TOSEI : ESG REPORT 2023

About this update from Tosei Corporation

726(,*5283 (6*5(32572023 3 z ԵՇՇԱԷԵӨԶՆՃՁӨՈԸԵӨ ԱՂԱԷԵՁԵՂՈ Ӿ ԚԵՇՇԱԷԵӨԶՆՃՁӨՈԸԵӨԟՆԵՇԺԴԵՂՈӨԱՂԴӨԍԏԞ ԚԵՇՇԱԷԵӨԶՆՃՁӨՈԸԵӨԍԸԱԺՆՁԱՂӨՃԶ ԢՉՇՈԱԺՂԱԲԺՀԺՈՍӨԍՃՁՁԺՈՈԵԵ z ԣԞԢԏԔӨԑՆՃՉՄӰՇӨԢՉՇՈԱԺՂԱԲԺՀԺՈՍ Ԁ ԞՉՆӨԋՄՄՆՃԱԳԸӨՈՃӨԢՉՇՈԱԺՂԱԲԺՀԺՈՍ ԏԢԑӨԟՆՃՁՃՈԺՃՂӨԢՍՇՈԵՁ Long-Term Vision, Medium-Term Management Plan ԟԱՆՈԺԳԺՄԱՈԺՃՂӨԺՂӨԔՂԺՈԺԱՈԺՊԵՇ ԍՃՁՁԺՈՁԵՂՈӨՈՃӨԢԎԑՇ z ԏՂՊԺՆՃՂՁԵՂՈ 14 ԥԺՇԺՃՂ ԣԱՆԷԵՈӨԱՂԴӨԟՆՃԷՆԵՇՇ ԍՀԺՁԱՈԵӨԍԸԱՂԷԵ ԌԺՃԴԺՊԵՆՇԺՈՍ ԏՂՊԺՆՃՂՁԵՂՈԱՀӨԟՃՀՀՉՈԺՃՂӨԱՂԴӨԡԵՇՃՉՆԳԵՇ ԢՉՇՈԱԺՂԱԲԺՀԺՈՍӨԐԺՂԱՂԳԵ ԏՂՊԺՆՃՂՁԵՂՈԱՀӨԡԵԱՀӨԏՇՈԱՈԵӨԍԵՆՈԺԶԺԳԱՈԺՃՂՇ z ԢՃԳԺԱՀ 46 ԙԱԲՃՆӨԏՂՊԺՆՃՂՁԵՂՈ ԡԵՇՄՃՂՇԵӨՈՃӨԢՃԳԺԱՀӨԝԵԵԴՇ ԢՃԳԺԱՀӨԍՃՂՈՆԺԲՉՈԺՃՂ ԑՃՊԵՆՂԱՂԳԵ ԍՃՆՄՃՆԱՈԵӨԑՃՊԵՆՂԱՂԳԵ ԍՃՁՄՀԺԱՂԳԵӨԱՂԴӨԡԺՇԽӨԚԱՂԱԷԵՁԵՂՈ ԎԺՇԳՀՃՇՉՆԵ ԏՌՈԵՆՂԱՀӨԏՊԱՀՉԱՈԺՃՂՇ 72 91 ӨԡԵՄՃՆՈԺՂԷӨԟԵՆԺՃԴ ӠӨӨԐԺՇԳԱՀӨՍԵԱՆӨӼӺӼ3Ө ӨӨӨӨӲԐՆՃՁӨԎԵԳԵՁԲԵՆӨӻӶӨӼӺӼ2ӨՈՃӨԝՃՊԵՁԲԵՆӨӽӺӶӨӼӺӼ3Ӵ 3 Message from the Managament The Tosei Group's corporate philosophy is to "create new value and inspiration in all aspects of real estate." In this time of serious environmental and social issues, we recognize that creating a sustainable society through our corporate activities is the "creation of new value" demanded by the world. With climate change becoming a pressing issue globally, companies have a greater responsibility to fulfill in order to realize a decarbonized society and a circulating society, and the demand for sustainability management is further increasing. In this business environment, we established the Tosei Group ESG Policy and ESG Action Guidelines in January 2019, and set up a system to promote them. Since 2020, we are promoting our business activities in recognition of our role in achieving SDGs (the Sustainable Development Goals) set forth by the United Nations. We aim to grow through the portfolio management of six businesses. In particular, we position as growth drivers the Revitalization Business, which contributes to the utilization of existing resources and the reduction of environmental impact, and the Development Business, which promotes initiatives that contribute to environmental friendliness and comfort, such as energy conservation and the introduction of IoT, and our stable businesses, such as the Leasing, Fund, Management, and Hotel Businesses, will also strive to approach environmental and social issues according to the ESG Policy and the ESG Action Guidelines. With the spread of COVID-19 since 2020, people's values and lifestyles have become even more diverse. The Tosei Group will continue to strive for ESG management in consideration of sustainability in order to continue to be a company with value to all stakeholders, while responding flexibly to changes in the social environment. The President and CEO Seiichiro Yamaguchi 4 Message from the Chairman of Sustainability Committee In November 2023, the Tosei Group identified materiality (material issues) in the promotion of sustainability and specified important issues and themes to be prioritized by the Group. In January 2024, we also formulated our Long-Term Vision 2032 and Medium-Term Management Plan "Further Evolution 2026," in which we announced our intention to evolve further as a comprehensive real estate company in order to contribute to the realization of a sustainable society. In our business activities, we aim to promote sustainability measures by planning products and providing services with an awareness of environmental issues such as climate change and social issues such as diversity, disaster prevention and community revitalization. In our management infrastructure, we will strive to further enhance sustainability-conscious business management and corporate governance. In order to smoothly promote these initiatives, the Sustainability Committee will play a central role in monitoring the status of initiatives at relevant departments including group companies, and will work in close collaboration to steadily achieve the plans. CFO and Senior Executive Officer Chairman of Sustainability Committee Noboru Hirano 5 TOSEI Group's Sustainability Our Approach to Sustainability Participation in Initiatives ESG Promotion System Commitment to SDGs Long-Term Vision, Medium-Term Management Plan Our Approach to Sustainability In order to contribute to the realization of a sustainable society through our corporate activities, the Tosei Group has established "The Tosei Group ESG Policy" and "The Tosei Group ESG Action Guidelines" and is striving to implement ESG management that takes sustainability into consideration by establishing an ESG promotion system led by the Sustainability Committee. The Tosei Group ESG Policy and The Tosei Group ESG Action Guidelines The Tosei Group ESG Policy The Tosei Group has a mission of creating new value and inspiration in all aspects of real estate as a global-minded group of seasoned professionals. It regards its commitment to the Environment, Social and Governance as a priority management challenge. It will seriously address the social issues associated with real estate to contribute to society and achieve its own continuous growth. The Tosei Group ESG Action Guidelines 1. Carry out business activities that achieve sound growth We will respond swiftly and appropriately to changes in business circumstances and continue business activities that will ensure sound growth to meet our social responsibility to all stakeholders. We will make concerted efforts to strengthen our structure for enhancing corporate governance and building an internal control system. 2. Comply with laws and regulations We will not only comply with laws and regulations relating to the environment, society and corporate governance, but we will also provide internal training aimed at improving knowledge and promoting understanding, and we will carry out activities for increasing outsiders' awareness. 3. Take actions that increase the value of real estate We will take actions toward resolving a range of issues involved in real estate and increasing its added value with a view to making effective use of real estate and energizing local communities in all our business activities. 4. Carry out business activities with environmental considerations With the aspiration of building a low-carbon society, we will introduce measures that increase the energy efficiency of real estate owned. We will work to reduce water consumption and waste emissions and implement reduce, reuse and recycle activities in a positive effort towards building a recycling-oriented society. 6 5. Contribute to tenants, locals and communities through real estate owned In terms of our aim of practicing actions in accordance with these action guidelines, we will work to collaborate with corporate tenants of real estate owned, business partners such as property management firms and occupants of residential real estate to establish harmony with the local people and communities. 6. Increase customer satisfaction We will strive to offer products and services based on safety and reassurance and sincerely carry out business activities consistently from customers' standpoints in an effort to increase customer satisfaction. 7. Increase employee satisfaction We will define personnel as an essential part of our business and continue developing seasoned professionals. We will create a positive corporate culture in which diverse personnel with different backgrounds respect one another and work with a focus on teamwork in an effort to boost employee satisfaction. 8. Disclose ESG information We will disclose our ESG targets, monitor the state of actions on a regular basis and make their results known to stakeholders on our website and by other means. Developed: January 2019 7 Materiality (Material Issues) for the Tosei Group The Tosei Group started identifying its materiality as part of its pursuit of sustainability from November in fiscal year 2022, in order to strongly drive ESG management. We have long been implementing a wide range of environmental,social and governance initiatives. With companies sure to come under increasing pressure to implement initiatives to address climate change and other social and environmental issues in the future, we are committed to further accelerating our initiatives by specifying important themes that we should address as a priority to help solve social and environmental issues for the development of a sustainable society and to drive ESG management for the achievement of sustainable corporate growth. Materiality Identification Process 8 Materiality of The Tosei Group Materiality(The value we believe it is important Contributi Theme Major initiatives on to the to create) SDGs - Energy conser ation and use of Action on climate change and promotion of a renewable energy recycling-oriented society - Disaster pre ention and mitigation - Efficient use of resource Coexistence with the - Impr vement and visualization of environment environmental performance in both Environmentally friendly manufacturing and service 'tangible' and 'intangible' aspects provision - eduction of environmental impact of real estate revitalization and development - Utilization of di erse human resources Healthy work environment that embraces diversity - Promotion of di erse working styles - Pursuit of job satisfactio and individuality - especting for human rights - Promotion of mental and p ysical wellbeing Action to address social issues - Safe y and security of mind of High quality products and services that give safety customers and reassurance - Safe y and security of mind of employees and suppliers Creation, rehabilitation and revitalization of local - ehabilitation, creation and revitalization of local communities communities - evitalization of local economies - Enhancement of corpo ate Solid corporate Governance that promotes healthy corporate growth governance governance - Complianc - Strengthening risk managemen Developed: November 2023 9 ESG Promotion System The Group has established a Sustainability Committee to deliberate and determine ESG-related policies and activities. The committee is chaired by the director responsible for sustainability (Noboru Hirano, CFO and Senior Executive Officer) appointed by the CEO, and consists of members appointed by the director responsible for sustainability. The contents of the deliberations are regularly reported to the Board of Directors and reflected in the Group's business activities in cooperation with each relevant department. Tosei Group Long-Term Vision 2032 Background and Purpose The business environment surrounding the Group has become increasingly uncertain amid revolutionary changes, including the escalation of climate change issues, the emergence of geopolitical risks, the declining birthrate and the aging of society in Japan, the acceleration of behavioral changes triggered by the COVID-19 pandemic, and rapid advances in digital technology. In order to adapt to such changes in the business environment, ensure the Group's continued growth over the future, and enhance corporate value by contributing to the realization of a sustainable society, the Company formulated "Tosei Group Long-Term Vision 2032" to clarify "the Company's direction (what the Company envisions to be)" based on the Company's core competencies that are the source of the Group's competitive advantage and to make Group-wide efforts to realize its vision. The Company formulated the new medium-term management plan "Further Evolution 2026" for the initial three years (phase 1) out of the nine-year period in order to realize the Long-Term Vision 2032. Overview of the "Tosei Group Long-Term Vision 2032" The Group, through its six real estate-related businesses, has provided various solutions to realize the potential value of real estate. The Company is also expanding the business domain while mitigating risks by combining multiple businesses with different business attributes and are continuing to improve its real estate investment technique as a portfolio manager capable of handling a wide variety of assets. Furthermore, in the asset management domain, the Company offers world-class services trusted by real estate investors around the world and will work toward growing its business and realizing the Long-Term Vision 2032 by further expanding the Company's core competencies, i.e., the Company's "Real Estate Solution Capabilities," "Portfolio Management Capabilities," and "Global Reach Capabilities". 10

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