Medium-Term Management Plan 2023

In March 2021, the Daigas Group formulated and announced the “Daigas Group Medium-Term Management Plan 2023 ‘Creating Value for a Sustainable Future’” that covers the three years from FY2022.3 to FY2024.3. Under the Medium-Term Management Plan 2023, we have committed to creating “value for a sustainable future” with our stakeholders and achieving further growth as a corporate group that provides value that contributes to solving social issues in order to realize a sustainable society.

Under the Medium-Term Management Plan 2023, we strive to build up momentum for a further growth of our business as a corporate group that provides solutions to achieving a sustainable society, focusing on creating value for a sustainable future with our stakeholders.

We aim to enhance our earning capabilities through growth of our existing business and growth by investment and to ensure shareholder returns depending on our profit growth while maintaining our financial soundness. We also strive to achieve growth in each of our business segments, which are Domestic Energy, International Energy, and Life & Business Solutions.

We aim to achieve proper capital allocation to secure sufficient funds for investment and shareholder returns while minimizing external borrowing by enhancing our capabilities to increase cash flows from operational activities as well as replacing our assets.

In March 2021, the Daigas Group announced the Daigas Group Medium-Term Management Plan 2023: Creating Value for a Sustainable Future.

In formulating the medium-term management plan, the Group newly identified important aspects (materiality). In identifying materiality, the Group held discussions with the relevant organizations within the Group and extracted medium- to long-term items with an impact on society and the environment, followed by items with future financial impacts on the Group, based on changes in the business environment and social trends related to sustainability. After considering the impacts of each item, material issues concerning the impact on society and the environment were identified with reference to the opinions of outside experts. Based on these processes, the Group’s medium-term management plan advocates “creating value for a sustainable future” as it positions the pursuit of value creation for solving social issues and achieving it together with stakeholders as one of its priority strategies.

At the same time, the Group will strive to accelerate ESG management by revising the Group Charter and Code of Conduct and conducting business management that embraces its corporate philosophy system, medium-term management plan, materiality, and key performance indicators (KPIs).

In response to the growing social need for measures against global warming, the Daigas Group aims to become carbon neutral by 2050 by decarbonizing the raw materials of city gas through methanation using renewable energy and hydrogen and by decarbonizing power sources through introduction of renewable energy, in addition to the conventional efforts to expand the use of natural gas.

A lot of time and social cost will be required to achieve technological innovation for realizing carbon neutrality. Thus, it is essential to reliably reduce CO2 emissions until such technological innovation is attained. In the meantime, the Daigas Group set the following targets for 2030 as the milestones for the Group’s contribution to the reduction of CO2 emissions throughout society.

Materiality indicators, management approach and evaluation, and major actions are reported in the “Actions on Materiality” section.

Materiality indicators, management approach and evaluation, and major actions are reported in the “Actions on Materiality” section.

Materiality indicators, management approach and evaluation, and major actions are reported in the “Actions on Materiality” section.

We plan to evolve into a group of enterprises with a robust business portfolio by promoting each business unit’s autonomous growth and optimally allocating resources throughout the Group. We strive to improve our business portfolio management and governance while enhancing profit earning capabilities of each business unit by introducing ROIC.

In order to create value for a sustainable future, we need the growth of earnings and capital efficiency of each business unit and a robust portfolio comprising those businesses. Under CVS 2023, we are improving our business management through the introduction of ROIC as a new management indicator, with the aim of boosting the earning capabilities of each business unit with more focus on the balance sheet.

At the same time, we are increasing the business control functions of each business unit, which enhances their flexibility and agility in business operations. We are also introducing more frequent review of our business plan and resource allocation at the group headquarters. These measures are efficiently improving the robustness of our business portfolio while enabling it to quickly adapt to change.

We aim to be a corporate group that can keep on changing to continue providing value amid rapid change in society and the working environment as well as changes in customer values. We will proactively leverage digital technology, which is progressing rapidly, for our business, and accelerate innovative service creation, data management evolution, and operational process innovation. We have launched the DX Strategy Department in the Corporate Planning Headquarters for implementing effective and swift digital transformation under the leadership of top management.

We will change our business operations to enable them to respond rapidly and flexibly to any changes to enhance productivity dramatically to create value sustainably for realizing the Medium-Term Management Plan 2023 and the Long-Term Management Vision 2030. In the new age in which both our customers and services rapidly change, we will aim for transformation of the business itself and for innovation as a corporate group that can keep on changing by revising constantly and flexibly our business model, operations, rules, and systems that used to be taken for granted. In order to make a major transformation to realize our vision, we will work on building a promotion system driven by top management, strengthening human resources development, demonstrating the comprehensive strength of the Daigas Group including OGIS-RI Co., Ltd., and building alliances with our partner companies.

We will offer various services with higher value by incorporating trends and the diverse needs of customers without delay. This does not only refer to the development of new businesses and new services, but also leads to increasing sophistication in existing businesses, resulting in an increase in customer accounts, business opportunities, and net sales as well as raising business operations to the next level. In rapidly changing times, it is important to “accelerate the trial and error cycle”. We will acquire skills through practice, innovate the system itself and foster customs and mindsets across the entire Group, which enable the Group to move forward with new initiatives aggressively and quickly.

The Group has been leading efforts to utilize data, placing “Business Analysis Center” at its core. In the future, utilizing valuable assets such as data as our strengths is the key to value creation and growth strengths. For example, if we can catch customer’s needs from data, we can offer services optimized for each customer. We will continue to create new value in customer experiences and our supply chain by developing our initiatives in the past and evolving data management further.

We will thoroughly review our internal operations from “the perspective of customers,” not from an internal point of view. We will also focus on merging and abolishing operations as well as standardizing and aggregating different procedural operations among organizations to broadly redesign the entire operational process. Furthermore, the workload for remaining operations will be reduced with digital technologies such as AI and RPA. Through these transformations, Group employees will be able to generate extra power to work on more nonroutine and discretionary operations as well as operations that require higher expertise and judgment in a pleasant working environment. This will allow employees to devote more energy to providing better value to customers.

We will enhance programs in sequence by leveraging the knowledge on the development of human resources that can utilize data, an effort that we have been making proactively for years while accumulating expertise on creating innovative services and drastic transformation on operational processes. In addition, we will provide a wide range of experience and practical chances for employees of various ages and positions, including “TORCH,” a program for new business creation for young employees, training schemes for executives and manager-level employees and new business development collaborated with venture capitals. Furthermore, we will help employees grow by providing them feedback on upskilling through these programs.

The Daigas Group is committed to promoting diversity, equal opportunity, and inclusion in the organization in order to be a corporate group with diverse talent that continues creating new types of value.

We aim to be a group of enterprises that provide a work environment that values uniqueness of each employee, tolerates no discrimination, acknowledges employee diversity including gender, age, physical disabilities, nationalities, form of employment, lifestyles^*1, religions, sexual orientation^*2, and gender identity^*3.

We provide support in realizing highly productive way of working and suitable work-life balance for each employee as a basis for them to pursue their career opportunities.

Materiality indicators, management approach and evaluation, and major actions are reported in the “Actions on Materiality” section.