Sustainability

Sustainability

Environmental Conservation

Conservation of the Global Environment

The OPEN HOUSE Group promotes sustainability aiming to contribute to the realization of a sustainable society through our business activities while achieving sustainable corporate growth. We have positioned environmental conservation as one of our material issues. Recognizing that our business activities affect the environment, we will promote initiatives to reduce environmental impact and conserve the environment, both within the Group and throughout our entire value chain.

Approach to Climate Change

Global warming is advancing rapidly due to the increase in greenhouse gas emissions caused by global economic development. As global warming advances, it brings significant impacts to the living environments of humans and other biological life by causing rising sea levels, abnormal weather phenomena, and so forth. We recognize that there is an increasing risk of damage due to abnormal weather in the Group’s business activities as well.
In December 2020, the Japanese government declared a target of achieving virtually zero greenhouse gas emissions by 2050, which has rapidly accelerated decarbonization efforts in Japan.
The Group is also working to share issues and discuss improvement proposals for realizing a decarbonized society, mainly through the Sustainability Committee.

Agreement with the Recommendations of TCFD

In January 2021, the Group declared its agreement with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) to companies for disclosing information regarding risks and opportunities related to climate change. As a member of the TCFD Consortium—a group of Japanese companies that are in agreement with the TCFD—we are working to provide disclosures in line with the TCFD recommendations.

Information Disclosure on Climate Change based on the TCFD Recommendations

1. Governance

The Company recognizes climate change as one of the issues that have a material effect on its management. It positions the Sustainability Committee, chaired by the Managing Director who serves as Division Director of the Corporate Planning Division and composed of division heads, as the body responsible for climate change-related issues. The Sustainability Committee regularly evaluates the Company’s response to various issues related to climate change. Furthermore, the Board of Directors monitors the Sustainability Committee, and reports and deliberates on important policies and matters.

<Operating structure>

2. Strategy

The OPEN HOUSE Group has identified risks and opportunities presented by climate change envisioned for 2030 for its mainstay single-family homes related business. It also analyzed the financial effects based on two scenarios envisioned by the Intergovernmental Panel on Climate Change (“IPCC”) and considered future response policies as follows.

(1) Scenario analysis assumptions (definitions)

(i) 1.5°C scenario(ii) 4°C scenario
Transition riskRisks and opportunities associated with changes in policies, rules, technologies, the market, customer preferences, etc. during the transition period to a low-carbon society.Strict global climate change policies are thoroughly implemented, succeeding in limiting global warming.
As a result, the average temperature in 2050 only rises by 1.5°C compared to before the Industrial Revolution in the 18th century.
Despite various calls for attention to global warming, the world’s nations are unable to cooperate, and strict policies are not introduced.
As a result, global warming progresses further, the average temperature rises by 4°C, and natural disasters become more severe and frequent.
Physical riskThe acute risk such as natural disasters becoming more severe and frequent due to climate change, and the chronic risk such as rising average temperatures and abnormal weather.

(2) Results of scenario analysis

(i) 1.5°C scenario
In the 1.5°C scenario, the transition risk of introducing a carbon tax and mandating solar panels is seen as the main factor pressuring earnings. However, winning new customers by providing homes with a low environmental impact is an earnings opportunity. In terms of the physical risk, the risk from natural disasters, etc. is negligible. Overall, we have concluded that the financial effects in this scenario are limited.

(ii) 4°C scenario
In the 4°C scenario, we concluded that there is no significant transition risk. In terms of physical risk, the single-family homes related business operated by the OPEN HOUSE Group is a short-flow business. Because of this, by increasing our sensitivity to changes in the external environment such as intensifying natural disasters, we can reduce risks, and have concluded that there are no significant financial effects in this scenario.

<List of risks, opportunities, and financial effects>

Risks and opportunities/ItemsEffectsFinancial effects
1.5℃4℃
Transition risk・Opportunity[Risk]
Carbon tax introduction
Rising procurement costs of materials, etc. from the introduction of the carbon tax
(Rising construction contracting costs)
-
Rising fuel costs for company vehicles from the introduction of the carbon tax-
Rising electricity usage costs from the introduction of the carbon tax-
[Risk]
Mandated installation of solar panels
Rising costs (0% pass-through rate to sale price) from the mandated installation of solar panels (60%)-
[Opportunity]
Rising demand for homes with a low environmental impact
Increased earnings with the provision of homes with a low environmental impact (ZEH Oriented)-
Physical risk[Risk]
Effects of intensifying typhoons and floods
Increased costs due to periods of suspended operations from intensifying typhoons and floods--
Decreased earnings from price decreases in homes under construction from intensifying typhoons and floods
[Risk]
Increased negative health effects from severe heat (heatstroke, etc.)
Increased costs due to reduced productivity of construction workers from severe heat
Decreased earnings from reduced sales efficiency of sales staff from severe heat
[Financial effects key]
/
: absolute value of ¥1 billion or more and less than ¥5 billion
Not applicable
: absolute value of ¥100 million or more and less than ¥1 billion
/
: absolute value of ¥10 million or more and less than ¥100 million
-
: no financial effect, or an absolute value of less than ¥10 million

(3) Future response

As a result of the above analysis, we confirmed that reducing the cost of cutting GHG emissions and mandated solar panel installation is effective in reducing risk and that providing homes with a low environmental impact presents an earnings opportunity.
Furthermore, in reducing GHG emissions, in terms of Scopes 1 and 2*, we expect to achieve our targets mainly by sequentially converting company vehicles to vehicles with a low environmental impact, by reducing energy, and by using renewable energy in the medium to long term. However, the OPEN HOUSE Group has a high ratio of Scope 3* emissions to total emissions, and it recognizes that its response to Scope 3 is important. Scope 3 emissions are mainly made up of GHG emissions from the use of homes after sale and emissions in the supply chain for materials procurement. To reduce Scope 3 emissions in the future, we need to call for the understanding and cooperation of all relevant parties.
On the other hand, regarding the installation of solar panels, even if solar panels are installed in the single-family homes provided at low cost in good locations by the OPEN HOUSE Group’s single-family homes related business, because the size of lots is limited, the amount of power produced by current solar panels will not cover the energy needs of an average home.
Furthermore, regarding the provision of homes with a low environmental impact, for locations that meet set conditions (locations in use districts subject to the north oblique line restriction [Category 1 and 2 low-rise exclusive residential districts and Category 1 and 2 medium-to-high-rise exclusive residential districts] with a total lot area of less than 85 m2), a “ZEH Oriented” category has been established for homes with a low environmental impact that do not require solar panel installation (cutting-edge ZEH-oriented homes with a high level of exterior thermal insulation and high-efficiency, energy-saving equipment). Certain regions in which the OPEN HOUSE Group is operating its single-family homes related business meet the above conditions. However, there are issues that must still be solved for commercialization, including the space and costs currently required to install high-efficiency, energy-saving equipment and the omission of certain heating equipment.
Therefore, while following the trends of government regulations, heightened customer awareness of carbon reduction, technological innovation in solar power generation equipment, etc., we will continue to consider said issues to choose the best methods for all our stakeholders, in view of economic rationality.

3. Risk management (system)

The Sustainability Committee of the Company formulates a basic policy on environmental issues and manages risks created by climate change. The Sustainability Committee identifies the issues facing the OPEN HOUSE Group by following trends in Japan and the world in response to climate change, including exchanging information with external experts. It also discusses the necessary policies with Group companies and operating divisions, and regularly monitors the progress of those policies. The Sustainability Committee also manages the progress of the established GHG emission reduction targets, and continuously considers raising the targets further. The Sustainability Committee regularly reports to the Board of Directors on the climate change issues and the progress of initiatives to address the issues. Through these efforts, the Company has developed a system to respond appropriately to the risks and opportunities presented by climate change, which is expected to further diversify, expand and intensify in the future.

4. Metrics and targets

Based on the results of the scenario analysis, to reduce the risks from climate change, the Company set the medium- to long-term GHG emission reduction targets. In addition to working to achieving Scope 1 and Scope 2 targets in the near term, we will continue to consider setting Scope 3 targets.

(*) Scopes 1, 2, and 3
Scope 1
: emissions from the business activities of covered companies (direct emissions)
Scope 2
: emissions produced from the use of energy provided by other companies (indirect emissions)
Scope 3
: emissions from other business activities (indirect emissions mainly from materials procurement and the use of homes after sale)

Establishment of the Japan Wood-Housing Association

In April 2021, Sanei Architecture Planning Co., Ltd., KI-STAR REAL ESTATE CO., LTD and the OPEN HOUSE Group jointly established the Japan Wood-Housing Association to solve SDG issues.
Through its activities, the association will provide assistance for sustainable developmental cycles for lumber in Japan, comprising cutting, usage, and planting, in order to contribute to the realization of a decarbonized society.

Objectives

  1. Promote high-quality wood houses that people can live in worry-free and achieve the sound development of the industry for wood houses built for sale
  2. By promoting the use of domestic lumber for wood houses built for sale, restore and maintain various functions of domestic forests (reduction of greenhouse gases, cultivation of water sources and conservation of biodiversity)

Activities

  • Support the promotion of domestic lumber usage
  • Technological development and research on wood buildings
  • Research and development to improve the capabilities and quality of wood buildings, and promotion of public awareness
  • Human resource development related to wood buildings
  • Development and research on the supply system of temporary wood housing in the event of a disaster
  • Presentation of proposals and opinions to government agencies and related organizations
  • Other activities necessary to achieve the objectives of the association
  • Activities shall be conducted throughout Japan and overseas

Initiatives to Reduce Greenhouse Gas Emissions

The Group considers that climate change due to greenhouse gas emissions will have a significant impact on the long-term sustainability of society. In addition, we recognize that abnormal weather and natural disasters caused by climate change could pose serious risks to our business activities and growth. We are therefore promoting initiatives on various fronts, such as reducing greenhouse gas emissions associated with business activities and promoting energy-saving in houses.
Our initiatives to reduce greenhouse gas emissions in each business year are as follows.

[Note on calculation data]
Data related to climate change is calculated based on the following.
Subject of the calculation: OPEN HOUSE’s single-family homes related business
Subject period: Fiscal year (October to September each year)

FY2018FY2019FY2020
Share of net sales of the single-family homes
related business among overall business
55.9%63%65.9%

Emissions by Scope (CO2)

[Note on calculation data]
Data related to climate change is calculated based on the following.
Subject of the calculation: OPEN HOUSE’s single-family homes related business
Subject period: Fiscal year (April to March each year)

Unit: tCO2

Scope and CategoryTarget activities for calculationFY2018FY2019FY2020Ratio
Scope 1: Direct emissions of greenhouse gases from business activitiesFuel usage at business sites and of company vehicles6187769830.1%
Scope 2: Indirect emissions of greenhouse gases associated with the use of energy supplied by other companiesElectricity usage at business sites and construction sites1,4451,7701,7620.2%
Scope 1 and 2 total2,0632,5462,7450.3%
Scope 1 and 2 emissions intensity per unit of business site area (tCO2/m2)0.0890.0930.093
Scope 3: Indirect emissions other than Scopes 1 and 2552,739667,188771,62099.6%
Scope 3 emissions intensity per unit of net sales (tCO2/100 million yen)269.1267.3268.5
 Category 1: Purchased goods and servicesPaper, water supply and construction contracted to other companies132,010154,097178,09523.0%
 Category 2: Capital goodsAcquisition of property, plant and equipment1,1951,0041,3230.2%
 Category 3: Fuel- and energy-related activities not included in Scope 1 or Scope 2Fuel and electricity usage3464344920.1%
 Category 4: Upstream transportation and distributionIncluded in Category 1
 Category 5: Waste generated in operationsIndustrial waste generated at construction sites3,0683,3604,8850.6%
 Category 6: Business travelEmployee business trips (air travel, railway travel, taxi and accommodations)128134750.01%
 Category 7: Employee commutingEmployee commuting (train)2262462380.03%
 Category 8: Upstream leased assetsIncluded in Scopes 1 and 2
 Category 9: Downstream transportation and distributionNot applicable
 Category 10: Processing of sold productsNot applicable
 Category 11: Use of sold productsProjected use of electricity and city gas in sold houses over 30 years406,892496,864573,37874.0%
 Category 12: End-of-life treatment of sold productsProjected industrial waste generated upon demolition of sold houses8,87411,04813,1351.7%
 Category 13: Downstream leased assetsNot applicable
 Category 14: FranchisesNot applicable
 Category 15: InvestmentsNot applicable
Scope 1, 2 and 3 total554,802669,734774,366100%

Scope 1 and 2 Emission Amounts and Intensities per Unit of Business Site Area

Scope 3 Emission Amounts and Intensities per Unit of Net Sales

Scope 3 Total Emissions and Breakdown by Category (Fiscal 2019)

Energy Consumption by Type

Unit: GJ

Energy typeFY2018FY2019FY2020
Gasoline9,13911,43014,558
City gas105194148
Electricity28,20935,39936,591
Total37,45447,02351,297

Energy Consumption by Type

Initiatives to Reduce Greenhouse Gas Emissions and Promote Energy-Saving in Products

We use insulation materials in all of our buildings. We aim to reduce the environmental impact of customers living in the houses we supply. To do this, we build houses that have high air conditioning efficiency by insulating all walls, etc. that are in contact with outside air using high-performance glass wool that has superior airtightness and moisture repelling properties to ordinary glass wool, and covering these with semi-fireproof gypsum board and wallpaper.
Moreover, at Open House Architect Co., Ltd., non-fluorocarbon insulation materials are used for all insulation to create houses that take LCCO2* into consideration.
Until now, fluorocarbon gas has been used as a foaming agent to create plastic-foam type insulation material. However, the fluorocarbon gas released in the manufacture, use, and disposal of insulation materials destroyed the ozone layer and had a significant impact on global warming, and its use is now restricted. The substitute fluorocarbon that has been used in its place does not harm the ozone layer; however, it has a powerful greenhouse effect. Therefore, the government has been promoting the use of non-fluorocarbon products.

* LCCO2: The CO2 emission reduction effect over the life cycle of a building. It refers to the total amount of CO2 emissions from the construction to demolition and disposal of a building.

Approach to Promoting Green Certification Acquisition for Buildings

ZEH* Promotion Targets and Results

* ZEH: Net zero energy house

Open House Development Co., Ltd.
Fiscal year201620172018201920202025
Promotion target10%20%30%40%50%50%
Result0%0%0%0%0%

Fiscal year: April of the year to March of the following year

Open House Architect Co., Ltd.
Fiscal year201620172018201920202025
Promotion target2%5%20%40%65%50%
Result0%0%0%0%0%

Fiscal year: April of the year to March of the following year

Group companies Open House Architect and Open House Development are registered ZEH Builders/Planners. Up until fiscal 2018, the houses built by the Group were not ZEHs. However, the Group is now committed to promoting ZEHs.

Compliance with Housing Performance Indication System

The housing performance indication system is designed to allow comparison and consideration of the functions of newly built houses such as earthquake resistance and energy-saving in advance. The system involves objective evaluations of the house by a third-party institution at the design and construction phases according to common rules. The Group makes proposals that comply with the housing performance indication system at customers’ request.

Approach to Water Use

Today, localized torrential rains, flooding, and dryness due to chronic water depletion have become global issues. Going forward, these problems are expected to become increasingly severe due to population growth and climate change.
The Group does not use large quantities of water in its business activities. At this point, we do not consider water risk to be a major concern. However, a certain level of water use is necessary on construction sites.
The Group recognizes that there are concerns over the impacts due to climate change, such as increasing construction costs to counter natural disasters. Furthermore, to enable all people to use clean water sustainably, the Group considers it necessary to take measures to avoid excessive water consumption with regard to water use in the real estate that it supplies.
As a company that provides houses for people to live in, we make efforts to save water at the level of our employees and at our construction sites, as well as through engagement with our supply chains. In addition, we make efforts to improve efficiency so that we can reduce our water-related impact.

Water Usage

At single-family home construction sites, the majority of water usage is for foundation and ground improvement work. We expect an increase in our water usage proportionate to the increase in houses constructed as we grow. Looking ahead, we will continue to manage the amount of water usage on construction sites, being mindful to save water.

FY2018FY2019
Water usage (m3)24,23928,326
Number of houses delivered3,8814,754
Water usage per house (m3)6.245.95

[Note on calculation data]
Subject of the calculation: Clean water usage at construction sites of single-family homes
Subject fiscal year: April to March

Water Risk Assessments

The OPEN HOUSE Group uses the Aqueduct assessment tool developed by the World Resources Institute (WRI) to recognize water stress and risk at its business sites. We confirm the assessment of water stress and water risk at our main business sites in Japan and overseas.
Aqueduct is a tool that maps the water risks such as flooding, drought, and water stress, then provides users around the world with water-related information to encourage best practices in water resource management.
To promote appropriate water use going forward, we will conduct periodic risk assessments of each major business area to assess the situation and make employees aware of saving water, aiming to ascertain and reduce water risks.

Water Risk Assessment (Conducted for Fiscal 2020)

Water risk level*Number of sites
Low (0–1)2
Low-Medium (1–2)2
Medium-High (2–3)6
High (3–4)1
Extremely High (4–5)2

* Aqueduct assessment standard

Approach to Waste Reduction and Resource Recycling

The OPEN HOUSE Group recognizes that using limited resources without waste and reducing waste by recycling and so forth is an important priority for conserving the environment.
To help create a recycling-oriented society, we comply with laws, regulations, and ordinances regarding air, water, and soil pollution, as well as other harmful substances, and strive to prevent environmental pollution by curbing emissions of pollutants. We also manage and process industrial waste generated during construction appropriately, and work to prevent impacts from harmful substances on the environment and building users’ health. Moreover, the Group selects waste collection providers that put an emphasis on reuse of resources. For waste that cannot be reused or recycled, we will process it correctly and work to prevent impacts of the waste on the environment.

Initiatives to Reduce Waste in Our Businesses

The majority of the waste in our businesses is associated with construction materials.
To reduce waste, we order interior wall materials pre-cut to size and have them shipped to the building site. We do the same with exterior wall materials as well.
Open House Architect Co., Ltd. uses factory pre-cut materials in a proprietary panel construction method that increases the efficiency of material processing and reduces material loss.

Furthermore, the entire OPEN HOUSE Group actively uses construction materials that are easy to reuse. In doing so, we strive to create houses that help to reduce both CO2 emissions and the impact of houses on the global environment.

The Group’s amount of industrial waste generated and recycling rate are as follows.

Subject period: Fiscal year (April to March each year)

Industrial Waste Generated
(During construction of single-family homes by Open House Development Co., Ltd.)

Waste has increased in step with the expanding construction volume.
Going forward, we will work to reduce industrial waste through efforts such as increasing the amount of reusable waste from resources that is recycled.

Unit: t

FY2017FY2018FY2019
Generated Waste Amount22,59422,81526,440
Recycled Waste Amount17,95117,82116,648
Non-Recycled Waste Amount4,6434,9949,792
Recycle Rate79%78%63%

Fiscal year: April of the year to March of the following year

Industrial Waste Generated (Fiscal 2019)

Harmful Substance Controls and Pollution Prevention Initiatives

The Group appropriately processes and controls harmful substances in accordance with various laws and regulations. As of fiscal 2019, there have been no violations of environmental laws and regulations or environmental accidents since fiscal 2017.