Forest trees are used as timber, fuel, and other resources. Forests, with the abilities to fix CO2 and maintain rich biodiversity, are important for realizing a decarbonized society that respects the natural world. Reuse of timber also helps realize a recycling-oriented society. Thus, forest resources are closely connected with the realization of a decarbonized, recycling-oriented society that respects the natural world. The Obayashi Group has established the Circular Timber Construction® recycling-oriented model to make maximum use of rich forest resources, while also adopting Loop50, a future concept aiming to achieve a good balance between sustainability and an attractive lifestyle.

Going beyond the promotion of wooden structures and interiors, the Obayashi Group draws on its past experience, expertise, and knowledge in forestry to promote a complete and sustainable cycle for domestic timber. This cycle encompasses operations upstream (tree planting and cultivation), midstream (processing and procurement), downstream (construction), and beyond (power generation and supply). Through this initiative, we aim to use sustainable forest resources and to realize a society that respects the natural world.

Regarding its forest management project, including these activities, the Group applied for the "Forests x ACT Challenge 2024" organized by the Forestry Agency and won the Forestry Agency Director-General Award.

• Regarding its forest management project, including these activities, the Group applied for the "Forests x ACT Challenge 2024" organized by the Forestry Agency and won the Forestry Agency Director-General Award.(Available only in Japanese)

We are working on initiatives for the circular use of forest as our upstream activities. Obayashi has developed a hybrid system for cultivating saplings, which combines artificial light and natural light, and started producing larch saplings in Nichinan Town, Tottori Prefecture. This system can reduce costs to one-sixth of the current costs and shorten the growth period, from two years at longest to six months at shortest, by switching the cultivation of saplings grown under artificial light to that under natural light. This system can supply approximately 10,000 saplings annually, helping recycle forest resources and promote carbon neutrality.

The Obayashi Group maintains and manages its own forests of 400 ha in Japan. Among them, approximately 170 ha are located in Hokkaido Prefecture, where the Group promotes the circular use of forest through clearcutting and reforestation.

To uphold the Circular Timber Construction vision, Obayashi works to activate a domestic timber circulation of operations upstream, midstream, downstream, and beyond. Especially to enhance processing expertise, Obayashi Corporation has established a capital alliance with Cypress Sunadaya Co., Ltd., a manufacturer and distributor of timber products, making the company a consolidated subsidiary of Obayashi. Through this partnership, Obayashi aims to strengthen sustainable supply chains and enhance price competitiveness of non-residential wooden architecture. Cypress Sunadaya, a manufacturer of Japanese cypress timber products, is a leading manufacturer and distributor of cross laminated timber (CLT) in Japan. By establishing this capital tie-up, both companies will work together to develop new products and expand distribution networks, aiming to ensure a reliable supply of quality timber products at competitive prices.

In 2011, the Obayashi Group established the CSR Procurement Guidelines in order to fulfill its corporate social mission. Since then, the Group has worked together with partner companies to practice CSR procurement. In 2020, we revised the guidelines to reflect needs in society and established the CSR Procurement Policy by adding concrete items. The most important points are stipulated in contracts and confirmed when they are agreed. We are engaged in supply chain management by sharing the revised policy with partner companies and verifying their awareness status. Timber products have been procured in accordance with the CSR Procurement Guidelines. In response to growing public concern not only about environmental distraction but also about human rights violations, we started conducting traceability surveys in 2021 regarding imported timber.

• Obayashi Group CSR Procurement Guidelines
• Strengthening Relationships of Trust with Suppliers (Traceability Survey)

We see an increasing importance of timber utilization as we strive to achieve a decarbonized, recycling-oriented society that respects the natural world in efforts to realize a sustainable society. Wooden structures and interiors will make a great contribution to decarbonization as the second forest in urban areas and provide a space of well-being (quality of life) leading to mental and physical health. Obayashi is sincerely committed to promoting wooden structures and interiors and the development of necessary technologies for wooden architecture.

Obayashi is actively working on biomass power generation by using biomass that are usually discarded, such as wood scraps, thinned wood, and household waste. Because biomass resources absorb CO2 in the growth process, this method is considered a sustainable energy source.

Otsuki Biomass Power Plant (in Yamanashi Prefecture):

Power generation capacity	14.5 MW
Fuel	Domestically grown wood chips and branches
Start of operation	December 2018
Effect	Annual power supply to approximately 30,000 households

Kamisu Biomass Power Plant (in Ibaraki Prefecture)

Power generation capacity	51.5 MW
Fuel	Imported wood pellets and palm kernel shell (PKS)
Start of operation	February 2022
Effect	Annual power supply to approximately 110,000 households

LOOP50 is a concept of aiming for the future where people live in harmony with forests and trees while promoting a timber cycle. This approach intends to maintain rich resources of the forest and use trees abundantly after growing them for 50 years to benefit from them in a sustainable way.

Global Forest Watch, a tool capable of checking forest-related changes, land cover, land use, climate, and biodiversity in forests helps Obayashi to analyze the coverage rate and the integrity of biodiversity in the forests where Obayashi procures timber, and to identify a variety of risks against the use of forest resources. The analysis of changes in the forest coverage rate of the forests it owns, using this tool, showed that the forest coverage of these areas decreased by 507 ha and increased by 558 ha from 2005 to 2020. In this way, forest resources are utilized while maintaining a good balance. Obayashi will conduct business activities mitigating risks attributing to the use of forest resources.

We promote the development of technologies for conserving and managing forest resources. Examples include a sapling production system to promote the cultivation of forest resources, rigid cross joints and O･Mega Wood to realize wooden structures and interiors, and a wooded-area monitoring method with LiDAR as a conservation technology.