Top CommitmentMessage from the President
For a world full of more smiles on more faces
I would like to express my heartfelt gratitude to our valued stakeholders for their encouragement and understanding in our running of the Daiwa House Group.
Fiscal 2022 was an important year, marking the first steps in fulfilling Daiwa House Industry’s Our Hopes for the Future, which defines our Purpose as “Creating the fundamental societal infrastructure and lifestyle culture rooted in regeneration, ensuring a world where we live together in harmony embracing the Joys of Life.” We formulated Our Hopes for the Future as a guide for the route we should travel on our journey toward our 100th anniversary in 2055. Those Hopes for the Future trace their origins to the aspirations of our founder— aspirations that every employee still holds dear. The drafting process involved countless discussions to hammer out what we need to change to be attuned to the times, and what we need to hold onto, taking on board the values, hopes, and desires of all stakeholders and, in particular, members of younger cohorts like students. Underlying this approach was our desire to stay close to stakeholders. As we work to fulfil Our Hopes for the Future, we will continue to tackle all challenges that lie ahead.
Putting smiles on customers: The first step in fulfilling our Group Purpose
We in the Daiwa House Group meet some 30 million customers each year. Getting close to them and making them smile is the first step in achieving Our Hopes for the Future. This entails every employee being able to put themselves in the customers’ shoes and make them smile. Since the year before last, I have regularly visited offices around the country and held Q&A sessions with employees. I was especially impressed when one said, “I may be making some customers long to see us more” when I asked whether they are truly attending closely to all 30 million of our customers. If we can get every employee to adopt a similar attitude, take ownership, and engage with customers, we will be able to realize Our Hopes for the Future. Thus I will continue to visit our offices across Japan, engaging in close dialogue with our employees.
Doing all we can for our Earth
Meanwhile, we have started taking steps in line with our six materialities (priority issues). A crucial issue is bringing about a circular economy and carbon neutrality. We take pride in spearheading action on environmental issues and are engaged in wind and hydro power generation in addition to solar despite our being an enterprise whose business focus is in areas other than power generation.
We are keenly focus on achieving carbon neutrality in particular for the sake of tomorrow’s children. In recent years, abnormal weather due to climate change is becoming an everyday occurrence, and the cause is clear. We must not shirk from doing everything in our power to address this serious situation. We have endorsed the Japanese government’s Carbon Neutral Declaration and set 2030 milestones on the way to carbon neutrality by fiscal 2050. We are working diligently toward this end.
The more buildings we build, the closer we get to a carbon-neutral society
Our Seventh Medium-Term Management Plan, in motion since fiscal 2022, prioritizes realizing carbon neutrality by making all buildings carbon-free. We aim for all new buildings we deliver to be, in principle at least, net-Zero Energy Houses (ZEHs) or net-Zero Energy Buildings (ZEBs) equipped with solar systems. In fiscal 2022, we launched, TORISIA, a net-Zero Energy House–Mansion (ZEH-M) rental housing product, and decided to make ZEH-M specifications standard for PREMIST-brand condominiums we build from fiscal 2024 onward. Our initiatives are proceeding smoothly in all businesses, and I can sense that employees’ environmental awareness is steadily growing. In fiscal 2022, all power purchased by Daiwa House Industry (the Group’s parent entity) in Japan, including that used in factories and on construction sites, was derived from in-house renewable energy sources. We aim to reach 100% renewable energy purchases across the entire Group, including overseas locations, in fiscal 2023 and are on track to reach our 2025 RE100 target of 100% renewable energy, including power from in-house facilities. We will be transitioning the Hibikinada Thermal Power Station, which joined our group in January 2023, to a solely biomass-fired plant, and integrating it into our expanded renewable energy generation business. Moving ahead, we intend to add depth to these initiatives until we have made our corporate group self-sufficient in renewable energy, a hitherto virtually unprecedented feat. And we have reviewed our real estate investment criteria to make them more conducive to contributing to the environment. With a view to future interest rate rises, we raised the IRR benchmark—our hurdle rate for deciding whether to invest. However, we also want to strengthen our approach from a sustainability as well as margin perspective; so we also implemented measures to ease investment criteria using internal carbon pricing. We trust this will play a major role in creating environmentally friendly buildings. These initiatives mean that the more buildings we build, the more quickly we will all get to carbon neutrality.
TORISIA: ZEH-M–specification rental housing
A place where everyone can build on their strengths and play an active role
As seen in the Daiwa House Corporate Creed, “developing people through business,” cultivating human resources has always been our highest priority. Our diversity, equity, and inclusion (DE&I) approach revolves around providing opportunities and environments where all our people can develop and build on their strengths and play an active role. As our business portfolio has diversified in recent years, we have shifted responsibility for recruitment to individual business units. In the first place, this allows our people to choose a field they are most likely to shine in. Their horizons widen as they grow and they find new aspirations, and if they need to change business fields to make them happen, we have an internal “free agent” program that they can take advantage of to find a new workplace. We want to support employees looking for self-directed growth in this way and in fiscal 2022, introduced a Multi-Experiential Career Support Program that provides “cross-border experiences,” centered on secondary jobs. In addition to self-arranged opportunities, we also put out open-call opportunities for secondary jobs arranged by the Company. For example, engineers and other skilled employees can— as professionals in building and construction—take up a secondary assignment to teach students and, through the experience, learn things they could not inside the Company. We also have an in-house secondary job program to which employees can allocate one or two hours of their time a week. Motivated by their desire to do something, employees make the time to pursue this second interest by being more productive at their main jobs.
One important element in our HR development is looking at people’s strengths. I believe that education begins with knowing what will put a huge smile on a person’s face—smiles only arise when people tapped into their strengths. We develop personnel with unique strengths by helping them find and extend their innate ones. To this end, we increase opportunities to learn inside and outside the Company and focus on personnel rotation. This provides an environment where our people can gain a wide range of experiences, further enabling them to bring strengths to bear that tie into new businesses and sustainable growth for Daiwa House. And as personnel apply their unique abilities, we further expand the opportunities and places where they can maximize their potential.
Aiming for a world where we live in harmony, embracing the Joys of Life, through business
We plan to expand overseas by rolling out a business model with a higher weighting of factory production, our specialty. This entails providing our Industrialization of Construction skills to Group companies outside Japan. Our expertise in this area reduces construction times and delivers quality products at low prices. I have no doubt that this will prove useful in the US, which is suffering a labor shortage, as well as in countries with rapid population growth. I hope that taking this business model global and making a success of it will result in a dramatic change in the shape of our overseas development. Further, when disasters such as earthquakes occur in Japan, Daiwa Lease and other Group companies stand ready to provide a smooth response that runs the gamut from designing emergency temporary housing through post-delivery management. Our Group companies in Europe are involved in sales and rental of modular structures, one kind of industrialized building. When temporary housing is required in Europe, Daiwa House Group companies can use our expertise to play a role in rebuilding localities in affected countries.
We will also press on with our long-standing efforts to develop a circular value chain. Starting with the creation process, it carries on through customer service, management operations, and renovation, and by nurturing and maintaining vital relationships of trust over the long-term, we create rich lives hand-in-hand with our customers. At the core of these activities is our Livness brand, which handles our Group’s revitalization business. We established the brand to engage in brokerage, renovation, and purchase/ resale, which it carried out in detached houses and rental housing, and going forward it will roll out initiatives for large buildings and commercial facilities as well. We will maintain our focus here as the business addresses societal issues such as shrinking population and aging infrastructure.
Finally, I would like to touch upon digital transformation (DX), an entrenched feature of the modern world. We at Daiwa House have far-reaching initiatives in what we see as an industrywide challenge and plan to give back the fruits of our efforts to society. However, we can never take our eyes off the purpose of DX; the use of digital technologies must not be allowed to weaken heart-to-heart connections between people. We intend to use DX to transform the time our employees have traditionally spent on work and processing tasks to time spent thinking of how we can make our customers, business partners, and community members smile. We are constantly mindful of using digital transformation to bring people closer together.
As we travel the road toward achieving Our Hopes for the Future (Purpose) by 2055, changes in society and the times may obscure our specific initiatives upon occasion. At such times, we will return to our roots—the idea of putting smiles on the faces of our customers and society as a whole, as we strive to bring about a world where we live in harmony, embracing the Joys of Life.
Members of Cultivation Business Development Section and Daiwa House Bloom who work together at Cocolan House
On into the future with our founder’s spirit!
Since the founding of the Daiwa House Group, we have constantly pioneered new horizons, bearing in mind our founder’s spirit that we are in business, not to make a profit, but to be of service to society, and we have thus provided many buildings and services to address societal issues. Our aspiration has remained steadfast in the face of changing operating environments and people’s individual values.
First, we get close to our customers and make them smile, then think hard about what we can do to make the world a better place on our journey toward realizing Our Hopes for the Future.
Our founder declared that we will continue growing even during tough times. Our strength, and in our very DNA, is to always advance steadily without pause, through any adversity. Spurred on by this strength, we are making Our Hopes for the Future a reality, and, through businesses that help make the world a better place, we will continue to grow and build the future hand-in-hand with our customers, stakeholders, and society at large.
I would like to conclude by thanking you in advance for your ongoing encouragement and support.