Contents / Editorial policy

Company profile

Top Message

Sustainability Strategy

Resource Circulation Business

Used-cars-related Business

Global Resource Circulation BusinessSocietyBusiness foundation / Growth foundation

References

Sustainability Strategy

Sustainability Strategy to overcome non-continuous changes and to sustain business growth
Mission Statement

Mission Statement

Contribute to createa sustainable society

Sustainability Strategy(Five-year strategy for the period from FY2018 to FY2022)

Resource Circulation Business

Goal

Recycling

Remanufacturing

Reuse

Global Resource
Circulation Business

Sustainability
Strategy

Environment Management
Consulting Business

Used-cars-related
Business

Welfare Service
Business for Persons
with Disabilities

To achieve concurrent
sustainability ofsociety and our company
Key policies

Greatly enhance the company’s credibility
in society

Effectively demonstrate the HOLDINGS’ leadershipwithin the group to improve corporate governanceand promote the brandGreatly enhance efficiency in the use ofoperational resources
Consolidate businesses in line with the Sustainability
Strategy for the efficient use of operational resources

Greatly enhance productivity
Greatly enhance productivity by making use of newtechnologies and experience

Growth Foundation

The ENVIPRO Group espouses the mission statement, which is to“contribute to create a sustainable society.” The mission statement
demonstrates how our group will contribute to society through ourbusinesses, which is our purpose for existing. It indicates thegeneral, unchanging direction for our group to follow, no matter
how the times and social environment change. This is also a
message to those people who feel empathy with this statement to“work together to this end.”

Sustainability Strategy
To ensure the achievement of the mission above, our group has
developed the Five-year Sustainability Strategy (FY2018 FY2022). By focusing on businesses that address unsustainableconditions in society, we will promote the sustainability of bothsociety and our company.
Based on the corporate philosophy, we will restructure and establish
a set of systematized mechanisms, ranging from the mission and thestrategies to the implementation plans over years. Linking the
Sustainability Strategy with the implementation plans developed byour group companies through the steady operation of the newmechanisms, we will enhance the implementation levels, thereby
achieving our mission.

Business Foundation

Corporate Philosophy

Sustainability Report 20198

Contents / Editorial policy

Company profile

Top Message

Sustainability Strategy

Resource Circulation Business

Used-cars-related Business

Global Resource Circulation BusinessSocietyBusiness foundation / Growth foundation

References

Sustainability Strategy

Verification of business segments to facilitate prompt management decision-making

In the past, our business reports described all activities under the single segmentthat was the “Resource Recycling Business.” However, in order to develop
implementation strategies by segment and facilitate prompt management decisionmaking in response to the drastically changing economic environment, we havedeveloped multiple segments since June 2019: “Resource Circulation Business,”“Global Resource Circulation Business,” “Used-cars-related Business,” and“Others” that includes “Environment Management Consulting Business” and“Welfare Service Business for Persons with Disabilities”.

Business segment

Reuse

Promoting the distribution of used products andmaintenance parts without modifying their functionality
or value.

Resource Recycling
Circulation (Resource recovery)

Promoting recycling by developing highly advanced
technologies that can shred metal scrap and waste, andphysically sort them by material type based on theirdifferent properties.

Resource Circulation Business

Remanufacturing

Recycling

Reuse

Global Resource
Circulation Business

Description

Manufacturing recycled raw materials and articles outof waste and scrap by taking the advancement ofrecycling technologies to the next level.

Company

Processing department,
ECONECOL Inc.
KURODA RECYCLE Co., Ltd.
SYN ECO Inc.
TOYO RUBBER CHIP Co., Ltd.
PLA 2 PLA Inc.
VOLTA Inc.

Equity method affiliates
ARBIZ Corporation
Fuji Eco Cycle Co., Ltd.

Remanufacturing

Used-cars-related
Business

Welfare Service
Environment Management
Business for Persons
Consulting Businesswith Disabilities

Global Resource Circulation

Promoting optimal global resource circulation throughthe import/export and trilateral trading of a wide rangeof resources including metals, plastic scrap, and biomass
fuel.

Used-cars-related

Stocking high-quality Japanese used cars/heavymachinery and used car maintenance parts such asengines, and exporting them overseas as well as
trilateral trading.

3WM Co., Ltd.
(Including the three overseas
subsidiaries)

OthersOffering consulting services specialized in environmental
management, including the provision of support forcompanies to develop their own environmental strategy
and CO2 emission reduction plan.
Further, undertaking the business to help persons withdisabilities secure employment by offering on-the-job
training to enhance their skills.

Bright Innovation Co., Ltd.
ASTOCO Inc.

Foreign trade department,
ECONECOL Inc.

Sustainability Report 20199

Contents / Editorial policy

Company profile

Top Message

Sustainability Strategy

Resource Circulation Business

Used-cars-related Business

Global Resource Circulation BusinessSocietyBusiness foundation / Growth foundation

References

Sustainability Strategy

Identifying material issues for the realization of sustainable development
In view of our mission statement, which is to “contribute to create asustainable society,” we examined the strengths of our group and theimpact of these issues on business, in addition to requests fromsociety to address such issues and our purpose for existing. We
subsequently identified “material resources” and“energy resources” as two material issues to the company.

By explicitly designating the business strategy concerning thesematerial issues as the Sustainability Strategy, we will firmly promote
the implementation of any relevant activities.

Step 1

Step 2

Step 3

Identifying business risks/opportunities in society

Examining issues from the three points of view

Identifying material issues

We verified the business and social environments of the company byidentifying the issues and risks both inside and outside of Japan thatcreate unsustainable conditions, the directions that society should
follow to realize a sustainable society, and any associated business
opportunities.

To identify material issues to our company, we examined theidentified business risks and opportunities against the three elementsthat specify material issues: “impact on business,” “strength of ourgroup,” and “effects on society.”

After identifying “material resources” and “energy resources” as our
two material issues, we used them to verify the direction of ourcompany and developed the Sustainability Strategy by applying a
backcasting approach.

In modern times, a wide variety of issues have surfaced which put
the sustainability of society at risk, such as the impacts of climatechange, anticipated shortages of material resources, the declining
birthrate and the aging population. We believe that businesses canplay a crucial role in addressing these issues, which will in turnprovide them with larger markets and more business opportunities.

Process to identify material issues

Unsustainable conditions
・Increasing impacts of climatechange・Material resource limitations
・Limitations of fossil fuelconsumption
・Losing the spirit of generosity
・Increasing adverse effects of shortterm investment
・Development of Asian countries
and their limitations
・Decline of developed countries
・Difficulties in sustaining social
infrastructure
・Increasing number of countries
with an aging population

Exploring sustainability
・Expansion of resource circulation
・Expansion of clean energy

・Development of a service
industry that pursues people’s
happiness・Development of an economy that
promotes local consumption of
locally produced products
・Privatization of public
infrastructure

Elements to identify
material issues
1.Impact on business
2.Strength of our group
3.Effects on society

Material Resources
・Depletion of minor metals/
Shortage of mineral resources
・Reduction of waste/scrap(increasing in Japan and thewhole of Asia)

Energy Resources
・Climate change/
Decarbonized society
・Increasing demand forrenewable energy
・Energy demand (Asia)

・Development of an economy
that promotes local
consumption of locally
produced products (Energy,
resources)

・Accelerating electrification,
automation, and networking
・Expansion of ESG investment
・Growth in China/Asia

Sustainability Report 201910

Contents / Editorial policy

Company profile

Top Message

Sustainability Strategy

Resource Circulation Business

Used-cars-related Business

Global Resource Circulation BusinessSocietyBusiness foundation / Growth foundation

References

Sustainability Strategy

Various activities for the achievement of Sustainable Development Goals (SDGs)

The ENVIPRO Group has specified some SDGs that are particularly
relevant to the business and our mission statement, which is to“contribute to create a sustainable society,” and has been
implementing various activities which contribute to the achievementof SDGs, particularly focusing on those specified above.
What are the Sustainable Development Goals (SDGs)?
The Sustainable Development Goals are a collection of international
development goals to be achieved between 2016 and 2030, which
was adopted by the UN Summit held in September 2015. They
consist of 17 goals and 169 targets to realize a sustainable world andpledge to leave no one behind.

Goal 1: Poverty
・With the improvement of the efficiency and the profitability ofour business, including those of the Resource Circulation
Business, we will increase the income of the employees andimprove their quality of life.

Goal 3: Health・ We prevent water and soil pollution and contamination byproperly managing scrap materials at our plants which comply
with safety and environmental standards.

Goals 4 and 10: Education/Equality
・ Under government sponsored programs such as the preemployment transition support program and the type B continuous
employment support program, we provide an environment where
persons with disabilities are able to acquire knowledge and skills,
and support them to be continuously engaged in rewarding work.

Goals 5 and 8: Gender/Working Environment
・ We have created an environment where employees can choose
a working style that fits them best, by introducing various systems
including those for permanent employees with shorter working
hours and telecommuters in order to meet the different needs of
employees including female employees with small children.
・ We thoroughly implement measures to prevent work accidents
in order to ensure the safety of employees.

Goal 7: Energy
・ We joined “RE100*1” in July 2018, setting a goal to match
100% of the electricity consumed in our business activities withelectricity generated from renewable sources by 2050. We haveadopted renewable energy to power our factories, and promote
the introduction of renewable-energy power systems such as theinstallation of solar panels on factory roofs.
・ We promote international transactions of PKS (Palm Kernel
Shell) by establishing container yards in South East Asia. We
will contribute to increasing the supply of sustainable biomass
fuel by expanding our involvement in the supply of wood pellets
in the future.
*1: RE100: a global initiative which brings together companies committed to using
100% renewable energy for the electricity consumed in their businesses.

Goals 9 and 12: Technology Innovation/Consumption and Production
・ We contribute to the circulation of limited resources and reducing
waste by engaging in the recycling business to collect precious metals
from metal scrap and waste, and the remanufacturing business to
produce recycled raw materials. Moreover, we aim to establish asustainable consumption and production mechanism by further
developing the technologies and experience that we have nurtured
over the years. To this end, in 2018 we established a new laboratory
in ENVIPRO HOLDINGS Inc.

Goal 11: Community Development
・“Syn Eco Plaza Azumino” contributes to revitalizing the local
community and the development of a sustainable community
through recycling and creating employment: the collection andrecycling of waste and items disposed by households, and the hiringof persons with disabilities at the factory.

Goal 13: Climate Change
・We contribute to the reduction of CO2 emissions across supply chainsthrough our engagement in the recycling and remanufacturingbusinesses, the mainstay of our company. Furthermore, we promote CO2
emission reductions in the recycling and manufacturing processes bypromoting the purchase of electricity generated from renewable sources
and adopting a renewable-energy power system.
・We help companies reduce CO2 emissions by providing consulting
services for them to formulate their decarbonization strategies as well as
solution services such as the adoption of renewable energy.
・We endorsed the “TCDF (Task Force on Climate-related Financial
Disclosures) recommendations” in May 2019. We will analyze the risks
and opportunities of climate change on our businesses and integrate theminto our business strategies.

Goal 14: Marine Resources
・ We contribute to preventing marine pollution caused by plastics bydeveloping technologies which sort waste plastics and recycle theminto pellets, and expanding the range of recycled raw material use.

Goal 17: Partnerships
・ We contribute to promoting global resource circulation and thecontrol of environmental pollution through the export of reusable
products, including used cars from Japan and internationaltransactions of resources.
・ By joining the following initiatives, we acknowledge ourengagement in environmental businesses and promote activities
which will lead to the realization of a sustainable society.
・Japan Climate Leaders’ Partnership (JCLP)・RE100・CDP*2 Scoring partner*2 CDP: Global initiative concerning the disclosure of climate change-related information.
Sustainability Report 201911

Contents / Editorial policy

Company profile

Top Message

Sustainability Strategy

Resource Circulation Business

Used-cars-related Business

Global Resource Circulation BusinessSocietyBusiness foundation / Growth foundation

References

Sustainability Strategy

Sustainability Strategy Highlights

Lithium-ion Battery Recycling Plant operations

Launching of High-Filling High-Speed Melting Business

Operations at a recycling plant forlithium-ion batteries started in
September 2018. It promotes thecollection of minor metals (cobalt,
nickel, etc.) from batteries. →P.17

In June 2019, we introduced a newtechnology to mix and fusematerials together that an ordinary
kneader finds difficult to mix. In
collaboration with the
manufacturers of basic materials
and others, we are engaged indeveloping various uses forrecycled materials. →P.21■ Obtained a patent for a technology related to the■ Opening of Syn Eco Plaza Azumino■ Mottainai BOX

In May 2019, we obtained a

Approved by theof silver were collected from waste incineration ash. →P.16

Syn Eco Plaza Azumino, a
recycling center for regional
circular and ecological economy
through recycling, was opened
in April 2019 with the aim ofhelping to address social issues
in the community throughrecycling and employment
creation. →P.19■ TOYO RUBBER CHIP Co., Ltd. has become an■ New laboratory established under ENVIPRO■ Procurement of the retired dedicated aircrafts of

In May 2019, TOYO RUBBER CHIP
Co., Ltd. successfully achieved 100%of the electricity consumed by thefactory with renewable energy,
becoming an “RE100 factory.” Priority
will be given in receiving electricity
from the Komiya Solar Power Plant
owned by a group company. →P.22

The laboratory was established inorder to develop core technologies
through the assessment ofrecycling technologies, analysis ofrecycled raw materials,
accumulation of data, andacquisition of technical know-how. →P.33

In May 2019, we concluded thepurchase and sale agreement for
two retired dedicated aircrafts ofJapanese government (B747-400),
after winning a tender invited by
the Air Self-Defense Force. Theycollection of precious metals from waste
incineration ash

patent for a technology tocollect precious metals fromwaste incineration ash
discharged by general waste
disposal facilities. As of June
2019, we concluded agreements with three municipalities for thepurchase of riddling ash. In FY2018, 22.7 kg of gold and 162.5 kg“RE100 Factory”

HOLDINGS, Inc.

Approved by the “Regulatory Sandbox Framework”

Regulatory Sandbox Framework,
we installed the “Mottainai
BOX” in 13 municipalities
across the northern part of Nagano
in April 2019. Using IoT to manage
the collection boxes installed across a wide area, we promote theefficient collection of material resources and the improvement ofrecycling rates. →P.20

Japanese government

were handed over at the end of June in the same year. We sold usedparts to buyers as resources to be recycled. →P.25
Sustainability Report 201912

Contents / Editorial policy

Company profile

Top Message

Sustainability Strategy

Resource Circulation Business

Used-cars-related Business

Global Resource Circulation BusinessSocietyBusiness foundation / Growth foundation

References

Sustainability Strategy

Circular Economy and Our Group Businesses

What is the Circular Economy?

● Circular Engine of the Circular Economy

In recent years, the circular economy concept has been gaining
considerable attention. This is an alternative economic system to thelinear economy which is characterized by mass-production, massconsumption, and mass-disposal, and the one-way flow of materials.
The circular economy is aimed to reduce wastes and instead use
them circularly as resources.
It is intended to address environmental issues while achieving
economic growth by creating the maximum added value with theminimum investment. This concept is totally consistent with thegoal of our Sustainability Strategy, “to achieve concurrent
sustainability of society and our company.”

The circular economy aims to provide another value for materials
that were once discarded. Our group’s Resource Circulation
Business offers social value to consumers by giving them theopportunity to choose eco-friendly products. It creates new resource
value for disused primary materials. Therefore, our group believes
that we can play a crucial role in the circular economy, performing
the function of an engine for resource circulation.

●Risks and Opportunities
The circular economy is expected to change economic models fromthe simple selling of products to the sharing of products, and theselling of experiences and functions. Furthermore, the flow ofwastes and resources will be potentially adjusted in accordance with
whoever owns the products.
Moreover, if manufacturers start getting involved in the
procurement of necessary resources or recycled raw materials, theboundary between arterial (product supplying) and venous(recycling) industries may disappear, potentially leading to newcompetition among industries. This could pose business risks forour group.
On the other hand, there are also various potential business
opportunities such as the expansion of recycled raw material use
and markets, and the emergence of new business models throughthe development of IoT in the venous industry. Our group needs todecide on our positions where we can take the maximum advantage
of our strengths.

Focusing on the reuse, recycling and remanufacturing of materials,
we will promote the finest technologies for resource circulation
across supply chains, and the development of arterial-venous
collaboration systems through partnerships with manufacturers.
Through these engagements, we will grow into a company that istruly appreciated in a society which is experiencing a transition to
the circular economy.

Roles of Our Businesses in the Circular Economy
Resource Circulation BusinessInformation concerning supply
chains in the venous industry(Functions as an engine for resource circulation)

Remanufacturing

Recycling

Reuse

Recreating resource value

Offering New Resource Value/Social ValuePrimary materials
discarded

Designing

Procuring

Manufacturing

Arterial
industry

Distributing

Using

Linear economy

Disposal

Sustainability Report 201913