Taisei Group’s Materiality

Review of Materiality

In May 2024, alongside the formulation of the [TAISEI VISION 2030] Achievement Plan and the Medium- to Long-Term Business Plan (2024-2026), we positioned materiality as a high-level concept within our Medium-to Long-Term Business Plan, establishing it as a fundamental principle guiding our business activities. We also revised our materiality in light of the latest sustainability issues, identifying the following five key issues.
To achieve our goals, we are integrating key measures and KPIs related to these material issues into the [TAISEI VISION 2030] Achievement Plan and other initiatives.

  • 1. Co-creation of new value to realize affluent lives
  • 2. Realization of a sustainable, environmentally friendly society
  • 3. Realization of a society and workplace environment where everyone can work lively
  • 4. Integrity and Pride in manufacturing: Safety, Quality, and Technology
  • 5. Fair corporate activities that support trust:Compliance and Governance
Materiality Identification Process

The process for identifying and reviewing material issues is as follows:

  • 1. A working group consisting of the Corporate Planning Devision, the Sustainability Division, and external experts extracted 482 sustainability issues from SDGs, SASB industry-specific materiality maps, and other sources, then consolidated similar issues into 123 items.
  • 2. The working group considered two aspects: the “Impact of the environment and society on corporate activities and corporate finance (risks and opportunities)” and the “Impact of corporate activities on the environment and society (stakeholders) (risks and opportunities),” narrowing down the issues to 15 that are most significant for the Group.
  • 3. Based on management interviews, questionnaires to the Taisei Group employees, questionnaires to our core subcontractors, and opinions of the Corporate Culture Reform Working Group*, five material issues were identified that encompass all relevant aspects.
  • 4. Approved by the Board after prior deliberation by the Management Committee and thorough discussion.

*Corporate Culture Reform Working Group (WG): Working Group members selected through In-house Recruitment fundamentally reviewed value in a job, work styles, atmosphere and custom of the organization and launched the Corporate Culture Reform which build the foundation of "newly born Taisei Group."

We have incorporated each identified material issue into the medium- and long-term business strategies of the [TAISEI VISION 2030] Achievement Plan and the key measures of the Medium-term Business Plan. KPIs have been established in the Medium term Business Plan, and we are working to integrate them with our business strategies. We will continue to review our materiality as necessary, considering changes in the external environment and the opinions and expectations of our stakeholders.

Identification of Evaluation Topics

In the process of reviewing materiality, the working group extracted and consolidated 123 sustainability issues. These issues were quantitatively evaluated and examined based on the importance of “risks and opportunities for the Company” and “risks and opportunities for society.” As a result, 15 key topics that could be significant for the Group were identified.

Identification of Materiality

Based on the results of interviews with management and questionnaires to the Taisei Group employees regarding the 15 selected issues, we aimed to define materiality that encompasses all of these issues. To enhance stakeholders’ understanding of the issues we recognize and the actions we are taking, we limited the number of materiality topics to five and focused on clear and concise descriptions.

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Materiality and KPIs

The five identified material issues have been integrated into the key measures of the [TAISEI VISION 2030] Achievement Plan and the Medium-Term Business Plan (2024-2026). We have established the following KPIs and targets for each material issue and are actively working to address sustainability challenges.
The Corporate Planning Division and the Sustainability Division monitor the progress of these initiatives and regularly report to the Sustainability Promotion Committee. If there is a risk of not achieving the KPI, the causes are analyzed, and corrective actions are taken to ensure achievement. These conditions are reviewed in advance by the Management Committee and the Sustainability Committee and regularly monitored by the Board.

Materiality and KPIs (results)

Materiality What We Should Aim For Sustainability Issues
Issue for Clients / Society

Co-creation of new value
to realize affluent lives
  • To provide new values beyond our clients’ imaginations by incorporating the social values required in the future into community development and infrastructure development through internal and external collaboration as well as open innovation.
  • Natural disaster
  • Community development and infrastructure
  • Economic growth and increased demand for infrastructure in emerging countries
Issue for the Environment

Realization of a sustainable,
environmentally friendly society
  • To contribute to the realization of a sustainable and environmentally friendly society through our business by developing and promoting environmental technologies and services while recognizing the impacts of our business activities on and from the environment, and complying with environmental laws and regulations.
  • Natural disaster
  • Carbon neutral (Decarbonized Society)
    • • Climate change
    • • Transition to renewable energy
  • Circular economy (Recycling Oriented Society)
  • Nature positive (Nature Co-Existing Society)
Issue for Employees / Suppliers

Realization of a society and
workplace environment where
everyone can work lively
  • To create an environment where everyone involved in the Group’s business, including the employees in the Group and suppliers, can maximize their abilities in accordance with their own career plans.
  • To respect the human rights of everyone involved in the Group’s business.
  • Securing and utilizing diverse human capital
  • Supply chain management
  • Productivity, working environment,
    and well-being
Integrity and pride in manufacturing:
Safety, Quality, and Technology
  • To strive consistently to further improve our abilities, recognizing again that safety, quality, and technology are the starting points for customer satisfaction and the solution of social issues.
  • Occupational health and safety
  • Quality
  • Technology development / DX
Fair corporate activities
that support trust:
Compliance and Governance
  • To thoroughly ensure compliance in order to increase our stakeholders’ trust, and to maintain a governance system to maximize corporate value and prevent damage.
  • Governance, compliance,
    and risk management
Major KPIs and Targets
  FY2023 Results FY2026 Targets FY2030 Targets
Number of regional collaboration projects 9 cases 15 cases 50 cases
ZEB ratio of design and build projects (ratio by area)*1 40% 70% 100%
Customer satisfaction Building Construction 82.8%

Civil Engineering 98.3%		 Building Construction 100%

Civil Engineering 100%		 Building Construction 100%

Civil Engineering 100%
Total CO2 emissions and reduction rate (Scope 1 + 2) 290,000 t-CO2*5 -18% compared to FY2022 -42% compared to FY2022
Renewable energy generation capacity 123GWh*6 170GWh 220GWh
Final disposal rate of construction waste 2.8% 3.0% 3.0% or less
Number of projects contributing to Nature Positive 50 cases 50 cases 50 or more cases
Engagement score B 50.2 BBB 55 A 60
Percentage of newly employed female graduates 22% 27% 30%
Percentage of confirmation on supplier’s sustainability activities 54% 100% Group 100%
Implementation rate of 8-day site closure per 4 weeks Building Construction 39.0%

Civil Engineering 69.6%		 Building Construction 100%

Civil Engineering 100%		 Building Construction 100%

Civil Engineering 100%
Number of fatal accidents and serious accidents*2 0 cases 0 cases 0 cases
Number of major quality-related problems*2 0 cases 0 cases 0 cases
Number of major external awards*3 Building Construction 11 awards

Civil Engineering 8 awards		 Building Construction 12 awards

Civil Engineering 6 awards		 —
—
Number of patent applications 837 cases
(3 years total)		 840 cases
(3 years total)		 1,100 cases
(4 years total)
Number of digital advanced usage site offices (Cumulative)*4 290 worksites 650 worksites All worksites
Number of serious compliance violations*2 1 cases 0 cases 0 cases
Number of serious security incidents*2 0 cases 0 cases 0 cases
  • *1Common KPIs for the realization of a sustainable, environmentally friendly society.
  • *2Incidents and accidents that occur in the business activities of the Company that may cause serious loss to the management of the Company and its Group companies.
  • *3Architecture: BCS Award, Annual Architectural Design Commendation of Architectural Institute of Japan, Young Architect Award for Selected Architectural Designs of the Architectural Institute of Japan, Selected Works of the Architectural Institute of Japan, BELCA Award, The Institute of Electrical Installation Engineers Award (technical Category), Japan Illumination Award, Minister of the Environment Awards for Climate Action.
    Civil Engineering: JSCE Awards (Outstanding Civil Engineering Achievement Award, Innovative Technique Award, Tanaka Award), and Japan Federation of Construction Contractors, Doboku Prize.
  • *4Cumulative number of site offices with T-BasisX® and T-iDigital® Field installation.
  • *5Figures are for FY2022.
  • *6Including investment already determined.

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Previous Materiality

Review of Previous KPI: Worksite Implementation Rate of an 8-Day Site Closure per 4 Weeks

The Worksite implementation rate of the 8-day site closure per 4 weeks was a KPI in the Medium-Term Business Plan (2021-2023), with a target of 100% implementation in FY2023. However, we fell significantly short of this target, particularly at construction worksites. Correcting long working hours and securing holidays are important issues not only for the Group but also for the entire construction industry, including the supply chain, and the implementation of the 8-day site closure per 4 weeks is the most effective measure. We will continue to aim for 100% implementation, collaborating with our supply chain to improve productivity and implement efficient construction, including mechanization and automation. We will also collaborate with industry groups to gain clients understanding and work towards achieving this goal.

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