The Tokyu Fudosan Holdings Group has established the Basic Regulations on Risk Management as well as basic matters related to the development and operation of its risk management system.

Policy

Tokyu Fudosan Holdings Corporation prepares and operates a risk management system based on the "Risk Management Basic Rules". This risk management system refers to ISO 31000 which is a representative risk management framework.

The Company recognizes all internal and external factors that adversely affect its management, such as financial loss, loss of brand image, discontinuance or suspension of business continuity, as a risk. In order to comprehensively manage them, we are grasping the serious risks of the whole company and implementing countermeasures systematically and on a scheduled basis according to priority. In addition, each group company evaluates and analyzes the risk and manages it.
 
Management risks, business process risks and other risks that seriously affect management (such as crisis management response) are managed as "Major Risks". They are managed in the following individual risk unit.
 
《Major Risks》
①Investment risk 　②Financial capital risk　  ③Personnel labor risk     
④Legal compliance risk　 ⑤IT strategy risk 　⑥Information leakage risk   
⑦Crisis management response
 
ESG risk is managed as a sub category of "major risks".
《Example of ESG risk 》
･Climate change  　· Biodiversity conservation  　· Environmental pollution
· Waste reduction and appropriate treatment  　· Resource utilization
· Water resources conservation  　· Human rights protection
· Prevention of child labor  　· Contribution to the community and society
· Employee health and safety 　 · Employee human rights  　· Corruption, Bribery
· Corporate governance, etc

Risks that have a greater impact on business performance and financial status
　　①Investment risk 　②Financial capital risk　  ③Personnel labor risk　  ④Climate change risk

• Risk Factors

Article 4 of the Basic Regulations on Risk Management stipulates that the chief officer for risk management is the President & Representative Director. Also,

Management Structure

Risk Management System

In our group, the corporate Auditors audit the execution of risk management by the President and Representative Director, who is the head of risk management, based on the "Risk Management Basic Rules", and the Internal Audit Department of the Group audits risk management systems and risk management operations at each group company.
 The Board of Directors has established the "Compliance Regulations" as guidelines for actions of executives and employees, and we supervise corporate activities in good faith and fairness and ensure the soundness of management based on self-discipline.

Risk management is managed through the Group Management Committee and the Board of Directors and The Risk Management Committee manages the risk management carried out by each group company in a comprehensive manner. Corruption and bribery are centrally managed within the risk management system, regardless of the level of risk. Especially for high-risk businesses, we have established departments responsible for individual risk, and that department grasps, evaluates and analyzes the risk management structure and management situation of the group. The results of the Risk Management Committee are reported to the Board of Directors and the risk management process is reviewed as necessary.

At the end of every fiscal year, our group estimates the amounts of penalties or legal settlements that are likely to occur in the future due to events from the current and previous fiscal years

Reserve Fund for Legal Violations and Litigation

At the end of every fiscal year, our group estimates the amounts of penalties for ESG issues or legal settlements that are likely to occur in the future due to events (including corruption and bribery ) from the current and previous fiscal years (if the loss of a court case is expected) and sets aside a reserve fund. We determine whether to disclose this amount or not (including in notes to financial statements) on a case by case basis in light of the materiality of the amount on the consolidated balance sheet. Over the previous three years, there have been no disclosures with regards to legal settlements or other matters. Future plans for disclosure are as follows.

• Disclosures as of December 31, 2020:  None
• Disclosures until December 31, 2021:  None planned