Environment

Information disclosure based on TCFD proposal

Information disclosure based on TCFD proposal

In October 2021, the MIRAIT ONE Group joined the TCFD Consortium*2, endorsing the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD)*1, which aims to proactively disclose the financial impact of climate-related risks and opportunities. In May 2022, we disclosed information based on the recommendations on "Governance," "Risk Management," "Strategy (Scenario)," "Target," and "Actual Performance" as described in the section below. In the future, we will monitor changes in the external and internal environment associated with climate change with respect to "identified risks" and "opportunity examination." We will also work to expand the scope of disclosure further to include the development of risk management system, continued review of risks and opportunities based on scenario analysis, etc. and progress toward achieving the greenhouse gas emissions reduction targets.

  • image *1 Established by the Financial Stability Board to facilitate more informed decision making on investments, credit, and insurance underwriting, help stakeholders better understand the concentration of carbon-related assets in finance, and formulate recommendations for more effective climate-related disclosures.
  • image *2 An organization established as a forum for companies, financial institutions, etc. that endorse the TCFD, working together to discuss effective information disclosure by companies and initiatives to help financial institutions make appropriate investment decisions based on disclosed information.

Governance

In FY 2021, the ESG Management Promotion Committee (see ESG Management Promotion Structure) was established in September. In its six meetings held since that time, the Committee adopted the materiality theme of “Building and Maintaining an Environmentally-Friendly Society” following deliberations by the Executive Committee and Board of Directors. To step up its contribution to realize a decarbonized society, the Group set the “greenhouse gas emissions reduction target (FY 2030)" as one of the KPIs in its Medium-term Management Plan and established a system to monitor its progress.

It was held five times in fiscal year 2022.(four times after the launch of MIRAIT ONE).

By submitting a letter of commitment to SBTi, the 2030 greenhouse gas emission reduction targets created by our company have been recognized as SBT (Science Based Targets*1).
After the establishment of the new company in July 2022, we created the ESG Management Promotion Committee, developed an operating schedule, and discussed the specific reduction status and measures of GHG emissions. We also conducted an evaluation and analysis of the results of the response from various ESG rating agencies.

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*1 Greenhouse gas reduction targets set by companies with a target year of 5 to 15 years in the future consistent with the level required under the Paris Agreement (limiting global warming to well-below 2°C above pre-industrial levels and pursuing efforts to limit warming to 1.5°C). (From the Ministry of the Environment and Ministry of Economy, Trade and Industry Green Value Chain Platform)

We also revised the remuneration system for board members to raise the awareness of management on ESG initiatives. In FY 2022, a non-financial target of “greenhouse gas emissions” was introduced as a new indicator in addition to the conventional indicators for performance-linked compensation: “consolidated operating profit” and “consolidated ROE.”

Risk Management

We have established a basic policy and promotion system for risk management as a corporate group in the form of “Risk Management Regulations,” as we take appropriate steps to deal with various risks based on our risk management plan.

In fiscal year 2022, the “Risk Management Execution Committee” was held twice. We discussed and addressed the usage status of helplines and the management status of significant risks such as litigation cases across each company in the corporate group. Based on the analysis of the results of the "Compliance and Risk Management Survey" conducted for all employees and executives, we clarified countermeasures for each department and raised awareness by introducing recent cases of "compliance violations".(Related section: Thorough risk management.)

The ESG Management Promotion Committee also takes the initiative on climate-related risks and opportunities, monitoring changes in the external and internal environment associated with climate change and identifying climate risks and opportunities that affect our business. The identified risks and opportunities are evaluated and analyzed to determine their impact on the Group with a focus on risks and opportunities that have a high degree of impact. Following deliberations by the Board of Directors and the Executive Committee, these are incorporated as company-wide risks and opportunities.

Strategy

The MIRAIT ONE Group has analyzed the potential climate-related risks and opportunities in the future by referring to the scenarios based on the average temperature rise of less than 2°C (e.g. 1.5°C) and 4°C*1. Consequently, it was assessed that the transition to a decarbonized society (policy/legislation/market/reputation) would be subjected to the impacts that manifest as a result of anticipated future events and physical (acute/chronic) impacts from climate change.

We reviewed our medium-term management strategy with respect to these risks and reaffirmed the "realization of a decarbonized society through business activities" as a material issue. In terms of our business engagement, we have also identified the growing demand for smart infrastructure/energy solutions as a prospective opportunity.

*1 The scenarios refer to the following.
A scenario in which a decarbonized society is realized quickly:
• International Energy Agency (IEA) World Energy Outlook 2018 Sustainable Development Scenario (SDS)
• IEA Energy Technology Perspectives 2017 Beyond 2°C Scenario (B2DS)
A scenario in which the physical impact is manifested:
* Intergovernmental Panel on Climate Change (IPCC) Fifth Assessment Report
* An IPCC Special Report on the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty

Future where the target of less than 2°C (such as 1.5°C ) is achieved: A scenario for the rapid materialization of a decarbonizing society

Envisioned scenario Tighter carbon emission regulations Increasing awareness toward decarbonization
Identified risks
Duration until risk occurrence Medium- and long-term Short-, medium- and long-term Short-term
Type Policy/regulation Policy/regulation Market/reputation
Description ・Increase in material and fuel procurement costs due to carbon taxation
・Increased business burden due to insufficient compliance with regulations such as carbon pricing
・Risk of cost increase due to the purchase of credits for emissions in case of failure to achieve reduction targets.
・Increase in electricity costs due to a shift to renewable energy sources ・ When environmental measures turn out to be inadequate
- Decrease in orders for new construction projects
- Termination of existing maintenance contracts
- Loss of customers due to higher reputation risks
Opportunity examination
Duration until risk occurrence Medium- and long-term Short-, medium- and long-term Short-term
Type Product/service/energy Product/service/energy Market
Description ・Increase in demand for renewable energy and energy-saving projects (solar power generation, EV charging, LED lighting, etc.) ・Increase in demand for shift to energy-saving equipment
・Promotion of the efficient electricity use with the use of IoT
・Increase in demand for renovation work
・Increase in demand for ZEB and smart city-related projects
Initiatives
Details ・Promotion of power-saving through DX and work-style reform.
・Improvement in fuel efficiency through the use of fuel additives for vehicles, and promotion of EV adoption.
・Promotion of renewable energy utilization in purchased electricity.
・Identifying and promoting the procurement of low-carbon products.
・Proper disclosure of information to stakeholders.

Future where average temperatures rise by 4°C: A scenario characterized by the manifestation of physical impact

Envisioned scenario Increase in the frequency and severity of natural disasters Rise in average temperatures
Identified risks
Duration until risk occurrence Short-, medium- and long-term Short-, medium- and long-term Long-term Medium- and long-term
Type Acute Acute Chronic Chronic
Description ・Damage to telecommunication equipment and base stations caused by heavy rains and typhoons and increase in restoration costs
・Decrease in workforce due to disaster.
・Discontinuation of products and services due to disruption of the value chain ・Increase in air conditioning costs incurred by data centers, etc. ・Decrease in labor productivity and increase in health issues such as heat stroke due to deterioration of outdoor working environment.
Opportunity examination
Duration until risk occurrence Short-, medium- and long-term Medium- and long-term Long-term Medium- and long-term
Type Market/resilience Market Market Resilience
Description ・Increase in demand for pole-free electricity to deal with abnormal weather conditions ・Growing demand for disaster prevention and mitigation work for telecommunication equipment and base stations due to the increase in the frequency and severity of natural disasters ・Replacement of air conditioning equipment with high-efficiency equipment
・Improvement of the operation of HVAC equipment
・Further promotion of DX and remote working style
Initiatives
Details ・Increase in demand for facility enhancements such as battery storage systems and emergency power supply.
・Development of multi-skilled human resources.
・Enhancement of collaboration with MIRAIT ONE Partners*1.
・Water supply solution business. ・strengthening of air conditioning business. ・Streamlining construction through DX and strengthening worker health management.

*1 Collaboration with partner companies is a core theme of ESG management foundation. We have launched the "MIRAIT ONE Partners" with approximately 350 core companies out of the 2,200 cooperating companies and partner companies within the Mirait One Group.(July 2022)

Target

To achieve carbon neutrality by 2050, we have set the greenhouse gas emission reduction targets toward FY2030, which was certified by the SBTi (Science Based Targets initiative) in February 2023 as a science-based target. These are also included as non-financial targets in our Medium-term Management Plan that begins in FY 2022, in order to steadily capture growth opportunities for our business in relation to decarbonization.

Greenhouse gas emissions reduction targets toward FY 2030

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Actual results

The results of greenhouse gas emissions for fiscal 2020 and subsequent years are as follows.

Reduction of greenhouse gas emissions

Independent assurance statement for fiscal year 2022(PDF:334KB)
(For past independent assurance statements, click here.)

Category Emissions
FY 2020
(Standard)
FY 2021 FY 2022
Scope 1 Direct emissions 66,890 67,907 65,166
Scope 2 Indirect emissions 22,841 21,277 19,754
Scope 3 Other indirect emissions 2,471,130 2,413,496 2,222,900
Category1 Purchased goods and services 513,292 452,295 337,073
Category11 Use of sold products 1,892,870 1,848,997 1,814,356
Others (Category2,3,5,6,7,12,13) Total 64,968 112,204 71,471*1
Sum total for Scope1ー3 2,560,861 2,502,680 2,307,820

*Figures for FY 2020 (Standard) include those for Seibu Construction Co., Ltd.
*Emission unit: Scope1,2 (t-CO2), Scope3 (t-CO2e)

*1 Appendix: Breakdown of Others

CategoryEmissions(t-CO2e)
Category2Capital goods32,442
Category3Fuel-and-energy-related activities
(not included in Scope 1 or 2)
13,165
Category5Waste generated in operations3,362
Category6Business travel1,866
Category7Employee commuting3,392
Category12End of life treatment of sold products3,163
Category13Downstream leased assets14,081

*Category 4, 8, 9, 10 are not applicable to our company.

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Realization of a decarbonized society

Initiatives in Company Offices, Business Locations, etc.

Saving and Creating Energy at Construction Centers

At local construction centers, we have installed LED lighting, demand monitoring systems for power consumption, and rooftop solar power generators to promote energy conservation.

Total annual power generation by solar power generators at MIRAIT ONE Corporation offices

image * The scope of aggregation was changed in FY 2021.

Promotion of Energy Conservation and Transition Toward Renewable Energy

To reduce electricity consumption, which accounts for a large portion of energy consumption in offices, the entire Group is working together to promote multifaceted power-saving measures. They include: reducing the number of printers and copy machines, and using them more efficiently; setting PCs to a power-saving mode; optimum indoor temperature control; switching off unnecessary lighting; and raising awareness on using elevators less frequently.

The Group is working to transition to the use of renewable energy in different business locations. In FY 2022, 28% of the energy used in the company building was changed to renewable energy.

Vehicles with better fuel efficiency/reduction of greenhouse gas emissions

In addition to accelerating the conversion to low-emission, fuel-efficient vehicles such as EVs and hybrids, we also use cloud-type drive recorders to promote “eco-driving,” which has a lower environmental impact and helps lower the number of traffic accidents. In addition, we are working to reduce greenhouse gas emissions through better fuel efficiency and company-wide educational campaigns on the use of fuel additives that cut greenhouse gas emissions. In FY 2022, we changed 14% of business-use automobiles to EVs and hybrid automobiles.

image Promoting the use of EVs

Environmental Protection through Business Activities

Focusing on Green Energy Businesses as the Core of Growth Strategy

We aim to realize a decarbonized society by constructing, operating, and maintaining more efficient social infrastructures and advanced energy-related systems as part of our business activities, and by promoting the supply of renewable energy.

We contribute directly to creating energy infrastructure needed for a decarbonized society through environmental and social innovation Business in the Corporate/Environmental and social Infrastructure domain. Specifically, this is performed through the design, construction, operation and maintenance of power generation systems that rely on solar power and other renewable energy sources, installation and maintenance of LED lighting and EV charging systems, supply of energy management and storage battery systems, and the acquisition of the planner certification of ZEB (Net Zero Energy Building). We also take an active part in initiatives toward realizing high-efficiency smart energy systems and smart cities, in addition to developing broadband wireless sensor network systems.

From FY 2023, which is the second year of the 5th Medium-Term Management Plan, we set forth “enhancement of green energy businesses” as one of the important growth strategies, and will make corporate-wide effort on local government PPA, industrial power storage facilities, and inter-system connection businesses, in addition to existing businesses related to solar power generation, EV battery chargers, and rechargers, aiming for net sales of 30 billion yen from these new businesses in FY 2026.

Constructing a Solar Power Generation Plant, As a Green Power Business Operator

We started the construction of a solar power generation plant in Fujinomiya City, Shizuoka Prefecture in September 2022. The plant started operation in March 2023, and started providing power to electricity retailers from April 2023.

This project not only builds and operates power generation facilities as the first green energy business in MIRAI (future) domains, but also significantly enhances our business domain by playing the role of a power generating company to gain lands, develop facilities, and sell power. Moving forward, we will work toward the enhancement of this business based on the technological competence that we cultivated through the construction of telecommunication facilities and total facilities, to solve problems of customers and society and to vitalize local communities.

Enhancement of renewable energy businesses

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image Power generation plant

Constructing Green Water-Supply Facility Robust over Natural Disasters

In Namie-machi, Fukushima Prefecture, the Group has been contributing to the renewal of the town through an EMS (Energy Management System) that bundles renewable energy generated locally by various devices including solar generators, wind generators, hydrogen-fuel cells, and solar heat collectors. From July 2022, the Group also started the construction of a green water-supply facility that is robust against natural disasters by combining solar power generation and secondary cells, and the facility started operation from March 2023. Power is supplied to water-supply machines such as well pumps and water-supply pumps from secondary cells that are charged from solar panels installed on roofs of houses. This water supply facility is also connected to the power grid of power companies, but this is for charging from the grid when power from solar power generation is cut off for a long time. It can continue to operate even in a disaster or power failure in which grid power is not available.

Also, even when solar power systems are not generating power, the system provides power from secondary cells for at least 72 hours, contributing to the safety and security of the local community.

  • image Water-supply facility that combines solar power generation and secondary cells
  • image Secondary cell facility

Commended by a Supplier for Our Secondary Cell Business

In April 2023, MIRAIT-X Corporation, one of group companies, received Customer Service Excellence Award from TESLA for its excellent services in sales and construction that involves Powerwall, TESLA’s secondary cell system.

Moving forward, we will enhance sales in the green energy business by conducting the construction, maintenance, and operation of facilities that use secondary cells and accumulating expertise and know-how in this field.

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Contributing to Circular Society

Contributing to Circular Society

The Group will reduce geoenvironmental impact by properly disposing of industrial waste generated from our business operations on our own responsibilities and by promoting environmental conservation activities in consideration of sustainable use of resources.

Establishing Policy on Disposal of Industrial Waste

In order to translate resource recycling and waste reduction steps into sustainable growth and enhanced corporate value, the Group has established targets on the Industrial waste final disposal ratio for FY 2030 in its 5th Medium-term Management Plan that begins in FY 2022. In July 2022, the “MIRAIT ONE Group Policy on disposal of industrial waste” was established to develop this initiative into effective policies.

KPI of the Fifth Medium-term Management Plan
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FY 2021 FY 2022
2.19% 3.41%

Recycling Construction By-products

We continuously work to minimize construction by-products generated at each construction site and to find ways to recycle by-products that are generated. As part of that effort, we launched an initiative in 2008 in the telecommunications construction industry to transition from conventional, disposable wooden drums for winding steel stranded wire to reusable ECO drums. Today, ECO drums are used for most drum sizes.

image ECO drums

Promoting Recycling of Used Construction Products

We collect used uniforms and helmets to promote recycling through material processing (to be reused as new raw materials).

Reducing Paper Use

MIRAIT ONE Corporation promotes specific measures and initiatives to reduce paper use by using less paper at meetings, eliminating the need to stamp paper documents and reforming business processes.

Green Procurement

The Group promotes green procurement of paper and stationery with a target green procurement rate of 80% to be achieved by the end of FY 2025. The result in FY 2022 was 82.5%.

Environmental Management

Conformance to ISO 14001

Each of our Group companies complies with and practices environmental management system (ISO 14001) (ratio of certified locations: 100%). Each business location evaluates the environmental impact of its operations, formulates measures to address significant environmental impacts, and implements a PDCA cycle for continuous improvement. Over the eight years from 2015 to 2022, our Group companies in Japan have reported zero cases of the violation of environmental laws and regulations, accidents/pollution that leads to environmental problems, or complaints about environmental problems.

In PDCA of these environmental protection activities, the actual values of our main performance indicators (CO2 emission, electricity consumption, consumption of fuels such as gasoline and kerosene, emission of paper waste, household waste and industrial waste, and green purchasing payments) are utilized for monitoring and analysis. In summer and winter, when electricity consumption increases, each workplace implements its own targets to reduce power consumption based on the actual values of performance indicators.

Green Development Guidelines

In FY 2017, the Group established the “Green Product Development Guidelines,” which outline the items to be considered in the development stages to protect the global environment.In the development of construction methods, products and services, we comply with relevant laws and regulations and take into account the environmental impact throughout the life cycle.

Environmental Standards for Evaluating and Selecting Business Partners

As part of our integrated management system, we evaluate and select our business partners in order to ensure their compliance with our product requirements by determining whether they are capable of supplying products and services that satisfy our requirements. Specifically, suppliers whose transaction value exceeds the predetermined amount are evaluated based on the Supplier Evaluation Criteria Table, which is shared across the Company.

The evaluation items include items related to quality, deadline, and management, as well as items dedicated to the environmental area (E) of ESG, such as ISO 14001 certification and efforts to reduce environmental impact.

Items subject to supplier score evaluation

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Initiative for Water Resources

Contribution to the Reduction of Water Risks and Effective Use of Water Resources

The Group considers water risks as significant as climate change risks, and is working to provide various solutions centering around the maintenance and construction of water infrastructures. The Group considers these efforts as examples of business-based contribution for the reduction of water risks and effective use of water resources.

Providing DX Promotion Solution for Water and Sewerage Construction

There is a global rise in the importance of measures against water risks and the effective use of water resources, and also there are serious domestic problems of the aging of social infrastructures and the decrease of working population. Under these circumstances, the Group conducts water engineering business of several billion yen every year to support stable and continuous operation of water infrastructures and the effective use of water resources.

In September 2022, the Group started providing water DX solutions that include the deterioration diagnosis, construction, and maintenance of water pipes using data and ICT technologies, based on customer needs and lessons that we have learned through our water business. Through the eight solutions described below, the Group provides environmental values related to water resources, as well as social values through operation streamlining.

(1) Solution for deterioration prediction, impact evaluation, and planning of water pipe renewal
The solution estimates breakage risks and deterioration conditions by algorithms of AI and machine learning that use customers’ data of water pipe path facilities and water leak records. The solution provides a map display of business risks that would be caused by water leak, and automatically creates action plans in consideration of costs.

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(2) Solution for water pipe construction management (photoruction water)
We provide functions specialized for water pipe construction. It is possible to improve the efficiency of construction management tasks using ICT technology.

(3) Water-supply smart meter solution
The solution automatically sends flow data by wireless communication. Automatic meter reading, water leak detection, and real-time water flow display are possible without service personnel visiting different sites.

image Automatic meter reading and water leak detection

(4) Solution for water pipe bridge inspection using drones
This solution contributes to the prevention of water leak and pipe breakage caused by the aging of water-supply facilities using drones and ICT technology.

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AI is used to analyze data and infrared camera images captured by drones to detect rust and concrete cracks.

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(5) Water quality inspection
The use of drones facilitates the inspection of water quality and alga in reservoirs conducted as environment conservation measures. The alga propagation status is checked by the analysis of image captured by a spectrum camera.

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(6) Water and civil engineering
(7) Construction of water purification plant

We will propose the effective construction and renewal of water-supply facilities using data obtained by the above solutions.

(8) Solution for monitoring, operation, and maintenance of facilities
We respond to the needs for full outsourcing of the operation and maintenance of facilities by our 24-7 support system after they are deployed.

Contribution to resilient urban and regional development

Minimizing the Impact of Disasters and Accidents

The MIRAIT ONE Group contributes to sustainable urban and regional development through the construction of eco-friendly and resilient social infrastructure by leveraging the Group’s technologies in a wide range of areas including IoT, 5G, ICT, and energy systems.

We recognize the important role the Group plays in recovery response, especially in the event of a disaster or accident, as a safeguard for the communications and network environment. We have conducted recovery activities for communication infrastructure in various regions that sustained damage from torrential rains in August 2021, Typhoon No. 10 in September 2020, and Typhoons No. 15 and No. 19 in September and October 2019.

Creating Information and Communication Infrastructures That Can Withstand Natural Disasters

The proper functioning of information and communication networks is an integral element in people’s lives and industrial and economic activities. The MIRAIT ONE Group has emphasized its consistent commitment to the construction and operation of information and communication infrastructures that can withstand natural disasters, including wind and flood damage, and earthquakes.

An example is our focus on the initiative to lay power lines underground to eliminate utility poles that can be damaged or knocked down by earthquakes and typhoons. A landmark project of MIRAIT ONE Corporation involves the construction of underground power lines to eliminate utility poles in Ponto-cho, a signature scenic area in Kyoto. In consideration of the narrow roads in the area, a new construction method (small box method) was adopted for the first time in Japan. Officials from many municipalities, including the Tokyo Metro-politan Government, have visited the site to witness the new construction method that requires less cost and a shorter construction period than conventional methods.

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Given the low proportion of underground power lines in Japan, the potential for business chances in this domain remains high (see the graph below). We will continue to capture growth opportunities by creating information and communication infrastructures that can withstand natural disasters.

Proportion of underground power lines in the world

image Source: Compiled by MIRAIT ONE Corporation based on data provided by the Ministry of Land, Infrastructure, Transport and Tourism.

Disaster Response Using Drone Technology

Leveraging its experience in infrastructure maintenance and disaster response using drones, the MIRAIT ONE Group launched, in October 2021, services for water pipeline bridge inspection offered by MiratecDrone. The services are designed to deal with the increasing number of water leakage and damage accidents resulting from the aging of water facilities. The services materialized following a demonstration test conducted in collaboration with the Sakai City Waterworks and Sewerage Bureau in February 2020. The parties have promoted the practical application of this technology after the test revealed that drones can accurately identify cracks on the pipe exterior surface, peeling paint, rust conditions, cracks in concrete on bridges and other anomalies.

image Inspecting a water pipe bridge using drone

In December 2021, the company signed the “Agreement on Emergency Disaster Response Activities Using Unmanned Aircraft (photography, etc.)” with the Ministry of Land, Infrastructure, Transport and Tourism. Based on an agreement signed between the MLIT’s Omiya National Highway Office and seven companies including our company, drones will be mobilized immediately when an earthquake beyond intensity 6 lower strikes in the 23 Tokyo wards. Drones are used to assess damage on the assigned routes to aid road restoration and early recovery of damaged facilities. Their aim is to enable a swift response using drones in the event of an earthquake that hits the Tokyo metropolitan area directly.

Also, in March 2022, our company and MiratecDrone conducted a drone survey exercise with Tokyo's Koto Ward to assess damage to civil engineering facilities in the ward in the event of a disaster. The exercise is based on the “Agreement on Cooperation for Assistance Using Unmanned Aircraft in Times of Disaster” signed with Koto Ward in July 2020. In the event of a large-scale disaster, our company, along with MiratecDrone, will immediately mobilize drones at the request of the ward to inspect roads, bridges and other civil engineering facilities in the ward to quickly assess the extent of damage.

  • image Exercise in action
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Biodiversity Preservation Initiatives

Based on its materiality theme, “Contribution to environmentally-friendly urban and regional development,” the Group makes effort not only in business but also in social contribution activities such as volunteerism toward the realization of sustainable society that is mindful of biodiversity including the preservation of the ecosystem.

MIRAIT ONE MAI Initiatives

Our group is involved in a project by our partner company MURAYAMA CONSTRUCTION CO,LTD., which aims to preserve the ecosystem, shift to environmentally friendly agriculture, deal with the increase in abandoned farmland, and preserve the original landscape of Satoyama. In a show of support, employees of our Group have helped out with some of the farm work as volunteers.

In FY 2023, employees and their families, as well as our President and CEO, participated as volunteers in planting and harvesting rice.

The harvested rice is used as “MIRAIT ONE MAI” to support activities to “protect rice terraces.”

We will continue to contribute to nature conservation and biodiversity preservation.

  • image Rice planting work
  • image Sun-drying work
  • image Rice harvesting work
  • image MIRAIT ONE MAI