 2017, training sessions were held for the personnel staffing the consultation desks at subsidiaries and LIFEVAL companies to strengthen their ability to handle inquiries and consultations. These desks play an effective role in enabling the Company to discover and resolve problems at an early stage so that the Companyʼs self-regulating processes function effectively.

Number of Cases Handled by Consultation Desks (FY2017) Consultation Topics Number of Cases

Interpersonal relations and employment matters 35

Laws and regulations 4

Internal rules 7

Communication and other issues 58

Total 104

Compliance Practices

Tokyo Gas, our subsidiaries and LIFEVAL companies organize a range of activities to encourage employees to apply Tokyo Gas Group Our Code of Conduct to their own situations.

Workplace Workshops Using Training Resources Workshops led by compliance promoters are held at the level of individual workplaces at Tokyo Gas, our subsidiaries and LIFEVAL companies (28,726 employees participated in fiscal 2017). These workshops feature awareness-raising resources entitled “The Case Method,” “Collected Cases of Compliance,” and “Learning from Cases! Collected Statutes.” Developed in light of Tokyo Gas Group Our Code of Conduct, the resources are used to improve participant understanding of the laws, ordinances and regulations governing the practice of Our Code of Conduct and to help them apply the code in practice.

Instilling a Compliance-oriented Mindset through Training Level-specific training for new employees and others is provided with the active participation of subsidiaries and LIFEVAL employees to foster a compliance mindset (1,527 employees underwent training in fiscal 2017). The Compliance Department also conducts customized onsite training to meet the needs of each department and company and generate synergies through their own independent activities (614 employees took part in a total of 27 training sessions in fiscal 2017).

Strict Compliance with the Antimonopoly Act, the Act against Unjustifiable Premiums and Misleading Representations and the Subcontract Proceeds Act Training is provided annually to the Tokyo Gas Group employees to improve understanding of legal compliance. In fiscal 2017, around 600 Group employees took part in 9 training sessions on the Antimonopoly Act, the Act against Unjustifiable Premiums and Misleading Representations, and the Subcontract Proceeds Act. During the sessions, concrete instances of legal violations released by the Fair Trade Commission and Consumer Agency*were explained as practical case studies. *Case studies include examples of cartels and abuses of superior bargaining position (Antimonopoly Act), and misleading representation (Act against Unjustifiable Premiums and Misleading Representations). Training session on the Antimonopoly Training session provided to managers and Act staff related to misleading representation

Sharing Information on Compliance We are working to raise the standard of compliance by widely publicizing across the Tokyo Gas Group up-to-date information on the compliance risks associated with changes in the Groupʼs business environment, including those associated with our evolution as a total energy business, acceleration of our global business development, and the revision and stricter enforcement of prevailing legislation. One way in which we share this information is by publishing the bimonthly newsletter “Compliance Information” as a resource for compliance managers and promoters who lead activities at the Company, subsidiaries, LIFEVAL companies and some partner companies. In fiscal 2017, information on changes in public expectations was quickly shared, including information on compliance check points for the revised Act on the Protection of Personal Information and information on the revised Consumer Contract Act enforced in June 2017. These newsletters are also used in workplace workshops to share information on cases within and outside the Company.

Compliance information

Support for Tokyo Gas Group Compliance Promotion Tokyo Gas promotes compliance by LIFEVAL and other partner companies, which provide regional services on behalf of Tokyo Gas. We conduct onsite training and provide educational tools tailored to the current status of each company and assist in encouraging the adoption of PDCA cycles. As part of our compliance promotion activities, we distribute copies of Tokyo Gas Group Our Code of Conduct and booklets on subjects, such as the protection of personal information, and hold lectures for management-level personnel. Since fiscal 2010, we have exchanged opinions on compliance with some partner companies, and we share news on compliance and information on compliance measures to raise awareness. Copies of Our Code of Conduct are also distributed by the Tokyo Gas Merchandisers Organization (“TOMOS”) to all employees of its members to ensure that the code takes root and that business is conducted in accordance with the values and principles espoused by Tokyo Gas.

Prevention of Bribery and Corruption

Basic Policies The Tokyo Gas Group is fully committed to preventing bribery and corruption in all domestic and international transactions by complying with the anti-bribery and corruption laws in each country and region and specifying in Tokyo Gas Group Our Code of Conduct our obligations to comply with laws and be fair and honest with our customers and suppliers. In line with the expansion in our overseas business in accordance with the goals set forth in GPS2020, we have established the Basic Policy On Overseas Business Promotion, which pledges to carry out equitable and transparent corporate activities in international communities. In particular, bribery and corruption not only damages social credibility but can also hamper economic growth in developing countries. We have thus formulated the Foreign Public Official Anti-Bribery and Corruption Guidelines to outline specific actions we must take.

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

Summary of 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 and appointments of certain third parties must first be approved through 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 they are appointed, clauses prohibiting bribery and corruption must be incorporated into their contracts, and other appropriate measures must be completed. The same applies to M&As with foreign firms.

Action Items of the Foreign Public Official Anti-Bribery and Corruption Guidelines

Prohibition of bribery of foreign public officials Prohibition of facilitation payment Prohibition of inappropriate hospitality, gifts, invitations, overseas donations, etc. Prohibition of bribery (other than foreign public officials) Transactions with third parties Relationships with partners of joint ventures, etc. Prohibition of taking bribes Mergers and acquisitions Prohibition of fraudulent accounting Obligation to whistle-blow and cooperate with investigations Emergency response Disciplinary action Training and monitoring

Operating Structure

The chief compliance officer acts as the executive officer with chief responsibility for preventing 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 to take responsibility for the approval of hospitality, gifts, donations, and the like, confirmation of the findings of due diligence when appointing third parties, approval of entry into contracts, and other matters. The Compliance Department decides on specific measures for implementing the guidelines.

Anti-bribery and corruption training session for employees involved in international business Effective Application of the Guidelines to Prevent Bribery and Corruption The Tokyo Gas Group provides training to employees primarily involved in business overseas to ensure proper compliance with the guidelines. In fiscal 2017, 344 personnel received this training. We have produced an English version of the guidelines for locally hired employees and have distributed the English edition of Tokyo Gas Group Our Code of Conduct to ensure that everyone understands its content. We have also established a system to enable Group employees working overseas to report and seek advice. We implement PDCA cycles to ensure that bribery and corruption are being prevented by monitoring the situation through internal audits and other means to confirm that the procedures established by the guidelines are being followed.

Verification and Audit of Penetration of Compliance

Compliance Awareness Surveys We regularly conduct surveys of all employees, including officers, regular and temporary employees at the Company and subsidiaries, to monitor the effectiveness of compliance promotion activities. In fiscal 2017, we made the contents of our survey more specific by increasing the number of survey items related to reporting, contact and consultations in the event of problems. In addition to all employees of the Company and subsidiaries, we distributed the survey to those at Tokyo Gas LIFEVAL (“LIFEVAL”) companies to which we outsource various tasks. As the following figures show, Tokyo Gas, its subsidiaries and LIFEVAL companies have maintained high average scores of over 3 out of a maximum of 4 in every category. As a reference for future improvement, general feedback on the survey results and corresponding actions to be taken was provided by the Compliance Promoter Liaison Committee in January 2018 and individual feedback on survey results was provided to each company between February and March of the same year. These survey results are posted on the intranet for review by all employees of Tokyo Gas, our subsidiaries and LIFEVAL companies.

Overview of the FY2017 Compliance Survey Results Compliance Auditing The Internal Audit Department regularly conducts audits of Tokyo Gas and its subsidiaries and affiliates focusing on the severity of risks and the probability of their materialization from the perspective of legislation related to the audited unitʼs operations, as well as corporate ethics and social norms. Promotion of Compliance

Basic Policies

The foundation of the Tokyo Gas Groupʼs brand value of “Safety, Security, and Reliability” is being able to guarantee the security of information throughout our business operations. In particular, we believe our social responsibility as a public utility company is to prevent any leaks of confidential information, particularly including information on our more than 11 million customers as well as the destruction of or tampering with systems. In light of the evolving business environment, including sophisticated use of the Internet and the increased threat of cyber-attacks, such as unauthorized access from external sources and computer viruses, Tokyo Gas will establish a PDCA cycle to further strengthen our ability to ensure information security.

PDCA Cycle for Ensuring Information Security

Information Security Promotion System

Tokyo Gas has set up information security systems for each division and department to prevent accidents and minimize the impact from the leakage of confidential information or the destruction and tampering of systems. The same information security promotion system is in place at our subsidiaries and affiliates as well as at around 260 partner companies as part of a concerted effort to manage information security risks across the Tokyo Gas Group. Through these efforts, we promote the active use of information and achieve a higher brand value as well as sustainable growth. Tokyo Gas Group Information Security Promotion System

Tokyo Gas Group Information Security Promotion

Code of Conduct to Ensure Information Security

The security of information is vulnerable to the risk of one personʼs carelessness undoing all other efforts. A breach can quickly occur if one person lets down their guard assuming that everyone elseʼs vigilance will provide sufficient protection. The Code of Conduct to Ensure Information Security provides guidelines on decision making and action steps for every individual in the Group for safeguarding information. The Group reviews the code as appropriate to maintain its relevance.

Code of Conduct to Ensure Information Security

Practices to Ensure Information Security

We implement both technical and personnel-related measures to continuously ensure information security that incorporates advances in information technology and the prevailing information security situation society. In terms of technology, we deploy multiple layers of security, including the installation of hardware to protect against unauthorized access from external sites and software to detect and remove computer viruses. In terms of personnel, we have developed arrangements to promote information security, provide related training, and perform self-checks. The Computer Security Incident Response Team (CSIRT) has also been set up as a special unit to rapidly handle incidents. In fiscal 2017, security training was provided to regular and temporary employees at about 80 companies, including Tokyo Gas, our subsidiaries, and Tokyo Gas LIFEVAL (“LIFEVAL”) companies. Participants learned about the proper handling of confidential information taken offsite, dealing with email from unknown senders, and managing IDs and passwords to strengthen their understanding of the risks associated with the theft and loss of data and information leaks caused by computer viruses. For self-checks, employees verify whether they are acting in accordance with the knowledge and rules gained through security training and report the results to relevant job sites so that employees can improve workplace behavior. Our company, subsidiaries and LIFEVAL will continue to implement personnel and technical-based strategies to maintain and improve the information security competence of every employee.

Information Security Training

To deepen understanding of information security risks such as information Purpose leakage due to theft, loss and virus infection

Regular and temporary employees at about 80 companies, including Tokyo Gas, Target employees its subsidiaries and Tokyo Gas LIFEVAL

・Proper handling of confidential information when taken offsite Contents of ・Dealing with email from unknown senders education ・Managing IDs and passwords

Self-checks

・ Self-checking whether employees are acting in accordance with the knowledge and rules that they learned from information security training ・ Reporting the results to every workplace

Protection of Personal Information

We recognize that properly protecting and handling personal information is at the foundation of our business activities and a vital social responsibility. In fulfilling these responsibilities, we have established the following policies for guiding our best efforts to protect personal information.

●Policy on Protection of Personal Information at Tokyo Gas

(1) Legal compliance In addition to observing all applicable laws and regulations and guidelines governing the protection of personal information, Tokyo Gas establishes and continually improves Company policy and internal rules for protecting personal information.

(2) Personal information management Tokyo Gas takes necessary actions under relevant laws, regulations and guidelines and properly manages personal information to prevent any loss, leakage or unauthorized changes to said information. In addition, a person is assigned to be responsible for the protection of personal information at each workplace and to educate and monitor employees in regard to this issue.

(3) Collection and use of personal information Tokyo Gas appropriately obtains personal information to properly and efficiently conduct business. Prior to collecting such information, Tokyo Gas informs the person in advance of the purpose for which the information will be used and only obtains the specific information necessary to achieve this purpose.

(4) Provision of personal information to third parties Tokyo Gas does not provide personal information to any third party without obtaining the prior agreement of the person affected, except as allowed to do so under relevant laws, regulations or guidelines, and in certain cases where, for example, parties receiving the entrusted information are not legally defined as third parties. When providing personal information to, for example, an entrustee, Tokyo Gas selects a party that can meet and fulfill the necessary standards and obligations for managing personal information, makes appropriate arrangements for the protection of the personal information and monitors the said party. (5) Disclosure, correction, etc., of personal information When a person seeks to disclose, correct or delete personal information, Tokyo Gas endeavors to promptly respond, within reasonable limits under relevant laws and guidelines, after confirming the person's identity.

Link ▶ Handling of Personal Information

Secure Control of Personal Information The Tokyo Gas Group collects and utilizes a massive volume of personal information, including information on over 11 million customers. To ensure the personal information of all our customers is appropriately protected and managed, we have established a Company-wide personal information security control system. Moreover, we are committed to thoroughly informing employees about the legal concerns and implications to raise their awareness of the need and practices for protecting personal information. We established a Company-wide personal information security control system even before the Act on the Protection of Personal Information took full effect on April 1, 2005, and since then we have been working to ensure that all employees are thoroughly informed of the act by developing in- house rules and manuals in compliance with it. In addition to voluntary checks conducted to monitor if personal information is being properly managed, personal information protection audits are conducted by the Internal Audit Department to assess compliance with the act and other applicable laws, ordinances and guidelines as well as our own policy on the protection of personal information and internal rules. In order to constantly foster awareness of information security, employees learn about protecting personal information as part of the level-specific training provided when they join the Company, during their third year and qualification promotions, and on other appropriate occasions. Prior to the revised Act on the Protection of Personal Information going into effect on May 30, 2017, we began informing each company of the Tokyo Gas Group of the details of the revised act in the second half of fiscal 2016. We also implemented the necessary preparations to comply with the new requirements, such as the clarification of personal information and handling of anonymously processed information. Moreover, we formulated guidelines for creating anonymously processed information and shared them throughout the Group to facilitate the legally permitted use of personal information. In April 2017, we distributed a pamphlet that explains the practical aspects of the Act on the Protection of Personal Information to all Group employees and its subsidiaries, Tokyo Gas LIFEVAL companies and other partner companies in order to strengthen understanding and encourage rigorous compliance.

Letʼs Follow the Rules: A Guide for Protecting Personal Information

Information Security Audit

The Internal Audit Department audits the Company and its subsidiaries and affiliates to determine whether the audited organizations are taking proper steps to ensure information security, to identify specific information security risks, and to confirm whether controls are being properly developed and implemented to manage these risks. Enhancement of People-Centered Management Base

Basic Policies on Human Resources

Tokyo Gas has developed its personnel programs with recognition that its vitality depends on its people, and that Company growth cannot be achieved without the growth of its personnel. Our programs for remuneration, benefits and promotion are designed to reflect the performance of each employee over a given period so that everyone is confident that their efforts and contributions to Company performance will be appropriately rewarded. By offering a variety of benefits and compensation, we want to enhance the motivation and satisfaction of our employees and create a lively, dynamic organization. Enhancement of People-Centered Management Base

Promotion of Diversity

Why Is this Materiality?

To work toward creating an energetic workplace in which every employee can fully exercise his or her knowledge, skills, and experience.

FY2017 Performance and Evaluation Criteria for evaluating KPIs Target achieved (100% or above) Target not achieved but improved performance from the previous fiscal year Target not achieved

Note: Qualitative indicators with no evaluation axis are assessed on the basis of whether progress has been made since the previous fiscal year.

Target (CSR KPIs) FY2017 Results Evaluation

Promotion of active ■ Promotion of opportunities for diverse human resources participation of Details of activities: diverse human November 2017: Held a meeting to share initiatives on resources and promoting the active participation of diverse human workstyle flexibility resources. March 2018: Designated a Nadeshiko Brand company for the second consecutive year. April 2017– March 2018: Raised awareness through training and seminars (total attendance: 900). - For female employees: Held seminars on subjects including womenʼs career development, returning to work after childcare leave, and support for balancing work and nursing care. - For supervisors: Held lectures on promoting the active participation of diverse human resources, held seminars for supervisors with subordinates who are parenting, and raised awareness through various management training programs.

Results: Ratio of women in management (as of April 1, 2018): 7.6% (up 3.5% from 9 years ago) Average length of service by gender (as of March 31, 2018) Male: 19.3 years, female: 19.3 years Employment of people with disabilities (as of March 31, 2018) 150 (employment rate: 2.1%) Note: The figure has risen to 167 (employment rate: 2.3%) as of June 2018

■ Development of conditions to accommodate diverse workstyles Details of activities: April 2017: Introduced a work-at-home program, which we plan to expand in several stages. April 2017: Increased the number of times parental leave periods can be changed and reinforced our promotion of paternity leave. July–September 2017: Encouraged employees to take summer vacations. July–August 2017: Adopted a morning-oriented work program that enables employees to enjoy more leisure and family time during long summer evenings. August 2017: “Premium Friday” held every Friday (typically just the last Friday of every month). October 2017: Shared the presidentʼs message on correcting and limiting long working hours and shifting to workstyles that emphasize the value of time. November 2017: Launched a website related to the management of working hours and improving productivity. January 2018: Introduced agency services to support employees who are providing nursing care.

Performance: Major programs and the number of users in FY2017 Employees working shorter hours as parents of small children: 217, employees taking parental leave: 50 (93.3% subsequently returned to work) Employees working shorter hours to care for relatives: 2, employees taking nursing care leave to care for relatives: 1

Key Initiatives for FY2018 and Beyond We reviewed the Tokyo Gas Groupʼs key CSR activities and materiality in fiscal 2017. Please visit the related link to view the latest information on our materiality and CSR KPIs.

Link ▶ Identifying New Materiality

Development of Human Resources

Why Is this Materiality?

To ensure corporate sustainability by developing highly expert, ethically responsible human resources as a prerequisite to raising future competitiveness.

FY2017 Performance and Evaluation Criteria for evaluating KPIs Target achieved (100% or above) Target not achieved but improved performance from the previous fiscal year Target not achieved

Note: Qualitative indicators with no evaluation axis are assessed on the basis of whether progress has been made since the previous fiscal year.

Target (CSR KPIs) FY2017 Results Evaluation

Development of a ■ Continued to operate our contribution-type personnel training structure management system, role fulfilment assessment system, goal management system, and 360-degree appraisal system. ■ Developed employee skills through an effective combination of training provided by superiors on the job (OJT) supplemented by training (Off-JT) programs, self-development programs, and workplace transfers and rotations.

■ Maintained a twin-pillared human resource development program consisting of the fostering of foundational and common skills and wide-ranging expertise.

■ Implemented a supporter program to assist in the development of younger employees.

Key Initiatives for FY2018 and Beyond We reviewed the Tokyo Gas Groupʼs key CSR activities and materiality in fiscal 2017. Please visit the related link to view the latest information on our materiality and CSR indicators.

Link ▶ Identifying New Materiality

Occupational Safety and Health

Why Is this Materiality?

To continue ensuring the safety and health of employees, which is of fundamental importance to our management foundation.

FY2017 Performance and Evaluation Criteria for evaluating KPIs Target achieved (100% or above) Target not achieved but improved performance from the previous fiscal year Target not achieved

Note: Qualitative indicators with no evaluation axis are assessed on the basis of whether progress has been made since the previous fiscal year.

Target (CSR KPIs) FY2017 Performance Evaluation

Promotion of ■ Promotion of stress check program occupational safety Widely promoted the program by recommending regular and and health semi-regular employees to take stress check-up.

■ Promotion of measures to prevent passive smoking Implemented a campaign based on our Guidelines on Preventing Passive Smoking at all 53 offices, and completed preventive measures such as prohibiting smoking indoors and implementing construction work to improve smoking rooms.

■ Establishment of chemical risk assessment Implemented risk assessments for all 7 newly purchased chemical substances as legally mandated. Also implemented a voluntary risk assessment and other measures related to chemical substances for which we are not obliged by law to obtain SDSs (safety data sheets). Key Initiatives for FY2018 and Beyond We reviewed the Tokyo Gas Groupʼs key CSR activities and materiality in fiscal 2017. Please visit the related link to view the latest information on our materiality and CSR KPIs.

Link ▶ Identifying New Materiality Enhancement of People-Centered Management Base

Employment Situation

As of March 31, 2018, our workforce totaled 7,518 (male: 6,392, female: 1,126)*1 *1 Numbers include employees loaned by Tokyo Gas to other organizations but exclude those loaned to Tokyo Gas from other organizations (hereafter, “registered personnel”).

Number of Full-time Employees by Gender*2, 3, 4 Unit FY2015 FY2016 FY2017

Non- 6,519 (86.7) 6,518 (85.7) 6,392 (85.0) Male consolidated Consolidated - 11,745 (84.2) 11,442 (83.4)

Non- 999 (13.3) 1,086 (14.3) 1,126 (15.0) Female consolidated Persons（%） Consolidated - 2,212 (15.8) 2,284 (16.6)

Non- 7,518 7,604 7,518 Total consolidated Consolidated - 13,957 13,726

*2 Count as of the end of March in each fiscal year. *3 Non-consolidated data exclude personnel on loan to Tokyo Gas from other organizations, and include personnel on loan from Tokyo Gas to other organizations (“registered personnel”). *4 Consolidated data exclude personnel on loan to Tokyo Gas and its subsidiaries from other organizations, and include personnel on loan from Tokyo Gas and its subsidiaries to other organizations.

Average Age by Gender*5, 6, 7 Unit FY2015 FY2016 FY2017

Non- 42.1 41.4 40.7 Male consolidated Consolidated - 41.8 41.2 Age Non- 41.6 41.1 40.6 Female consolidated Consolidated - 39.9 40.0

*5 Values as of the end of March in each fiscal year. *6 Non-consolidated data are for Tokyo Gas employees (registered personnel). *7 Consolidated data exclude personnel on loan to Tokyo Gas and its subsidiaries from other organizations, and include personnel on loan from Tokyo Gas and its subsidiaries to other organizations.

Turnover Rate Transparent Hiring Practices

Our recruitment activities comply with the guidelines of Keidanren (Federation of Economic Organizations). We also disclose corporate information and job offers at an early stage so that students can maintain their focus on studies with sufficient time to research and select companies. Moreover, we host various seminars to provide students with an accurate picture of our company.

Hiring of New Graduates *1 Category Unit 2016 2017 2018 Breakdown of 2018 hires

Undergraduate and Graduate*2 Person 207 220 186 Male 126 Female 60

High school Person 84 31 20 Male 18 Female 2

Total Person 291 251 206 Male 144 Female 62

*1 Hiring status as of April 1 of each fiscal year.

*2 Including technical college graduates.

Employee Awareness Survey

We regularly survey all employees to ascertain their views on work, the workplace, lifestyles and other factors and incorporate the results into improvements in our personnel programs and other uses. These surveys show that, in general, our employees are satisfied working for Tokyo Gas. The next survey is scheduled to be conducted in fiscal 2018.

Building Positive Labor-Management Relations through Active Communication

Our labor union operates under a union shop system. All employees except for those in management are subject to membership in the Tokyo Gas Labor Union based on a union shop agreement* and therefore the labor union participation rate of applicable employees is 100%. The agreement with our labor union clearly states that “the company and the labor union confirm and mutually respect the companyʼs management rights and the labor unionʼs basic labor rights.” It honors the freedom to associate and organize as well as the right to act and bargain collectively. The company and labor union establish sound and positive labor-management relations and exchange honest opinions on various management issues and labor conditions through periodic labor-management negotiations. Also, we strive to provide our non-labor union contract employees with a safe working environment and have signed a minimum wage agreement with them. In addition, we are mindful of local laws and regulations and respect worker rights. *An agreement under which employers agree to dismiss workers who do not become union members or who withdraw from or are expelled from the union. All qualifying employees are enrolled in the union.

Main Labor-Management Consultations and Topics Discussed in FY2017 Negotiation Period Main Themes

Negotiations on economic working conditions, Intensive spring labor- February personnel arrangements, rules of employment management talks through March and other working conditions

Special Subcommittee of the April and Current state and future direction of business Joint Management Council October strategy and key policies (policy related)

Special Subcommittee of the Forecasts of company performance and financial Joint Management Council May results (financial results)

May and Current and projected working hours and Working Hours Committee November productivity increases

Employee Pay and Benefits October and Current state of personnel arrangements and Programs Committee December policies

Business Process and Work June, Verification and analysis of our involvement in Style Reform Promotion November, and business processes and labor innovation for committee December improved productivity

Departmental labor- June and Current state and future direction of management councils October departmental/divisional policies (branch level) Enhancement of People-Centered Management Base

Personnel Programs (Roles and Qualifications System, Contribution-Type Personnel Management System)

Our Roles and Qualifications System puts employees into five categories based on individual development and the degree to which they contribute to the organization. We also maintain the Contribution-Type Personnel Management System for evaluating the development and performance of each employee from multiple perspectives and supporting their development in terms of specific expertise and at an early stage of their career. We will maximize organizational performance by having each employee recognize their particular organizational contribution and also maximize their expertise and strengths through clearly defined role expectations and their position in the organization according to category and contribution type.

Roles and Goals by Contribution Type Expert General Business Fellow

Promotes the business of the Supervises or supports Tokyo Gas Group from the Promotes improvements duties at the Tokyo Gas perspective of what is best for the in the Tokyo Gas Group Group locations by Roles organization overall while also solutions and innovation utilizing the skills, and strengthening their field of functions through high- techniques, knowledge Goals expertise based on the skills, level skills, techniques and network acquired techniques and knowledge and knowledge in a through experience in a acquired through various work- specialized field. specialized field of work. related experiences.

Appraisal System

Appraisal System for Determining Benefits and Remuneration, Human Resource Development, and Transfers We use a goal management system in which each employee sets their own goals. Under the system, we evaluate goal achievements and contributions to the Group as a means of determining appropriate benefits and remuneration. In addition to evaluation based on goal management, we conduct other assessments, including the Role Demonstration Evaluation*1 and 360 Degree Appraisal System*2 (behavioral evaluation, multi- dimensional evaluation). *1 Determining the skill development and demonstration necessary for satisfying the expectations for the roles of each type of contribution

and expected roles, used for developing expertise and in training.

*2 A system in which a personʼs daily behavior is evaluated by managers as well as peers and subordinates. Enhancement of People-Centered Management Base

Development of the Human Resources System

Basic Policy With the belief that people grow through their work, we develop employee skills and competencies by effectively combining core training by workplace managers on the job, with supplementary, off- the-job education and training, self-development and transfers as well as job rotations. We also provide opportunities for discussing career plans and the Open Recruitment program so that employees can experience a sense of self-fulfillment and satisfaction through their work.

Education and Training System

Tokyo Gas takes a two-pronged approach to training personnel: developing basic and common skills required of a businessperson and enhancing specialized skills. We strive to develop highly competent employees who can think independently and motivate others to join them while flexibly adjusting to changes in the business environment by expanding, heightening and increasing the skills required for each contribution type. We will strive to boost productivity driven by the development of individuals and the leadership they demonstrate at Tokyo Gas by maximizing every employeeʼs capabilities and strengths.

Developing Basic and Common Skills Required of a Businessperson In addition to job transfers and rotations aimed at encouraging professional development, we provide training in basic education, management skills and career planning. Part of the training engages Tokyo Gas Group employees in developing common skills as well as a sense of cohesiveness within the Group.

Training Category Training Focus

For managers and recently promoted employees. Develop an Management Skills Development awareness of expected roles for each contribution type and level of employment as well as enhancing management skills.

For managers. Provide training based on collaboration and Next Generation Leadership interaction with other companies to develop leadership with Development the broad perspective and vision essential for times of change.

Active intra-departmental discussion-based programs for management, directors and their subordinates from various Human Network Development divisions to enrich and broaden leadership vision and perspectives as well as network development.

Develop internationally competent professionals who can excel in both domestic and foreign markets through global leadership development, enabling participants to experience Global Adaptability Development global business, OFF-JT, including internship programs at overseas companies, and self-development support programs. We encourage our employees to study at graduate schools and technical schools, both in Japan and overseas, so that Study Abroad Program they can broaden their views, obtain business-related skills and develop extensive networks toward comprehensively contributing to our business.

We provide seminars, external training, online training and other types of education to support employee self- development. The programs encompass the purpose for Self-Development Support Program increasing their expertise and other typical content such as skills for developing goals, collaboration skills and task management.

Link ▶ Fundamental and Universal Skills Development Training Structure Chart（PDF︓242KB）

Enhancing Specialized Skills We implement divisional and cross-divisional training to develop particular specialty skills required at each division.

Development of Human Resources in the Residential Services Sector

Human Resource Development Center

Our human resource development center delivers training to employees of the Tokyo Gas Group and partner companies working in the residential services sector. In fiscal 2017, we offered approximately 160 courses (1,275 sessions in total) taught by nearly 60 instructors, including current and former employees as well as those from Group companies. In collaboration with the related departments, we set up an internal qualification program and provide technical training in areas such as safety inspection, equipment repair, installation of gas appliances and water heaters, and gas installation work in order to guarantee the quality of our residential services sector business. We offer basic knowledge and mindset training to remain the customerʼs number one choice. We also offer e-learning courses as a convenient way for participants to renew qualifications.

Tsurumi Human Resource Development Center (23 classrooms, 25 workshop rooms, concept house, amenities, etc.)

Training Facilities Takinogawa Human Resource Development Center (2 classrooms, 3 workshop rooms)

Senju Human Resource Development Center (1 classroom, 4 workshop rooms)

Human Resource Development in the Pipeline Sector Our Pipeline Network Division identifies desired skills and implements the related training toward establishing a foundation of essential competencies from a mid- to long-term perspective. In order to maintain and pass on technical skills, we strive to improve specialty skills through OJT based on daily instruction as well as OFF-JT conducted by training centers and other sources.

Skills and Technical Ability Recognition Program

We have introduced a recognition program for supporting every employee in obtaining the required skills and technical ability to take full responsibility for attaining a level of job performance that will satisfy both our customers and society at large. The program is structured in a way that enables personnel to perform their work at a consistent level of skill and technical ability. This fundamental system allows us to continuously fulfill our responsibilities to customers and general public.

Meister Instructor Program

This in-house qualification program supports our human resource development efforts by recognizing highly skilled personnel in order to improve workplace skills and effectively pass on technical abilities to the next generation. It is intended to clearly define the ultimate professional for handling tasks such as emergency safety, maintenance and construction management so that younger employees will strive to raise the level of their technical skills up to that of “Meister” instructors. We also require Meisters to recognize their responsibility to pass on their skills to younger personnel.

Training Centers (Pipeline Training Center, Emergency Management Training Center, Transmission Training Center, Customer-owned Gas Line Maintenance Training Center)

OFF-JT is provided at four centers designed to develop specific tasks in each line of work. We provide staff from our Group and partner companies with regular training in such areas as basic induction skills, work performance improvement and common core skills. We also offer custom training, offsite programs, training tools and video lending, open access to facilities and other channels for various training needs. Training Management System All of these training opportunities are administered through our STUDY II system (qualification management system for the Transmission Training Center). Employees of the Tokyo Gas Group and partner companies can use the system to apply for training, and information on the system can be transferred to other systems, which helps employees manage their personal development documentation.

Pipeline Training Center (Tsurumi)

Emergency Management Training Center (Tsurumi)

Transmission Training Center (Soka)

Training Facilities

Customer-owned Gas Line Maintenance Training Center (Tsurumi) Topic

The Tokyo Gas Group Mindset Orientation

In April 2018, we hosted the “The Tokyo Gas Group Mindset Orientation,” focused on new employees. The program included lectures on our main policies, customer satisfaction, compliance, human rights, the environment, diversity and CSR to develop a strong group awareness and sense of unity. Mai Minakami, a para swimming athlete who works in our Personnel Department, delivered a welcome speech to new employees describing her views on balancing work and competition as well as challenges for the future.

Tokyo Gas Group Mindset Orientation

Transfers and Job Rotations

Assigning the Right Person to the Right Position We endeavor to place the right person in the right place so that employees will find their work rewarding. Every year, employees have an interview with their supervisors to discuss their career plans. Their self-evaluation along with remarks by the supervisor is registered in the personnel system and incorporated into decisions related to transfers and rotation plans as well as career development.

Open Recruitment Program and Free Agent Program We establish an Open Recruitment program and Free Agent program to supplement our ongoing personnel transfer program, and we enable employees to apply for the position of their choice. Enhancement of People-Centered Management Base

Management Commitment

The Tokyo Gas Group actively supports diversity to promote the advancement of people with various talents as essential for our future growth and development.

As competition between energy companies continues to intensify, the Tokyo Gas Group strives to maintain its position as the customer's choice and to achieve sustainable growth and development far into the future. One key priority for the Group as a whole is to promote diversity. For us to continue to meet diversifying customer needs, every Group employee must have the chance to excel and fully apply their knowledge, ability and experience and to work effectively in teams. We are committed as a corporate group to developing and expanding systems to achieve this goal and foster employee awareness while continuing to proactively create an organizational culture in which all excel, regardless of gender, age, disability, nationality or sexual orientation, and whether they were hired straight out of university or mid-career.

April 2018 Takashi Uchida Representative Director, President and CEO Tokyo Gas Co., Ltd.

Basic Policy

The Tokyo Gas Group promotes workplace diversity as a corporate enterprise that offers every employee the opportunity to excel by applying their full knowledge, abilities, and experience. (1) We structure our corporate organization to encourage mutual respect for diverse work styles while enhancing productivity. (2) We proactively support the success of women as the foundation for promoting diversity across the organization. (3) We deeply integrate the promotion of diversity into all our business operations through our Group Diversity Promotion Team.

Framework for Promoting Diversity

The Tokyo Gas Group has set up a Group Diversity Promotion Team in the Personnel Department to work closely with management in effectively implementing a variety of initiatives and meeting the objectives of promoting womenʼs careers, increasing employment of persons with disabilities, and Grand Career Support*. *Development of career opportunities for employees in their 50s or older. Tokyo Gas Group Diversity Promotion Program

Overview of the Tokyo Gas Group Diversity Promotion Activities

Active Training and Elevation of Women

Tokyo Gas has been actively promoting the career development of women. In addition to enriching our programs to support a balance between childcare and work, we are strengthening employee awareness and evolving our corporate culture by hosting seminars on womenʼs career development. The ratio of women in management positions has increased by 3.5% in 9 years, from 4.1% in 2009 to 7.6% in 2018. Appointments to the general manager and manager level in particular have dramatically increased from 4 to 19, while the first women was promoted to managing executive officer in April 2018. Our goal is to raise our female management ratio to 10.0% by 2020.

Action Plan for Promoting Womenʼs Careers (Tokyo Gas Co., Ltd.)

Ratio of Women in Management*1, 2 The ratio of female management is steadily rising as a result of strategic measures. *1 Number of Tokyo Gas employees (registered personnel) are as of April 1 of each fiscal year.

*2 Employees in supervisory positions, or employees of equivalent status.

Average Age by Gender*3 No significant difference in average age between male and female employees.

*3 Tokyo Gas employees, as of end of March of each fiscal year.

Average Length of Employment by Gender*4 No significant difference in length of employment between male and female employees.

*4 Tokyo Gas employees (registered personnel) as of end of March of each fiscal year.

Percentage Returning to Work from Parental Leave*5, 6 Most of our employees return to work after taking a maternity leave.

*5 Tokyo Gas employees (registered personnel) as of end of March of each fiscal year.

*6 Percentage of those returning to work after maternity leave in each fiscal year. Hiring by Gender*7 Number of women hired is increasing each year.

*7 New graduates (graduates, undergraduates, technical college graduates) among Tokyo Gas employees as of April 1 of each fiscal year.

Efforts for Promoting Female Advancement (Based on The Act of Womenʼs Participation and Advancement in the Workplace) As part of our active efforts to recruit and retain female employees, we are building employee awareness and evolving our corporate culture through seminars we host for both female employees and their managers.

Seminars and Lectures in FY2017*8 Number of Date Theme attendees

Seminar for managers with subordinates who have small May 2017 38 children

November Lecture on promoting the active participation of diverse 350 2017 human resources

January 2018 Seminar on womenʼs career development 34

March 2018 Seminar for employees returning to work after childcare leave 27

*8 Data represents the Tokyo Gas Group employees.

Training for Female Employees

Womenʼs Career Development Seminar

Focused on early career development, we provide female employees in their 20s with opportunities to proactively develop their careers.

Enthusiastic female employees attending a seminar Womenʼs Seminar for Returning to Work after Childcare Leave

Prior to returning from childcare leave, female employees are offered opportunities to easily transition back to work and balance work and childcare by envisioning how they can practically manage their working style and work in cooperation and collaboration with their managers and peers.

Seminar on returning to work after maternity leave

Seminar on Career Development for Parents of Small Children

We provide opportunities for considering long-term career development to those who have spent a given period of time balancing work and childcare.

Male employees also attend the seminar for managing their careers while raising children.

Awareness-Building and Corporate Culture Development for Managers

Seminars for Supervisors with Subordinates Who Are Raising Children

For supervisors who have subordinates that are raising children, we offer seminars on management methods to help them understand and encourage support for balancing work and childcare.

Seminar for supervisors

Manager Training

New supervisors learn about performance evaluation, staff development skills, and diversity management. Diversity management includes practical training on the needs for promoting the advancement of diverse talent including women, understanding childcare and nursing care programs, how to communicate with diverse staff through case studies and role playing. Practical management training Lecture on Promoting the Advancement of Diverse Talent

General managers and managers learn from external lecturers how to create a workplace in which every individual can perform at their highest level. In 2017, we invited Yoshie Komuro, CEO of Work and Life Balance Inc.

Seminar on work-life balance

Panel Discussion on Promoting Womenʼs Careers

In October 2016, our managers held a panel discussion on expanding the range of occupations for women and raising management awareness on the topic of “Further advancing the careers of female employees.” About 300 people attended, and the female employees showed a particularly strong interest.

Panel discussion

Topic

Female Advancement in the Pipeline Department

Since fiscal 2010, we have regularly appointed female employees to positions historically assigned to males, such as field work. As the career scope of our female employees expands, their work styles will diversify. Since fiscal 2015, we have held gatherings for female employees in the field works department so they can exchange ideas and concerns on career development involving times of maternity and raising children. From these gatherings we incorporated their opinions into changes such as creating a uniform for female staff and lighter tools and expanding female locker rooms, and generally worked to reinforce a female employee-friendly environment.

External Evaluation We are being recognized through Kurumin certification by the Minister of Health, Labor and Welfare as a company that actively supports childcare based on the Act on Advancement of Measures to Support Raising Next-Generation Children. We were also designated as a Nadeshiko Brand in fiscal 2017 for the second consecutive year by the Ministry of Economy, Trade and Industry and the Tokyo Stock Exchange. Ongoing Career Development Support

In April 2016, we established a Grand Career Support Program, replacing our previous programs, which had primarily focused on enriching the life of employees in retirement. The new program provides comprehensive support for employee career development assuming that they will work until age 65. Also, it is intended to improve the motivation and performance of our employees over 50 years old by clarifying the work they can contribute through interviews with training and career consultants in the Personnel Department.

State of Reemployment after Mandatory Retirement Unit 2015 2016 2017

Total number of retired employees *1 Person 319 348 273

241 251 203 Tokyo Gas *3 Person （75.5） （72.1） (74.4) Number of reemployed employees *2 (%) 26 42 46 Subsidiaries, etc. （8.2） （12.1） (16.8)

*1 Number of employees of mandatory retirement at age 60

*2 Number of rehired employees after mandatory retirement

*3 Data for Tokyo Gas, Co., Ltd.

Employment of Persons with Disabilities

At Tokyo Gas, persons with disabilities perform all kinds of work alongside other employees. The ratio of employed persons with disabilities as of June 2018 was 2.35%, well above the statutory rate.* The Liaison Committee to Promote Employment of Disabled People was launched in April 2016 to foster understanding, further expand employment and create more opportunities for persons with disabilities to succeed professionally at Tokyo Gas. It also strives to develop safer, more accessible working conditions. *The statutory employment rate is determined by the Employment Rate System for Persons with Disabilities and is the percentage of regular workers who are required to be employees with disabilities.

Prohibiting LGBT Discrimination

Our Code of Conduct, which defines the required values and standards of behavior for everyone at the Tokyo Gas Group, explicitly prohibits discrimination and harassment on the grounds of sexual orientation or gender identity. In the Management Commitment, It is clearly stated that in order to be a corporate group, we must proactively create an organizational culture for everyone and excel, regardless of sexual orientation. In addition, our consultation desks satisfy the adoption of “employment management measures concerning problems caused by sexual harassment in the workplace” specified in Article 11 of the Act on Securing, etc. of Equal Opportunity and Treatment between Men and Women in Employment. We provide training in LGBT issues, which is incorporated, for example, training for human rights promotion leaders. Additionally, we organize related talks by outside speakers for middle-level managers and human resource managers.

Training for human rights promotion leaders Accessible Bathrooms

Multipurpose, accessible bathrooms are available and equipped to accommodate people using wheelchairs as well as ostomates* in addition to fitting boards for changing clothes at three locations in the Tokyo Gas head office building. Groupwide, nine accessible bathrooms are provided in seven buildings. *An ostomate is a person who has undergone surgery to create an artificial opening in the body (a “stoma”) to discharge waste due to damage to the digestive tract or urinary tract caused by illness or accident.

Multipurpose, accessible bathroom

Supportive Environment for Balancing Work and Childcare or Nursing Care

As a major pillars of our personnel policy, we are strengthening our organization by drawing out the skills of every employee so they can achieve their full potential. We practice a style of management that cultivates and maximizes the diverse characteristics and abilities of employees and creates a workplace environment that is comfortable at different life stages, so that everyone can meet the expectations for their respective roles and make the most of their abilities. In April 2014, we extended the period of eligibility to work shorter hours to care for small children from the end of third grade to the end of sixth grade. Provision was further enhanced in April 2017 employees were permitted to flexibly change the date on which they intended to return to work from parental leave if they were unable to obtain a nursery place for their child. As for nursing care, a three-year period for a leave or for nursing care work has become available to all employees. The parental leave, nursing care leave, and shortened working hour schemes are longer than those required by law. We also offer systems that allow employees to take leaves of absence for fertility treatment, to attend events at their children's and grandchildren's schools, and to provide nursing care for family members, and these systems are widely used by employees. We have introduced other arrangements to further increase the options for employee work styles, including leaves to allow employees to accompany spouses working overseas.

Major Programs and Usage *1 2015 2016 2017 Program Content Item Male Female Male Female Male Female

Number of 283265545 users Until the end of April Parental leave immediately following Rate of return to the childʼs 3rd birthday 100 100 100 100 100 92 work (%) *2 Flex-time system is Shorter hours available during Number of for parents of 213 227 3 214 pregnancy and until child users small children completes 6th grade

Up to 3 years for one Nursing care relative within the Number of 3401 leave second degree of kinship users requiring nursing care.

Flex-time system is available for up to 3 Nursing care years for one relative Number of 0302 work within the second degree users of kinship requiring nursing care.

Leave to For employees Number of accompany accompanying a spouse 443 users partner posted overseas

Total Special leave (paid) for Community (including up to 5 days within 1 88 48 58 service leave repeat year users)

For employees who reach the age of 30, 35, 40 and Sabbatical 50 Number of 594 514 673 system Provided with users commemorative gifts and special leave (paid)

*1 Data for Tokyo Gas, Co., Ltd.

*2 Percentage of employees taking parental leave each fiscal year who returned to work at the company.

Support for Work-Parenting Balance

Work Style Reform

Management tenaciously focuses on the value of “time” long working hours the value of “time” to rectify and reduce long working hours so that every employee can work with enthusiasm while maximizing their potential. In addition to establishing diverse working styles, we review work processes and methods while also taking action to boost organizational productivity.

Work Style Reform Action Plan In fiscal 2018, we established and started implementing our “Work Style Reform Action Plan,” as required by Keidanren for member companies. The plan defines goals for three focus areas: rectifying long working hours, encouraging employees to take annual leave, and promoting flexible work styles. We also set numerical targets to ensure successful implementation.

Work Style Action Plan KPIs (Numerical Targets)

By fiscal 2020, reduce cases of over 80 hours of extra non-legal Theme 1: working hours per month to zero (0), and in fiscal 2017 cut cases Rectifying long working hours of 60–80 hours/month by half

Theme 2: Reduce the number of employees who have taken fewer than 5 Encouraging employees to take annual paid vacations during fiscal 2018 to zero (0) annual leave

Theme 3: Create an environment that allows for teleworking for all Promoting flexible work styles employees by 2020

Generally Prohibiting Overtime Work after 20:00

In principle, we prohibit overtime work after 20:00 so as to help our employees maintain their health, promote diversity in our human resources, and secure the work-life balance.

Work-at-home Program

The work-at-home program was tested in fiscal 2016 and fully introduced in some workplaces in fiscal 2017. Digitizing documents and the use of information and mobile devices to boost productivity have made it possible for employees to work from home. Over 350 employees have already applied for these arrangements, and we expect the number to rise as we increase the applicable workplaces and further update the ICT environment.

Mobile Working

Arrangements have been made to allow employees to work away from the office using mobile devices to more effectively use time spent commuting or in transit for greater efficiency.

Flex-time System

Employees can flexibly alter their reporting and leaving time between 7:00 and 22:00 through consultation with their superiors as long as they include the required core time (mandatory working hours) of 10:00 to 15:00. This system applies to about 90% of our employees, excluding shift workers.

Leave-on-Time Day

We designate a monthly “Leave-on-Time Day” as an opportunity to reflect on working productively by maximizing results within a given period.

Premium Friday

In an effort to review work processes and methods while also boosting productivity, employees have been encouraged since February 2017 to take a half day off or use flex-time to finish work early on the last Friday of each month as long as this does not disrupt work.

Morning-oriented Work to Make Use of Summer Evenings

In July and August only, employees are encouraged to start and finish work around 30–60 minutes earlier than usual by utilizing the flex-time program, as long as this does not disrupt work, so they can enjoy their personal lives during a longer evening.

Encouraging Employees to Take Leaves in the Summer

The period from July to September has been designated the “period for summer leaves” with the goal of encouraging all employees to take at least seven days of paid leave during this time.

Declaration of Time to Leave Office

To promote a work style that focuses on the value of time, we ask employees to decide and declare the time they plan to leave the office each day. A motivational poster is displayed at each workplace to establish a working environment that makes it easier to leave the office.

Reminders on the importance of targeting time to leave work

Robotic Process Automation (RPA)

The RPA Office promotes operational optimization by actively utilizing RPA, which automates business operations through software. As of April 2018, eight departments have adopted the program, and others plan to do so as well.

“Waku Waku Work” Work Style Innovation

We have defined positive, exciting styles of work that generate value and raise productivity as Waku Waku Work, which is work that is value creating, varied and fun. Using ICT and other resources, we have been working on the following three forms of Waku Waku Work categorized according to objective. Under the leadership of promotion managers at each department and headquarters, each workplace has been exploring and implementing exciting work styles. Challenges to Overcome toward Achieving Goals

*Working hours = hours invested + hours expended Hours invested: time used to generate value (thinking, communicating, etc.) Hours expended: time consumed without generating value (administrative tasks, searches, transit time, etc.)

“Three Works” as Measures for Work Innovation Enhancement of People-Centered Management Base

Basic Principle of Occupational Safety and Health Activities

●Basic Policy

Occupational safety and health, which protects workersʼ lives and wellbeing, is the foundation of a companyʼs existence and a fundamental corporate social responsibility. Tokyo Gas Group believes that the values of Safety, Security, and Reliability that we advocate for our customers as our corporate brand can only be accepted when we consistently secure our own occupational safety and health. We consider occupational safety and health to be one of the most important challenges of corporate management. Our Group places the highest priority on ensuring safety and health, and enforces compliance, including adherence to all related laws and regulations, and making every effort to eliminate the risk of disasters and accidents toward securing an excellent safety and health record.

To put its Basic Policy into practice, the Tokyo Gas Group takes concerted action to promote safety and health in line with objectives established by workplace leaders in each organization based on the following Group-wide Occupational Safety and Health Policy.

●Fiscal 2018 Group-wide Occupational Safety and Health Policy

All employees, from top management down, will actively promote safety and health activities to safeguard the safety and health of each individual.

1. With full awareness of its public mission and social responsibilities, the Group will strictly enforce internal rules on safety and health, work procedures, etc., as well as legislation, such as the Industrial Safety and Health Act and Road Traffic Act. Particularly in 2018, we will fully comply with the “13th (2018–2022) Occupational Health and Safety Program” set by the Ministry of Health, Labor and Welfare as well as the Industrial Safety and Health Law amendments.

2. The Group will further enhance its occupational safety and health management system (OSHMS) in tandem with the permeation of chemical risk assessments. Furthermore, we will strive to reduce the risk of accidents by intensifying our efforts to eliminate human error. We will also strive to eliminate all serious accidents in the workplace by ensuring “point and check” procedures and strengthening safety awareness.

3. To reinforce the Tokyo Gas brandʼs corporate brand Safety, Security, and Reliability, workplace leaders will take the initiative to prevent traffic accidents. Particular attention will be paid to reducing accidents caused by younger and senior employees, parking area accidents, and accidents caused by carelessness toward a 20% reduction year-on-year in the number of traffic accidents associated with negligence as well as accidents causing injury to others.

4. Action will be taken to ensure that all employees receive health examinations and to implement a stress check program throughout the organization. The Group will use the results to enhance measures to prevent employee mental and physical illness and maintain and improve their health. The Group will particularly follow up on guidelines for preventing passive smoking while reviewing and implementing measures to discourage smoking altogether. 5. Our firm commitment to safety and health activities is intended to support Tokyo Gas Group member companies in more efficiently and completely conducting their own proactive health and safety initiatives.

Structure for Promoting Occupational Safety and Health

Promotion Structure The Tokyo Gas Group has established a Central Safety and Health Committee, which is chaired by the executive officer responsible for the Personnel Department. The committee formulates policy on safety and health activities and reviews and promotes the implementation of measures to prevent accidents and disasters as well as to improve mental and physical health across the Group. It also determines the Groupʼs safety and health promotion awards. If necessary, the committee reports on issues under consideration to the Corporate Executive Meeting and the Board of Directors for final discussion and decision-making.

Safety and Health Management Structure

Industrial Accident Prevention

Industrial Accident Prevention Tokyo Gas has in place a company-wide occupational safety and health management system to prevent industrial accidents. This includes further reinforcement of the occupational safety and health activities undertaken by each workplace on a daily basis. Under the Central Safety and Health Committee, each workplace proactively implements applicable measures. And we plan to enhance our OSHMS by implementing all industrial safety and health activities using PDCA cycles as well as by complying with related regulations, such as the Industrial Safety and Health Law, through periodic reviews and validation of our occupational safety and health management system. Occupational Safety and Health Management System Operational Flow

Risk Assessment

Risk assessments enable us to quantify potential accident risks and then take action to reduce or eliminate them. Since 2016, we have been complying with mandatory chemical risk assessment to raise awareness of these risks.

Preventing Traffic Accidents To prevent traffic accidents, the Company provides driver training programs that utilize outside facilities for new drivers, drivers with a history of accidents, and middle-aged and senior drivers who have been licensed under our own in-house system. When employees renew their licenses (in principle every five years), they receive behind-the-wheel instruction from outside driving instructors using drive recorders. Participants are able to correct unsafe driving habits and adopt safe ones by improving their driving skills and becoming aware of their own driving behaviors. With a top priority on safety, various training programs and other opportunities raise driver awareness of the importance of “stop and look,” resulting in fewer traffic accidents. Moreover, we strive to prevent accidents by incorporating “Safety Support Car” systems, which we have been promoting since fiscal 2017, in all vehicles. We also assign specially trained safe-driving instructors to each workplace in order to provide instruction through both behind-the-wheel and classroom sessions. In addition to these initiatives, we periodically publish a safety management guidebook, provide information to safe driving managers and utilize opportunities presented by the governmentʼs spring and autumn nationwide traffic safety campaigns in order to provide detailed traffic safety information to every workplace and raise safety awareness.

Training Implementation We are implementing multi-level educational programs on occupational safety and health as well as safety awareness. In addition, we provide educational programs for the development of legal managers.

Implementation of Safety and Health Educational Programs (FY2017) Number of Details Period participants

New employee training April 252 Level-specific training on safety and Safety and health training April, May health and on safety planning 243 for new managers (7 times)

Lectures on occupational safety and health (Tokyo Gas Group) September 476

April– Foreman training (legally mandated) February 151 (6 times)

Training for safety administrators at the time of appointment April 36 (legally mandated)

Hygiene supervisor training May 74

Traffic safety and driving training (new drivers, people involved in April–March 789 accidents, etc.)

Safe driving with attendant instructors utilizing drive recorders May–March 798

Work-related Accidents, Traffic Accidents, Rate of Lost Work Time Due to Accidents and Severity Rates*1 Unit 2015 2016 2017

Work-related injuries*2 28 23 38 Cases Traffic accidents 110 141 134

Rate of lost work-time injuries*3, 5 0.49 0.41 0.36 - Severity rate*4, 5 0.007 0.003 0.002

*1 Data is for regular and semi-regular employees of Tokyo Gas.

*2 Includes accidents that do not result in lost worktime.

*3 Rate of people taking work leave per 1 million actual work hours.

*4 Number of workdays lost as a result of accidents/injuries per 1,000 actual working hours.

*5 Includes injuries due to traffic accidents caused by others.

Rate of Lost Work Time due to Accident Trend*6

*6 Lost work time rate: rate of employees taking work leave due to accidents per 1 million actual work hours. Severity Rate Trend*7

*7 Severity Rate: rate of lost working days due to accidents per 1,000 actual work hours.

Maintaining and Improving Health

Occupational Health Activities Tokyo Gas created a Health Insurance & Employeesʼ Welfare Section within the Personnel Department. A number of occupational health activities are conducted under the leadership of our occupational physician. Moreover, we are committed to providing checkups for 100% of our employees as a fundamental means for raising their awareness of their own health. Also, we support the early detection of diseases, the effective use of outside medical institutions, and follow ups for employees who require further attention. Close collaboration with workplaces and individuals facilitates the provision of counseling for mental health, improving workplace environments and preventing the recurrence of illness, with the overall objective of maintaining and improving employee well-being. Additionally, health-related information is shared across the Group companies.

Approach to Mental Health We are strengthening our efforts to manage mental health issues, since about 60% of all sick leaves taken are due to mental health concerns. (1) Stress checks Ongoing mandatory stress checks required by Industrial Safety and Health Law Effort for promoting voluntary workplace assessments (group analysis) conducted by workplace managers and applying results to actual improvements (2) Business line assistance Utilizing manager training and other opportunities to provide education on improving workplace environments and effectively engaging managers (3) Individual support Individual support through a stress-check program and support for employees returning to the workplace after an absence Our consultation programs include our resident occupational physicians and nurses as well as telephone consultations and counseling by external institutions

Preventing Lifestyle-related Diseases We are developing and implementing the following activities to prevent lifestyle-related diseases. (1) Promoting good exercise habits (2) Preventing passive smoking (3) Smoking cessation programs

Health Support for Expatriates Overseas Health management support is offered to the growing number of expatriates in the wake of the globalization of our business. (1) Full implementation of statutory health checkups before and after posting (2) Recommendation of vaccinations against infectious diseases according to location of posting (3) Health counseling for employees and their families Infection Control Measures To minimize the threat of infectious diseases, we established a countermeasure office and are implementing preventive initiatives. (1) Countermeasure for new influenza strains Informing applicable employees as necessary for pursuing their work as well as providing mask training through our websites Maintaining adequate stock of sanitation materials for preventing the spread of infectious diseases (masks, etc.), food and others Providing the latest information through the intranet and other tools (2) Countermeasures for other infectious diseases (seasonal influenza, norovirus, rubella, etc.) Posting the latest information on Intranet and other tools as well through the Safety and Health Committee and lectures

Occupational health staff interviewing employee

Training Implementation We provide lectures on health management and encourage employees to attend them.

Safety and Health Education Programs Implemented in Fiscal 2017 Activity Period Participants

Lectures on Managing Health April–March (67 sessions) 2,731

External Recognition We are accredited as a 2018 Health Management Superior Corporate (large enterprise division) ̶White 500̶as determined by the Ministry of Economy, Trade and Industry in collaboration with the Japan Health Conference. The healthcare management superior corporate accreditation system is designed to recognize large, mid-size and small corporations with exceptional healthcare management, in accordance with the regional health issues and the health promotion initiatives promoted by the Japan Health Conference. Our recognized efforts include attainment of 100% participation in regular health checkups for employees, the promotion of measures to prevent passive smoking, lifestyle-related diseases and mental health issues. Supply Chain Management

Tokyo Gas believes that it must fulfill its social responsibility in cooperation with business partners, rather than doing so on its own when delivering products and services to customers. In 1992, we introduced guidelines and basic requirements to pursue open, equitable and fair purchasing activities. Adhering to these guidelines, we have forged relationships of trust and jointly implement CSR initiatives. In 2017, we revised the Basic Requirements for Purchasing, Purchasing Guidelines for Suppliers and Green Purchasing Promotion Guidebook to promote procurement with even greater consideration for CSR. Together we will also enhance our brand values of Safety, Security and Reliability through a committed effort to pursue open, equitable and fair purchasing activities based on these policies.

Principles and Standards of Purchasing Practice

Basic Policy Our transactions and relations with suppliers are governed by Tokyo Gas Group Our Code of Conduct, which defines the values and guidelines shared by all members of the Tokyo Gas Group, and we seek to ensure that the Code is thoroughly understood and observed. Furthermore, we have stipulated a code of conduct for purchasing activities in our Principles and Standards of purchasing practice, and we strive to establish relationships of trust based on highly transparent, fair and equitable transactions with our partners. To enhance customer trust, it is essential that not only the Tokyo Gas Group but also its suppliers practice compliance, preserve the environment, ensure occupational safety, respect human rights, and show concern for local communities. We request suppliers to adhere to our Purchasing Guidelines for Suppliers and Green Purchasing Promotion Guidebook. Each time we place an order for construction and other work, we notify suppliers of our Specifications for Common Environmental Management and seek their adherence to requirements such as legal compliance, reduced environmental impact and consideration for occupational safety and health.

●Procurement Policies (Revised in Fiscal 2017)

Principles and Standards of purchasing practice: code of conduct governing the purchasing activities of Tokyo Gas Purchasing Guidelines for Suppliers: requirements for doing business, including quality, legal compliance, labor, safety and human rights, environment, and local communities Green Purchasing Promotion Guidebook: environmental aspects of procurement that require consideration

Principles and Standards of Purchasing Practice To realize its Corporate Action Philosophy, Tokyo Gas established Principles and Standards of Purchasing Practice comprising the following points as a code of conduct for its purchasing activities. In fiscal 2017, we revised the Principles and Standards to promote procurement that pays even greater consideration for CSR.

●Principles and Standards of purchasing practice Tokyo Gas Co., Ltd. (“the Company”) strives to practice its Corporate Action Philosophy by adhering to the following Principles and Standards of Purchasing Practice, which serves as the code of conduct governing purchasing activities. 1. Openness 1.1 The Company will procure goods and services, both domestically and internationally, that meet the Companyʼs standards for quality, safety, and cost, through procedures that are simple and easily understood. 2. Fairness and Equality 2.1 The Company will select its suppliers in a fair and equitable manner on the basis of economic rationality, with due consideration to quality, price, reliability, guaranteed delivery, after-sales service, suitability with existing facilities, technological ability, financial health, and CSR stance. 2.2 The Company is fully committed to complying with the laws and regulations prohibiting bribery, corruption, misappropriation, antitrust, and other illegal behavior.

3. Mutual Trust 3.1 The Company will establish relationships of trust with its suppliers based on fair and equitable transactions and strive to maintain and enhance the safety, security, and reliability of its brand through mutual prosperity and cooperation. Indispensable to providing stable energy is the stable supply of quality goods and services from suppliers at fair prices and within the designated delivery periods, all based on mutual trust.

4. Commitment to Compliance 4.1 The Company and its suppliers must fully comply with the letter and spirit of all relevant laws and regulations, social norms, and corporate ethics when conducting business transactions.

5. Environmental Protection 5.1 The Company will work with its suppliers to protect the natural environment toward realizing a resource-saving society by adopting the perspective of environmental friendliness in addition to economic considerations. 5.2 The Company will promote Green Purchasing in accordance with its Green Purchasing Promotion Guidebook and also to follow through with its Environmental Policies.

6. Occupational Safety and Respect for Human Rights 6.1 The Company will work with its suppliers to ensure occupational safety and respect for human rights.

7. Consideration for Local Communities 7.1 The Company will work with its suppliers to preserve the environment and ensure respect for human rights in local communities, while also striving to ensure their safety and security.

7.2 The Company will actively engage in activities that contribute to the development of local communities toward the betterment of society.

Link ▶ Action on Resource Procurement Supply Chain Management

Purchasing Guidelines for Suppliers

To clarify and address the tasks in a collaborative effort, the Tokyo Gas Group sets out its requirements in the Purchasing Guidelines for Suppliers and requests that they be put into practice. Promotion of CSR will also result in reducing risks and enhancing quality across the supply chain. Our objective is to achieve mutual growth alongside our suppliers and play our part in creating a sustainable society.

● Purchasing Guidelines for Suppliers

The Company seeks the cooperation of its suppliers and requests that they understand and act in accordance with the Basic Requirements so as to ensure mutual trust throughout purchasing activities.

1. Quality Guarantee 1.1 The Supplier must meet the requirements for quality and performance as set by Tokyo Gas and maintain that level of quality and performance over a reasonable period of time.

2. Reasonable Pricing 2.1 The Supplier must offer prices deemed reasonable with respect to quality, performance, specifications, terms of delivery, terms of payment, trends in market prices, and other relevant areas.

3. Compliance with Terms of Delivery 3.1 The Supplier must observe the contractual time of delivery specified by the Company.

4. Safety Assurance 4.1 The Supplier must ensure the safe use and operation of its products.

5. Maintenance and After-Sales Service 5.1 The inspection, maintenance, and repair services that the Supplier is required to provide should be undertaken in a fast and precise manner, an approach that should also be applied to its design and production or implementation of goods and services. In addition, the Supplier must be capable of quickly providing the necessary parts and technical assistance for standard repairs and in the event of an emergency.

6. Risk Management 6.1 The Supplier must be able to respond quickly and effectively in the event of a quality-related problem or emergency such as a natural disaster or accident.

6.2 The Supplier must appropriately handle personal information and confidential information.

6.3 The Supplier must appropriately manage intellectual property, including confidential information and know-how.

7. Commitment to Compliance 7.1 The Supplier must comply fully with the letter and spirit of all relevant laws and regulations, including the antitrust law and subcontractor law, and is expected to observe social norms and corporate ethics. The Supplier must also maintain a fully functioning system for the prevention and early detection of illegal behavior. 8. Consideration for Labor, Safety, and Human Rights 8.1 The Supplier must act in compliance with laws, regulations, and social norms related to occupational health and safety, working conditions, and human rights, and must engage in initiatives for addressing these issues. Specific requirements include:

Eliminating all discriminatory practices based on race, ethnicity, religion, gender, age, place of birth, nationality, physical and mental disability, academic background, social status, sexual preference, sexual identity, and other factors, and striving to provide equal opportunities and fair treatment; Attending to the health and safety of employees and implementing the necessary measures; Properly managing working hours and avoiding forcing work against the will of the employee; Respecting employeesʼ right to organize and allowing collective bargaining and labor- management consultations; Protecting the rights of workers, complying with minimum wage requirements, and giving due consideration to providing a living wage; and Prohibiting child labor and forced labor and preventing illegal labor practices.

9. Environmental Protection 9.1 The Supplier is required to implement sufficient measures to avoid harming the global environment, pay due consideration to environmental issues, and reduce its environmental impact. The Supplier is also expected to implement initiatives in line with the Companyʼs Green Purchasing Guidelines.

10. Consideration for Local Communities 10.1 The Supplier is required to work with its business partners to protect the environment, respect human rights, and ensure the safety and security of local communities.

10.2 The Supplier is encouraged to actively engage in activities that contribute to the development of local communities toward the betterment of society.

11. Supply Chain Management 11.1 In addition to observing the guidelines, the Supplier is expected to encourage its business partners to implement the initiatives set forth therein.

12. Prohibition of Involvement with Conflict Minerals 12.1 As a precondition to any business transaction, products supplied by the Supplier must not contain conflict minerals (gold ore, coltan, wolframite, and cassiterite) produced to fund militant groups in the Democratic Republic of the Congo and its neighboring countries and regions.

Specifications for Common Environmental Management

Specifications for Common Environmental Management cover rules on issues such as legal compliance, reduction of environmental impact and consideration for occupational safety and health. We present them to suppliers whenever we commission construction and other work, requesting their cooperation.

Initiatives for Green Purchasing

Tokyo Gas has been practicing green purchasing*1 since fiscal 1996. We systematically pursue green purchasing in accordance with our Green Purchasing Promotion Guidebook and require suppliers to adhere to specifications based on our Purchasing Guidelines for Suppliers. *1 Placing priority on purchasing products and services with lower environmental impact. Green Purchasing Promotion Guidebook

The Tokyo Gas Group will promote Green Purchasing in accordance with these guidelines and by adopting the perspective of environmental friendliness, in addition to common criteria such as cost, quality, and terms of delivery, when procuring and purchasing construction works and services as well as materials, manufactured goods, and components (hereafter “goods and services”).

1. Purpose of Green Purchasing 1.1 Tokyo Gas endeavors to proactively and consistently contribute to protecting the global environment and building a resource-saving society, not only by reducing the environmental impact of its business activities through initiatives such as energy conservation and waste reduction but also by promoting Green Purchasing in the upstream segment of its business activities toward reducing its overall environmental impact.

2. Considerations for Selecting Goods and Services 2.1 In accordance with the Green Purchasing Guidelines laid out by the Green Purchasing Network (GPN), Tokyo Gas will select goods after considering the diverse environmental impacts throughout their life cycles, from extraction of raw materials to disposal, as explained below. 2.1.1 Reduction of environmental impact Reduced use or emission of substances that are harmful to the environment and human health. Proper control of legally designated chemical substances. 2.1.2 Conservation of resources and energy Limited consumption of resources, energy, and water during product manufacture, use, and installation. 2.1.3 Sustainable extraction and use of resources Sustainable extraction methods and effective utilization to prevent depletion of resources. 2.1.4 Capacity for long-term use Enable long-term use based on ease of repair, parts exchange, and other considerations. 2.1.5 Reusability Can be reused. 2.1.6 Recyclability Can be recycled. 2.1.7 Use of recycled materials Contains a significant ratio of recycled materials and reused components. 2.1.8 Ease of treatment and disposal Can be easily treated and disposed of as waste. 2.1.9 Legally compliant waste disposal Promotes the recycling of resources through reduced waste generation, reuse, and thorough sorting and ensures a legally compliant waste disposal process. 2.1.10 Biodiversity conservation Mitigates direct and indirect impacts of business operations on the ecosystem.

3. Considerations for Selecting Suppliers 3.1 When selecting suppliers, Tokyo Gas will give higher priority to companies that actively pursue environmental protection initiatives, such as implementation of an environmental management system (EMS) that includes:

3.1.1 Establishing environmental principles and guidelines; 3.1.2 Appointing dedicated environmental officers; 3.1.3 Complying with environmental laws and regulations; 3.1.4 Identifying the environmental impacts of business activities; 3.1.5 Disclosing environmental information; 3.1.6 Protecting the environment in collaboration with local communities and NGOs; 3.1.7 Promoting Green Purchasing; and 3.1.8 Asking suppliers to pursue environmental protection activities.

4. Collection and Use of Environmental Information 4.1 Tokyo Gas will actively collect, organize, and analyze environmental information on goods and services as well as manufacturers and sales companies. The information will be shared by the Purchasing Department and used to ensure appropriate management of Green Purchasing. 5. Note on Implementing Green Purchasing 5.1 When undertaking procurement and purchasing, the Purchasing Department of Tokyo Gas will give priority to selecting the goods and services with the least environmental impact, from among candidates that meet requirements such as quality and terms of delivery, while at the same time striving to contain costs.

Example of Promoting Green Purchasing through Electronic Catalog Tokyo Gas has introduced purchasing from an electronic catalog*2 that lists over 100,000 items. Office supplies, fixtures and equipment, and printed matter comprise the majority of listed items, and we place priority on products that meet green purchasing requirements. The catalog provides us with environmentally-friendly options. In addition, we also promote the use of Tokyo Gas Recycled Paper made of paper waste generated by Tokyo Gas. *2 Our PASPO purchasing system facilitates ordering from an electronic catalog via the Internet in a simple and timely manner Supply Chain Management

Communication with Our Suppliers

We disclose information on major procurement items and procurement procedures on the corporate website and provide opportunities for participation as needed. When starting a new business relationship, we screen our new partner to check the status of their CSR activities in addition to the basic requirements. With respect to our suppliers, we conduct a survey each year on the overview of each company and their efforts on compliance and the environment, and we meet with management when the survey results indicate that meetings are necessary. Furthermore, we engage in two-way communication with our suppliers by sharing information during meetings on a daily basis.

Links ▶ Purchasing Guidelines ▶ Purchasing Guidelines for Suppliers ▶ Green Purchasing Promotion Guidebook ▶ Procurement Area ▶ Standard Purchasing Procedure Results of Supplier Survey

Results of FY2017 CSR Survey of Suppliers CSR Data

Note: The sum of individual environmental data may not be equal to the total due to the way figures are rounded.

The Tokyo Gas Group Business Activities and Material Balance

We monitor and manage impacts on the environment at every stage of our LNG value chain to reduce the impact on the environment.

The Tokyo Gas Group Business Activities and Material Balance (FY2017)

Boundary: ▶ Tokyo Gas Co., Ltd. and 46 consolidated subsidiaries in Japan (PDF: 76KB) *1 For city gas production by the Tokyo Gas Group.

*2 Energy usage by the Tokyo Gas Group excluding double-counting due to intra-group supply of heat and electricity.

*3 City gas: Volume of gas sales excluding supply to other gas utilities and sales for internal Group use.

Wholesale supply: Volume of gas supplied to other gas utilities.

Heat: Includes sales from LNG terminals as well as district heating and cooling centers and spot heat supply. Includes intra-group supply.

Electric power: Volume of sales of all electric power, including power purchased for business use from other companies and the market

as well as Group power stations.

*4 Source: “Study of Life Cycle Greenhouse Gas Emissions of LNG and City Gas 13A” (Proceedings of the annual meeting of Japan Society

of Energy and Resources 35, pp. 23–26, 2016)

Production: 0.77; Liquefaction: 6.71; Transportation by sea: 1.48 g-CO2/MJ, based on gross heating value *5 CO2, CH4, NOx: Excludes double-counting due to intra-group supply.

Volume of wastewater: Specified wastewater and domestic sewage.

*6, 7 PE pipes, Steel and cast-iron pipes: Tokyo Gas on a non-consolidated basis.

*8 Gas sales volume multiplied by emission intensity.

▶ The Tokyo Gas Group Business Activities and Material Balance (FY2017) (PDF: 184KB)

(1) Usage of Energy and Water/Emissions into the Atmosphere and Water System

Use of Energy and Water/Emissions into the Atmosphere and Water Systems

Feedstock and Sales Volume Category Unit FY2013 FY2014 FY2015 FY2016 FY2017

City gas feedstock LNG Thousand tons 11,057 11,513 11,411 11,583 11,407 (Note 1) LPG Thousand tons 418 441 438 434 491

City gas Million m3 14,527 15,358 15,263 15,571 15,380 (Note 2)

Heat Sales volume TJ 3,353 3,287 3,251 3,451 3,496 (Note 3)

Power Billion kWh 9.71 10.61 10.96 12.65 14.66 (Note 4)

City Gas Feedstock (LNG/LPG) City Gas Sales

Heat Sales Power Sales

Note 1: For city gas production by the Tokyo Gas Group.

Note 2: Volume of gas sales including supply to other gas utilities and excluding sales for internal Group use.

Note 3: Includes sales volume from LNG terminals, in addition to district heating and cooling centers and spot heat supply. Also includes intra-group supply. Note 4: Volume of sales of all electric power, including power purchased for business use from other companies and the market as well as Group power stations.

Energy Usage*1, 2 Category Unit FY2013 FY2014 FY2015 FY2016 FY2017

Energy usage (Note 1) TJ 60,457 66,399 68,561 79,230 82,651

LNG terminals TJ 3,894 4,069 3,998 4,169 4,291

District heating and cooling TJ 4,361 4,167 4,167 4,316 4,037 centers

Power plants TJ 49,733 55,639 57,871 68,250 71,967

Tokyo Gas business TJ 1,453 1,417 1,387 1,483 1,444 offices, etc.

Other Group TJ 1,541 1,490 1,460 1,362 1,368 companies

(Tokyo Gas Co., TJ 5,638 5,785 5,678 5,954 6,043 Ltd.)

Electric power (Note 2) MWh 545,218 593,097 615,419 626,729 607,725

LNG terminals MWh 304,788 334,229 345,227 363,053 368,259

District heating and cooling MWh 76,446 90,973 94,640 98,529 84,621 centers

Power plants MWh 10,732 8,774 11,407 9,775 10,700

Tokyo Gas business MWh 54,499 52,350 52,372 51,526 49,786 offices, etc.

Other Group MWh 118,673 115,677 112,890 103,847 105,089 companies

(Tokyo Gas Co., MWh 364,971 391,536 402,357 419,502 422,776 Ltd.)

Thousand City gas 1,275,444 1,402,022 1,447,012 1,691,380 1,775,849 m3

Thousand LNG terminals 21,378 18,769 14,600 14,544 16,206 m3

District heating Thousand and cooling 82,570 74,482 73,328 75,133 72,420 m3 centers

Thousand Power plants 1,152,267 1,289,852 1,341,099 1,582,434 1,668,543 m3

Tokyo Gas Thousand business 16,900 16,726 15,969 18,209 17,697 m3 offices, etc.

Other Group Thousand 2,328 2,192 2,015 1,060 984 companies m3

(Tokyo Gas Co., Thousand 43,837 40,994 35,990 38,347 39,676 Ltd.) m3

Heat (Note 2) TJ 31 38 48 71 55

District heating and cooling TJ 176 203 198 232 211 centers Tokyo Gas business TJ 89 85 88 93 95 offices, etc.

Other Group TJ 167 158 166 195 195 companies

(Tokyo Gas Co., TJ 99 94 96 102 104 Ltd.)

Other fuels TJ 5.40 5.23 5.80 4.89 4.04

LNG terminals TJ 0.18 0.22 0.68 0.50 0.53

Tokyo Gas business TJ 0.64 0.64 0.60 1.34 0.50 offices, etc.

Other Group TJ 4.59 4.37 4.52 3.04 3.01 companies

(Tokyo Gas business TJ 0.85 0.86 1.28 1.84 1.03 offices, etc.)

Gasoline kL 3,571 3,282 3,219 3,342 3,195

(Tokyo Gas Co., kL 1,461 1,425 1,444 1,420 1,335 Ltd.)

Diesel oil kL 228 219 208 198 249

(Tokyo Gas Co., kL 37 35 41 47 59 Ltd.) Fuels for Thousand vehicles City gas 218 203 175 135 133 m3

(Tokyo Gas Co., Thousand 185 172 142 124 124 Ltd.) m3

LPG kL 295 280 220 142 114

(Tokyo Gas Co., kL----- Ltd.)

Thousand LNG cryogenic energy 2,659 2,289 2,364 2,678 2,890 tons

Cryogenic Thousand power 796 460 724 785 787 tons generation

Portion sent to Thousand subsidiaries 821 853 852 820 820 tons and affiliates

BOG treatment, Thousand 1,042 976 788 1,073 1,283 etc. tons Energy Usage (by Fuel Type) Energy Usage (by Business)

Note 1: Excludes double counting by intra-group supply of heat and electricity.

Note 2: Excludes double counting by intra-group supply.

Water Usage Category Unit FY2013 FY2014 FY2015 FY2016 FY2017

Thousand Tap water and industrial water 6,023 5,751 5,388 5,017 5,180 m3

Thousand LNG terminals 1,542 1,662 1,457 1,138 1,125 m3

District heating and Thousand 1,597 1,439 1,459 1,552 1,507 cooling centers m3

Thousand Power plant 1,890 1,703 1,569 1,492 1,765 m3

Tokyo Gas business Thousand 607 572 537 544 506 offices, etc. m3

Thousand Other Group companies 387 375 366 290 276 m3

Thousand (Tokyo Gas Co., Ltd.) 2,192 2,276 2,036 1,726 1,674 m3

Thousand Seawater LNG terminals 795,227 784,406 773,963 781,879 784,651 m3

Water Usage (Tap Water and Industrial Water) Emissions into the Atmosphere Category Unit FY2013 FY2014 FY2015 FY2016 FY2017

Thousand tons CO2*1, 2 (Note 1) 3,074 3,376 3,479 4,014 4,179 of CO2

LNG terminals (Note Thousand tons 200 210 202 206 207 2) of CO2

District heating Thousand tons and cooling 223 213 211 217 201 of CO2 centers (Note 3)

Power plants (Note Thousand tons 2,522 2,823 2,938 3,466 3,654 4) of CO2 Greenhouse Tokyo Gas gases Thousand tons business offices, 75 73 71 74 72 of CO2 etc. (Note 5)

Other Group Thousand tons 81 77 75 69 68 companies (Note 6) of CO2

(Tokyo Gas Co., Thousand tons 290 298 288 296 294 Ltd.) (Note 7) of CO2

Thousand tons CH4*3 (Note 8) of CO2 4614511 equivalent

NOx Tons 272 272 302 367 402

LNG terminals Tons 14 14 11 13 13 (Note 9)

District heating and cooling Tons 59 53 52 51 54 centers

Power plants Tons 182 187 223 282 311

Tokyo Gas business offices, Tons 17 18 15 21 24 etc. (Note 9)

(Tokyo Gas Co., Tons 32 32 28 35 38 Ltd.)

Greenhouse Gas Emissions (CO2 Equivalent) (SCOPE 1 + SCOPE 2)

Note 1: Excludes double counting by intra-group supply. Totaling 4,178 (based on adjusted emission factors) for the Tokyo Gas Group overall. Note 2: 205 (based on adjusted emission factors)

Note 3: 200 (based on adjusted emission factors)

Note 4: 3,655 (based on adjusted emission factors)

Note 5: 72 (based on adjusted emission factors)

Note 6: 68 (based on adjusted emission factors) Note 7: 293 (based on adjusted emission factors)

Note 8: About 425 tons of CH4 emissions

Note 9: Emissions from facilities that generate soot and smoke specified in the Air Pollution Control Act.

Greenhouse Gas Emissions from Feedstock Procurement (SCOPE 3) Category Unit FY2013 FY2014 FY2015 FY2016 FY2017

LNG procured Million tons 12.80 13.97 13.87 14.25 14.24

Million tons of Extraction 0.57 0.62 0.58 0.60 0.60 CO2 Greenhouse gas (CO2 Million tons of Liquefaction 5.84 6.38 5.08 5.22 5.22 equivalent) CO2 (Note) Marine Million tons of 1.38 1.50 1.12 1.15 1.15 transport CO2

Note: Calculated based on greenhouse gas emission intensity throughout the lifecycle, from extraction of natural gas to processing and transportation, as analyzed by the LCA approach.

• FY2012–14 emission intensity

Extraction: 0.81; Liquefaction: 8.36; Transportation by sea: 1.97 g-CO2/MJ, based on gross heating value

Source: “Future Forecast for Life Cycle Greenhouse Gas Emissions of LNG and City Gas 13A” (Japan Society of Energy and Resources,

presentation report 28 (2), pp. 51–56, 2007)

• Emission intensity from FY2015 Extraction: 0.77; Liquefaction: 6.71; Transportation by sea: 1.48 g-CO2/MJ, based on gross heating value Source: “Study of Life Cycle Greenhouse Gas Emissions of LNG and City Gas 13A” (Proceedings of the annual meeting of Japan Society of Energy and Resources 35, pp. 23–26, 2016)

CO2 Emissions and Emissions Reduction at Customer Sites (SCOPE 3) Category Unit FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017

Total million 26.94 27.09 27.67 29.36 28.96 29.43 29.60 amount tons of CO2

Amount

CO2 of reduction million Baseline 0.87 1.52 3.29 3.43 3.94 4.04 relative tons of CO2 to FY2011

Energy Usage and CO2 Emissions Associated with Cargo Transportation (Tokyo Gas Co., Ltd.) (SCOPE 3) Category Unit FY2013 FY2014 FY2015 FY2016 FY2017

million tons Transportation amount 93.12 94.59 98.42 85.70 82.72 -km

Energy usage (crude oil kL 3,258 3,275 3,354 3,165 3,055 equivalent)

kL/million Energy usage intensity 35.0 34.6 34.1 36.9 36.9 tons-km

CO2 emissions tons-CO2 8,576 8,615 8,810 8,267 7,993

Emissions into Water Systems Category Unit FY2013 FY2014 FY2015 FY2016 FY2017

thousand Wastewater 1,106 1,116 1,091 1,090 1,069 m3

thousand LNG terminals (Note) 242 265 287 291 242 m3

District heating and cooling thousand 321 325 330 354 330 centers m3 thousand Power plants 544 525 474 445 498 m3

thousand (Tokyo Gas Co., Ltd.) 249 273 296 300 258 m3

COD tons 1.9 1.9 1.6 1.4 1.4

LNG terminals tons 1.2 1.2 1.2 1.0 0.9

Power plants tons 0.6 0.6 0.5 0.4 0.4

(Tokyo Gas Co., Ltd.) tons 1.2 1.2 1.2 1.0 0.9

Wastewater COD (Chemical Oxygen Demand)

Note: Data are for wastewater discharges from wastewater treatment facilities and sewage discharges.

Conversion Factor, etc. CO2 Emission Factor Category Unit FY2013 FY2014 FY2015 FY2016 FY2017

City gas (Tokyo Gas 13A) kg-CO2/m3 2.21 (Note 1)

Purchased electricity (average of all 0.525 0.530 0.505 0.500 0.486 kg-CO2/kWh power sources) (Note 2) etc. etc. etc. etc. etc.

Steam (excluding industrial kg-CO2/MJ 0.057 Heat use), hot water, cold water (Note 3) Industrial steam kg-CO2/MJ 0.060

Heavy oil A kg-CO2/L 2.71

Diesel kg-CO2/L 2.58 Other fuels Kerosene kg-CO2/L 2.49 (Note 3) Gasoline kg-CO2/L 2.32

LPG kg-CO2/kg 3.00

Note 1: Calculated based on the typical composition of city gas (type 13A) supplied by the Tokyo Gas (15°C, gauge pressure of 2 kPa).

Note 2: Emission factors from electric power companies, released in accordance with the ministerial ordinance stipulated by the Act on Promotion of Global Warming Countermeasures.

Note 3: Calculated using the unit calorific value released in accordance with the ministerial ordinance stipulated by the Act on Promotion of Global Warming Countermeasures, and multiplying this amount by the emission factor per unit calorific value and by 44/12.

Unit Calorific Value Category Unit FY2013 FY2014 FY2015 FY2016 FY2017

City gas (Tokyo Gas 13A) MJ/m3N 45.00 (Note 1)

Purchased Daytime electricity MJ/kWh 9.97 electricity Nighttime electricity MJ/kWh 9.28 *4 Other than general (Note 2) MJ/kWh 9.76 electricity utilities

Steam (excluding industrial MJ/MJ 1.36 Heat use), hot water, cold water (Note 2) Industrial steam MJ/MJ 1.02

Heavy oil A MJ/L 39.1

Diesel MJ/L 37.7 Other fuels Kerosene MJ/L 36.7 (Note 2) Gasoline MJ/L 34.6

LPG MJ/kg 50.8

Crude oil equivalent coefficient (Note 2) kL/GJ 0.0258

Note 1: City gas calorific value of the Tokyo Gas (0°C, 1 atmospheric pressure)

Note 2: Act on Rationalizing Energy Use (the Energy Efficiency Act)

*1 For district heating and cooling centers that sell power using Combined Heat and Power (cogeneration), the amount of energy usage is

divided between those for heat production and those for power generation using the allocation factor calculated based on the Act on

Promotion of Global Warming Countermeasures. Data for energy used to produce heat is reflected in “District heating and cooling

centers,” and data for energy used for power generation is reflected in “Power plants.” Data for the “Tokyo Gas business offices, etc.” does

not include energy used for LNG terminals and district heating and cooling centers. “Other Group companies” refers to data on Group

companies excluding district heating and cooling centers, and power plants.

*2 Some variance in the data listed under different categories may exist since the data has been processed to properly assess the changes in

energy usage intensity for each business activity (such as by reflecting the amounts commissioned by other companies at LNG terminals).

*3 CH4 (methane) emissions were converted to CO2 emissions by multiplying by the global warming potential of 25, as stipulated in the Act

on Promotion of Global Warming Countermeasures.

*4 For the crude oil equivalent of electricity usage under “District heating and cooling centers” and the “Tokyo Gas business offices, etc.,” the

amounts purchased from power utility companies were all calculated using daytime electricity factors.

(2) Waste

Industrial Waste

Category Unit FY2013 FY2014 FY2015 FY2016 FY2017

Generation tons 122,705 130,193 149,317 144,230 160,419

Amount recycled tons 119,039 124,975 142,629 140,373 156,064

Final disposal tons 2,450 3,714 2,433 1,312 1,823 Industrial waste*1, 2 Recycling rate ％ 97 96 96 97 97

Final disposal ％ 23211 rate

Generation tons 1,476 1,330 1,291 809 617

Amount recycled tons 1,062 925 851 476 354

Final disposal tons 2 16 18 2 4 Production plants*1 Recycling rate ％ 72 70 66 59 57

Final disposal ％ 01101 rate

Generation tons 118,111 125,816 144,594 139,856 155,510

Construction work*1, 2 Amount recycled tons 115,303 121,455 138,851 136,807 151,997

Final disposal tons 2,258 3,472 2,221 1,123 1,469 Recycling rate ％ 98 97 96 98 98

Final disposal ％ 23211 rate

Generation tons 3,118 3,046 3,431 3,565 4,292

Amount recycled tons 2,674 2,595 2,926 3,090 3,713

Business offices, Final disposal tons 190 226 194 187 350 etc.*1 Recycling rate ％ 86 85 85 87 86

Final disposal ％ 67658 rate

Generation tons 4,137 4,430 4,462 4,449 5,950

Amount recycled tons 3,647 3,719 3,629 3,701 4,638

Final disposal tons 194 360 431 389 981 Tokyo Gas Co., Ltd. Recycling rate ％ 88 84 81 83 78

Final disposal ％5810916 rate

Industrial Waste (All) Industrial Waste (Production Plants)

Industrial Waste (Construction Work) Industrial Waste (Business Offices, etc.)

Results by Major Sites (FY2017)

LNG terminals (Negishi, Sodegaura, Ohgishima, Hitachi) Amount Final Final Generation Recycling Category recycled disposal disposal (tons) rate (%) (tons) (tons) rate (%)

Sludge 125.3 23.5 0.0 18.8 0.0

Scrap metal 10.6 10.6 0.0 99.9 0.1

Waste oil 6.3 6.0 0.0 94.9 0.1 Waste plastics 12.4 8.2 0.1 65.8 0.4

Specially controlled industrial waste 1.3 0.3 0.0 22.7 0.0

Other 0.7 0.4 0.0 56.7 0.3

Total 156.5 48.8 0.1 31.2 0.0

District Heating and Cooling Centers Amount Final Final Generation Recycling Category recycled disposal disposal (tons) rate (%) (tons) (tons) rate (%)

Sludge 17.9 7.6 2.8 42.2 15.4

Scrap metal 26.3 26.3 0.0 100.0 0.0

Waste oil 13.4 12.1 1.1 90.0 7.9

Waste plastics 8.8 8.8 0.0 100.0 0.0

Other 2.8 2.8 0.0 100.0 0.0

Total 69.3 57.5 3.8 83.1 5.5

Waste from Construction Work*2 Amount Final Final Generation Recycling Category recycled disposal disposal (tons) rate (%) (tons) (tons) rate (%)

Debris 82,346 81,175 637 98.6 0.8

Sludge 2,905 1,412 132 48.6 4.6

Scrap metal 1,932 1,924 4 99.6 0.2

Woodchips 432 397 32 91.7 7.5

Waste plastics 832 668 149 80.3 17.9

Glass, concrete, ceramic waste 59,927 59,605 320 99.5 0.5

Paper waster 195 183 12 93.7 6.1

Other 6,941 6,635 181 95.6 2.6

Total 155,510 151,997 1,469 97.7 0.9

Business Offices, etc.*1 Amount Final Final Generation Recycling Category recycled disposal disposal (tons) rate (%) (tons) (tons) rate (%)

Scrap metal 1,090 1,077 11 98.8 1.0

Waste plastics 1,389 1,163 214 83.7 15.4

Waste oil 349 346 2 99.2 0.5

Sludge 352 101 59 28.8 16.8

Glass, concrete, ceramic waste 162 126 36 77.7 22.3

Debris 76 68 8 89.1 10.1

Other 874 832 21 95.2 2.4

Total 4,292 3,713 350 86.5 8.2

*1 Data for “Production plants” include that from business offices that produce city gas and other products, district heating and cooling

centers, and power plants. Data for “Construction work” are for construction taken on by Group companies as original contractors. Data

for “Business offices, etc.” include all data other than that from “Production plants” and “Construction work.”

*2 Including construction work for customers of our subsidiaries and affiliates. General Waste

Category Unit FY2013 FY2014 FY2015 FY2016 FY2017

Generation tons 3,645 3,457 3,143 2,931 2,818

Amount tons 2,755 2,725 2,441 2,224 2,090 recycled

General Recycling rate％7679787674 Waste Generation tons 1,154 1,132 1,016 1,045 1,010

Tokyo Gas Co., Amount tons 977 967 870 850 806 Ltd. recycled

Recycling rate％8585868180

Generation tons 2,329 2,299 2,056 1,833 1,722

Amount tons 2,220 2,194 1,934 1,720 1,570 recycled

Paper Recycling rate％9595949491 waste Generation tons 863 882 783 775 719

Tokyo Gas Co., Amount tons 821 830 738 721 680 Ltd. recycled

Recycling rate％9594949395

General Waste (All) General Waste (Paper)

By-Products from Gas Pipeline Construction

Category Unit FY2013 FY2014 FY2015 FY2016 FY2017

Amount recovered tons 231 228 235 260 283

PE pipe Amount recycled tons 231 228 235 260 283

Gas pipe Recycling rate ％ 100 100 100 100 100 (Note 1) Amount recovered Steel and tons 3,995 4,670 5,003 6,126 5,605 cast-iron and recycled pipe Recycling rate ％ 100 100 100 100 100

Pipeline extension work km 1,160 1,170 1,121 1,026 1,038

million Excavated Estimated excavated amount 3.57 3.71 4.49 3.88 4.03 tons soil (Note 2) Actual Reduction (by million reduced shallower laying of 1.43 1.42 1.32 1.35 1.28 tons amount pipes in narrow trenches and non- open-cut method)

Reuse (generated million 0.49 0.52 0.84 0.62 0.61 soil) tons

Recycle (improved million soil, regeneration 1.11.151.331.271.27 tons treatment)

Total reduction million 3.02 3.09 3.49 3.24 3.16 amount tons

Rate of reduction amount (comparison to ％ 8483788379 estimated excavated amount)

million Residual soil (actual amount) 0.55 0.62 1.0 0.64 0.86 tons

Rate of residual soil (comparison to estimated ％ 1617221721 excavated amount)

Pipeline extension work km 1,064 1,065 1,020 973 1,003

million Estimated excavated amount 3.33 3.47 4.25 3.75 3.94 tons

Reduction (by shallower laying of million pipes in narrow 1.36 1.35 1.25 1.31 1.24 tons trenches and non- open-cut method)

Reuse (generated million 0.45 0.47 0.79 0.61 0.61 soil) tons

Actual Recycle (improved million Tokyo Gas reduced soil, regeneration 1.07 1.12 1.31 1.26 1.25 tons Co., Ltd. amount treatment) (Note 2) Total reduction million 2.89 2.94 3.35 3.18 3.10 amount tons

Rate of reduction amount (comparison to ％ 8785798578 estimated excavated amount)

million Residual soil (actual amount) 0.45 0.52 0.90 0.57 0.85 tons

Rate of residual soil (comparison to estimated ％ 1315211522 excavated amount) PE Pipe Steel and Cast-Iron Pipe

Residual Soil and Reduction Amount

Note 1: Tokyo Gas Co., Ltd.

Note 2: Data for excavated soil and asphalt concrete.

Recovery of Used Gas Appliances from Customers

Category Unit FY2013 FY2014 FY2015 FY2016 FY2017

Used gas appliance, tons 4,345 3,933 3,861 3,715 3,445 Amount Waste, etc. recovered etc. (Note) Other tons 4,343 5,057 5,075 4,581 4,695

Total tons 8,687 8,991 8,936 8,296 8,140

Note: Excludes waste from specified kinds of home appliances.

Breakdown (FY2017) Amount Amount Final Recycling Final disposal Category recovered recycled disposal rate (%) rate (%) (tons) (tons) (tons)

Used gas appliances 3,444.8 3,444.8 0.0 100.0 0.0 and scrap metal

Waste plastics 559.0 521.9 37.1 93.4 6.6

Polystyrene foam 15.1 15.1 0.0 100.0 0.0

Cardboard boxes 575.1 575.1 0.0 100.0 0.0

Debris 320.3 287.4 33.0 89.7 10.3

Concrete and tile 253.5 119.1 134.4 47.0 53.0 scraps

Other 2,987.1 2,744.9 242.2 91.9 8.1 Total 8,139.7 7,693.2 446.5 94.5 5.1

(3) Environmental Accounting

Our environmental protection costs in fiscal 2017 totaled 5.7 billion yen, a decrease of 1.7 billion yen from the previous fiscal year. Investments totaled 970 million yen, down 1.78 billion yen from the previous year due in part to our passing the peak investment phase for the Toyosu Smart Energy Center. Expenses totaled 4.72 billion yen, an increase of 70 million yen from the previous fiscal year. The economic effect totaled 11.09 billion yen, a decrease of 1.39 billion yen from the previous fiscal year attributable mainly to decreased cost savings resulting from a reduction in excavated soil.

Environmental Accounting of Tokyo Gas on a Non-Consolidated Basis (FY2017 Results) Period: April 2017 to March 2018 Boundary: Tokyo Gas Co., Ltd. Standard of reference: Environmental Accounting Guidelines 2005 issued by Japanʼs Ministry of the Environment, and “Manual for the Introduction of Environmental Accounting in City Gas Business” prepared by the Japan Gas Association

Environmental Protection Costs (Unit: million yen) Categories of Environmental Investment Expenses Difference Protection Costs

FY FY FY FY Major items (examples) Investment Expenses 2016 2017 2016 2017

Capital investment, maintenance expenses, depreciation costs, Pollution personnel expenses, 515 40 380 479 -475 99 prevention etc., for prevention of air pollution, water pollution, noise pollution, etc.

Capital investment, maintenance expenses, depreciation costs, Global Company personnel expenses, environmental 1,653 381 674 608 -1,273 -66 business etc., for energy protection conservation, effective use of energy, protection of the ozone layer, etc.

Capital investment, maintenance expenses, depreciation costs, Resource personnel expenses, 8 5 454 369 -3 -86 recycling etc., for reduction/recycling of excavated soil, waste control, etc. Costs for green purchasing, environmental education, development and Environmental operation of the 0 0 313 305 0 -8 management Environmental Management System, environmental organizations, etc.

Costs associated with greenification and soil Other rehabilitation in 42 10 526 466 -32 -60 accordance with the Factory Location Act and ordinances

Costs for research and development of technologies to Environmental minimize 514 469 1,029 1,374 -46 345 R&D environmental Customer impact and high- sites efficiency appliances and systems

Costs of recovery Recycling of and recycling of sold used gas 0087 0 0 gas appliances, appliances packaging, etc.

Voluntary greenification, landscape conservation, nature conservation, Social beautification, support of local action 17 69 1,258 1,108 52 -150 environmental activities, programs environmental advertising, disclosure of environmental information

Total 2,750 973 4,642 4,716 -1,777 74

Note: Since decimal places have been rounded off to the nearest whole number, the calculated total and amount of increase or decrease

may not match.

”Expenses” include depreciation costs of 721 million yen in fiscal 2016 and 652 million yen in fiscal 2017. Since the costs for

environmental R&D are extracted from those for environmental protection, they may differ from the figures stated in the financial

report. Capital investment by Tokyo Gas Co., Ltd. (non-consolidated basis) was 165.4 billion yen, while the sales volume was 1,598.9

billion yen.

Main differences from the previous fisical year: • Pollution prevention The decrease in investment was due mainly to decreased investment by the production department. • Global environmental protection The decrease in investment was due mainly in part to our passing the peak investment phase for the Toyosu Smart Energy Center. Level of Environmental Burden

Level of Environmental Burden

Category FY2016 FY2017

NOX (Plants) mg/m3 0.5 0.5

NOX (district heating and cooling Pollution prevention 7.1 6.6 centers) g/GJ

COD (Plants) mg/m3 0.0 0.0

Energy usage intensity (plants) 206 209 GJ/million m3 Company Global environmental business Heat sales intensity (district heating protection 2.0 2.0 and cooling centers) GJ/GJ

Energy usage (business offices) TJ 938 902

Excavated soil (thousand tons) 573 846

Resource recycling Industrial waste (tons) 4,449 5,950

General waste (tons) 1,045 1,010

(Reference figures) Environmental R&D CO2 emissions reduction (million 394 404 Customer tons-CO2) sites (Reference figures) Recycling of used gas Recovery of used gas appliances and 3,715 3,445 appliances scrap metal by SRIMS (tons)

Note: The level of environmental burden is based on environmental performance data.

Economic Effect (Unit: million yen) Economic effect FY2016 FY2017 Difference

Cost reduction from the operation of energy-saving equipment 482 532 50

Cost reduction from a reduction in the amount of excavated soil 11,664 10,222 -1,442

Sale of valuables 277 309 32

Other (cost reduction from water conservation) 57 29 -28

Total 12,480 11,092 -1,388

Note: The total and difference figures may not be equal to actual calculation results because the numbers are rounded off to the nearest

integer.

Main differences from the previous fisical year: • Economic effect The economic effect decreased from the previous fiscal year due mainly to lower cost savings resulting from reductions in excavated soil.

Compliance with Local Government Ordinances on the Environment and Energy

Tokyo Gas prepares and publishes the following plans and reports in accordance with the ordinances of local authorities. Global Warming Action Plan (Large Establishments) • FY2018 Hamamatsucho (Head Office) Building • FY2018 Senju Techno Station

Tokyo • Global Warming Action Report (Small/Medium-Sized Establishments)

Environmental Energy Reporting Program • Energy Status Reports • Environmental Energy Plans

Saitama Pref. FY2018 Global Warming Action Plan Report

Kanagawa Pref. FY2018 Report on Results of Action against Global Warming in Business

Yokohama City FY2018 Report on State of Action against Global Warming

City Gas CO2 Emission Factors

CO2 is emitted when city gas is used. There are two ways of calculating CO2 emissions: calculating them directly from the amount of city gas used (in m3), and calculating them from the calorific value (MJ).

Calculation from usage (m3) CO2 emission factor for city gas in terms of usage of kg-CO2 per m3N of gas

CO2 emission factor

Service area (pref.) Type of gas CO2 emission factor per 1 m3N (kg-CO2/m3N)

• Emission factor for residential and other low- pressure gas users 2.21 kg-CO2/m3*1 • Emission factor for factory, commercial building, and Tokyo, Kanagawa, Chiba, 13A other medium-pressure gas users Ibaraki, Tochigi, Saitama 2.19 kg-CO2/m3*2 • Emission factor at standard temperature and pressure 2.29 kg-CO2/m3N*3

• Emission factor for residential and other low- pressure gas users 2.11 kg-CO2/m3*1 • Factory, commercial building, and other medium- Gunma*4 13A pressure gas users 2.09 kg-CO2/m3*2 • Emission factor at standard temperature and pressure 2.18 kg-CO2/m3N*3

• Emission factor for residential and other low- pressure gas users 1.90 g-CO2/m3*1 • Factory, commercial building, and other medium- Limited areas in Yotsukaido 12A pressure gas users City, Chiba 1.88 kg-CO2/m3*2 • Emission factor at standard temperature and pressure 1.96 kg-CO2/m3N*3

*1 At 15°C and gauge pressure of 2 kPa

*2 At 15°C and gauge pressure of 0.981 kPa

*3 0°C and 101.325 kPa (1 atm)

*4 Same as the above service areas since October 14, 2016. Calculation from calorific value (MJ) CO2 emission factor for city gas in terms of kg-CO2 per MJ of gas Or CO2 emission factor for city gas in terms of kg-C per MJ of gas

Unit calorific values and CO2 emission factors

Calorific value CO2 emission C emission per 1 m3N factor per 1 MJ of factor per 1 MJ Service area (pref.) Type of gas MJ/m3N calorific value of calorific value (kcal/m3N) (kg-CO2/MJ) (kg-C/MJ)

Tokyo, Kanagawa, Chiba, 13A 45 (10,750) 0.0509 0.0139 Ibaraki, Tochigi, Saitama

Gunma* 13A 43.14 (10,306) 0.0506 0.0138

Limited areas in Yotsukaido 12A 38.52 (9,200) 0.0509 0.0139 City, Chiba

*Same as the above service areas since October 14, 2016.

For more details ▶ Calculation of CO2 emission factors from proportional composition of city gas (PDF: 356KB)

Assessment of CO2 Emissions Reduction due to Reductions in Purchased Electricity

Amount of Thermal Power Generation Varies According to Electricity Usage In Japan, the electricity supplied by electric utilities is generated primarily by thermal power, nuclear power and hydroelectric power plants. Nuclear power plants operate at full capacity except when undergoing a routine inspection, while the annual power output of hydroelectric power plants is determined by the amount of rainfall. The electricity supply is adjusted by operations at thermal power plants. Therefore, in terms of total annual output, it is most likely to be thermal power generation that is cut when electricity use is reduced through energy-saving measures.

For more details ▶ GHG Protocol Guidelines CSR Data

Overview of Employees

Number of Full-time Employees by Gender *1, 2, 3 Unit FY2015 FY2016 FY2017

Non- 6,519 (86.7) 6,518 (85.7) 6,392（85.0) Male consolidated Consolidated - 11,745 (84.2) 11,442（83.4)

Non- 999 (13.3) 1,086 (14.3) 1,126（15.0) Female consolidated Persons (%) Consolidated - 2,212 (15.8) 2,284（16.6)

Non- 7,518 7,604 7,518 Total consolidated Consolidated - 13,957 13,726

*1 Data are as of the end of March of each fiscal year.

*2 Non-consolidated data exclude personnel on loan to Tokyo Gas from other organizations and include personnel on loan from Tokyo Gas to other organizations (registered personnel).

*3 Consolidated data exclude personnel on loan to Tokyo Gas and its subsidiaries from other organizations and include personnel on loan from Tokyo Gas and its subsidiaries to other organizations.

Note: Number of Tokyo Gas employees (registered personnel) as of the end of March of each fiscal year.

Breakdown of Employees by Age and Gender*1, 2, 3 Age Unit Male Female Total

Non- 1,783（27.9） 281（25.0） 2,064（27.5） Under 30 consolidated Consolidated 2,622（22.9） 552（24.2） 3,174（23.1）

Non- Persons 848（13.3） 149（13.3） 997（13.3） From 30 to 39 consolidated (%) Consolidated 2,005（17.5） 425（18.6） 2,430（17.7）

Non- 1,767（27.6） 452（40.1） 2,219（29.5） From 40 to 49 consolidated Consolidated 3,552（31.0） 848（37.1） 4,400（32.1） Non- 1,925（30.1） 241（21.4） 2,166（28.8） From 50 to 59 consolidated Consolidated 3,143（27.5） 452（19.8） 3,595（26.2）

Non- 69（1.1） 3（0.2） 72（1.0） 60 and over consolidated Consolidated 120（1.0） 7（0.3） 127（0.9）

Non- 6,392 1,126 7,518 Total consolidated Consolidated 11,442 2,284 13,726

*1 Data are as of the end of March 2018. *2 Non-consolidated data are for Tokyo Gas employees (registered personnel). *3 Consolidated data exclude personnel on loan to Tokyo Gas and its subsidiaries from other organizations and include personnel on loan from Tokyo Gas and its subsidiaries to other organizations.

Average Age by Gender *1, 2, 3 Unit FY2015 FY2016 FY2017

Non- 42.1 41.4 40.7 Male consolidated Consolidated - 41.8 41.2 Age Non- 41.6 41.1 40.6 Female consolidated Consolidated - 39.9 40.0

*1 Data are as of the end of March of each fiscal year. *2 Non-consolidated data are for Tokyo Gas employees (registered personnel). *3 Consolidated data exclude personnel on loan to Tokyo Gas and its subsidiaries from other organizations and include personnel on loan from Tokyo Gas and its subsidiaries to other organizations.

*Number of Tokyo Gas employees (registered personnel) are as of the end of March of each fiscal year.

Average Length of Employment by Gender *1, 2, 3 Unit FY2015 FY2016 FY2017

Non- 21.1 19.7 19.3 Male consolidated Consolidated - 17.1 16.7 Age Non- 19.9 18.7 19.3 Female consolidated Consolidated - 14.4 14.7

*1 Data are as of the end of March of each fiscal year.

*2 Non-consolidated data are for Tokyo Gas employees (registered personnel). *3 Consolidated data exclude personnel on loan to Tokyo Gas and its subsidiaries from other organizations and include personnel on loan from Tokyo Gas and its subsidiaries to other organizations. *Number of Tokyo Gas employees (registered personnel) are as of the end of March of each fiscal year.

Ratio of Women in Management*1, 2

*1 Number of Tokyo Gas employees (registered personnel) are as of April 1 of each fiscal year.

*2 Employees in supervisory positions, or employees of equivalent status.

Hiring of New Graduates *1, 2 Breakdown of Breakdown of Breakdown of Unit FY2016 Hires FY2017 Hires FY2018 Hires Male Female Male Female Male Female

Non- 156 51 167 53 126 60 Undergraduate consolidated and Graduate*3 Consolidated - - - - 218 126

Non- 74 10 27 4 18 2 High School consolidated Persons Consolidated - - - - 62 11

Non- 230 61 194 57 144 62 Total consolidated Consolidated - - - - 280 137

*1 Data are as of April 1 of each fiscal year.

*2 Non-consolidated data are for Tokyo Gas employees (registered personnel).

*3 Including technical college graduates.

Hiring of Mid-Career Personnel*1, 2 May 2015 to May 2016 to May 2017 to Unit April 2016 April 2017 April 2018

Non- 51212 Male consolidated Consolidated - - 231 Persons Non- 021 Female consolidated Consolidated - - 73 Non- 51413 Total consolidated Consolidated - - 304

*1 Data includes contract employees who became regular employees.

*2 Non-consolidated data are for Tokyo Gas employees (registered personnel).

Hiring of People with Disabilities *1, 2, 3 Unit March 2016 March 2017 March 2018

Number of persons hired Persons 137 (2.00) 153 (2.10) 150 (2.10) (percentage of (%) total employees)

*1 Data are for regular and contract employees at Tokyo Gas.

*2 Figures are as of the first day of the month shown for each fiscal year.

*3 Figure has risen to 167 people, or 2.35% of the workforce, as of June 2018.

State of Reemployment after Mandatory Retirement Unit FY2015 FY2016 FY2017

Total number of retired employees*1 Persons 319 348 273

Tokyo Gas *3 241（75.5） 251（72.1） 203（74.4） Persons Number of reemployed*2 Subsidiaries 26（8.2） 42（12.1） 46（16.8） (%) Total 267（83.7） 293 249（91.2）

*1 Number of employees who left the company at the mandatory retirement age of 60.

*2 Number of people hired as “career employees” (contract employees rehired after reaching mandatory retirement age).

*3 Data are for Tokyo Gas on a non-consolidated basis.

Major Programs and Number of Users *1 FY2015 FY2016 FY2017 Programs Outline Item Unit Male Female Male Female Male Female

Number of Persons 2 83 2 65 5 45 Until the end of users Parental April immediately leave following the Percentage childʼs 3rd birthday returning % 100 100 100 100 100 92 to work*2

Flextime program Shorter available during hours for pregnancy and Number of parents of Persons 213 3 224 3 214 until the child users small completes the 6th children grade

Up to 3 years to provide care for a Nursing Number of relative within the Persons30401 care leave users second degree of kinship

Flextime program available up to 3 Nursing years to provide Number of Persons00302 care work care for a relative users within the second degree of kinship

For employees Leave to accompanying a Number of accompany Persons 4 4 3 spouse posted users partner overseas

Community Special paid leave Cumulative service for up to 5 days number of Persons 88 48 58 leave within 1 year users

Commemorative gift and paid leave Sabbatical Number of for employees who Persons 594 514 673 system users reach the ages of 30, 35, 40 and 50

*1 Data are for Tokyo Gas on a non-consolidated basis.

*2 Percentage of employees taking parental leaves each fiscal year who returned to work at the company

Number of Employees Leaving the Company *1, 2 Unit FY2015 FY2016 FY2017

Male Non-consolidated 36（0.52） 58（0.86） 29（0.43） (Percentage of employees leaving the company) Consolidated -（-） -（-） 206（-）

Female Non-consolidated 9 （0.89） 9（0.85） 9 （0.79） Persons (Percentage of employees (%)*3 leaving the company) Consolidated -（-） -（-） 112（-）

Total Non-consolidated 45（0.57） 67（0.86） 38（0.49） (Percentage of employees leaving the company) Consolidated -（-） -（-） 318（-）

*1 Non-consolidated data are for Tokyo Gas employees (registered personnel).

*2 Consolidated data exclude personnel on loan to Tokyo Gas and its subsidiaries from other organizations and include personnel on loan from Tokyo Gas and its subsidiaries to other organizations.

*3 The percentage of people leaving the company is calculated as follows: number of regular employees leaving for personal reasons (as of March 31 of each fiscal year)/number of regular employees (as of April 1 of each fiscal year).

Number of Temporary and Contract Employees *1, 2 Unit FY2016 FY2017 FY2018

1,608 (16.0) 1,728 1,670 Contract Male 1,067 (10.6) 1,153 1,131 employees Female 541 (5.4) 575 539 Persons Temporary employees(%) 652 (6.5) 642 558 Total 2,260 (22.5) 2,370 2,228

Grand total (regular employees + 10,048 10,195 9,746 sum of above)

*1 Data are as of April 1 of each fiscal year.

*2 Percentage figures show the ratio to grand total (total number of employees of Tokyo Gas as of April 1 of each fiscal year).

Average Annual Salary* Unit FY2015 FY2016 FY2017

Average annual salary 10,000 yen 649 640 636

*Figures exclude the salary of personnel in management positions.

Average Overtime Hours Unit FY2015 FY2016 FY2017

Average monthly overtime hours Hours/person 16.1 16.6 15.9

Days of Paid Leave Taken per Year Unit FY2015 FY2016 FY2017

Days of paid leave taken per year Days/person 15.2 15.5 15.1 Number of Employees with Right to Collective Bargaining (Employees Excluding Management)* Unit FY2015 FY2016 FY2017

Number of employees Persons 7,313 7,199 6,937

*Data are as of April 1 of each fiscal year.

Average Annual Training Hours* Unit FY2015 FY2016 FY2017

Average annual training hours Hours/person 15.8 18.2 13.5

*Data on training provided by the Personnel Department (excludes training provided independently by other departments).

Implementation of Occupational Safety and Health Education Programs

Implementation of Occupational Safety and Health Education Programs Details Unit FY2015 FY2016 FY2017

New employee 298 291 252 training Level-specific training on safety and health and on safety planning Safety and health training for 165 306 243 new managers

Risk management seminar on safety and health (general 360 390 476 manager level)

Statutory foreman training 172 156 151 Persons Statutory training for safety administrators at the time of 51 41 36 appointment

Hygiene supervisor training 85 75 74

Traffic safety and driving training (for new drivers, persons 904 898 789 involved in accidents and others)

Safe driving with attendant instructors utilizing drive recorders 599 795 798

Seminars on promoting health 3,347 2,510 2,731

Overview of Accidents and Injuries

Change in Number of Work-related Injuries, Number of Traffic Accidents, Rate of Lost Work-time Injuries, and Severity Rate*1 Unit FY2015 FY2016 FY2017

Work-related injuries*2 28 23 38 Cases Traffic accidents 110 141 134

Rate of lost work-time injuries*3, 5 0.49 0.41 0.36 - Severity rate*4, 5, 6 0.007 0.003 0.002

*1 Data are for regular and semi-regular employees of Tokyo Gas.

*2 Includes accidents not resulting in lost worktime.

*3 Rate of people taking work leave per 1 million total actual working hours. *4 Number of workdays lost as a result of accidents/injuries per 1,000 total actual working hours.

*5 Includes injuries due to traffic accidents caused by others.

*6 Lost workdays are counted based on standards placed by the Japanese Ministry of Health, Labour and Welfare. CSR Data

Membership of the Board of Directors, Advisory Committee, Audit & Supervisory Board, and Corporate Executive Meeting

As of the As of the As of the end of end of end of Unit June June June 2016 2017 2018

Directors 3 3 (1) 3 (1)

External Audit & Supervisory 3 (1) 3 (1) 3 (1) Board of Board members Directors Directors 8 8 5 (0)

Internal Audit & Supervisory 222 (0) Board members

Representatives appointed from among outside directors and outside 333 Audit & Supervisory Board members Advisory Committee Director, Chairman of the Board 1 1 1 Persons Representative Director, 111 President and CEO

Audit & Supervisory External 3 (1) 3 (1) 3 (1) Audit & Board members Supervisory Audit & Supervisory Board Internal 222 (0) Board members

Representative Director*1 111

Corporate Executive Vice Presidents*2 222 Executive Meeting Senior Managing Executive Officer - - 2 Managing Executive Officer 10 11 6

Notes: Data shown are for Tokyo Gas Co., Ltd.

The numbers in parentheses indicate the numbers of female members

*1, *2 Post is held concurrently by three representative directors.

Training and Consultation on Human Rights and Compliance

Participants in Training on Human Rights Outline Unit FY2015 FY2016 FY2017

Training upon entering the company, Level-specific during the third year, and during Persons 1,534 1,531 1,527 training qualification promotions (two levels) Workplace Practical training on topics selected by 7,983 11,699 15,543 workshops each workplace

Training programs and follow- First-time leader training (1 year) and up for 280 225 353 follow-up training human rights promotion leaders

Planning- Human rights study sessions 359 380 350 type training

Training led by instructors provided Loaned upon request by companies, local instructor-led authorities and other organizations 135 132 20 training (including the Industrial Federation for Human Rights, Tokyo)

Note: Data shown are for the Tokyo Gas Group.

Participants in Training on Compliance Outline Unit FY2015 FY2016 FY2017

Training upon entering the company, Level-specific during the third year, and during Persons 1,534 1,531 1,527 training qualification promotions (two levels)

Number of Training customized to meet the needs Customized persons 2,634 2,818 1,016 of individual companies and training (number （73） （84） （24） departments of sessions)

Workplace Training at the individual workplace Persons 23,745 25,136 28,726 workshops level led by compliance promoters

Note: Data shown are for the Tokyo Gas Group.

Number of Cases Handled by Consultation Desks Consultation Topics Unit FY2015 FY2016 FY2017

Interpersonal relations and employment matters 16 17 35

Laws and regulations 5 11 4

Internal regulationsCases 21 7 7

Communication and other issues 66 71 58

Total 108 106 104

Note: Data shown are for the Tokyo Gas Group. CSR Data

Third-Party Independent Assurance Report

The social and environmental performance indicators (data on human resources and the environment)* provided in the Tokyo Gas Group CSR Report on this website have been third-party assured by KPMG AZSA Sustainability Co., Ltd. (a member of the KPMG Japan group) to enhance their credibility. We will work to further raise the standard of our CSR activities in the future, taking account of the issues pointed out in the course of the third-party assurance process and the reader feedback received via our website and other channels. *Third-party assured content is indicated by a box next to the subject title.

Independent Assurance Report on the Tokyo Gas Group CSR Report

Social Data Environmental Data

Links ▶ Independent Assurance Report on the Tokyo Gas Group CSR Report (Social Data) (PDF︓395KB） ▶ Independent Assurance Report on the Tokyo Gas Group CSR Report (Environmental Data) (PDF︓1,863KB） Important Notices in FY2017

Disclosure of Incidents That Affected Our Stakeholders

In fiscal 2017, the Tokyo Gas Group issued 19 press releases concerning issues that raised concern among our customers or society at large. These are published on the Tokyo Gas website but Japanese only.

Number Press Release Category of Actions Taken by the Tokyo Gas Group Subject Cases

In response to incidents involving bathroom Defects and Fire accidents heater dryers made by Rinnai Corporation, we other problems caused by notified the affected customers, set up a toll-free with equipment 1 bathroom heater number and are in the process of visiting sold under the dryers customers to conduct inspections and replace Tokyo Gas brand parts.

We visited the homes of affected customers, confirmed the safety of the product, provided information and set up a toll-free number. Under instructions from the Ministry of Economy, Trade Illicit operations and Industry, we reported the results of our Defects and during voluntary investigation, the causes of the incident and other problems replacement work 4 preventive measures. We have subsequently with gas for gas cocks with resumed replacement work for gas cocks with air appliances air vent ports vent ports. Tokyo Gas is aware of the gravity of the incidents and the guidance received from the ministry, and we will strengthen cooperation with subcontractors to prevent a recurrence.

From the standpoint of preventing secondary damage, we promptly contacted all affected customers individually to explain the situation and Loss and leakage offer our apologies. Tokyo Gas considers of customer 5 protecting customer information to be an issue of information utmost importance and is aware of the gravity of the incident. We are cooperating with the department involved, subcontractors and partner companies to prevent a recurrence. Loss of customer We temporarily suspended customer accounts that were suspected to have been breached and information Leakage of promptly contacted all affected customers to customer personally explain the situation and offer our information and apologies. We also submitted a report to the illicit use of loyalty 2 Tokyo Metropolitan Police Department and points due to Ministry of Economy, Trade and Industry. Tokyo unauthorized Gas considers protecting customer information access to the web and assets to be an issue of utmost importance. inquiry service We are aware of the gravity of the incident and are doing our best to prevent a recurrence. We requested gas retailers and transmission Inappropriate service operators to delete customer information provision of that had been inappropriately made available to customer them and redefined the content of the information information to gas 1 we provide to gas retailers and transmission retailers and service operators. Tokyo Gas considers protecting transmission customer information to be an issue of utmost service operators importance. We are aware of the gravity of the incident and are working to prevent a recurrence.

We contacted all affected customers to personally Omissions in explain the situation and offer our apologies. With billings and regard to customers to whom bills were not sent, notifications in the 1 we charged a combined amount in the bill for the residential following month. We will implement preventive Gas and monitoring service measures to ensure that incidents such as this will electricity not be repeated. charges Overcharging on We explained the situation and offered our gas/water space apologies to affected customers, and we refunded heating fees and 1 the overcharged amount. We will implement refunds in the spot preventive measures to ensure that incidents such heat supply as this will not be repeated. business

Given the results of the certification survey, Tokyo Results of the soil Gas will take appropriate action in accordance survey at the Soil with the Soil Contamination Countermeasures Act Toyosu site (Area 1 contamination and Tokyo metropolitan ordinances when 4-1B) and future conducting construction work involving future action excavation at the site.

Omissions in We explained the situation and offered our communication apologies personally to each affected customer settings for and promptly worked on the communication remote monitoring settings and compensated customers for the in the “G-Link” 24- 1 period during which we could not provide the hour remote remote monitoring service. We will implement monitoring service preventive measures to ensure that incidents such for gas heat as this will not be repeated. pumps (GHPs)

We explained the situation and offered our apologies to affected customers, and we provided Omissions in compensated for the reduced benefit amount. We explanation of cuts 1 also provided a renewed explanation of the benefit in Nuclear Site Others system. We will implement preventive measures Location Benefits to ensure that incidents such as this will not be repeated.

In response to an administrative order issued by the Consumer Affairs Agency, we have implemented preventive measures, including employee training and enforcement of compliance Misrepresentation with the Act against Unjustifiable Premiums and in flyers for the 1 Misleading Representations, and have submitted a gas exhibition report to the Consumer Affairs Agency. We will implement preventive measures by raising understanding of premiums and representation among employees to ensure that incidents such as this will not be repeated. GRI Content Index

The Tokyo Gas Group CSR Report 2018 has been prepared in accordance with the GRI Standards 2016: Core option.

The data on the environment and human resources provided in the Tokyo Gas Group CSR Report have been third-party assured.

For more details ▶ Third-Party Independent Assurance Report

GRI102: General Disclosures ●: Items that are required to disclose in the core option Disclosure Pages in 2018 CSR Report

1. Organizational profile

● 102-1 Name of the organization Corporate Profile

Activities, brands, products, ●102-2 and services Businesses

● 102-3 Location of headquarters Corporate Profile The Tokyo Gas Groupʼs LNG Value Chain and Key Initiatives Contributing to Sustainable Development

● 102-4 Location of operations Locations

● 102-5 Ownership and legal form Corporate Profile

Corporate Profile ● 102-6 Markets served INVESTORSʼ GUIDE [PDF︓7,227KB] P.6-15 (City Gas Business - Overseas Business)

Corporate Profile ● 102-7 Scale of the organization INVESTORSʼ GUIDE [PDF︓7,227KB] P.6-15 (City Gas Business - Overseas Business)

Social Data Information on employees and ●102-8 Employment Outlook other workers Action on Diversity The Tokyo Gas Groupʼs LNG Value Chain and Key Initiatives Contributing to Sustainable Development

● 102-9 Supply chain INVESTORSʼ GUIDE [PDF︓7,227KB] P.4-5 (Gas Resource Data), P.10 (Major Facility Plans・Sales Data)

Significant changes to the ●102-10 organization and its supply chain A Public Notice (in Japanese only)

Risk Management System

Promoting Risk Management

Management of Chemical Substances

Measures to Counter Environmental Risks

Climate Change Mitigation and Adaptation

Precautionary Principle or Managing Water Risk ●102-11 approach Combating Soil Pollution

Environmental Data–Compliance with Local Government Ordinances on the Environment and Energy

Risks of Businesses

UN Global Compact ● 102-12 External initiatives Keidanren Committee on Nature Conservation

UN Global Compact

The Japan Gas Association

KEIDANREN (Japan Business Federation)

The Tokyo Chamber of Commerce and Industry ● 102-13 Membership of associations (TCCI)

The Japanese Para-Sports Association

An official partner of the Japanese Paralympic Committee in the Gas & Gas Utility Services category

2. Strategy

Statement from senior ●102-14 Top Commitment decision-maker

Top Commitment

Overview of CSR Management

The Tokyo Gas Group's Key CSR Activities and Materiality Key impacts, risks, and 102-15 The Tokyo Gas Groupʼs LNG Value Chain and Key opportunities Initiatives Contributing to Sustainable Development

Environmental Data–The Tokyo Gas Group Business Activities and Material Balance

Disclosure of Incidents That Affected Our Stakeholders

3. Ethics and integrity

Values, principles, standards, Overview of CSR Management ●102-16 and norms of behavior Basic Stance on Respecting for Human Rights Promotion of Compliance -Basic Policies

Thorough Implementation of Compliance

Thorough Implementation of Compliance

Initiatives on Respecting Human Rights Mechanisms for advice and 102-17 concerns about ethics

Purchasing Inquiries

4. Governance

Corporate Governance

CSR Promotion System ● 102-18 Governance structure

Corporate Governance Report [PDF︓556KB]

Corporate Governance

CSR Promotion System

Human Rights Promotion System

Continual Improvement to the Environmental Management System

102-19 Delegating authority Customer-oriented System and Activities

Compliance Promotion Structure

Framework for Promoting Diversity

Structure for Promoting Occupational Safety and Health

Information Security Promotion System

Corporate Governance

CSR Promotion System

Human Rights Promotion System

Continual Improvement to the Environmental Executive-level responsibility Management System 102-20 for economic, environmental, and social topics Customer-oriented System and Activities Compliance Promotion Structure

Structure for Promoting Occupational Safety and Health

Information Security Promotion System

Corporate Governance

Stakeholder Engagement

CSR Promotion System

Continual Improvement to the Environmental Management System

Consulting stakeholders on Customer-oriented System and Activities 102-21 economic, environmental, and Proactive Information Disclosure to Customers social topics Compliance Promotion Structure

Structure for Promoting Occupational Safety and Health

Initiatives on Respecting Human Rights -Human Rights Promotion System

Information Security Promotion System Corporate Governance Composition of the highest 102-22 governance body and its Governance Data–Membership of the Board of committees Directors, Advisory Committee, Audit & Supervisory Board, and Corporate Executive Meeting

Corporate Governance

Chair of the highest governance 102-23 Corporate Governance Report [PDF︓556KB] P.1 (1. body Basic Views on Corporate Governance, Capital Structure, Corporate Attributes and Other Basic Information)

Corporate Governance

Management Structure

Nominating and selecting the 102-24 Corporate Governance Report [PDF︓556KB] P.2 highest governance body ((4) Policy on procedures for election (nomination) of Officers)

Independence Standards for Outside Officers [PDF︓59KB]

Corporate Governance

Management Structure

102-25 Conflicts of interest Audit Structure

Internal Control

Compliance Promotion Structure

Corporate Governance

Management Structure

CSR Promotion System

Continual Improvement to the Environmental Role of highest governance Management System 102-26 body in setting purpose, values, and strategy Customer-oriented System and Activities Compliance Promotion Structure

Structure for Promoting Occupational Safety and Health

Human Rights Promotion System

Corporate Governance

Management Structure

Audit Structure Collective knowledge of highest 102-27 Internal Control governance body Risk Management

CSR Promotion System

Working Toward Better CSR Practice

Corporate Governance

CSR Promotion System

Evaluating the highest Customer-oriented System and Activities 102-28 governance bodyʼs performance Continual Improvement to the Environmental Management System

Thorough Implementation of Compliance Structure for Promoting Occupational Safety and Health

Initiatives on Respecting Human Rights -Human Rights Promotion System

Information Security Promotion System

Corporate Governance

CSR Promotion System

Stakeholder Engagement Policy

Customer-oriented System and Activities

Continual Improvement to the Environmental Identifying and managing Management System 102-29 economic, environmental, and social impacts Thorough Implementation of Compliance

Structure for Promoting Occupational Safety and Health

Initiatives on Respecting Human Rights -Human Rights Promotion System

Information Security Promotion System

Effectiveness of risk Corporate Governance 102-30 management processes Risk Management

Review of economic, 102-31 environmental, and social - topics

CSR Promotion System Highest governance bodyʼs role 102-32 in sustainability reporting The Tokyo Gas Groupʼs Key CSR Activities and Materiality

Communicating critical Corporate Governance 102-33 concerns Thorough Implementation of Compliance

Nature and total number of 102-34 Thorough Implementation of Compliance critical concerns

Management Structure

102-35 Remuneration policies Directors Remuneration Relationship Corporate Governance Report [PDF︓556KB] P.2 ((4) Policy on procedures for election (nomination) of Officers)

Directors Remuneration Relationship Process for determining 102-36 remuneration Corporate Governance Report [PDF︓556KB] P.2 ((4) Policy on procedures for election (nomination) of Officers)

Stakeholdersʼ involvement in 102-37 - remuneration

102-38 Annual total compensation ratio -

Percentage increase in annual 102-39 - total compensation ratio

5. Stakeholder engagement

● 102-40 List of stakeholder groups Overview of CSR Management Stakeholder Engagement

Building Positive Labor-Management Relations Collective bargaining ●102-41 through Active Communication agreements Social Data–Overview of Employees

Overview of CSR Management

Identifying and selecting The Tokyo Gas Groupʼs Key CSR Activities and ●102-42 stakeholders Materiality

Stakeholder Engagement

Overview of CSR Management

Approach to stakeholder Stakeholder Engagement ●102-43 engagement Customer-oriented System and Activities

Proactive Information Disclosure to Customers

Customer-oriented System and Activities

System for Promoting Customer Satisfaction

The Tokyo Gas Groupʼs Key CSR Activities and ● 102-44 Key topics and concerns raised Materiality

Stakeholder Engagement

Questionnaire Results and Highlights of Feedback

6. Reporting practice

Entities included in the ●102-45 consolidated financial statements Group Companies

The Tokyo Gas Groupʼs Key CSR Activities and Defining report content and ●102-46 Materiality topic Boundaries Editorial Policy

The Tokyo Gas Groupʼs Key CSR Activities and ● 102-47 List of material topics Materiality

● 102-48 Restatements of information Not applicable

● 102-49 Changes in reporting Not applicable

●102-50Reporting period Editorial Policy

● 102-51 Date of most recent report Editorial Policy

●102-52Reporting cycle Editorial Policy

Contact point for questions ●102-53 regarding the report Contact Us

Claims of reporting in In accordance with the GRI Standards 2016: Core ●102-54 accordance with the GRI option Standards

●102-55GRI content index GRI Content Index

● 102-56 External assurance Third-Party Independent Assurance Report GRI103: Management Approach Disclosure Pages in 2018 CSR Report

The Tokyo Gas Groupʼs Key CSR Activities and Materiality

Enhancement of Energy Security Targets and Performance

Contribution to the Environment Targets and Performance Explanation of the material 103-1 topic and its Boundary Contribution to Local Communities Targets and Performance

Respect for Human Rights Targets and Performance

Promotion of Compliance Targets and Performance

Enhancement of People-Centered Management Base Targets and Performance

Overview of CSR Management

Enhancement of Energy Security Targets and Performance

Safety Management System

Customer-oriented System and Activities

Tokyo Gas Groupʼs Community-based Service System

Contribution to the Environment Targets and The management approach and 103-2 Performance its components Continual Improvement to the Environmental Management System

Contribution to Local Communities Targets and Performance

Respect for Human Rights Targets and Performance

Promotion of Compliance Targets and Performance

Enhancement of People-Centered Management Base Targets and Performance

CSR Promotion System

CSR Management PDCA Cycle

Enhancement of Energy Security Targets and Performance

Contribution to the Environment Targets and Evaluation of the management Performance 103-3 approach Contribution to Local Communities Targets and Performance

Respect for Human Rights Targets and Performance

Promotion of Compliance Targets and Performance

Enhancement of People-Centered Management Base Targets and Performance

GRI200: Economic topics 〇: Items that are identified as material aspects Disclosure Pages in 2018 CSR Report

GRI-201: Economic Performance

Direct economic value 201-1 INVESTORS' GUIDE [PDF︓7,227KB] P.2-3 generated and distributed (Challenge 2020 Vision / GPS2020︓Numerical Targets), P.16 (Personnel Data), P.22-23 (Financial Data〈Performance Indicators〉), P.30-31 (Statements of Income (Consolidated; for 10 years))

Measures to Counter Environmental Risks

Climate Change Mitigation and Adaptation Financial implications and other 201-2 risks and opportunities due to Environmental Data–(3) Environmental Accounting climate change

Risks of Businesses

Defined benefit plan obligations 201-3 - and other retirement plans

Financial assistance received 201-4 - from government

GRI-202: Market Presence

Ratios of standard entry level 202-1 wage by gender compared to - local minimum wage

Proportion of senior 202-2 management hired from the - local community

GRI-203: Indirect Economic Impacts

Benefits of LNG (Liquefied Natural Gas)

Procurement of LNG

Overseas Business

Production of City Gas

Development of the Electric Power Business

Supplying City Gas

Earthquake and Disaster Preparedness

Working to Ensure Customer Safety

Infrastructure investments and Enhancing the Safety of Gas Appliances 203-1 services supported Customer-oriented System and Activities

Lifestyle Services

Social Action Programs through Our Main Line of Business

Working with the International Community

Urban Development

INVESTORSʼ GUIDE [PDF︓7,227KB] P.6-15 (City Gas Business - Overseas Business)

Significant indirect economic 203-2 - impacts

GRI-204: Procurement Practices

Proportion of spending on local 204-1 - suppliers

〇 GRI-205: Anti-corruption

Operations assessed for risks 205-1 Prevention of Bribery and Corruption related to corruption

Compliance Promotion Structure Communication and training Compliance Practices 205-2 about anti-corruption policies and procedures Prevention of Bribery and Corruption Verification and Audit of Penetration of Compliance

Confirmed incidents of 205-3 No incidents corruption and actions taken

GRI-206: Anti-competitive Behavior

Legal actions for anti- 206-1 competitive behavior, anti-trust, Press Release on an Order for Action Regarding and monopoly practices Flyers of the Gas Exhibition (in Japanese only)

GRI300: Environmental topics 〇: Items that are identified as material aspects Disclosure Pages in 2018 CSR Report

GRI-301: Materials

Materials used by weight or Environmental Data–The Tokyo Gas Group Business 301-1 volume Activities and Material Balance

Contribution to the Environment Targets and Performance

301-2 Recycled input materials used Promoting the 3Rs

Environmental Data–The Tokyo Gas Group Business Activities and Material Balance

Contribution to the Environment Targets and Performance

Reclaimed products and their Dealing with Waste at Customer Sites 301-3 packaging materials Environmental Data–The Tokyo Gas Group Business Activities and Material Balance

Environmental Data–(2) Waste

〇 GRI-302: Energy

Contribution to the Environment Targets and Performance

Environmental Data–The Tokyo Gas Group Business Energy consumption within the 302-1 Activities and Material Balance organization Environmental Data–(1) Usage of Energy and Water/Emissions into the Atmosphere and Water System

Environmental Data–The Tokyo Gas Group Business Activities and Material Balance Energy consumption outside of 302-2 the organization Environmental Data–(1) Usage of Energy and Water/Emissions into the Atmosphere and Water System

Contribution to the Environment Targets and Performance

302-3 Energy intensity Environmental Data–(1) Usage of Energy and Water/Emissions into the Atmosphere and Water System

Addressing Climate Change

Technological Innovations in CHP Systems

Reduction of energy Environmental Data–The Tokyo Gas Group Business 302-4 consumption Activities and Material Balance

Environmental Data–(1) Usage of Energy and Water/Emissions into the Atmosphere and Water System

Reduction of CO2 Emissions at Customer Sites

Technological Innovations in CHP Systems

Development and Promotion of Air Conditioning Reductions in energy Systems 302-5 requirements of products and Environmental Data–The Tokyo Gas Group Business services Activities and Material Balance

Environmental Data–(1) Usage of Energy and Water/Emissions into the Atmosphere and Water System

GRI-303: Water

Managing Water Risk

Environmental Data–The Tokyo Gas Group Business Activities and Material Balance 303-1 Water withdrawal by source Environmental Data–(1) Usage of Energy and Water/Emissions into the Atmosphere and Water System

Water sources significantly 303-2 Managing Water Risk affected by withdrawal of water

303-3 Water recycled and reused -

〇GRI-304: Biodiversity

Operational sites owned, Biodiversity Conservation Activities leased, managed in, or 304-1 adjacent to, protected areas Measures in Our Value Chain and areas of high biodiversity Other Measures for Biodiversity Conservation value outside protected areas

Biodiversity Conservation Activities Significant impacts of activities, 304-2 products, and services on Measures in Our Value Chain biodiversity Other Measures for Biodiversity Conservation

Measures in Our Value Chain 304-3 Habitats protected or restored Other Measures for Biodiversity Conservation

IUCN Red List species and national conservation list 304-4 Measures in Our Value Chain species with habitats in areas affected by operations

〇 GRI-305: Emissions

Addressing Climate Change

Environmental Data–The Tokyo Gas Group Business Activities and Material Balance 305-1 Direct (Scope 1) GHG emissions Environmental Data–(1) Usage of Energy and Water/Emissions into the Atmosphere and Water System

Addressing Climate Change

Environmental Data–The Tokyo Gas Group Business Energy indirect (Scope 2) GHG Activities and Material Balance 305-2 emissions Environmental Data–(1) Usage of Energy and Water/Emissions into the Atmosphere and Water System

Other indirect (Scope 3) GHG Addressing Climate Change 305-3 emissions Reducing the Transportation Carbon Footprint Environmental Data–The Tokyo Gas Group Business Activities and Material Balance

Environmental Data–(1) Usage of Energy and Water/Emissions into the Atmosphere and Water System

Environmental Data–The Tokyo Gas Group Business Activities and Material Balance

305-4 GHG emissions intensity Environmental Data–Conversion Factor, etc.

Environmental Data–Assessment of CO2 Emissions Reduction due to Reductions in Purchased Electricity

Addressing Climate Change

Other Efforts to Reduce CO2 Emissions 305-5 Reduction of GHG emissions Environmental Data–The Tokyo Gas Group Business Activities and Material Balance

Emissions of ozone-depleting 305-6 Management of Chemical Substances substances (ODS)

Environmental Data–The Tokyo Gas Group Business Activities and Material Balance Nitrogen oxides (NOX), sulfur Benefits of LNG (Liquefied Natural Gas) 305-7 oxides (SOX), and other significant air emissions Environmental Data–(1) Usage of Energy and Water/Emissions into the Atmosphere and Water System

〇 GRI-306: Effluents and Waste

Environmental Data–The Tokyo Gas Group Business Activities and Material Balance Water discharge by quality and 306-1 destination Environmental Data–(1) Usage of Energy and Water/Emissions into the Atmosphere and Water System

Environmental Data–The Tokyo Gas Group Business Activities and Material Balance Waste by type and disposal 306-2 method Environmental Data–(2) Waste

Promotion of Resource Saving

306-3 Significant spills Combating Soil Pollution

306-4 Transport of hazardous waste Management of Chemical Substances

Managing Water Risk

Water bodies affected by water Biodiversity Conservation Activities 306-5 discharges and/or runoff Promotion of Biodiversity Conservation–Measures in Our Value Chain

〇 GRI-307: Environmental Compliance

Non-compliance with Continual Improvement to the Environmental 307-1 environmental laws and Management System regulations

GRI-308: Supplier Environmental Assessment

New suppliers that were 308-1 screened using environmental - criteria

Negative environmental The Tokyo Gas Groupʼs LNG Value Chain and Key 308-2 impacts in the supply chain and Initiatives Contributing to Sustainable Development actions taken Stakeholder Engagement

GRI400: Social topics 〇: Items that are identified as material aspects Disclosure Pages in 2018 CSR Report

〇 GRI-401: Employment

New employee hires and Employment Outlook 401-1 employee turnover Social Data–Overview of Employees

Benefits provided to full-time employees that are not Action on Diversity 401-2 provided to temporary or part- Social Data–Overview of Employees time employees

Active Training and Elevation of Women

Supportive Environment for Balancing Work and 401-3 Parental leave Childcare or Nursing Care

Social Data–Overview of Employees

GRI-402: Labor/Management Relations

Minimum notice periods 402-1 - regarding operational changes

〇 GRI-403: Occupational Health and Safety

Workers representation in Building Positive Labor-Management Relations formal joint management– 403-1 through Active Communication worker health and safety committees Social Data–Overview of Employees

Types of injury and rates of Industrial Accident Prevention injury, occupational diseases, Social Data–Overview of Employees 403-2 lost days, and absenteeism, and number of work-related Social Data–Implementation of Occupational Safety fatalities and Health Education Programs

Workers with high incidence or 403-3 high risk of diseases related to - their occupation

Health and safety topics Building Positive Labor-Management Relations 403-4 covered in formal agreements through Active Communication with trade unions

〇 GRI-404: Training and Education

Average hours of training per 404-1 Social Data–Overview of Employees year per employee

Development of the Human Resources System

Programs for upgrading Education and Training System 404-2 employee skills and transition assistance programs Transfers and Job Rotations Action on Diversity

Percentage of employees receiving regular performance 404-3 Personnel Programs and Appraisal System and career development reviews

〇 GRI-405: Diversity and Equal Opportunity

Active Training and Elevation of Women

Diversity of governance bodies Ongoing Career Development Support 405-1 and employees Employment of Persons with Disabilities

Prohibiting LGBT Discrimination Social Data–Overview of Employees

Ratio of basic salary and 405-2 - remuneration of women to men

GRI-406: Non-discrimination

Incidents of discrimination and 406-1 Initiatives on Respecting Human Rights corrective actions taken

GRI-407: Freedom of Association and Collective Bargaining

Initiatives on Respecting Human Rights

Operations and suppliers in Purchasing Guidelines for Suppliers which the right to freedom of 407-1 Building Positive Labor-Management Relations association and collective through Active Communication bargaining may be at risk Communication with Our Suppliers (Supplier Survey)

GRI-408: Child Labor

Initiatives on Respecting Human Rights Operations and suppliers at CSR Efforts throughout the Supply Chain 408-1 significant risk for incidents of child labor Communication with Our Suppliers (Supplier Survey)

GRI-409: Forced or Compulsory Labor

Initiatives on Respecting Human Rights -Human Rights Promotion System Operations and suppliers at 409-1 significant risk for incidents of CSR Efforts throughout the Supply Chain forced or compulsory labor Communication with Our Suppliers (Supplier Survey)

GRI-410: Security Practices

Security personnel trained in 410-1 human rights policies or - procedures

GRI-411: Rights of Indigenous Peoples

Incidents of violations involving 411-1 - rights of indigenous peoples

○ GRI-412:Human Rights Assessment

Operations that have been 412-1 subject to human rights - reviews or impact assessments

Employee training on human Initiatives on Respecting Human Rights -Training 412-2 rights policies or procedures System

Significant investment agreements and contracts that 412-3 include human rights clauses or - that underwent human rights screening

〇 GRI-413: Local Communities

Stakeholder Engagement

Contribution to Local Communities Targets and Performance Operations with local community engagement, Concept of Social Action Programs 413-1 impact assessments, and Building Communities and a Way of Life that Is Safe development programs and Secure

Building a Society and a Way of Life that Is Good for the Environment Enriching Our Life and Culture

Support for Employee Volunteer Activities

Management of Chemical Substances

Climate Change Mitigation and Adaptation

Operations with significant Managing Water Risk 413-2 actual and potential negative impacts on local communities Combating Soil Pollution Biodiversity Conservation Activities

Measures in Our Value Chain

GRI-414: Supplier Social Assessment

New suppliers that were 414-1 - screened using social criteria

The Tokyo Gas Groupʼs LNG Value Chain and Key Initiatives Contributing to Sustainable Development

Negative social impacts in the Stakeholder Engagement 414-2 supply chain and actions taken CSR Efforts throughout the Supply Chain

Communication with Our Suppliers (Supplier Survey)

GRI-415: Public Policy

415-1 Political contributions We do not make political contribution.

〇 GRI-416: Customer Health and Safety

Launch of Voluntary Action Plan on Product Safety

Assessment of the health and Improvements for Safer, User-friendly Gas 416-1 safety impacts of product and Appliances service categories Promoting Switchover to Safer Appliances

Earthquake and Disaster Preparedness

Incidents of non-compliance concerning the health and Disclosure of Incidents That Affected Our 416-2 safety impacts of products and Stakeholders–Important Notices in FY2017 services

GRI-417: Marketing and Labeling

Requirements for product and 417-1 Proactive Information Disclosure to Customers service information and labeling

Incidents of non-compliance 417-2 concerning product and service - information and labeling

Incidents of non-compliance 417-3 concerning marketing Press Release on an Order for Action Regarding communications Flyers of the Gas Exhibition (in Japanese only)

○GRI-418: Customer Privacy

Substantiated complaints concerning breaches of Disclosure of Incidents That Affected Our 418-1 customer privacy and losses of Stakeholders–Important Notices in FY2017 customer data

〇 GRI-419: Socioeconomic Compliance

Non-compliance with laws and 419-1 regulations in the social and No violation of laws and regulations economic area Global Compact Content Index

The Ten Principles of UN Global Compact Pages in 2018 CSR Report

Top Commitment

CSR at the Tokyo Gas Group

Overview of CSR Management Principle One: Businesses should support and respect the protection of The Tokyo Gas Groupʼs Key CSR Activities and internationally proclaimed human rights. Materiality

Stakeholder Engagement

Respect for Human Rights

Basic Policy Human Initiatives on Respecting Human Rights Rights

Promotion of Compliance

Basic Policy

Thorough Implementation of Compliance

Principle Two: Businesses should make sure that they are not complicit in human Supply Chain Management rights abuses. Basic Policy

CSR Efforts throughout the Supply Chain

Communication with Our Suppliers (Supplier Survey)

CSR at the Tokyo Gas Group

The Tokyo Gas Groupʼs Key CSR Activities and Materiality Principle Three: Businesses should uphold the freedom of association and Stakeholder Engagement the effective recognition of the right to collective bargaining. Respect for Human Rights

Basic Policy

Initiatives on Respecting Human Rights

Promotion of Compliance

Labour Basic Policy Thorough Implementation of Compliance Principle Four: Businesses should uphold the elimination of all forms of forced and compulsory labour. Enhancement of People-Centered Management Base Basic Policy

Employment Outlook

Personnel Programs and Appraisal System

Personnel and Career Development

Action on Diversity Principle Five: Businesses should uphold the effective abolition of child labour. Engaging in Occupational Safety and Health

Supply Chain Management Basic Policy

CSR Efforts throughout the Supply Chain

Communication with Our Suppliers (Supplier Survey) Principle Six: Businesses should uphold the elimination of discrimination in respect of employment and occupation. CSR Data

Social Data

Contribution to the Environment

Basic Policy

Principle Seven: Businesses should Targets and Performance support a precautionary approach to Environmental Management environmental challenges. Climate Change Countermeasures

Addressing Climate Change

Reduction of CO2 Emissions at Customer Sites

Energy Savings and Reduction of CO2 Emissions in Business Operations

Promotion of Resource Recycling

Promotion of Biodiversity Conservation Principle Eight: Businesses should Promotion of Environmental Technologies Environment undertake initiatives to promote greater Development environmental responsibility.

Contribution to Local Communities

Basic Policy

Social Action Programs through Our Main Line of Business

Urban Development

Supply Chain Management Principle Nine: Businesses should encourage the development and diffusion Basic Policy of environmentally friendly technologies. CSR Efforts throughout the Supply Chain

Communication with Our Suppliers (Supplier Survey)

CSR at the Tokyo Gas Group

Overview of CSR Management

The Tokyo Gas Groupʼs Key CSR Activities and Materiality

Promotion of Compliance Principle Ten: Businesses should work Anti- Basic Policy against corruption in all its forms, Corruption including extortion and bribery. Thorough Implementation of Compliance

Supply Chain Management

Basic Policy

CSR Efforts throughout the Supply Chain

Communication with Our Suppliers (Supplier Survey) ISO 26000 Content Index

ISO26000

Guidance on social Pages in 2018 CSR Report responsibility core Issue subjects

Corporate Governance

Corporate Governance Organizational Organizational governance governance CSR at the Tokyo Gas Group

Working Toward Better CSR Practice

CSR at the Tokyo Gas Group

Working Toward Better CSR Practice

Stakeholder Engagement

Contribution to the Environment

Environmental Management

Promotion of Biodiversity Conservation

Contribution to Local Communities

Social Action Programs through Our Main Line of Business

Issue 1: Due diligence Respect for Human Rights

Issue 2: Human rights risk Basic Policy situations Initiatives on Respecting Human Rights Issue 3: Avoidance of complicity Promotion of Compliance Issue 4: Resolving grievances Basic Policy Issue 5: Discrimination and Human rights Thorough Implementation of Compliance vulnerable groups

Issue 6: Civil and political rights Enhancement of People-Centered Management Base Issue 7: Economic, social and cultural rights Basic Policy

Issue 8: Fundamental principles Employment Outlook and rights at work Personnel Programs and Appraisal System

Personnel and Career Development

Action on Diversity

Engaging in Occupational Safety and Health

Supply Chain Management

Basic Policy

CSR Efforts throughout the Supply Chain

Communication with Our Suppliers (Supplier Survey)

CSR Data

Social Data CSR at the Tokyo Gas Group

Stakeholder Engagement

Respect for Human Rights

Initiatives on Respecting Human Rights

Promotion of Compliance

Basic Policy Issue 1: Employment and employment Information Security Management relationships

Issue 2: Conditions of work and Enhancement of People-Centered Management social protection Base

Labour practices Issue 3: Social dialogue Basic Policy

Issue 4: Health and safety at Employment Outlook work Personnel Programs and Appraisal System Issue 5: Human development and training in the Action on Diversity workplace Engaging in Occupational Safety and Health

Supply Chain Management

Basic Policy

CSR Efforts throughout the Supply Chain

CSR Data

Social Data

Contribution to the Environment

Targets and Performance

Environmental Management Issue 1: Prevention of pollution Climate Change Countermeasures Issue 2: Sustainable resource use Addressing Climate Change

Issue 3: Climate change Energy Savings and Reduction of CO2 mitigation and Emissions in Business Operations The environment adaptation Measures at the City Gas Issue 4: Protection of the Production and Supply Stages environment, biodiversity and Promotion of Resource Recycling restoration of natural Promotion of Biodiversity Conservation habitats

CSR Data

Environmental Data

Issue 1: Anti-corruption The Tokyo Gas Group Value Chain Issue 2 : Responsible political involvement The Tokyo Gas Groupʼs LNG Value Chain and Key Initiatives Contributing to Sustainable Issue 3: Fair competition Development Fair operating practices Issue 4: Promoting social responsibility in the CSR at the Tokyo Gas Group value chain Overview of CSR Management Issue 5: Respect for property rights Stakeholder Engagement Contribution to the Environment

Climate Change Countermeasures

Reduction of CO2 Emissions at Customer Sites

Reducing the Transportation Carbon Footprint

Promotion of Resource Recycling

Promotion of Biodiversity Conservation

Promotion of Compliance

Basic Policy

Thorough Implementation of Compliance

Supply Chain Management

Basic Policy

CSR Efforts throughout the Supply Chain

Important Notices in FY2017

Enhancement of Energy Security

Earthquake and Disaster Preparedness

Enhancing the Safety of Gas Appliances

Efforts to Enhance Customer Satisfaction

Contribution to the Environment

Targets and Performance

Climate Change Countermeasures Issue 1: Fair marketing, factual and unbiased Addressing Climate Change

information and fair Reduction of CO2 Emissions at Customer contractual practices Sites

Issue 2: Protecting consumersʼ Reduction of CO2 Emissions at health and safety Customer Sites

Issue 3: Sustainable Advancing and Expanding Natural consumption Gas Use with Highly Efficient Issue 4: Consumer service, Residential Gas Appliances and Consumer issues support, and Systems complaint and dispute Promoting Smart Networks resolution Reducing the Transportation Issue 5: Consumer data Carbon Footprint protection and privacy Proposing Exemplary Energy- Issue 6: Access to essential Saving Lifestyles for Customers services Promotion of Resource Recycling Issue 7: Education and awareness Promotion of Environmental Technologies Development

Contribution to Local Communities

Social Action Programs through Our Main Line of Business

Promotion of Compliance

Information Security Management CSR Data

Environmental Data

Important Notices in FY2017

CSR at the Tokyo Gas Group

Overview of CSR Management

Stakeholder Engagement

Enhancement of Energy Security

Earthquake and Disaster Preparedness

Enhancing the Safety of Gas Appliances

Contribution to the Environment

Promotion of Environmental Technologies Development

Contribution to Local Communities

Basic Policy

Working with the International Community Issue 1: Community involvement Social Action Programs through Our Main Line of Business Issue 2: Education and culture Urban Development Issue 3: Employment creation and skills development Respect for Human Rights Community involvement Issue 4: Technology and development development and Basic Policy access Initiatives on Respecting Human Rights Issue 5: Wealth and income creation Promotion of Compliance Issue 6: Health Thorough Implementation of Compliance Issue 7: Social investment

Enhancement of People-Centered Management Base

Basic Policy

Employment Outlook

Personnel Programs and Appraisal System

Personnel and Career Development

Action on Diversity

Engaging in Occupational Safety and Health

Supply Chain Management

Basic Policy

CSR Efforts throughout the Supply Chain

Important Notices in FY2017 A

Gas pipelines under roads and customer sites that may have become Aging pipelines corroded or otherwise degraded over time and must be replaced or repaired.

B

Water pumped aboard a ship to assist in maintaining its balance when it is sailing with a small load and could become unstable. The seawater at ports Ballast water of call is often used as ballast water, and the aquatic organisms it contains may become invasive and adversely affect ecosystems when discharged in other locations.

Abbreviation for business continuity plan. Documented preparations by a company for an emergency, such as a natural disaster, major fire or terrorist attack. These plans describe actions to be taken under normal conditions, BCP and the means, methods and other arrangements to be implemented during emergencies to ensure the continuation of business while minimizing loss or damage to operating assets, and maintaining or immediately restoring core operations.

Abbreviation for Building-Housing Energy-efficiency Labeling System. A BELS system in which third-party evaluation agencies assess and certify new and older buildings for their energy-saving performance.

Organic matter other than fossil resources derived from renewable sources Biomass such as waste wood and kitchen waste. Biomass is expected to contribute to the reduction of CO2 emissions by replacing fossil energy.

C

Credit for reduction in emissions of greenhouse gases achieved by one source purchased to offset emissions from other sources such as human Carbon offsets and economic activities that cannot be otherwise reduced; may include planting trees, protecting forests or producing clean energy (purchased emission rights).

Abbreviation for Comprehensive Assessment System for Built Environment CASBEE Efficiency.Buildings are assessed on the basis of their environmental performance and assigned a rating on a five-point scale.

Coastal carrier A ship that operates between domestic ports.

Distributed energy system that generates electricity through various Combined heat and means, including engines, turbines and fuel cells, fueled by natural gas power (CHP) system and other fuels, and using waste heat to simultaneously generate steam and hot water. This environmentally sound system diversifies power sources and saves electricity.

Liquefied natural gas (LNG) is a liquid at -162°C, and 1 kg of LNG has the Cryogenic power cryogenic energy to turn 2.5 kg of water into ice. This cold energy is generation recovered to generate electricity.

Activities for promoting CSR across the entire supply chain, from the CSR procurement of raw materials to the delivery of products and services to Procurement/Supply customers, in which a company requires suppliers to meet CSR criteria Chain Management including the environment, labor conditions and human rights, in addition to specifications, pricing and delivery period.

D

The country or region in which is located the final port of call for which LNG Destination is bound. LNG contracts have traditionally contained "destination clauses" which restrict where LNG can be landed.

A system for independently procuring and managing heat and power by locating power sources close to the demand, in cooperation with major power grids. Solar and wind power generation and combined heat and Distributed energy power (CHP) systems fall under this category. Compared with conventional system centralized power sources, this system offers benefits such as eliminating transmission loss and providing the possibility of using waste heat for the CHP systems.

Promoting diversity in a business context means respecting and accepting all people, regardless of gender, age, disability, nationality, values and other Diversity attributes, by creating an inclusive work environment; ultimately contributes to sustainable corporate growth and development.

E

Bundle of services efficiently delivered to customers by energy service providers to solve energy-related problems. May include provision of heat, Energy services electricity and water generated by combined heat and power systems, boilers, air conditioners, water treatment plants or other facilities.

The establishment of policies and targets by an enterprise to guide its Environmental voluntary actions for protecting the environment; encompasses the management associated implementation systems, procedures and other arrangements in system (EMS) factories and offices.

Soil and waste asphalt generated by work such as laying gas pipelines under Excavated soil roads.

F

A system that generates electricity through an electrochemical reaction Fuel cell between oxygen in the air and hydrogen extracted from sources such as the natural gas used to make city gas. G

Generation of electricity utilizing differential pressure of city gas flowing Gas pressure through gas pipelines to drive a turbine. This type of system conserves differential power energy by not consuming gas. Using the cold energy produced during the generation generation of electricity yields further energy savings.

Highly efficient means of generating electricity combining two methods. A Gas turbine fuel, such as natural gas, is combusted to drive a gas turbine. The heat of combined cycle the exhaust gas from the turbine is then recycled to convert water into steam, which in turn is used to drive a steam turbine.

H

Abbreviation for Home Energy Management System. A mechanism for optimizing energy use by making household consumption of energy, HEMS including electricity, gas and water, visible on the screens of TVs, computers and smartphones, and by automatically controlling energy consumption.

Name for the benchmark price of natural gas in the U.S., derived from the Henry Hub (U.S. Henry Hub distribution node in Louisiana in the southern U.S. The price of natural gas natural gas bought and sold is used as the index or benchmark value for the market) price price of futures on the New York Mercantile Exchange (NYMEX).

Also known as a trunk line. A gas pipeline operating at a gas pressure of at least 1 MPa with a typical diameter of 65 cm to 75 cm that is used to High-pressure gas transport city gas from an LNG terminal. Gas is supplied through this kind of pipeline pipeline using governor stations to transfer to medium-pressure pipelines, and then by district pressure regulators to the low-pressure pipelines that deliver city gas to residential users.

The process of identifying and assessing the impacts on human rights of Human rights due business activities as a whole, including the implementation measures for diligence preventing or mitigating these impacts.

I

A society based on mutual recognition and respect and support for the rights Inclusive society of every individual to pursue happiness and a fulfilling life, regardless of age, gender or disability.

The international standard for EMS developed by the International Organization for Standardization (ISO). Intended to align management with ISO 14001 the mitigation of environmental risk and contribution to the environment as well as to encourage continuous improvements in EMS standards.

J

A program in which reductions and sequestrations of emissions of greenhouse gases such as CO2 achieved by such means as the installation of J-Credit Scheme energy-saving equipment and planting trees are certified by the government as "credits." These credits can then be used to offset other carbon emissions toward achieving the targets for achieving a low carbon society.

L

Abbreviation for Life Cycle Assessment. A method of assessing how a LCA product affects the environment at each stage of its life, from production to use and disposal.

LGBT Collectively refers to lesbian, gay, bisexual, and transgender individuals.

Method for assessing the total amount of CO2 emissions of a product Lifecycle CO2 throughout its lifecycle, from the consumption of resources and energy emissions during the production of raw materials to the environmental load during final assessment waste disposal.

A gas consisting principally of methane (CH4) that has been liquefied by LNG (liquefied cooling to around -160°C. It is a clean energy source that produces virtually natural gas) no SOx or particulate emissions and is primarily used in Japan as fuel for power stations and as city gas.

LNG tank lorry Tank lorries are used to transport LNG to areas not served by gas pipelines.

The series of business activities that add value at each stage from procurement of LNG to delivery of products and services to the customer. The Tokyo Gas Group considers the "LNG value chain" to be the chain of all LNG value chain business activities, extending from the procurement of LNG to the transportation, production and supply of city gas, power generation, and delivery of energy solutions.

Low voltage Mainly refers to residential-use 100-volt or 200-volt electricity. power

M

Relationship between the amount of resources and energy required for Material Balance business activities and the residual volume of waste and emissions.

N

Abbreviation for Natural Gas Vehicle. Compared to vehicles fueled by gasoline or diesel, these natural gas fueled vehicles emit 10% to 20% less NGV (Natural Gas CO2, little NOx or HC, and no black smoke or particulate matter (PM). Vehicles) Expectations are high that NGVs will play a decisive role in preventing global warming and improving air quality.

P

Interest a trading company or other entity obtains when it finances, through Participating a loan or investment, a development project in a resource-producing interest country, granting it the right to acquire resources produced as a result of the project in proportion to the scale of its financial stake.

Gas pipe made of highly corrosion and quake resistant polyethylene and used for buried sections of pipeline. Tokyo Gas is increasing its use of these Polyethylene pipe pipes for the low-pressure pipelines that make up 90% of its network to minimize damage from earthquakes.

R

An energy-saving system that combines high combustion efficiency with low NOx emissions. Two burners are alternately fired and the heat of the exhaust Regenerative gas when one burner is fired is recovered by a heat reservoir to preheat the burner system air for the next combustion cycle. The system saves energy consumption by 30% to 50% while reducing CO2 emissions.

Inexhaustible energy sources such as sunlight, solar heat, hydropower, wind Renewable energy power, biomass and geothermal energy, which can be replenished relatively quickly.

Abbreviation for Robotic Process Automation. The use of robot software to RPA automate standard PC operations that were conventionally handled by humans.

S

Abbreviation for Smart Energy Network Energy Management System. A mechanism that applies ICT to link the demand data of buildings and supply SENEMS data of energy centers. Provides energy savings and cost reductions and enhances energy security by combining data on energy use for individual buildings with climate and other data for optimal operation.

Methane gas trapped in shale, which are thin, flakey rock formations formed Shale gas from ancient mud deposits. Shale gas resources are abundant and expected to have a major impact on world energy production and consumption.

An optimal local energy system centered on combined heat and power (CHP) Smart Energy systems for making maximum use of renewable and underused energy Networks (SENs) sources and controlled through ICT energy management.

Efforts undertaken by companies to understand stakeholdersʼ expectations Stakeholder for corporate business activities. Stakeholder dialogues are one form of engagement stakeholder engagement.

Activities for promoting CSR across the entire supply chain, from the Supply chain procurement of raw materials to the delivery of products and services to management/CSR customers, in which a company requires suppliers to meet CSR criteria procurement including the environment, labor conditions and human rights, in addition to specifications, pricing and delivery period.

T

Abbreviation for Tokyogas Eco System. A Tokyo Gas residential water heating system that uses heated water from a single heat source to provide TES hot water for bathing, space heating, underfloor heating, bathroom heating and drying. A type of unconventional natural gas that has accumulated in sandstone layers, which are harder than layers in which conventional gas accumulates. Tight sand gas Developed extensively since the late 1980s, as technological progress improved the prospects for commercial production.

U

Gas produced from sources other than ordinary gas fields. In addition to tight sand gas, coalbed methane, biomass gas and shale gas currently being Unconventional produced commercially, unconventional gas also includes methane hydrate, gas deep earth gas and other gas sources that are expected to become commercially viable energy sources in the future.

W

Wholesale Wholesale delivery of gas via pipelines to other general gas utilities, distribution domestic natural gas utilities and electric power companies.

Z

Abbreviation for Zero Energy Building. A building designed to achieve a zero annual balance between primary energy consumption and generation ZEB through major energy-saving features in combination with the use of renewable energy sources. Major Awards and Recognitions in FY2017

Recognitions for Products and Services

Cogeneration Award 2017 Consumer use category: Chairmanʼs Award Industrial use category: Award for Excellence Technological development category: Chairmanʼs Award, Special Award

Awarded by: Advanced Cogeneration and Energy Utilization Center Japan Recipient: Tokyo Gas Engineering Solutions Corporation, Tokyo Gas Co., Ltd.

The awards seek to raise social recognition for cogeneration and promote the wider use of better cogeneration systems. Tokyo Gas was recognized for making use of technologies that particularly excel in terms of innovative leadership and energy conservation.

11th Kids Design Award

Awarded by: Kids Design Association Recipient: Tokyo Gas Co., Ltd.

Our smartphone app “You and Enepa” was recognized as being designed to provide living environments that facilitate parenting and ensure the security, safety and healthy development of children.

15th Environmental and Equipment Design Award Landscape Design Category: Best Design Award

Awarded by: Association of Building Engineering and Equipment Recipient: Tokyo Gas Co., Ltd., Tokyo Gas Engineering Solutions Corporation

Tokyo Gas was recognized for developing an urban district based on the community development vision for the northern area of Tamachi Stationʼs east exit and formulated in October 2017 by Minato Ward in Tokyo, which integrates demand and supply for energy and balances highly efficient energy use with advanced urban functions. It was also recognized for consistently maintaining energy saving activities in the district.

Good Design Award 2017

Awarded by: Japan Institute of Design Promotion Recipient: Tokyo Gas Engineering Solutions Corporation

“VISCO WAVE,” the worldʼs first contactless viscometer developed on unique principles, was recognized for incorporating specialized technology into a consumer product with superior design quality.

35th IT Awards 2017 Special IT Award

Awarded by: Japan Institute of Information Technology Recipient: Tokyo Gas Co., Ltd. We earned praise for providing the “TG-DRESS” disaster recovery support system developed by Tokyo Gas in the aftermath of the Kumamoto earthquakes in 2016 for use by the staff of Seibu Gas Corporation, which contributed to the rapid recovery of gas supply.

Recognition of Merit

Citizensʼ Charter Award for Bright, Fun, and Beautiful Community Development

Awarded by: Utsunomiya City Recipient: Utsunomiya Branch Office, Tokyo Gas Co., Ltd.

For over 13 years, Tokyo Gas has organized classes at elementary and junior high schools in Tochigi for teaching the importance of energy and raising awareness of energy conservation. These activities have been praised for generating interest in environmental and energy issues amongst children and encouraging them to think about what they can do themselves.

11th Hokiichi Hanawa Awards Incentive Award

Awarded by: Saitama Prefecture Recipient: Keiichi Kimura, Tokyo Gas Co., Ltd.

The award recognizes individuals leading distinguished careers in society through an indefatigable effort to overcome disabilities. Athlete Kimura has appeared in three consecutive Paralympic Games and won three silver and three bronze medals. Moreover, he has shared his experience of the Paralympic Games and his hopes for creating a barrier-free society with children attending special needs schools. He has also proposed ideas for events intended to generate nationwide excitement ahead of the Tokyo 2020 Games. The award honors him for these efforts.

FY2017 Awards for Distinguished Service to Health, Labor and Welfare Statistics Health, Labor and Welfare Ministerʼs Award

Awarded by: Ministry of Health, Labor and Welfare Recipient: Tokyo Gas i Net Corporation

The Makuhari Office was designated as a business operation subject to the monthly labor survey, conducted by the Ministry of Health, Labor and Welfare since January 2015. The office reported its labor status to the Chiba Prefectural Government on a monthly basis and was recognized for its effort.

FY2017 Awards for Distinguished Contribution to Gas Safety Kanto Tohoku Industrial Safety and Inspection Department Directorʼs Award

Awarded by: Ministry of Economy, Trade and Industry Recipient: Tokyo Gas Group Gas Construction Work Service Outlet Category: 3 establishments Individual Category: 13 individuals

The awards are presented with the goal of raising the motivation of those involved in gas safety and promoting public understanding. The Tokyo Gas Group was recognized for offering distinguished service in ensuring gas safety.

FY2017 Awards for Distinguished Contribution to Gas Safety Economy, Trade and Industry Ministerʼs Award

Awarded by: Ministry of Economy, Trade and Industry Recipient: Tokyo Gas Group Gas Construction Work Service Outlet Category: 1 establishment Individual Category: 2 individuals

The awards are presented with the goal of raising the motivation of those involved in gas safety and promoting public understanding. The Tokyo Gas Group was recognized for offering distinguished service in ensuring gas safety. FY2017 Spring Conferment of Decoration Medal with Blue Ribbon

Awarded by: Cabinet Office Recipient: Shigeru Muraki, Executive Advisor, Tokyo Gas Co., Ltd.

The medal was presented in recognition of distinguished service in promoting industry.

Recognition for Advertising

57th ACC TOKYO CREATIVITY AWARDS TV Commercial, Film Category: ACC Gold Award

Awarded by: All Japan Radio & Television Commercial Confederation Recipient: Tokyo Gas Co., Ltd.

The award is aimed at raising creative quality in broad domains of advertising. Tokyo Gas won praise for the “Family Bond - Donʼt do that” series of corporate brand commercials as a comical and heart-warming TV commercial featuring the bond between a father and daughter.

56th JAA Advertising Awards Contest for Advertisements Chosen by Consumers Medalist

Awarded by: Japan Advertisers Association Recipient: Tokyo Gas Co., Ltd.

Awarded for the “Family Bond - Donʼt do that” series of TV commercials and “If the World Were to End Tomorrow” and “Christmas Feast” series of radio commercials as outstanding advertising from a consumer perspective.

33rd Yomiuri Advertising Awards, Advertisers Category “Being Prepared” Section: Grand Prize

Awarded by: Yomiuri Shimbun Inc. Recipient: Tokyo Gas Co., Ltd.

Awarded for our “Safe Supply” series of corporate brand advertisements featuring a woodblock print depicting a General Manager of the Supply Control Center with accompanying text on episodes from daily operations. The ads were rated by registered readers and screened by members of a selection committee.

46th Fuji-Sankei Group Advertising Awards TV Media: Grand Prize Radio Media: Award for Excellence

Awarded by: Fuji Television Network, BS Fuji, Sankei Sports newspaper and others Recipient: Tokyo Gas Co., Ltd.

The awards are presented based on the three concepts of “comprehensive,” “creative” and “popular” advertising. Tokyo Gas received the Grand Prize in the TV media category for the “Family Bond - Donʼt do that” series of corporate brand commercials and the Award for Excellence in the radio media category for the “Christmas Feast” series of commercials.

65th Asahi Advertising Awards Advertisers Category: Grand Prix

Awarded by: The Asahi Shimbun Company Recipient: Tokyo Gas Co., Ltd.

Awarded for our “Gas Safety” series of corporate brand advertisements featuring a woodblock print depicting a Gaslight 24 staff with accompanying text on an episode from the Great East Japan Earthquake. The ad received praise for expressing the staffʼs desperate efforts to convey their dedication through the picture and text.

66th Nikkei Advertising Awards Trading, Energy and Public Services Category: First Prize

Awarded by: Nikkei Inc. Recipient: Tokyo Gas Co., Ltd.

Our “Gas Safety” series of corporate brand advertisements featuring a woodblock print depicting a Gaslight 24 staff with accompanying text on an episode from the Great East Japan Earthquake. The ad was selected by a committee comprising university professors, copywriters and art directors. Inclusion in Socially Responsible Investment (SRI) Indices

The Tokyo Gas Group is recognized for the overall high quality and balance of its approach to CSR and environmental, social, and governance (ESG) issues, and it has been included in the following SRI indices (as of July 31, 2018).

FTSE4Good Global Index The FTSE4Good Global Index is a series of stock indices developed by FTSE Russell, a subsidiary of the London Stock Exchange Group. They assess corporate sustainability based on environmental, social, and governance performance and are used by investors as a key benchmark for determining which companies to invest in.

The FTSE Blossom Japan Index provides investors with a means of identifying Japanese companies that meet high environmental, social, and governance standards and is designed to minimize industry bias. In July 2017, the Government Pension Investment Fund of Japan (GPIF), the worldʼs largest institutional investor, began using this index to track investments. FTSE Blossom Japan Index

Note: FTSE Blossom Japan Index “FTSE Russell” (a registered trademark of FTSE International Limited and Frank Russell Company) hereby certifies that Tokyo Gas Co., Ltd. has been found, as a result of third- party investigation, to meet the requirements for inclusion in the FTSE Blossom Japan Index and has been made a constituent of the Index. The FTSE Blossom Japan Index was developed by FTSE Russell and is designed to measure the performance of Japanese companies that meet high environmental, social, and governance (ESG) standards. The FTSE Blossom Japan Index is widely used for developing and assessing sustainable investment funds and other financial products.

Link ▶ FTSE Blossom Japan Index

MSCI Global Sustainability Tokyo Gas has been included in the following stock indices of top Indexes environmental, social, and governance performers developed by Morgan Stanley Capital Investment (MSCI) of the U.S.

MSCI Global Sustainability Indexes Leading stock indices of companies selected for their outstanding environmental, social, and governance performance.

MSCI Japan ESG Select Leaders Index This index is based on a parent index of the top 500 stocks MSCI Japan ESG Select Leaders by market capitalization in the MSCI Japan IMI index of large, Index mid- and small-cap securities in Japan, and it consists of companies that are rated relatively high in their industries for environmental, social, and governance performance. MSCI Japan Empowering MSCI Japan Empowering Women Index (WIN) Women Index [WIN] This index is composed of companies that are selected from each industry for their high gender diversity scores.

Note: ・ The MSCI Japan ESG Select Leaders Index and the MSCI Japan Empowering Women Index were adopted by GPIF in July 2017 as benchmarks for their investment strategy.

・ MSCI ESG Indexes

THE INCLUSION OF Tokyo Gas Co., Ltd. IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF Tokyo Gas Co., Ltd. BY MSCI OR ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

STOXX Global ESG Leaders STOXX Global ESG Leaders Index is an index provided by STOXX Index of Switzerland, a subsidiary of Deutsche Börse AG. Based on the results of research by Sustainalytics, a Dutch SRI research and analysis provider, it is composed of companies selected for their outstanding action on the environment, society, and governance.

ETHIBEL Sustainability Index Compiled by Forum Ethibel, a Belgian NPO and SRI promoter, (EXCELLENCE Global) the ETHIBEL Sustainability Index (EXCELLENCE Global) investment register consists of companies that exhibit strong environmental, social, and governance performance.

The ETHIBEL Investment Register (EXCELLENCE) is an investment universe comprised of companies that exhibit high standards of corporate social responsibility. ETHIBEL Investment Register (EXCELLENCE)

Morningstar Socially Responsible The Morningstar Socially Responsible Investment Index is an Investment Index (MS-SRI) index of stock prices for listed companies in Japan that have been selected by Morningstar Japan K.K. for their outstanding social performance. It is the first index of its kind in Japan.

Certified Health & Productivity The Certified Health & Productivity Management Organization is Management Organization a recognition given to large enterprises as well as small and “White 500” (large enterprises medium-sized enterprises that practice particularly excellent category) health management in terms of initiatives addressing local health needs and health improvement initiatives spearheaded by Nippon Kenko Kaigi. Japanʼs Ministry of Economy, Trade and Industry and Nippon Kenko Kaigi have been jointly certifying companies since fiscal 2016 with the goal of expanding corporate health management practices.

Nadeshiko Brand Nadeshiko Brands are companies selected jointly by the Ministry of Economy, Trade and Industry and the Tokyo Stock Exchange for actively promoting the use of female human resources (including the development of conditions that allow women to stay employed). They are selected in each industry from among companies listed on the Tokyo Stock Exchange First Section.

SNAM Sustainability Index The SNAM Sustainability Index is based on corporate environmental, social, and governance performance data gathered through corporate research executed by Sompo Risk Management & Health Care Inc. and IntegreX Inc. It is managed by Sompo Japan Nipponkoa Asset Management Co., Ltd.

CSR Ratings

The Tokyo Gas Group has been awarded the following ratings by third-party rating bodies.

Through the Carbon Disclosure Project, institutional investors FY2017 CDP (Carbon Disclosure call on corporations to disclose their strategies on climate Project) change and actual emissions of greenhouse gases. It is operated Performance: A- (on an eight-grade scale by CDP, an international NPO. Scores for companiesʼ responses from A to D-) are published globally and serve as an important metric of corporate value.

This survey is conducted by Toyo Keizai Inc. with the goal of identifying companies that are trusted by a wide range of 12th Toyo Keizai CSR Ranking stakeholders for their CSR and financial performance. It covers 24th out of 1,165 companies (Score: 547.8 Japanese enterprises, which are assessed according to both CSR out of 600) criteria (in the fields of human resource use, the environment, corporate governance, and social performance) and financial criteria.

2016 Channel NewsAsia Sustainability Ranking 74th out 100 companies This is a ranking of the top 100 Asian sustainability performers, jointly selected from an ESG perspective by Singapore TV broadcaster Channel NewsAsia, top Asian CSR consultancy CSR Asia, and leading ESG rating company Sustainalytics.

Information Disclosure through Communication Efforts

The Tokyo Gas Group has received the following recognition with regard to its disclosure of information concerning communication.

2017 Securities Analystsʼ Award for Excellence in Corporate Tokyo Gas was recognized for serving as a model to other Disclosure companies in promoting disclosure, based on its efforts to Electric Power/Gas Industry consistently disclose quantitative information of interest to Division investors and provide useful information through its annual reports and other channels as well as clear policy on shareholder Excellence in Corporate returns (6th time in a row and 11th overall). Disclosure Tokyo Gas Group CSR Report 2017 Questionnaire Results

In order to obtain wide-ranging feedback from stakeholders, the Tokyo Gas Group has incorporated a feedback mechanism into its CSR report website and also conducts questionnaires on the Groupʼs CSR initiatives. The feedback obtained is shared with the relevant parties and used to make improvements to daily business activities and future CSR reports.

Rating CSR Activities of the Tokyo Gas Group

Areas of Interest (Multiple Responses Allowed) Feedback Highlights

Views on safety and disaster prevention

Impressed by the Groupʼs support for work to restore gas in the aftermath of the Kumamoto earthquakes, I would like to see continued collaboration with gas companies and local governments nationwide on reinforcing preventive measures against disasters. The Tokyo Gas Group should continue to place top priority on safety and security in its operations.

Views on continuity of supply

While the pursuit of profit is necessary for companies, the Tokyo Gas Group should maintain its efforts in providing stable supply as an organization responsible for social infrastructure. The Group should continue to strengthen its efforts on stable supply and preparedness against contingencies.

Views on the environment

As a corporate group closely involved with energy, the Tokyo Gas Group seems to be steadfastly working to reduce its environmental impact. I would like to see further progress in those efforts. The Tokyo Gas Group should promote renewable energy and the use of natural sources of energy.

Views on overseas expansion

I would like to know more about concerns surrounding the future of gas supply (imported energy). The Tokyo Gas Group should make global and regional contributions while consistently paying attention to safety and security.

Views on services

I would like the Group to provide various services useful to daily life in addition to supplying gas. It is good to know that the Tokyo Gas Group is attentive to customer satisfaction beyond simply selling service to consumers.

Views on the report

The report was easy to read but seemed a little text-heavy. The diagrams and images made the content easy to understand. The Groupʼs initiatives for each stakeholder were easy to grasp.

Questionnaire Summary

Survey period November 17, 2017–February 13, 2018

Content surveyed Tokyo Gas Group CSR Report 2017

Number of valid responses 302

Respondents Registered CSR reviewers*

* Individuals registered with DFF Inc., operator of the “Feedback Management” service, who have expressed interest in actively participating

in questionnaires and research on CSR. CSR Report

Top Commitment

The Tokyo Gas Groupʼs Contribution to the SDGs Special Feature As a Total Energy Group Providing the Backbone for a Sustainable Society

Benefits of LNG (Liquefied Natural Gas) The Tokyo Gas Group Value The Tokyo Gas Groupʼs LNG Value Chain and Key Initiatives Chain Contributing to Sustainable Development

Corporate Governance Management Structure Corporate Governance Audit Structure Internal Control Risk Management

Overview of CSR Management The Tokyo Gas Groupʼs Key CSR Activities and Materiality CSR at the Tokyo Gas Group Working Toward Better CSR Practice Stakeholder Engagement

Basic Policy Targets and Performance Procurement of LNG Overseas Business Production of City Gas Enhancement of Energy Development of the Electric Power Business Security Supplying City Gas Earthquake and Disaster Preparedness Working to Ensure Customer Safety Enhancing the Safety of Gas Appliances Efforts to Enhance Customer Satisfaction Lifestyle Services

Basic Policy Targets and Performance Environmental Management

Climate Change Countermeasures Addressing Climate Change - Addressing Climate Change Reduction of CO2 Emissions at Customer Sites - Reduction of CO2 Emissions at Customer Sites Contribution to the - Advancing and Expanding Natural Gas Use with Highly Environment Efficient Residential Gas Appliances and Systems - Advancing and Expanding Natural Gas Use with Highly Efficient Commercial Gas Appliances and Systems -Promoting Smart Networks - Reducing the Transportation Carbon Footprint -Proposing Exemplary Energy-Saving Lifestyles for Customers Energy Savings and Reduction of CO2 Emissions in Business Operations -Measures at the City Gas Production and Supply Stages - Measures in the Electric Power Business - District Heating and Cooling Services - Measures at Business Offices - Other Efforts to Reduce CO2 Emissions

Promotion of Resource Recycling Promotion of Biodiversity Conservation Promotion of Environmental Technologies Development

Basic Policy Targets and Performance Contribution to Local Social Action Programs through Our Main Line of Business Communities Working with the International Community Urban Development

Basic Policy Respect for Human Rights Targets and Performance Initiatives on Respecting Human Rights

Basic Policy Targets and Performance Promotion of Compliance Thorough Implementation of Compliance Information Security Management

Basic Policy Targets and Performance Employment Outlook Enhancement of People- Personnel Programs and Appraisal System Centered Management Base Personnel and Career Development Action on Diversity Engaging in Occupational Safety and Health

Basic Policy Supply Chain Management CSR Efforts throughout the Supply Chain Communication with Our Suppliers (Supplier Survey)

Environmental Data Social Data CSR Data Governance Data Third-Party Independent Assurance Report

Editorial Policy

Disclosure of Incidents that Important Notices in FY2017 Affected Our Stakeholders

GRI/Global Compact/ISO 26000 Content Index

Glossary

Major Awards and Recognitions

Major ESG Ratings

2018 2017 Download (PDF format) 2016 2015 2014

CSR Report (Japanese)

Questionnaire Results and Highlights of Feedback

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