4948 Tokyo Gas Group CSR Report 2016

Level-specific training and made-to-order training tailored to

individual companies’ and departments’ circumstances are provided

to raise compliance awareness throughout the Group.

The business environment faced by the Group is changing in

all kinds of ways. Legislation is being revised and enforced more

strictly, while the total energy business is evolving and global

business development accelerating. To ensure that all our employees

are capable of responding appropriately to these developments

occurring both within and outside the Group, we gather information

on compliance, share it internally, and provide relevant training.

In fiscal 2015, about 620 Group employees received training on

topics including the Antimonopoly Act, the Act against Unjustifiable

Premiums and Misleading Representations, and the Subcontract

Proceeds Act.

FY2015 State of Implementation

Breakdown Overview Participants

Workplace workshopsTraining at the individual workplace level led by compliance promoters 23,745

Made-to-order training

Training requested by individual companies and departments 2,634

Legal compliance training

Training in complying with legal revisions and stricter enforcement About 620

Basic Policy

To ascertain the effects of compliance promotion activities, Tokyo

Gas conducts yearly surveys of all employees, including those at our

subsidiaries and affiliates. In order to reflect the outcome of these

surveys in our future activities, in January 2016 we provided feedback

on the survey results and the nature of the actions we are taking in

response to those results to our compliance promoters. Feedback

was furthered delivered individually to subsidiaries and affiliates in

February and March, and the survey results and information on our

response have also been shared with the employees of Tokyo Gas

and its subsidiaries and affiliates through publication on our intranet.

In addition, the Internal Audit Department regularly conducts audits

of Tokyo Gas and its subsidiaries and affiliates focusing on the

seriousness of risks and the probability of their materialization from

the perspective of legislation related to the audited unit’s operations,

as well as corporate ethics and social norms.

Tokyo Gas is duty bound as a public utility to prevent the leakage of

customer and other confidential information and the manipulation

and destruction of data on its computer systems.

Tokyo Gas Group has established PDCA cycles and is stepping up

action to ensure information security in the face of changes in the

environment, including increasingly sophisticated use of the Internet

and the growing threat posed by cyber-attacks.

Information security promotion systems have been set up in all

divisions and departments with the aim of preventing information

security incidents (such as leaks of confidential information and

the destruction or falsification of data on computer systems) and

minimizing the damage and impact in the event that an incident

should occur. On the technology front, we have reinforced

information security by deploying multilayered defenses, including

hardware to protect against unauthorized access from external

networks and systems to detect and remove computer viruses. On

the personnel front, we have made organizational arrangements to

promote information security, and are also providing education in

information security and on performing self-checks. We will continue

to take action to enable employees at Tokyo Gas, our subsidiaries and

affiliates, and Tokyo Gas LIFEVAL to improve their own information

security standards.

The Tokyo Gas Group is committed to being a sound business

group whose executives’ and employees’ observance of high ethical

standards as well as laws and regulations earn it the trust of society.

To this end it seeks to improve compliance through the following

three approaches.

The Management Ethics Committee chaired by the President

meets twice a year to monitor the handling of concerns and

inquiries received by our compliance advisory service desks and

the extent to which compliance awareness has taken root, to

confirm the findings of compliance audits and other reviews, and

to discuss and decide on future activities.

1. Fostering of a compliance oriented mentality

We aim to establish values and a corporate culture in which each

executive and employee practices compliance-based decision-

making and actions.

2. Compliance efforts by each business department based on the

basic policies

Under the basic policies formulated by the Management Ethics

Committee, each business department of our group takes

specific and independent approaches closely connected to each

operation.

3. Establishment of the compliance PDCA cycle

In order to execute business activities in a flexible and consistent

manner in accordance with changes in operations or the legal

environment, we have established a PDCA cycle that enables us

to review our operations from the perspective of compliance and

improve them.

The Compliance Department, serving as secretariat to the

committee, conducts activities in each unit, including development

of compliance promotion systems, training and activities to raise

awareness, reduction of compliance risks, operation of compliance

advisory service desks, and distribution of information within the

Group.

■ Putting compliance into practiceOver 300 management-level personnel have been appointed

“compliance officers” and “compliance promoters” at each

workplace to lead action to promote concrete compliance activities,

and information is shared through the Compliance Promotion

Liaison Committee in order to stimulate greater action to promote

compliance. In order to promote compliance by Tokyo Gas LIFEVAL,

which provides services for Tokyo Gas Group at the local level, we

send out instructors to deliver training, provide workshop tools

tailored to the conditions faced by each company and help them to

implement PDCA cycles. Parallel with these activities, the Tokyo Gas

Merchandisers Organization (TOMOS) has established a “TOMOS

Charter of Conduct” in accordance with Our Code of Conduct in order

to align its compliance practices with those of Tokyo Gas.

■ Compliance advisory service desksTokyo Gas has established compliance advisory service desks

both internally (in the Compliance Department) and externally (at

law firms), and has expanded their coverage to include suppliers

and customers as well as Tokyo Gas Group members. All who use

these services are assured of their privacy and freedom from unfair

treatment as a result of having used them. Subsidiaries, affiliates, and

Tokyo Gas LIFEVAL also have their own advisory service desks, and

through the effective operation of these desks we are endeavoring

to ensure that compliance-related problems are discovered and

resolved quickly so that our corporate self-regulatory processes can

continue to function effectively.

In fiscal 2015, the compliance advisory service desks dealt with 52

cases, including cases concerning internal rules and cases concerning

relations in the workplace.

Education and Training

Compliance Promotion Structure (as of April 1, 2016)

Report

Report

Support/ReportInstruct/Report

Report/Consult

Consult/Inform

Compliance Audit

Report

Report/Consult

Management Ethics Committee

President

Board of Directors

Internal Audit Dept.

Audit and Supervisory Board Members

Compliance Dept.

Compliance Committee

Subsidiaries and Affiliates/Tokyo Gas LIFEVAL

Employees

Each Tokyo Gas Department

Each Unit

Chairperson: PresidentMembers: Division Executive Officers, Related General Managers

Our Code of ConductWe are taking ongoing action to ensure our employees

understand and practice Our Code of Conduct that

explains the values and decision-making standards that

all executives and employees are expected to share.

Learning from Cases! Collected StatutesThis guide takes a case study approach to explaining

legal issues that might arise in personnel management

and in routine dealings with customers. It is designed

for use by Tokyo Gas LIFEVAL members and other fi eld

managers.

Compliance Promotion Structure

We will practice fair and transparent management following PDCA cycles designed to strengthen Tokyo Gas Group’s compliance.

Highlights of Key Activities

Information Security

Verification and Audit of Penetration of Compliance

A training session on the Antimonopoly Act

Promotion of Compliance ｜ Permeation and Rigorous Practice of Compliance

5150 Tokyo Gas Group CSR Report 2016

Tokyo Gas Group collects and utilizes a vast amount of personal

information, including information on over 11 million customers. We

established a company-wide system for maintaining secure control of

personal information ahead of the full entry into effect of the Act on

the Protection of Personal Information on April 1, 2005. We have also

developed our own in-house rules and manuals to meet requirements

under this law and have implemented awareness-raising activities for

all group employees. Since the law took effect, personal information

protection audits have been performed by the Internal Audit

Department in addition to self-checks in order to confirm compliance

with the Act on the Protection of Personal Information and other

relevant laws, ordinances, and guidelines, and to assess compliance

with Tokyo Gas’s own privacy policy and internal regulations.

Awareness is continuously enhanced by educating our employees

in the protection of personal information when they join the

company, in their third year with us, whenever they are promoted,

and on other appropriate occasions. As part of our information

security education, we help employees improve their knowledge

of protection of personal information through annual e-learning

courses.

We will be ramping up our efforts to ensure secure management

of personal information in order to keep pace with our entry into the

electricity retail business.

We recognize that properly protecting and handling personal

information is the foundation of its business activities and an

important social responsibility. To assist its fulfillment of these

responsibilities, Tokyo Gas has established the following policies

under which the company makes its best efforts to protect personal

information.

Privacy Policy

1 Observing laws

In addition to observing all applicable laws and regulations

governing the protection of personal information and all relevant

laws, regulations, and guidelines, Tokyo Gas establishes its

company policy and internal rules for the protection of personal

information, and strives to improve them.

2 Managing personal information

Tokyo Gas takes necessary actions under relevant laws,

regulations and guidelines and properly manages personal

information in order to prevent any loss or leakage of or

unauthorized changes to said information. In addition, a person

responsible for the protection of personal information is assigned

at each workplace to educate and monitor employees in relation

to this issue.

3 Obtaining and using personal information

Tokyo Gas obtains personal information in appropriate ways in

order to properly and smoothly carry out its business activities.

When obtaining such information, Tokyo Gas informs the

person concerned in advance of the purpose of use of his or her

information, and uses said information only within the scope

necessary to achieve this purpose.

4 Providing personal information to third parties

Tokyo Gas does not provide personal information to any third

party without obtaining the agreement of the person involved,

except when allowed to do so under relevant laws, regulations

or guidelines, and in certain cases where, for example, parties

receiving the entrusted information are not deemed by law to

be third parties. When providing personal information to, for

example, an entrustee, Tokyo Gas selects a party that can meet

and fulfill the necessary standards and obligations for managing

personal information, makes appropriate arrangements for the

protection of the personal information, and exercises monitoring

over said party.

5 Disclosure, correction, etc. of personal information

When a person seeks to, for example, disclose or correct his or

her personal information, Tokyo Gas endeavors to respond to the

request promptly, within reasonable limits under relevant laws

and guidelines, after confirming the person's identity.

Secure Control of Personal Information

We recognize that properly protecting and handling the personal information of our more than 11 million customers is an

important social responsibility, and we will practice secure control of such information in accordance with our policy to protect

personal information.

Basic Principles

Let’s use properly in accordance with the rules: A Guide for Protecting Personal InformationThis practical commentary on the Act on Protection of Personal Information is distributed to employees of Tokyo Gas, its subsidiaries and affiliates, and Tokyo Gas LIFEVAL to ensure that they properly understand and practice protection of personal information.

Promotion of Compliance ｜ Prevention of Bribery and Corruption

Highlights of Key Activities

Promotion of Compliance ｜ Protection of Personal Information

Highlights of Key Activities

Bribery and corruption not only harm society’s trust in a company,

but can also impede economic growth in developing countries

themselves and lead to poverty and other problems of international

concern. To prevent this, Tokyo Gas requires in Our Code of Conduct

that “we will maintain fair relations and do nothing questionable

under applicable laws and ordinances.” To keep pace with our

globalization in accordance with the goals set forth in the Challenge

2020 Vision, we introduced “Foreign Public Official Anti-Bribery and

Corruption Guidelines” in April 2015 that outline the basic policies to

be followed in order to ensure that business is pursued in a fair and

transparent manner and in accordance with high ethical standards,

overseas in the international community as well as in Japan. These

guidelines declare that even acts expected to create opportunities for

business growth and profit are prohibited if they infringe our basic

policies.

Outline of the Foreign Public Official Anti-Bribery and Corruption

Guidelines

Guidelines for action

● Bribery and corruption of foreign public officials and other

individuals and spending on facilitation payments to foreign public

officials and other individuals are prohibited.

● The provision of inappropriate hospitality, gifts, donations, and

the like is prohibited. All hospitality, gifts, donations, and the like

made to foreign public officials and other individuals must first be

approved by the procedure described in the guidelines, and must

be accurately accounted for in a timely manner.

● To prevent the bribery and corruption of agents, consultants,

and similar third parties, due diligence must be performed before

appointing them, clauses prohibiting bribery and corruption

must be incorporated into their contracts, and other appropriate

measures must be taken. The same applies to M&As with foreign

firms.

The guidelines are promoted with the chief compliance officer serving

as the executive officer with chief responsibility for the prevention

of overseas bribery and corruption. Supervisors responsible for

implementing measures to prevent bribery and corruption overseas

are appointed in every department and company in the Group and

are responsible for the approval of hospitality, gifts, and donations,

confirmation of due diligence findings when appointing third parties,

approval of entry into contracts, and similar matters.

Tokyo Gas Group provides training for all those primarily involved

with business overseas to ensure that they understand and follow

the guidelines properly. In fiscal 2015, 235 personnel received this

training. We have also produced an English-language version of

the guidelines for locally hired employees, and have distributed the

English edition of Our Code of Conduct (see p. 49) to ensure that

everyone understands its content. We also have established a system

for overseas local employees to report incidents and seek advice

on these issues. We follow PDCA cycles to ensure that bribery and

corruption are being prevented by conducting regular internal audits

and other reviews to confirm that the procedures established by the

guidelines are being followed.

Effective Application of the Guidelines to Prevent Bribery and Corruption

Operating Structure

A training session in progress

As one means of addressing the risks that arise as we expand our operations overseas, we will take action to prevent the bribing of

foreign public officials and other individuals, and ensure that business is conducted in a fair and trustworthy manner.

Basic Principles