SDGs Contribution Sales(SLGB)

The Management Credo of Takamatsu Construction Group is "we conduct the construction business as a mutually complimentary activity vital to society".
We shall take full responsibility to construct buildings that are safe and useful to society. It is our duty to create better relationships and pursue social responsibility with our clients, business partners and employees, as well as our country, local societies, nature and global environment.

With greater expectations towards social contribution by corporate members, Takamatsu Construction Group will respond positively towards "Environment, Social and Governance" issues by each of our Group companies striving to maximize our professional fields of business and our corporate value.

SDGs Contribution Sales

In April 2019, our new Mid Term Plan "Create! 2022" was launched. In this "Create! 2022", we started to disclose "How much of the Group's revenue correspond to the 17 goals set by SDGs" as "SDGs Contribution Revenue". For FY Mar 2019, "SDGs Contribution Revenue" accounted for 25% of the Group's total revenue. We believe that initiatives for the SDGs are indispensable for the long-term growth of the Group, and we will continue to expand businesses that are compliant with the SDGs.

Notice regarding issuance of Straight Bonds (the first series) and Sustainability-Linked Green Bonds (the second series)

(*) About the target of 391.1 billion yen
In the past three fiscal years (FY Mar 2018 to FY Mar 2020), SDGs contribution revenue was an average of 92.7 billion yen per fiscal year. We have set targets for each fiscal year in order to improve on the past average results by 1.52% annually and achieve SDGs contribution revenue of 100.0 billion yen in FY Mar 2025. Since results may fluctuate from year to year, we assumed that SPTs will be the cumulative total of the next four fiscal years.

(1) Environment

1)Promote renewable energy
Civil engineering revenue directly linked to renewable energy
2)Ecological materials and methods
Construction revenue earned using ecological materials and methods

(2) Social

1)Provide safe residential buildings with a long life expectancy
Architectures with its strength exceeding Buildings Standards Act by more than 15%
2)Sustain safe, comfortable & high-quality living standards
Large-scale building renovation
3)Succession of traditional architecture culture/buried cultual property
4)Housing services for the elderly
operating of elderly housing with services

(3) . Revenue related to other technologies similar to (1) and (2) above that are acquired by TCG Group in connection with new business start-ups, technology development, mergers and other acquisitions.

In March 2021, we issued Japan's first SLGB (Sustainability-Linked Green Bonds), a combination of a Sustainability Linked Bond and a Green Bond.
We have set a target of sales corresponding to the 17 goals of the SDGs (SDG contribution sales), and will use all proceeds to construct the new Tokyo Head Office Building, the Group's Tokyo base building, which has excellent environmental performance.

Sustainability Linked Bonds (SLB)

SLB are bonds whose terms and conditions vary depending on whether or not they achieve predetermined Environment/ESG targets. Therefore, the funds raised need not be limited to a specific use of funds. SLB are assessed by key performance indicators (KPI) and SPTs predetermined by the issuer. A bond in which SPT is set as target values to be achieved with respect to KPI, and the terms of the bond change depending on whether the KPI achieve the SPT, thereby motivating the issuer to achieve the SPTs.

Green Bonds

A bond that conforms to the Green Bond Principles set forth by the International Capital Market Association (ICMA) and the 2020 edition of the Ministry of the Environment's Green Bond Guidelines, and is issued to raise funds for projects that contribute to solving environmental problems, i.e., "green projects".

SLGB

A sustainability-linked bond in which all the funds raised are used for green projects.

Third party assessment of conformity

In order to issue Sustainability-Linked Green Bonds, TCG has received confirmation from Japan Credit Rating Agency, Ltd. ("JCR") regarding its compliance with the "Green Loan and Sustainability-linked Loan Guidelines 2020" of the Ministry of the Environment and the "Sustainability-linked Bond Principles 2020" of the International Capital Market Association ("ICMA").
With regard to the conformity assessment of the Green Bonds, TCG has received a preliminary assessment of "Green1," the highest level of the "JCR Green Bond Assessment," from JCR to the effect that we conform to the "Green Bond Guidelines 2020" of the Ministry of the Environment and the "Green Bond Principles 2018" of ICMA.

Please refer to the news release issued by JCR today for the valuation.

i. JCR Green Finance Framework Assessment (JCR News Release, January 21, 2021)
ii. JCR Green Bond Assessment Third Party Opinion (JCR News Release, March 12, 2021) JCR Sustainable Finance & ESG

Investors that have committed to investing in the Sustainability-Linked Green Bonds

The following is the list of investors that have committed to investing in the SustainabilityLinked Green Bonds as of the date of this announcement.

Project overview

We issued SLGB as a means of financing our new Tokyo Head Office building, which was constructed in Shiba, Minato-ku, Tokyo.

New Tokyo Head Office building