Contents / Editorial policy

Top Message

Company profile

Sustainability Strategy

Resource Circulation Business

Used-cars-related Business

Other Businesses

EnvironmentSocietyBusiness foundation / Growth foundation

Sustainability Strategy

Global Resource Circulation BusinessTo achieve carbon neutral
Commit to become carbon neutral in our business by 2050

Renewable energy 100% in our business by 2030

Carbon neutral by 2050

Through our Resource Circulation Business, we contribute to greenhousegas (GHG) emissions reduction in the product lifecycle. Nonetheless, wedeclare that the GHG emitted from all of our businesses of our Group to becarbon neutral by 2050.
In this way, treatment and recycling operations of all the scrap and waste
we handle, will be performed with net zero emissions.

Resource depletion and climate change are not just two separate issues;
they are closely intertwined with each other as a global social issue. Our
Group's business, which is located at the end of the supply chain andresponsible for Resource Circulation Business, has the characteristics thatenable it to tackle both of these critical social issues through its businessprocess, and we believe that this is precisely the social responsibility that
we should fulfill.

Endless resource exploitation and GHG emissions are detrimental tosustainability. Thus we should find the solution to preserve thePlanet Earth's resources and its natural environment we share in thefuture.We will continue to play the role of supporting the social
infrastructure by accelerating resource circulation through circular
economy-related business activities and by making our entire
business operations carbon neutral.

0％

RE100 by 2030

In July 2018, we joined "RE100", which aims to source 100%
renewable energy in our business by 2050. Currently, renewableenergy sources in our group accounts for 17.8%.
This time as we announced our commitment to be carbon neutral by
2050, we reset our target year of RE100 to 2030, which is 20 years
ahead of schedule. This is because we recognize that expanding andaccelerating renewable energy which is the most important measureagainst climate change is an important theme to tackle for ourcompany, which has the mission of "contribute to create a sustainablesociety".

2030

Carbon neutral

RE100

We will achieve net zero
GHG emissions by 2050

2050

20 years aheadof schedule
Renewable energy

17.8％

Renewable energy percentage (FY2019)
As of the end of June 2020

Non-renewableenergy

82.2％

Sustainability Report 202010

Contents / Editorial policy

Top Message

Company profile

Sustainability Strategy

Resource Circulation Business

Used-cars-related Business

Other Businesses

Environment

SocietyBusiness foundation / Growth foundation

Sustainability Strategy

Global Resource Circulation Business

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

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 the general,unchanging direction for our group to follow, no matter how thetimes and social environment change. This is also a message to thosepeople who feel empathy with this statement to “work together tothis end.”

Mission Statement

Contributetocreatea sustainable society
Resource Circulation Business■ 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 unsustainable conditions insociety, we will promote the sustainability of both society and ourcompany.
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 theSustainability 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.

GoalTo achieve concurrent
sustainability ofsociety and our companyRecycling

Remanufacturing

Reuse

Global Resource
Circulation Business

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

Sustainability
Strategy

Environment Management
Consulting Business

Key policies

Used-cars-relatedBusiness

Welfare Service
Business for Persons
with Disabilities

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 theSustainability Strategy for the efficient use ofoperational resources

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

Growth Foundation

Business Foundation

Corporate Philosophy
Sustainability Report 202011

Contents / Editorial policy

Top Message

Company profile

Sustainability Strategy

Resource Circulation Business

Used-cars-related Business

Other Businesses

Environment

SocietyBusiness foundation / Growth foundation

Sustainability Strategy

Global Resource Circulation Business

Identifying material issues for the realization of sustainable development

In modern times, a wide variety of issues have surfaced which put the sustainability of society at risk, such as the impacts of climate change, anticipated shortages of material resources, the declining birthrate and the aging
population. We believe that businesses can play a crucial role in addressing these issues, which will in turn provide them with larger markets and more business opportunities.
In view of our mission statement, which is to “contribute to create a sustainable society,” we examined the strengths of our group and the impact of these issues on business, in addition to requests from society 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 these material issues as the Sustainability Strategy, we will firmly promote the implementation of any relevant activities.

■ Process to identify material issues

Step1

Identifying business risks/
opportunities in society

Unsustainable conditions
・Increasing impacts of climate change
・Material resource limitations
・Limitations of fossil fuel consumption
・Losing the spirit of generosity
・Development of Asian countries andtheir limitations
・Decline of developed countries
・Difficulties in sustaining socialinfrastructure
・Increasing number of countries with anaging population
・Increasing adverse effects of short-term
investment

Step2

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

３つの視点でExaminingissues fromマテリアリテ
ィofを検討
thethree points
view

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

Step3

Identifying material issues

Material Resources

Energy Resources

・Depletion of minor metals/Shortage of mineral resources

・Climate change/Decarbonized society

・Reduction of waste/scrap(increasing in Japan and thewhole of Asia)

・Energy demand (Asia)

・Increasing demand for renewable energy
・Development of an economy that promotes
local consumption of locally produced
products (Energy, resources)

Sustainability Report 202012

Contents / Editorial policy

Top Message

Company profile

Sustainability Strategy

Resource Circulation Business

Used-cars-related Business

Other Businesses

Environment

SocietyBusiness foundation / Growth foundation

Sustainability Strategy

Global Resource Circulation Business

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.

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

Goal 3: Health・ We prevent water and soil pollution and contamination by properly■ 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 wasadopted by the UN Summit held in September 2015. They consist of 17
goals and 169 targets to realize a sustainable world and pledge to leave noone behind.

managing scrap materials at our plants which comply with safety andenvironmental standards.

・ We are promoting new ways of working, including telecommuting

and the flex-time scheme, as part of measures to prevent theexpansion of COVID-19 to employees and the general public.

Goal 4 and 10: Education/Equality
・ Under government sponsored programs such as the pre-employmenttransition support program and the type B continuous employment
support program, we provide an environment where persons withdisabilities are able to acquire knowledge and skills, and support them tobe continuously engaged in rewarding work.
・ We run various employee training programs to improve their skills,
including a business school for employees.

Goal 5 and 8: Gender/Working Environment
・We have created an environment where employees can choose aworking 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 inorder to ensure the safety of employees.
・Envipro Holdings Inc. began recruiting new graduates in fiscal
2019. To build upon the current practice of hiring persons withdisabilities, we will be offering worthy job opportunities for peopleof different backgrounds.

Goal 7: Energy
・ We joined “RE100*1” in July 2018, setting a goal to match 100% ofthe electricity consumed in our business activities with electricity
generated from renewable sources by 2050. We have adopted
renewable energy to power our factories, and promote the introductionof renewable-energy power systems such as the installation 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 toincreasing the supply of sustainable biomass fuel by expanding ourinvolvement in the supply of wood pellets in the future.
*1RE100:aglobalinitiativewhichbringstogethercompaniescommittedtousing
100%renewableenergyfortheelectricityconsumedintheirbusinesses.

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 toproduce 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 inENVIPRO HOLDINGS Inc.

Goal 11: Community Development“Syn Eco Plaza Azumino” contributes to revitalizing the local
community and the development of a sustainable community throughrecycling and creating employment: the collection and recycling ofwaste and items disposed by households, and the hiring of persons withdisabilities 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
by promoting the purchase of electricity generated from renewablesources 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 FinancialDisclosures) recommendations” in May 2019. We will analyze the risks
and opportunities of climate change on our businesses and integratethem into 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 the control ofenvironmental pollution through the export of reusable products,
including used cars from Japan and international transactions of resources.
・By joining the following initiatives, we acknowledge our engagement inenvironmental businesses and promote activities which will lead to therealization of a sustainable society.
・Japan Climate Leaders’ Partnership (JCLP)・RE100 ・CDP*2 Scoring partner・CLOMA（Clean Ocean Material Alliance）*2 CDP: A global initiative concerning the disclosure of climate change-related information.

Sustainability Report 202013

Contents / Editorial policy

Top Message

Company profile

Sustainability Strategy

Resource Circulation Business

Used-cars-related Business

Other Businesses

EnvironmentSociety

Business foundation / Growth foundation

Sustainability Strategy

Global Resource Circulation Business

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 the goalof our Sustainability Strategy, “to achieve concurrent sustainabilityof 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.

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 collaboration
systems of forward and reverse logistics through partnerships withmanufacturers. Through these engagements, we will grow into acompany that is truly appreciated in a society which isexperiencing a transition to the circular economy.

Roles of Our Businesses in the Circular Economy
Resource Circulation Business(Functions as an engine for resource circulation)
Information concerning the reverse
logistics in the supply chain

Remanufacturing

Recycling

Reuse

Recreating resource value●Risks and Opportunities

The circular economy is expected to change economic models fromthe simple selling of products to the sharing of products, and theOffering New Resource Value/Social Value

selling of experiences and functions. Furthermore, the flow ofPrimary materials
discardedwastes and resources will be potentially adjusted in accordance with
whoever owns the products.

Designing

Procuring

Manufacturing

Distributing

Moreover, if manufacturers start getting involved in theprocurement of necessary resources or recycled raw materials, theIndustries in the forward logistics

Using

Linear economy

Disposalboundary between forward (product supplying) and reverse(recycling) logistics in the supply chain may disappear, potentiallyleading to new competition among industries. This could posebusiness risks for our group.
On the other hand, there are also various potential business
opportunities such as the expansion of recycled raw material use andmarkets, and the emergence of new business models through thedevelopment of IoT in the industries in the reverse logistics. Ourgroup needs to decide on our positions where we can take themaximum advantage of our strengths.
Sustainability Report 202014