Issues to Address

The top Group management priority is “Safety.” We will pursue “Ultimate Safety,” the unchanging mission for the Group, and continually improve our safety levels. 

During the fiscal year ended March 31, 2026, there were transportation disruptions due to overhead wire breakage on the premises of Shimbashi Station on the Yamanote Line in May 2025, a vehicle breakdown of the Yamagata Shinkansen E8 Series in June, as well as major transportation incidents caused by electric power stoppages on the Yamanote Line, Keihin-Tohoku Line, and Joban Line in January 2026 and on the Utsunomiya Line in February, respectively. In addition, an escalator fire occurred at Hatchobori Station on the Keiyo Line in the same month, and a train door opened while the train was running on the Chuo Main Line in March. This series of transportation incidents has caused great anxiety and inconvenience to customers.

We will strengthen and improve safe and stable transportation by fundamentally reviewing all operations again. As various facilities and operations, including vehicles, railway tracks and electricity, are mutually related for the railway system in particular, we need to enhance comprehensive knowledge, abilities and technical capabilities over operational fields in order to prevent the occurrence of transportation incidents and improve our response capabilities. We will also work to introduce advanced technologies, including AI and drones.

More specifically, recognizing that humans are the last line of defense for safety, we will work on (1) reviewing our business processes (work procedure) concerning the safety and stability of our transportation services, (2) improving our capabilities to respond to any abnormal situations, (3) improving the levels of our inspections and checks, (4) improving and strengthening the technical skills of our front-line employees who are engaged in facility maintenance and accident recovery, (5) increasing repair expenses related to facility maintenance and management, and (6) maintaining systems and technological strengths of our Group companies and partner companies.

Pursuit of “Ultimate Safety” is a common challenge regardless of railway-centered Mobility or Lifestyle Solutions. We will tackle it as a whole Group in order to provide services which customers can use with peace of mind.

From 2024 to 2025, a series of incidents occurred that repeatedly damaged the trust of our stakeholders in the Group, including the filing of fraudulent personnel-cost claims related to central government-commissioned projects and subsidies, inappropriate press-fit force values in wheelset assembly operations, and a warning from the Japan Fair Trade Commission for actions potentially violating the Antimonopoly Act. In response to these incidents, the Company established an “Expert Committee for Improving and Strengthening Group Governance” that included external experts on July 1, 2025 to restore trust in our management. Based on the report compiled by the Expert Committee and the discussions at the Board of Directors, the Group published specific improvement measures on March 18, 2026. In addition to updating the basic approach to internal control in the Group, we will establish the foundation to promote the “To the Next Stage” 2034 and tackle new business fields by implementing the improvement measures for the establishment of Group governance based on “a sound corporate culture,” “the necessary structures and rules,” and “active communication.”

The Group regards trust as the foundation for all of our businesses in the “To the Next Stage” 2034. We view past events that could threaten the very foundation of the business, such as a series of transportation incidents and multiple misconduct cases, as a harsh lesson, and we remain committed to ensuring compliance and to continuously improving and strengthening governance across the entire Group. Moreover, we will meet the expectations of stakeholders and further reinforce the trust which is the foundation for all our businesses by not only inheriting the experience and expertise cultivated by our predecessors but also by aiming for a true technical service industry company, one that will transform society through cutting-edge technological capabilities.

The Group announced the first medium- to long-term growth strategy for mobility “PRIDE & INTEGRITY” in September 2025. We will confront the sweeping global and domestic changes of our time—from labor shortages to the rapid evolution of technology like AI—, and achieve sustainable growth. We will enrich the lifestyles of all people by proactively realizing the “best combination of Mobility services,” optimally combining railways, which are capable of providing environment-friendly, reliable, high-speed transportation, and the transportation mode that enables flexible movement from the station to the destination to meet the various mobility needs of customers. 

As for our approach to ten years in the future, we will promote further reinforcement of transportation capacity by adding more Shinkansen vehicles as well as improving transportation quality through the prevention of transportation disruptions and the reinforcement of response capabilities. In addition, we will strive to increase the exchange population by creating attractive destinations through high-value-added movement spaces that make movement enjoyable, such as new nighttime limited-express trains, strategic attraction of concerts, and strengthening promotions for inbound tourists. Furthermore, we will improve profitability by restructuring and developing railway sites, which are assets of the mobility segment, and creating sites and new movements in the community through synergies with lifestyle solutions.

Moreover, we revised rail passenger fares on March 14, 2026, which was substantially the first time since the establishment of the Company, except for the consumption tax pass-through and the introduction of barrier-free charges, as it had become difficult to stably secure the necessary funds for capital investments and repairs to meet the diversified needs of customers and to play the societal role required of railways due to the situation including declining and aging population and rising prices. While requesting many customers who use our services to bear the burden, we aim to solve social issues as well as improve safety and services, including installment of platform doors, measures for natural disasters, improvement of terminal stations and realization of seamless transportation. In addition, we will continue making requests to the national government for the realization of a simple and flexible fare system. At the same time, for local lines, we will continue discussions with local municipalities, etc., in areas alongside railway lines to establish highly convenient and sustainable transportation systems, while promoting efficient operations through streamlining of facilities and review of operating forms in addition to initiatives to promote usage in cooperation with relevant parties in the region.

To contribute to the sustainable operation of the entire railway industry, we are inviting other operators to collaborate on standardizing technologies and parts. 

Furthermore, in cooperation with the Japan Railway Technical Service (JARTS), we have launched training programs for “Specified Skilled Workers.” Starting with this training, we will extend comprehensive human resources development programs to create the future of the Group and the railway industry.

In June 2024, the Group formulated a medium- to long-term business growth strategy: “Beyond the Border.” In Lifestyle Solutions, we will materialize the vision of “Beyond the Border” and leverage the Group’s extensive assets alongside our physical and digital customer touchpoints, promoting the transformation of existing businesses and launching new ventures. We will achieve our goal of “doubling Lifestyle Solutions’ revenue and profit by fiscal 2034 (compared to fiscal 2024)” two years ahead of schedule, with a further aim to increase operating revenue by 150 billion yen and operating income by 100 billion yen.

In the Retail & Service business, we will develop the trust of customers through reliable initiatives for compliance and safety to provide products and services by which everyone feels “security (peace of mind).” To meet diverse needs, we will promote a people focused, market-in approach and expand customer touchpoints through digital services. These include “JRE MALL” and “MASTRUM,” a platform capable of delivering datadriven advertising at the optimal time and place, through which we will establish new forms of communication. We will also drive revenue growth by opening “NewDays” stores at transportation hubs of other railway operators, installing “Multi-Ecube” smart lockers outside Group-owned sites, and expanding the network and service capabilities of our “Hako-byun” train-based parcel transportation service. Furthermore, based on the “Beyond Stations” concept, we will enhance the value of our stations by expanding immersive spaces and smart health stations.

In the Real Estate & Hotel business, we will leverage our Group’s strengths—highly convenient locations and extensive assets—to drive growth, with a particular focus on the real estate sector as our growth engine. On April 15, 2026, we concluded an integration agreement in the real estate business area with the Itochu Group. As an integrated company, we will combine the strengths of both parties and grow the real estate business dramatically, aiming for sales at the 250-billion-yen level in the next five years. We will continue to expand the speed and size of acquisition and sale of properties, accelerate the real estate rotation business, and expand the size of assets under management in the real estate fund business to 1.2 trillion yen by fiscal 2032, as well as create operational income in real estate sales exceeding 600 billion yen. Moreover, the co-creation urban development “Greater Shinagawa” by the Group from Hamamatsu Station to Oimachi Station started in earnest, including the grand opening of TAKANAWA GATEWAY CITY and the launch of OIMACHI TRACKS. Considering “Greater Shinagawa” as an advanced area aimed at generating innovations for urban life, we will engage in initiatives that will help improve the progressiveness and area value through co-creation with various relevant parties, including communities, companies and universities. Furthermore, we will promote advanced and attractive urban development, including large-scale redevelopment projects around Shinjuku Station and the Shibuya Station area.

In December 2024, we announced “Going beyond the Norm for Suica: Suica Renaissance.” We will evolve Suica from a “mobility and small payment tool” into a “lifestyle platform,” leveraging it as the foundation for all our businesses to generate synergies through dual-axis management. In February 2025, we began consolidating fragmented user IDs into “JRE ID.” Furthermore, we plan to introduce touchless walkthrough ticket gates in the Greater Shinagawa area in spring 2027. We also announced “teppay” in November 2025—a barcode payment service that transcends the current limitations of Suica, such as the 20,000-yen balance cap and the need for preloading—with its official launch scheduled for autumn 2026. Furthermore, in December 2025, weannounced the introduction of a local Suica (a service integrating Suica, MaaS (Mobility as a Service) and Lifestyle service by linking mobile Suica and My Number Card) in Gunma and Miyagi prefectures in the spring of 2027. Going forward, we will disseminate the improved model in both prefectures to realize regional revitalization.

Aiming to help “our customers and people in communities to realize enriched lives,” aimed for by our Group philosophy, we regard sustainability as an important policy of our Group management and strive to create social and economic values. We will promote “Management That Is ‘Good For All’,” which aims to distribute the values generated by business activities to realize the happiness of our customers, people in the community, stakeholders, investors, employees and their families, as well as to grow the Group.

With respect to the environment (E), we newly established an intermediate target for fiscal 2036 and 2041 to achieve “net zero” CO2 emissions in fiscal 2051; this target is included in the long-term environmental target “Zero Carbon Challenge 2050” announced in fiscal 2021. We will deliver new value aiming to realize a sustainable society by continuing to take on challenges to realize zero carbon. In addition, we will proceed with trial mounting of an inverter device on next-generation rolling stock drives for rolling stock for conventional lines (for Yamanote line cars) and demonstration tests of the hydrogen hybrid train “HYBARI” to reduce electricity consumption, with the aim of starting commercial operation in fiscal 2031.

With respect to society (S), we will realize companionable community development and regional revitalization via resolution of social issues using DX as well as foster “barrierfree attitudes” with our customers and local residents by promoting the understanding of an inclusive society through development of employees with a hospitality mindset, improvement of service quality through dialogue with handicapped persons, and experience and support for parasports. Moreover, in December 2025, we announced that the Company would take over a rugby team, “NEC Green Rockets Tokatsu,” operated by NEC Corporation in July 2026. Through the promotion of corporate sports, we will help solve social issues including the development of sound human resources, expansion of the base for competing population and fostering of regional vitality.

With respect to corporate governance (G), in addition to the initiatives to improve and strengthen governance of the entire Group, we have revised the rules for the Board of Directors, revitalized discussions on medium- to long-term management strategies, strengthened monitoring for the status of operational execution, and accelerated operational execution. Going forward, we will strive for higher corporate value by further enhancing corporate governance.

The Group will formulate strategies for safety, CX (Customer eXperience), human resources, innovation, finance and investment that form the foundation of its growth, and work as one towards the realization of “To the Next Stage” 2034. 

With respect to safety, improvement of the “Group Safety Plan 2028” is management’s top priority. In light of a series of transportation incidents, we will increase repair expenses for maintaining and managing facilities in fiscal 2027, and implement exchanges and repairs to recover from all impacts felt during the COVID-19 pandemic by the end of fiscal 2027. Moreover, we will make planned investments in safety equipment for the prevention of collisions and derailments, the development of platform doors, and the reduction of risks of natural disasters including those caused by fallen trees and bamboo. Furthermore, in the JES-Net (JR East Safety Network), which the Group, partner companies and cooperative companies are developing together, we will improve the safety level of the entire Group by establishing a subgroup for mobility and lifestyle solutions, respectively, to promote the coherence of the value and direction in safety, reinforcement of cooperation and initiatives for safety.

With respect to CX, we have formulated the “Group CX Strategic Vision 2030,” detailing the direction of service quality to be pursued by the entire Group. As the level of service quality expected by our customers and local residents changes and rises day by day, we will consolidate the power of the entire Group under the slogan “Customer Experience Value First,” visualize customer contact points, and analyze needs to improve services. In addition, we will promote initiatives to provide customers with peace of mind and excitement at all contact points, such as by strengthening and improving safe and stable transportation through a review of workflow (work procedures) and enhancing response capabilities at abnormal situations (practical training, provision of easy-to-understand information, etc.).

Regarding our human resources, we will position our “Personnel and wage system reforms” and “Business operational framework reforms,” both announced in May 2025, as the two pillars to drive “To the Next Stage” 2034, empowering every employee to take on new challenges and excel. Positioning “Diversity, Equity and Inclusion (DEI)” and “healthoriented management” as the foundation of our human resources strategy, we will realize new engagement for employees and the Company by promoting the three basic policies of “diversity,” “innovation” and “flexibility.” Moreover, we will increase hiring in all technical areas by a further 150 persons and create a corporate culture where diversified talents can play active roles to improve productivity for the entire Group and promote business management based on the two pillars of mobility and lifestyle solutions.

To drive innovation, we aim for new heights as a “technical services corporate group.” We will accelerate the integration of AI into our operations and the utilization of hydrogen, while pioneering a sustainable future through technological breakthroughs in expansive fields, including new energy such as fusion energy, and outer space. Positioning fiscal 2027 as the “Year One of AI and DX,” we will aggressively advance these initiatives.

With respect to finance and investment, we will establish a growth path toward operating income of five trillion yen for fiscal 2035, striving to maximize consolidated cash flows toward the realization of “To the Next Stage” 2034. Moreover, we will implement operational reforms by developing resilient and sustainable construction material procurement systems, executing appropriate and accurate settlements and introducing AI, etc. Furthermore, we will strive for autonomous management at each operations headquarters through the restructuring of business operational framework reforms.