Yamato Group Corporate Social Responsibility Report 2017

We Are Committed to Becoming a Company
Most Loved and Trusted by Society
Web edition

Table of Contents
Message from the President………………………………………

2

CSR Management……………………………………………

6

Our Major Initiatives……………………………………………………

8

Environment

Feature article 2015
Society

TA-Q-BIN Deliveries using Scheduled…………………………………………… 12
Bus Services

Under the key word “Necology,”
we create environmentallyfriendly logistics. ……………………………………… 25

We aim to earn the trust andrespond to expectations of
all stakeholders. ……………………………………… 27

Providing Eco-friendly and Smart
Logistics Services ………………………………………… 17
Governance

EconomyOverview and Major Indicators of theMedium-term Management Plan
DAN-TOTSU Three-Year Plan STEP ……… 22

Governance ……………………………………………… 29

Awards & Recognition………………………………………………… 35

Third-Party Opinion ……………………………………………………… 36
Policy for Publishing CSR Information ……………………………… 47
Participation in the UN Global Compact …………………………… 48

SafetyWith respect for human life as our
top priority, we are always striving
to achieve safety. …………………………………… 23

| Message from the President |The Yamato Group will celebrate its 100th anniversary in 2019. Our history is one of innovation, having
produced countless new essential services from time to time, including TA-Q-BIN. This is also the result of ourcommitment to the world and to people coupled with our pursuit of creating shared value (CSV) in which werealize economic and social value as a company while resolving various customer issues.
Today, Japan is faced with a number of challenges, including a falling birthrate, rising elderly population anddepopulation. Taking this situation into account, as a new form of CSV, the Yamato Group is focusing on“Project G (Government),” which calls for helping to resolve social issues through close partnerships withlocal governments and others. We have examined 1,971 projects as of June 2017 and of these currently 611
are being provided as actual services.
We are turning the information technology (IT), logistics technology (LT), and financial technology (FT) of ourgroup companies into platforms through partnerships with local people, NPOs as well as similar companies
operating in the community to tackle local issues together with local governments.
For example, we offer watch-over support for the elderly to regularly check on the well-being of elderly living
alone in the community, provide shopping support for those local residents who are unable to travel to stores
to do their shopping, and support the expansion of sales channels for local specialty products to addresscommunity issues such as the decline of local industries. In this manner, we are proposing solutions thatharness the functions of the Yamato Group based on the issues of the local community. Our combined
passenger-cargo service for TA-Q-BIN transport launched in fiscal 2015 using existing scheduled bus routes
received the Minister of the Environment’s Prize at the 13th Eco Products Awards. In communities facing
depopulation it is becoming more difficult to maintain the scheduled bus network that is one of the main ways
for residents to get around. This initiative switches transport of TA-Q-BIN from a truck to scheduled bus-2-

| Message from the President |operated along the same route, which not only lowers CO2 emissions, but also provides a new source ofincome that helps bus operators to maintain their route network. This initiative has been highly praised as asolution to community issues and for its revitalization of communities.
At present, we are working with community bus operators in Hokkaido, Iwate, Hyogo, Kumamoto andMiyazaki prefectures. Yamato Transport has recommended restrictions on cargo transport on passenger
vehicles be eased so that these initiatives can be expanded to depopulated areas nationwide and contributeto these communities.

Yamato Group Corporate Philosophy

The Yamato Group has come up with the “Value Networking” design,
which seeks to evolve logistics from a cost to a means for generating
value by restructuring our network in Japan and international markets
in an effort to support Japan’s growth strategy through logistics
restructuring that involves all customer business segments and sizes.
In 2013, we opened Haneda Chronogate as the centerpiece of thisconcept. At the same time, we opened the Atsugi Gateway for the
Kanto region in 2013 and the Chubu Gateway for the Chubu region in-3-

| Message from the President |2016. Following this, we will open the Kansai Gateway for the Kansai region in October 2017. By combining
the overwhelming speed of major logistics hubs with added value functions, our IT, LT and FT solutions, aswell as our last one mile TA-Q-BIN network in Japan and Asia, we will evolve distribution and transform not
only C-to-C logistics, but also B-to-C logistics as well.
Moving forward, under the “Value Networking” design, we will seek to increase the speed of customer
distribution like never before, while cutting costs and improving quality.

In the delivery business, recently we have seen significant increases in parcels and tight labor conditions dueto the rapid growth of e-commerce, and as a result, we were unable to keep pace with this growth and ourworking environment suffered.
As a critical aspect of social infrastructure, the Yamato Group recognizes that it is important for its employees
who underpin its services to have a sense of pride, motivation, and passion for what they do, in order for it tolive up to the expectations of society and customers. In February 2017, Yamato Transport established “office
for reforming working styles”, while other group companies set up “working styles innovation committees”. In
this manner, we have begun concerted efforts across all group companies to usher in working style reforms.
We are also working on the structural reform of the delivery business to redesign and innovate the businessmodel of the whole delivery business to better suit the current time frame.
Going forward, we will continually work on working style reform as a key focus of management.

Yamato Group’s CSR is defined as living up to the trust andexpectations of all stakeholders by fulfilling responsibilities in not only
the economy, but in safety, the environment, and society, based on the
10 aspects of our corporate stance, including “respect for human life,”“a corporation trusted by the local community” and “promoting
environmental protection,” and which form the heart of the YamatoGroup Corporate Philosophy.” The Yamato Group engages in CSR
activities after determining material issues and initiatives withconsideration given to its impacts on society, including stakeholders.
As we move forward with the globalization of our businesses, webecame a signatory to the UN Global Compact, a framework advocatedby the UN for achieving sustainable growth, in April 2014 and stated-4-

Yamato Group's CSR
Yamato Group's CSR activities are
deployed with a focus on safety, theenvironment, society and economy, in
accordance with the Yamato Group
Corporate Philosophy.
Efforts to continually build a soundcorporate culture will contribute tobusiness activities that comply withlaws and align with social norms. In
turn this will make it possible for theentire Yamato Group to continue
operations indefinitely into the future.
For this reason, we are committed toleveraging our collective strengths topromote CSR.

| Message from the President |our support for the four fields of focus (human rights, labor, theenvironment and anti-corruption) and 10 principles.
We also recognize that corporate value extends beyond mere financial
assessments such as operating income to include customer
satisfaction, shareholder satisfaction, social satisfaction and employee
satisfaction. We believe that enhancing overall corporate value
including CSR activities will link with the continual and sustained growthof the Yamato Group. Going forward, the Yamato Group will continue togenerate new value and make further efforts to become a company
most loved and trusted by society. Your continued support is greatly
appreciated.

-5-

| CSR Management |Yamato Group's CSR
Yamato Group's CSR activities are deployed with a focus on safety, the environment, society and economy, in
accordance with the Yamato Group Corporate Philosophy.
Efforts to continually build a sound corporate culture will contribute to business activities that comply with laws
and align with social norms. In turn this will make it possible for the entire Yamato Group to continue
operations indefinitely into the future. For this reason, we are committed to leveraging our collective strengths
to promote CSR.

- 6-

| CSR Management |CSR Management System
Yamato Group companies obtain external certification for quality, safety and the environment, among otherareas, in order to heighten the effectiveness of their CSR activities. Certifications obtained in fiscal 2016 areoutlined below.
* See the “Information Security” section for certifications obtained for information security.

Certifications held by Yamato Group companies
Certification
ISO9001

Company nameYamato Packing Technology Institute Co., Ltd.

Year
obtained
2008

Headquarters
Yamato System Development Co., Ltd.
Regional Sales Division
Chiba Logistics System Center, Tokyo Branch

JIS Q 9001:2008/ISO 9001:2008

1997

Tokyo SLC, Tokyo BranchShin-Tokyo Logistics System Center, Tokyo Branch

2008
2005

Chubu Logistics System Center, Chubu Branch
Chubu Logistics System Center (Inazawa), Chubu
BranchOsaka Logistics System Center, Kansai Branch
Osaka Logistics System Center (Higashi Yodogawa),
Kansai Branch
Osaka Minato Logistics System Center, Kansai
BranchHaneda On-demand Center, Tokyo Branch
Haneda On-demand Center (Oi Office), Tokyo
BranchHaneda On-demand Center (Oi Office #2 Center),
Tokyo Branch
System Solutions Company
Shin-Tokyo IDC

2007
2007
2007
2007
2011
2014
2005
2005
2003
2006

Yamato Logistics Co., Ltd.
Medical Logistics Company
Kanagawa Medical Center

2006

ISO14001

Yamato Packing Technology Institute Co., Ltd.
Headquarters

2008

Yamato Logistics Co., Ltd.
Medical Logistics Company
Kanagawa Medical Center

2009

ISO13485

Kobe Yamato Transport Co., Ltd.: obtained by Osaka Office

2012

Okinawa Yamato Transport Co., Ltd.

2015

Excellent Safe Driving Business
Certification (G-Mark)

Yamato Transport Co., Ltd.: obtained by 2,402 offices as of March
31, 2014
Yamato Multi Charter Co., Ltd.: obtained by all offices

2016

Yamato Global Express Co., Ltd.: obtained by 47 offices as ofMarch 31, 20172015

Yamato Home Convenience Co., Ltd.: obtained by 34 offices as ofJuly 6, 2017- 7-

| Our Major Initiatives |As we satisfy our CSR in terms of safety, the environment, society, andeconomy, we have decided the details of our initiatives based on theirmateriality to the Yamato Group and to our stakeholders, their impact
on society, and other factors. In order to advance our information
disclosure in the future, in fiscal 2014 we examined information wedisclose for important initiatives referencing the Sustainability Reporting
Guidelines Version 4 *.

- 8-

| Our Major Initiatives |Proper handling ofconfidential
information
Prevention of traffic
accidents

Prevention ofdangerous articles
being included in air
cargo shipments

Safety measures
matched to local
traffic conditions

Assistance with productrecalls
Prevention ofoccupational
accidents
Home security
Mental health care

Truck, bus and othervehicle management
and maintenancesolutions

Securing information
security for products
and services* Sustainability Reporting Guidelines: A set of international guidelines that apply to the creation of CSR/sustainability reports.
Operations with significant potential or actual negative impacts on local communities
Type of injury and rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related
fatalities, by region and by gender- 9-

| Our Major Initiatives |Eco-driving

Label recycling

Adoption of low
emissionvehiclesUse of uniforms
made fromrecycled PET
bottles

Promotion ofmodal shift
Environmental
impact reduction
throughcooperativetransport
Centralized
logistics
within large
mixed-usedbuildings
The First Bulk
DeliveryService of its
Kind in Japanfor
Residential
Neighborhoods
Using ICT

Confidential
document
recycling
service
Energy-saving
initiatives
Utilization ofnatural energy

Developing
eco-friendly
packagingmaterials

Reusing andrecycling
unwanted
articlesRecycling used
tires

Reusingrainwater

Going paperless* Sustainability Reporting Guidelines: A set of international guidelines that apply to the creation of CSR/sustainability reports.
Direct energy consumption within the organization

Significant environmental impacts of transporting
product and other goods and materials used for theorganization's operations, and transporting membersof the workforce
Materials used by weight or volume
Percentage of materials used that are recycled input
materials

Reduction of energy consumption
Direct greenhouse gas (GHG) emissions (Scope 1)
Greenhouse gas (GHG) emissions intensity- 10 -

| Our Major Initiatives |Improving quality and customer satisfaction
Product development based on customer needs (Ski TA-Q-BIN and Golf TA-QBIN, etc.)
Initiatives to improve customer service and work quality

Creation of workplaces to motivate
ducation and career development
Respect for diversity

Work-life balance

Fair and unbiased trading / Collaboration for safety and improving
service quality
Communication with TA-Q-BIN service partners

Appropriate and fair information disclosure / Enhancement ofcommunication
Publication of the annual report and booklets for shareholders
Earnings presentations and investor briefings held inside and outside Japan

Supporting society and education
Music TA-Q-BIN Kuroneko Family Concert
Children's Traffic Safety Workshop
Kuroneko Yamato Environmental Class
Yamato Transport Business Seminar for High School Students

Promotion of CSV in partnership with local communities
Lifestyle support, sales promotion support and tourism promotion support

Support for economic independence for people with disabilities
Initiatives by the Yamato Welfare Foundation
Operation of "Swan Bakery" stores, where people with disabilities work.
Donations by employees* Sustainability Reporting Guidelines: A set of international guidelines that apply to the creation of CSR/sustainability reports.
Return to work and retention rates after parental leave, by gender
Programs for skills management and lifelong learning that support the continued employability of employees andassist them in managing career endings
Percentage of operations with implemented local community engagement, impact assessments, and development
programs- 11 -

| TA-Q-BIN Deliveries using Scheduled Bus Services |Maintaining
Scheduled Bus
Services inMountainous

Combined
PassengerCargo
Operations

Benefits forMiyazki Kotsu,
YamatoTransport andExpanding
Combined
PassengerCargo

Communities
becoming more

Utilizing Empty
Space on

Local
Residents

Operations
Nationwide

Challenging

Buses

Voice of
Stakeholders
Voice of an
EmployeeSocial issue
The number of public transportation users in Japan’s coastal and mountainous areas of regional cities isdeclining due to the penetration of automobiles and a population exodus to cities. In particular, between
400 and 500 scheduled bus service routes have been reduced or eliminated altogether every year sincearound 2014.

- 12 -

| TA-Q-BIN Deliveries using Scheduled Bus Services |Maintaining Scheduled Bus Services in Mountainous Communities becoming more
Challenging
The communities of Higashimera district and Nishimera Village in Saito
City, both surrounded by mountains and forests in western Miyazaki
Prefecture, have among the largest depopulation and aging population
rates in the prefecture. Each year their population declines, while theratio of elderly living there is around 40%. In these communities,
scheduled bus services play an important role as a way for local
residents, including the elderly, to get to the urban part of the city.
Increasing productivity of routes with few passengers has become an
extremely difficult issue for bus operator Miyazaki Kotsu Co., Ltd.
Meanwhile, when delivering TA-Q-BIN parcels to customers in thesesame communities from Saito City, the nearly 50km journey for TA-QBIN deliveries from Saito TA-Q-BIN Center took close to an hour and ahalf. When considering the return trip, Yamato Transport had to set thecutoff time for same-day customer parcel collection at 3:00pm for bothcommunities, which has proven to be an inconvenience for customers.

Combined Passenger-Cargo Operations Utilizing Empty Space on BusesTo resolve this issue, Yamato Transport proposed combined passenger-cargo operations, whereby TA-Q-BIN
parcels would be transported between Saito City and Nishimera Village aboard a scheduled bus service. This
involved transporting a mixed cargo of bus passengers and TA-Q-BIN parcels by reducing a few passenger
seats to make room for cargo space on a scheduled bus already servicing the area.
First, a Yamato Transport Sales Driver (SD) carries the parcels to be delivered to customers in bothcommunities from the Saito TA-Q-BIN Center to the Miyazaki Kotsu Saito Bus Center, and then loads them
onto the bus. These parcels are carried by the bus and then handed over to SD responsible for each
community at bus stops along the way.

- 13 -

| TA-Q-BIN Deliveries using Scheduled Bus Services |Benefits for Miyazki Kotsu, Yamato Transport and Local Residents
This initiative offers benefits to each of the three parties.
First, Miyazaki Kotsu is able to increase productivity of its scheduled bus service and generate a new income
stream that will help to maintain its route network by transporting TA-Q-BIN parcels using otherwise empty
space.
Next, Yamato Transport is able to extend the cutoff time for same-day parcel collection to 5:00pm because
the SD for both communities no longer had to return to the Saito TA-Q-BIN Center, increasing the time spent
locally. Also, Yamato Transport is able to reduce CO2 emissions because of the shorter distance the delivery
truck drives.
Finally, local residents are able to access various facilities in the city including hospitals and supermarkets
because the bus network is unchanged, which maintains and improves their living standard. In addition, thismakes it possible to respond more flexibly to customer requests for changes in delivery times because theSDs can spend more time in both communities. Furthermore, at the time of delivery the SD can provide
watch-over support for the elderly by reporting any changes in customers to the local government, which
improves the lifestyle services of local residents.

Received the Minister of the Environment’s Prize at the 13th Eco ProductsAwardsIn December 2016, our combined passenger-cargo operations for
TA-Q-BIN transport using existing scheduled bus routes received
the Minister of the Environment’s Prize at the 13th Eco ProductsAwards.
In addition to reducing CO2 emissions by switching from truck toscheduled bus transport on certain routes, we received strong praise
for the wide reaching effectiveness of this service that goes beyond
reducing environmental impacts to provide an added level ofconvenience closely in tune with the needs of rural communities.

- 14 -

| TA-Q-BIN Deliveries using Scheduled Bus Services |Expanding Combined Passenger-Cargo Operations Nationwide
Yamato Transport currently offers combined passenger-cargo operations on three scheduled bus routes in
Miyazaki Prefecture. In January 2017, Yamato Transport launched the first Cool TA-Q-BIN using this service
in Japan between Saito City and Nishimera Village, which is being used to transport local specialty produce
grown locally.
Also, currently we are working on other combined passenger-cargo operations with local governments andcompanies in other parts of Japan, including Hokkaido, Iwate, Kumamoto and Hyogo prefectures, in addition
to Miyazaki Prefecture (as of June 2017). The Yamato Group is committed to using various angles to resolve
issues and revitalize communities in mountainous regions where aging populations and depopulation isprogressing.

Voice of Stakeholders

Offering Scheduled Bus Services that Contribute More to the Community
From the very beginning when I was presented with the proposal, I had
a very positive attitude during the review process because there weremany benefits in store for Yamato Transport, our company, and the
local community. However, I was concerned that the loading of parcels
could hinder scheduled bus operations.
In actuality, Yamato Transport provides the service in tune with ourexisting bus schedules, which means we can provide the same
services to our customers as before. Since the start of services,
customers have praised this novel approach as a good idea. Together
with Yamato Transport, I have also taken a look at special packing
materials for maintaining the freshness of products during extended
transport for the launch of Cool TA-Q-BIN services.
I look forward to working with Yamato Transport on other new venturesin the future as a scheduled bus service operator that contributes tolocal communities.

- 15 -

Katsumasa Onoue
General Manager
Bus Department
Miyazaki Kotsu Co., Ltd.

| TA-Q-BIN Deliveries using Scheduled Bus Services |High expectations for the future expansion of this service
Nishimera Village’s population is around 1,000, making it the smallest
in the prefecture. In the future, this community will see its population
become older and more and more people will rely on buses for making
a trip to the supermarket or hospital located in urban areas. Given this,I believe it is important to maintain scheduled bus services for local
community members. In addition, if more people find it difficult to go
out shopping, there will also be a need for shopping support and otherservices.
I hear from businesses that ship fresh foods that the service is now
more convenient because the final collection cutoff time for TA-Q-BIN
has been extended. I expect this service to play a role in revitalizing
our community once we see an increase in shipments of local specialty

Kusuo Sakamoto
Chairman
Nishimera Chamber ofCommerce and Industry

items such as citron, sweetfish and Nishimera salmon, among others.
Voice of an Employee

Deploying Our Know-how in Other Communities
The combined passenger-cargo operations launched first in Iwate
Prefecture mainly involved transporting parcels between offices andsorting centers called bases where parcels arrive from inside andoutside the prefecture. The service in Miyazaki Prefecture is different
because it relies on combined passenger-cargo operations on bus
routes to deliver parcels directly to the homes of customers.
We have been able to reduce the workload of SD by reducing travel
time which had been around three hours round trip. The fact that we
significantly extended the final collection time of the day also pleased
our customers very much. We also launched Cool TA-Q-BIN combined
passenger-cargo operations using refrigeration facilities, in order toincrease volume of temperature-sensitive parcels, such as local
specialty products. This is the first such service of its kind in Japan,
and so I hope to share know-how for similar services in othercommunities in Japan.

- 16 -

Yuji SatoManagerBusiness Development
Department
Miyazaki District Branch
Yamato Transport Co., Ltd.

| Providing Eco-friendly and Smart Logistics Services |For Sustainable
Urban Living

Centralized ofParcels from
Multiple
Providers

Delivering Ondemand
Logistics with
Centralized

Implementing
Various
Initiatives as a
Member of theManagement ofParcelCommunity

Voice of
Stakeholders
Voice of an
Employee

Information

Social issue
In recent years, there has been a significant increase in the percentage of people living in cities with apopulation of greater than 200,000 because of local government mergers and a higher concentration ofpeople living in urban areas. As a result, this has caused increase energy usage and encouraged local
governments across Japan to carry out a large number of projects for developing low-carbon andsustainable urban infrastructure.

- 17 -

| Providing Eco-friendly and Smart Logistics Services |For Sustainable Urban Living
Society is beginning to recognize the need for sustainable development and changing conventional
approaches to economic development and growth given the increasing seriousness of environmental issues.
Today, Japan’s regions face challenges such as depopulation while its urban areas are using a growing
amount of energy due to the greater concentration of populations. To address these issues, a large number ofurban development projects are underway throughout Japan with the focus on the keywords of eco, smart
and sustainable, because of the need to create sustainable approaches to living in urban areas.

Centralized Delivery of Parcels from Multiple Providers
Fujisawa Sustainable Smart Town (Fujisawa SST) was established through a partnership between the City of
Fujisawa in Kanagawa Prefecture and private-sector companies. It is located a close distance from the
Shonan shoreline, which is a famous surfing destination. As a smart town and hub of residential living, thiscommunity is promoting a sustainable, smart life for residents by incorporating new services and technologies
with an eye on community development that spans a 100-year time horizon.
Yamato Transport is now working on an evolution of smart logistics infrastructure to underpin community
development there in a partnership with the town’s information network and community, in light of theenvironmental goals Fujisawa SST has set for itself. In November 2016, Yamato Transport opened Next
Delivery SQUARE inside Fujisawa SST as an integrated logistics hub for the entire community. Using thishub, we launched a centralized delivery service in which all parcel deliveries from other providers go throughthis facility and Yamato Transport is responsible for the last one-mile. We have provided centralized delivery
services for commercial facilities, but this marks the first service of its kind in Japan for residential
neighborhoods.

POINT Certified under the Revised Act for Integration and Improvement of
Physical Distribution
On October 25, 2016, the centralized delivery service provided at Fujisawa SST became the first inJapan to receive certification from the Ministry of Land, Infrastructure, Transport and Tourism under the
Revised Act for Integration and Improvement of Physical Distribution.

- 18 -

| Providing Eco-friendly and Smart Logistics Services |Delivering On-demand Logistics with Centralized Management of Parcel Information
Next Delivery SQUARE is now able to manage information on parcels delivered within Fujisawa SST byconsolidating the parcels of other providers at the same location. In March 2017, we began providing services
utilizing this information. By streaming the day’s delivery schedule and notices of failure to deliver using asmart TV installed in each home, we have developed an environment for meeting the delivery needs ofresidents and created an on-demand logistics system. Changes can be made to the delivery time ordesignated delivery location from the TV screen, which eliminates the hassle of contacting each individual
express home delivery provider and receiving parcels individually. We also improve safety by making use ofhand-pushed trolleys and new three-wheelers (electric bicycles) for deliveries around the neighborhood.
We have also launched a special site introducing specialty product sales, lifestyle support services such as
cleaning services, and information about events held by Next Delivery SQUARE. At the same time, we aremaking life more convenient and fulfilling for local residents by disseminating information through their smart
TVs about new services such as ordering fresh fish from the Port of Odawara that is delivered the same day it
is caught.

POINT Eco-friendly Delivery Center
Next Delivery SQUARE uses LED lighting and is built from low-carbon construction materials, not tomention it has a photovoltaic power generation system, as a smart facility that generates its own energy.
As a result, Next Delivery SQUARE produces about 30% less CO2 emissions than Yamato Transport’s
other delivery centers.

Implementing Various Initiatives as a Member of the Community
At Next Delivery SQUARE, Yamato Transport employees lead the Children’s Traffic Safety Workshop to raise
traffic safety awareness among children attending kindergarten or elementary and junior high school in the- 19 -

| Providing Eco-friendly and Smart Logistics Services |area around Fujisawa SST. Employees also give these children the chance to tour and learn about the workthat takes place there during mini internships on routes with SD to convey the importance of work. In thismanner, Yamato Transport is committed not only to transporting parcels, but also to community development
together with local residents as a member of the community.
Going forward, the Yamato Group will continue to create proposes utilizing the functions of its groupcompanies with the aim of achieving sustainable communities.

Voice of Stakeholders

A Century of Community Development in a Public-Private Venture
Panasonic serves as the representative for the council that operates
Fujisawa SST. Fujisawa SST began considering the importance of asustainable lifestyle that is safe and security, instead of justenvironmentally friendly, following the Great East Japan Earthquake of
2011. In 2012, when I received this proposal from Yamato Transport, I
felt like Yamato Transport had a deep understanding of our vision forthis community. Yamato Transport explained the details of this service
during town meetings involving area residents, which led to its
adoption.
Fujisawa SST provides an environment where it is easy to test out new
businesses using cutting edge technologies like AI and IoT. I lookforward to rolling out new services that will contribute to thedevelopment of this community by utilizing the functions of the YamatoGroup.

Tomohiko Miyahara
General Manager
CRE Business Development
Group
Panasonic Corporation

Looking Forward to Tackling New Challenges for the Needs of Local Residents
My department is responsible for developing the residential systems
used inside Fujisawa SST. One of these systems is the smart TV
installed in each residence. The number of customers under contract
has increased since the launch of Yamato Transport’s on-demand
services. Also, the delivery service of fresh fish from the Port of
Odawara has been a hit with local residents because they get to enjoy
the surprise of not knowing which fish they will receive each day and,of course, the delicious taste of these fish caught on the same morningthey are delivered.
I feel Yamato Transport’s strength is its ability to propose various
solutions focused on the needs of local residents. They really
understand the concept and meaning of this community, so I reallylook forward to working with them to tackle new challenges in the
future.
Voice of an Employee- 20 -

Takashi Kameda
Manager
System Services Department /Business Creation Department
Fujisawa SST Management
Company

| Providing Eco-friendly and Smart Logistics Services |Always Thinking How to Contribute to Community Development
When I heard I was being transferred to Next Delivery SQUARE in
Fujisawa SST, honestly I felt uneasy about whether the job would be agood fit for me. Centralized delivery of parcels to a residential
neighborhood was a first-of-its-kind venture in Japan, but since thelaunch, customers who use this service have raved, proclaiming itsaves them the hassle of picking up their parcel and they know exactly
when the parcel will be delivered.
The mini internships planned since the inception of this facility havebeen a huge hit, and we plan on continuing these in the future. With
the goal of increasing what we offer to make this community evenbetter, we encourage SD to actively walk the community and talk withlocal residents to identify issues. I hope to continue working with othercompanies in Fujisawa SST to contribute to the revitalization ofcommunities with new ideas.

- 21 -

Junya Koizumi
Branch Manager
Fujisawa Tsujido Branch
Yamato Transport Co., Ltd.

| Economy |Overview and Major Indicators of the Medium-term Management Plan
DAN-TOTSU Three-Year Plan STEP

- 22 -

| Safety |Results of Initiatives in Fiscal 2016
Initiatives

Achievements and Results
4 major accidents (4 major traffic accidents, 0 major occupational accidents),

Formulationof safetyplans

Training of
Sales
Drivers

Plans to assuretransport safetyincluding no-fault accidents
The Yamato Group aims to reduce traffic accidents to zero. Every year, Yamato
Transport (J) formulates a plan to assure transport safety, and displays posters
providing information on safety goals and initiatives at all offices.
Safety Experts stationed nationwide: 312
At District Branch, Yamato Transport Co. Ltd. has stationed safety training directors.
These experts in safety measures provide safety instruction to Sales Drivers.

Education to
improve skills

Promotion ofsafetyawarenessamong
employees
Zero Traffic
Accidents
Campaign

Sales Drivers who have received ride-along instruction from Safety Experts
and/or managers: 44,392
Safety training provided to employees by Safety Experts: 2,331 times
Safety information magazine and safety calendar
Yamato Transport (J) publishes the safety information magazine "Safety First" with safe
driving tips and other information for Sales drivers, the "Driver's Safety Handbook"carried by all Sales Drivers, and the "Safety Calendar" that aids in training to improverisk sensitivity.
Implementation of the Zero Traffic Accidents Campaign
The Yamato Group implements the Zero Traffic Accidents Campaign in April and
September at all group companies, including outside of Japan. Yamato Transport (J)has conducted the campaign continually since 1970. In fiscal 2016, the spring session
focused on temporary stops, secondary stops and pointing and calling, while theautumn session covered the theme of practicing TTS*. As a result of these efforts, weachieved our goal of zero traffic accidents.
*

Commendations
and contests

Temporary stops (stop), secondary stops (indicate), pointing and calling (identify)

Long-Running No-Accident Commendation awardees: 8,274- 23 -

| Safety |Every year, Yamato Transport (J), Yamato Home Convenience, Yamato Global
Express, and Yamato Multi Charter commend Sales Drivers who excel in safe driving
and who remain accident-free.
Yamato Transport Nationwide Safety Contest
At the sixth safety contest held by Yamato Transport (J), 56 winners of contest at
branches nationwide, at Okinawa Yamato Transport, and at Yamato Global Express
competed on safety consciousness and driving technique. From this time, the two-ton
MP van category (automatic transmission) was newly created.
Also, the Tohoku District Branch of Yamato Home Convenience held a driving contest.
In addition to this, Employees of Yamato Multi Charter Co., Ltd. actively participated inoutside drivers’ contests.

Toward theachievement ofsafe work
environments

Initiatives to prevent occupational accidents
The Yamato Group performs internal sharing of information on near-miss incidents thatcan lead to major accidents, and formulates and carries out measures to achieve safe
workplace environments. In addition, all group companies implement measures suchas forklift safety seminars and Safety Week, which aims to improve safety
consciousness.
Vehicle maintenance plant Superworks: 23 sites
Superworks are Yamato Autoworks' 24-hour, 365-day maintenance plants that feature
greatly enhanced work efficiency. Of the company's 71 plants nationwide, 23 havebeen designated Superworks.

Vehiclemaintenancequalifications in addition to normal mechanic qualifications. This enables themechanics to perform completion inspections and confirm that vehicles conform tosafety standards following maintenance.

Maintenanceofequipment
and safetysystems

Enforcing driver's license checks through the adoption of IT systems

Adoption ofequipment andtools

Overseasrollout of
measures toassuresafetyMechanics: About 940 (including 600 with vehicle inspector qualifications)
Yamato Autoworks actively supports its mechanics' acquisition of vehicle inspector

Safetymeasuresmatched to local
traffic conditions

In addition to visual confirmation of licenses, Yamato Transport (J) uses portable
information devices to check IC card licenses, providing support for operation
management work and enforcing compliance through IT.
Adopting See-T Navi in delivery vehicles to support safe and Earth-friendly
driving
Yamato Transport's proprietary See-T Navi onboard vehicle system supports safe
driving with features that include digitized delivery route maps.
Safety measures matched to local traffic conditions
Safety managers, CSR managers and Safety Experts from Shanghai, Hong Kong,
Singapore, Malaysia and Taiwan observed the Yamato Transport Nationwide Safety
Meet held in Japan and learned about new safe driving methods. These individuals are
now rolling out what they learned in their own country using customized appraoches.

- 24 -

| Environment |* Necology: "Neco" comes from the Japanese word for "cat," found in the emblematic logo of the Yamato Group. We havegiven the name "Necology" to the movement by which this "Neco" (i.e., Yamato) engages in "ecology," and arecommunicating that name to society.

Results of Initiatives in Fiscal 2016
Initiatives

Achievements and Results

Eco in transport

Adopting our unique safety and ecological navigation
Every individual employee
will drive at all times in anenvironmentally-friendly
manner.

We strive to reduce gas
emissions, such as C02,
by introducing lowemission vehicles andconducting pickup anddelivery using handpushed trolleys and New
three-wheelers (electricbicycle with a trailer).

We strive to maximize theefficiency of logistics bypromoting joint operations
with other logistics
providers and modal shiftusing trains and seafaring
vessels.

system in approximately a cumulative 32,000 delivery
trucksThe unique See-T vehicular system of Yamato Transport (J)boosts the precision of eco-driving through visualization of fueland other driving conditions.
Adoption of about 5,200 new three-wheelers (electricbicycles with trailers)
Yamato Transport (J) is undertaking expansion of deliveries
that do not use motor vehicles.
Adoption of about 28,000 low-emission vehicles (55.9% of
all Yamato Group vehicles)
In our pursuit of delivery that avoids the use of vehicles
whenever possible, the Yamato Group is making use of new
three-wheelers and hand-pushed trolleys. For vehicles thatare required, we are making a shift to low-emission vehicles.
Total volume handled by rail and marine transportation:
About 430,000 tons
Reduction of environmental impacts in cooperation with atram company
Yamato Transport (J) and Yamato Logistics have balanced
flexible transport and CO2 emissions reductions by shifting
certain shipments of candies from Hokkaido to event venues
via railway and marine transport. We were recognized with anAward for Excellent Business Entities Working on Modal Shift- 25 -

| Environment |(New Business Development Category) at the 14th Excellent
Business Entities Working on Modal Shift organized by theJapan Association for Logistics and Transport.
Every employee will
endeavor to minimize
energy consumption andpractice energy saving
activities.

Eco in facilities

We utilize renewableenergy sources andpromote the conservationof energy at our facilities.

We strive to reduce waste
by promoting green
purchasing, recycling anda paperless office.

Displaying of Environmental Protection Declaration
posters and Indoor temperature setting stickers in all
Yamato Group offices
We are working to conserve energy by enforcing "Cool Biz"light summer wear and by reducing unneeded lighting.
Adoption of the latest environmental technology at
Haneda Chronogate
Incorporating the latest environmental technology that makes
use of natural energy we achieved a CO2 reduction of 46%
compared to conventional facilities. Also, we were able torecycle 100% of unnecessary items arising from facilites.
Green purchasing ratio: 83.7% (0.4 percenage point
increase compared to fiscal 2015)
We strive to select and purchase items with the least impact
on the environment.
Development and promotion of environmentally-friendly

We develop and promote
products using returnable
materials and otherenvironmentally-friendly
products.
Eco in products
We propose work
efficiency solutions andcontribute to customers'
energy conservation.

As a member of local
communities, weparticipate in community
environmental
Eco with local communities conservation initiatives.
We hold environment
classes to convey theimportance of theenvironment.

packaging materials
The Yamato Packaging Technology Institute has developed
packaging material that does not require package cushioning,and packaging material that can be easily separated fromother waste.
Provision of services that leverage information
communication technology (ICT)We provide joint transport services for products, joint usagetype online statement notification services, and other services
to support more efficient work by customers in a variety ofindustries.

Active participation in local cleanup campaigns

We hosted the Kuroneko Yamato Environmental Class 128
times during the year, with approx. 9,240 children
participating.

- 26 -

| Society |Results of Initiatives in Fiscal 2016
Initiatives

Achievements and Results
Implementation of customer service response competition (for customer

Customers

Improvement ofresponse quality

Employees
Education / training
and careerdevelopment

Service Center operators, Guest Operators and Sales Drivers)
We evaluate operators who are in daily contact with customers, awarding those
who score well in screening of response skills (facial expressions, conduct, way of
speaking, diction etc.), product knowledge, and communication skills.
Implementation of training led by an outside instructor
We actively hold training led by an outside instructor. At Atsugi District Branch, we
held hospitality training led by customer service instructors who were trained byoutside instructors.
715 persons took childcare leave / 570 persons worked shorter hours forchildcare
At Yamato Transport in Japan (Yamato Transport (J)), employees can takechildcare leave until the child become 14 months old, if their spouses are on
childcare leave and shorter working hours for childcare can be taken until the childfinishes fourth grade at elementary school.

Work-Life Balance

We are certified by Japan's Ministry of Health, Labour and Welfare as acompany that actively supports the balance between work and family life.
As of July 2017, three of our companies are certified by Japan's Ministry of Health,Labour and Welfare as a company that actively supports the balance between workand family life..
Yamato Management Service (2015), Yamato Logistics (2013), Yamato System
Development(2011)

Respect fordiversity

Promotion of programs for active engagement of female employees
We held the Female Leaders Meeting for female employees who have been with
the Yamato Group at least five years to draw out their skills and appetite forsuccess as leaders. Through the session for supervisors, we explained what is
expected of supervisors in terms of promoting the more active role of women in theworkplace.
- 27 -

| Society |Employment of 2,310 persons with disabilities (Employment rate: 2.15%)
We will continue to create a barrier-free workplaces conductive to work by people
with disabilities.

Partners

Fair and unbiased
trading /Collaboration forsafety andimproving service
quality

Appropriate andfair information
Shareholders disclosure /Enhancement ofcommunication

Communication with about 210,000 TA-Q-BIN service partners
Our Sales Drivers make daily visits to service partners. We also issue theinformation magazine "Kuroneko-Dayori" to general service partners such as liquor
and rice shops.
We publish an annual report and a booklet for shareholders to disclose
information.
Briefings for analysts held 4 times, and visited institutional investors forbriefings in North America / Europe / Asia
We conduct briefings for analysts 4 times a year, as well as overseas briefings for
institutional investors in North America, Europe, and Asia.
Music TA-Q-BIN "Kuroneko Family Concert" held 9 times per year, withattendance by 11,588 people.
Cumulative 311 concerts with a total attendance of about 450,000 people.
"11th Yamato Transport Business Seminar for High School Students"
Participation by 18 schools and 81 persons in fiscal 2016.
Cumulative participation by 100 schools and 557 persons (conducted every year

Social education
supportsince 2006)
The program received the Examination Committee Incentive Prize in the Awards for
Companies Promoting Youth Experience Activities by the Ministry of Education,
Culture, Sports, Science and Technology.
"Children's Traffic Safety Workshop" held 1,754 times per year, with morethan 180,000 participants.
Cumulative 27,871 times with participation by a cumulative about 2,900,000
persons (held every year since 2005)
Kuroneko Yamato Environmental Class
128 times per year with participation by about 9,240 people
Cumulative 3,121 times with participation by a cumulative 231,979 persons (heldevery year since 2005)

Local people

Lifestyle support, sales promotion support, tourism support etc.
Promotion of CSV
in partnership withlocal communities

Support foreconomic
independence forpeople withdisabilities

Total number of cases: 1,971 (611 cases in operation)
Number of agreements: 368 (as of the end of June 2017)
Through our main business, we make efforts to create value that can be shared byenterprises and society.
Support for the creation of workplaces in which people with disabilities canbe economically independent
Through the Yamato Welfare Foundation, we implemented the "Bridge to Dreams
Project (Yume E No Kakehashi Project)" to assist the preparation of "economic
independence".
Arrangement of Kuroneko direct mail delivery work for persons withdisabilities
Nationwide operation of 29 "Swan Bakery" stores employing people withdisabilities.
Fund raised through the Natsu No Kampa (summer donation) program: 72.89
million yen
About 200,000 employees in the Yamato Group raised funds for the Yamato
Welfare Foundation and NPO Ashinaga.

- 28 -

| Governance |We Aim to Continue as a Corporate Group in which Each Individual Holds a High Sense of Ethics

Corporate Governance
Making the securing of sound management, and the achievement of prompt andaccurate decision-making and business execution, our basic policy
Yamato Holdings, a pure holding company, and its group companies make the securing of soundmanagement, and the achievement of prompt and accurate decision-making and business execution, thebasic policies upon which we work to strengthen corporate governance.
Yamato Holdings has established the Board of Directors, the Management Committee, and the Executive
Conference as business management organizations involved in group-wide managerial decision-making,execution, and supervision, creating a structure to carry out prompt and proper decision-making on importantmatters.
The Board of Directors consists of 8 directors (including 3 outside directors) who serve one-year terms, during
which the directors clarify the responsibilities of management for the fiscal year. The Audit & Supervisory
Board consists of 2 full-time Audit & Supervisory Board members and 2 outside Audit & Supervisory Board
members, who audit the performance of directors’ duties through actions including attendance at Board of
Directors meetings and other important meetings. In addition, the auditors periodically hold Group Auditors’
Liaison Meetings to discuss auditing policy and methods with full-time Audit & Supervisory Board members
from major group companies, with the aim of enhancing auditing functions across the Group. All outside
directors and outside Audit & Supervisory Board members are independent officers pursuant to Tokyo Stock
Exchange Regulations, and their names are registered at the Tokyo Stock Exchange.

- 29 -

| Governance |Corporate governance promotion framework

Compliance
Strengthening internal control for the Group overall
The Yamato Group has established an internal control system in order to promote sound corporate culture in
the group a whole, and to enable employees to perform their duties effectively and efficiently without any
misbehavior or mistake.
Yamato Holdings has stipulated its basic policy on the internal control system in accordance with theCompanies Act, and each group company is working on strengthening internal controls. In addition, in orderto respond to the internal control report system pursuant to the Financial Instruments and Exchange Act,
which went into effect in April 2008, we created a post of internal control manager in major group companies,
and have made efforts to review business rules and standardize operations. We have also constructed aframework by which the section in charge of audits in Yamato Holdings and the sections in charge of internal
control in major group companies check whether work is being conducted effectively in accordance with rules,
and seek immediate remediation of any deviations. Internal control involving financial reporting by the YamatoGroup was found to be valid as of March 31, 2017, with a report submitted to the Kanto Local Finance
Bureau.

Setting the establishment of compliance management as our highest-priority issue
for CSR promotion
To construct a framework to prevent corporate misconduct in accordance with the laws and regulations andcorporate ethics, the Yamato Group is making efforts to ensure compliance management as a top-priority- 30 -

| Governance |issue for CSR promotion.
We have formulated the Group Corporate philosophy that summarizes the Yamato Group’s corporate
responsibility for and stance toward society, and have announced our Declaration of Compliance under which
we declare our observance of the laws and regulations, corporate ethics, etc. In all business offices of eachgroup company, a poster of our Declaration of Compliance has been put up to give a clear explanation incase of violations using illustrations. It helps to raise employees’ awareness and call their attention tocompliance.
Officers and employees of the Yamato Group are required to act in good faith in accordance with the abovementioned corporate philosophy. The departments responsible for compliance risk management of groupcompanies, centering on the Compliance and Risk Committee of Yamato Holdings are working to ensure theirobservance.
Compliance and risk management framework

We have also set up a Corporate Fraud Reporting Desk, Compliance Hotline and a Suggestion Box as pointsof contact in our whistle-blowing system, which enable us to directly obtain information on risks in thecompany by means of notification and consultation by phone or e-mail. They contribute to prevention ofcompliance violations.

- 31 -

| Governance |Business Continuity Plan (BCP)
Leveraging our experience from past earthquakes to effect improvements that will
enable appropriate response to major earthquakes
The Yamato Group offers the TA-Q-BIN service as social infrastructure, and is expected to keep offering thesteady service even under unforeseeable circumstances. In the wake of the emergence of novel influenza
strain (H1N1) in May 2009, we formulated a business continuity plan (BCP).
Based on this BCP, formulated according to response guidelines focusing on maximum priority on human life
and on quick restoration of our businesses, we addressed the problems caused by the Great East Japan
Earthquake (2011) and the Kumamoto Earthquake (2016). Using what we learned from these responses, wemade an additional manual that will enable us to assist the reconstruction of disaster-affected areas in an
organized manner, including cooperation for transporting public relief supplies in disaster-affected areas. We
continually review response and preparations for an earthquake occurring directly beneath the Tokyo
Metropolitan Area and an earthquake along the Nankai Trough, which are likely to occur in the future and are
expected to cause large-scale damage, so as to heighten the effectiveness of our response.

Helped to Relocate Important Cultural Properties following the Kumamoto
Earthquake
On the night of April 14, 2016 when the initial shaking of the Kumamoto Earthquake began,
employees at the Kyoto Artwork Branch of Yamato Logistics were hard at work preparing for the
Maruyama Okyo exhibit that was to take place the next day at the Yatsushiro Municipal Museum. The
exhibit was canceled due to the earthquake, and with aftershocks continuing, Yamato Logistics
worked with museum curators to relocate all of these important pieces of artwork to protect them frompossible damage. The exhibit was finally held one year later in April 2017.
The Yamato Group will continue to ensure it can quickly carry out the necessary response todisasters or other emergencies.
Customer voice
The understanding and cooperation of
everyone at Yamato Logistics was integral to
the successful relocation our works of art
following the Kumamoto Earthquake. We
were able to save these important culturalproperties thanks to everyone’s passion andcommitment as well as their careful handlingand attention.
Ryoji Torizu
Chief Curator
Yatsushiro Municipal Museum

Exhibit setup work (April 2017)- 32 -

| Governance |Information Security
Putting forth our Information Security Assurance Declaration and promoting theacquisition of certifications
The Yamato Group handles important personal information of many customers. We had always maintained
strict control over such information, and in March 2003, we announced our "Declaration on Ensuring
Information Security" in view of the social situation including frequent leakage of personal information from acompany. Since then, we have reinforced information security with an emphasis on "protection of personal
information," "confidentiality of corporate information," and "prohibition of falsification and concealment."
In 2016, we implemented our first campaign to raise awareness about information security across the entire
Yamato Group, including overseas subsidiaries. As part of this, each of our group companies carried out theirown unique measures for raising awareness based on their own situation.
For the purpose of ensuring proper and safe handling of personal information, we will strive to familiarize
employees with the information security rules, and to increase their educational opportunities. By doing so,
we believe we will be able to improve customer trust in our group.
In addition, for each of our group company workplaces we are actively working to acquire various
certifications regarding information security.

Security-related certifications acquired by group companies (as of August 2017)
Certification

JISQ15001(Privacymark
System)ISO27001

Year ofacquisition

Company nameYamato System Development Co., Ltd.

1999

Yamato Financial Co., Ltd.

2006

Yamato Contact Service Co., Ltd.
Head Office
Tokyo Call Center
Saitama Call Center
Miyakonojo Intelligent Contact Center
Wakayama Call Center
Tottori Intelligent Contact Center
Tome Contact Center
Kanto Mother Center
Kansai Mother Center

2007
2015
2007
2010
2012
2013
2013
2014
2015

Yamato Web Solutions Co., Ltd.

2007

Yamato Logistics Co., Ltd.

2010

Yamato Multi-maintenance Solutions Co., Ltd.

2006

Yamato Management Service Co., Ltd.

2011

Yamato Credit & Finance Co., Ltd.

2016

Yamato Transport Co., Ltd.
Headquarters
Haneda Chronogate
Atsugi District Branch

2015
2017
2017

Yamato System Development Co., Ltd.
Shin-Tokyo IDC
Osaka IDC

2004
2002
- 33 -

| Governance |Contactless credit card data processing services for large-scale affiliate stores

2009

Credit card terminal installation application form acceptance center operation
CAT joint usage system

2012
2013

Sorting and sending of account transfer request documents

2013

Member contact service
Joint usage-type online statement notification service

2014
2014

Proxy service for emergency invalidation procurement
Operations related to (new) registration of terminal installation application forms, accounttransfer systems (development), credit card terminal installation application form
acceptance center operation (development), online application acceptance service,settlement NW, settlement information DB

2014

Yamato Packing Service Co., Ltd.
Head office (human resources, general affairs, planning, information)
Documents Logistics Company (Sales Department, Sales Department Administration
Division, Planning Department, Tokyo Plant, Saitama Plant, Haneda Plant)

2015

2005
2005

Yamato Contact Service Co., Ltd.
Head Office
Tokyo Call Center

2006
2015

Saitama Call Center2007

Miyakonojo Intelligent Contact Center
Wakayama Call Center

2010
2012

Tottori Intelligent Contact Center
Tome Call Center
Kanto Mother Center
Kansai Mother Center

2013
2013
2014
2015

Yamato Packing Technology Institute Co., Ltd.
Headquarters
Packaging Testing Center

2009
2009

Yamato Logistics Co., Ltd.
Confidential Document Secure Solutions Division

2016

ISO20000

Yamato System Development Co., Ltd.

2006

PCIDSS

Yamato System Development Co., Ltd.
Credit card settlement service
Web billing service

2006
2011

Registration ofInformation
Security
Auditing Firms

Yamato System Development Co., Ltd.

2004

- 34 -

| Awards & Recognition |Year andmonth
receivedAwards, etc

Recognized by

Recipient

OctoberFirst to receive certification for an integration andstreamlining plan under the Revised Act for
Integration and Improvement of PhysicalDistribution

Ministry of Land,
Infrastructure, Transport andTourism

Yamato Transport Co., Ltd.

November

Recognized with an Award for Excellent Business
Entities Working on Modal Shift at the 14th
Excellent Business Entities Working on Modal
Shift (New Business Development Category)Japan Association for
Logistics and Transport

Yamato Transport Co., Ltd.

June

Logistics Environment Conservation Award,
17th Logistics Environment Awards

Japan Association for
Logistics and Transport

Yamato Transport Co., Ltd.

June

Minister of Land, Infrastructure, Transport andTourism Award, 1st Nihon Service Awards

Service Productivity &Innovation for Growth(SPRING)

International Cool TA-Q-BIN

February

Low Carbon Cup 2015
Special Mention Judges Award

Low Carbon Cup Executive
Committee(supported by the Ministry of
Yamato Holdings Co., Ltd.
the Environment and Platinum
Concept Network)

February

18th Environmental Communication Awards
Excellence Award for Global Warming Prevention
Measure Reporting (Global Environmental Forum
Director's Award)

Ministry of the Environment
and the Global Environmental
Forum

February

FY 2014 Awards for Companies Supporting Youth Ministry of Education, Culture,
Learning Activities Honorable Mention Judges
Sports, Science, andYamato Transport Co., Ltd.
AwardTechnology

January

18th Environmental Management Survey
2nd in Transportation Category

Nikkei Inc.

Yamato Holdings Co., Ltd.

December

FY 2014 Minister's Award for Transport
Businesses with an Excellent Environmental
Track Record

Minister of Land,
Infrastructure, Transport andTourism

Yamato Transport Co., Ltd.

November

3rd Healthy Life Expectancy Awards
Excellence Award in the Companies Category(awarded by the Director-General of the MHLW
Health Service Bureau)

Smart Life Project Secretariat(Cancer Control and Health
Promotion Division, HealthService Bureau, Ministry of
Health, Labour and Welfare)

Yamato Group Health
Insurance Society

November

8th METI Minister's Awards for Best Contributors
to Product Safety Special Prize

Ministry of Economy, Tradeand Industry

Yamato Multi-Maintenance
Solutions Co., Ltd.

Japan Society of HealthSupport Science

Yamato Group Health
Insurance Society

2016

2015

Yamato Group Corporate
Social Responsibility Report2014 (highlights version)

2014

7th Japan Society of Health Support Science
September Awards
Winner of the Practical Activities Category
July

2nd Platinum Awards
Grand Prize and Minister of Internal Affairs andCommunications Award

Platinum Awards Steering
Committee (Platinum Concept Yamato Holdings Co., Ltd.
Network)May

15th Logistics Environment Awards

Japan Association for
Logistics and Transport- 35 -

Yamato Transport Co., Ltd.

! Third-Party Opinion |(August 2017)

Masatoshi Tamamura
Professor
Faculty of Policy Management
Keio University

Orientation of this Third-Party Opinion and Points to Note
This Third-Party Opinion was written based on the author's interviews with relevant parties in August 2017,
his research on Project G conducted to date, as well as assessment of the Yamato Group Corporate Social
Responsibility Report 2017*.
* The Yamato Group Corporate Social Responsibility Report 2017 covers the period of fiscal 2016 from April 2016 to March
2017, including information about activities before or after fiscal 2016. The report is further published in both an abridged
highlights version (booklet) and full online report version (website). This Third-Party Opinion covers both formats.
In writing this Third-Party Opinion, the author also referred to the Yamato Group’s past corporate social responsibility
reports published on its website in order to review the company’s PDCA cycle and check trends in its approach to CSR (theEnvironmental Report for fiscal 2000 to fiscal 2003, the Environmental Sustainability Report for fiscal 2004, and the
Corporate Social Responsibility Report for fiscal 2005 onward).

This Third-Party Opinion examines the Yamato Group’s “Approach to CSR: Corporate Stance, Setting ofMateriality, Contents of Implementation, System and Others” and “CSR Report: Objectivity and Ease of
Understanding” as described in the Yamato Group Corporate Social Responsibility Report 2017 using an
independent perspective from the Yamato Group based on the author’s expertise. In turn, this Third-Party
Opinion provides the author’s views broken down by areas of excellence and areas in need of future
improvement.

1. Approach to CSR: Corporate Stance, Setting of Materiality, Contentsof Implementation, System and Others- 36 -

! Third-Party Opinion |<Areas of Excellence>
The title of the Message from the President in the Yamato Group Corporate Social Responsibility Report 2017
states “We are committed to being a company that continually creates new value for the world and forpeople,” which represents the belief that “based on its corporate philosophy, CSR represents the very
essence of management.”
The company’s fundamental approach underpinning its corporate philosophy is indicated as the company
precepts established in 1931 that contain the company’s founding spirit. In particular, the first precept states,“We ‘all’ represent the company.” The company’s website explains that employees identify themselves as anintegral part of the Yamato Group and that the company highly values this spirit where corporate management
represents a combination of the strengths of each and every employee.
Employees, who individually have contact with society, maintain a stance closely imbued by the precept “We‘all’ represent the company.” Management policy dictates that employees play an integral role in thecompany’s corporate social responsibilities, which can be viewed as a strength, I believe.
In actuality, the Yamato Group’s employees have developed and established various services to addresssocial issues (difficulties) based directly on customer feedback and their experience on the frontlines, and as
a result the company itself fulfills its corporate social responsibilities as an important piece of social
infrastructure. As a widely known example, I would like to cite TA-Q-BIN, a small parcel delivery service
empire established by the company forty years ago so that consumers could know when a parcel would be
picked up or delivered. This was followed by a number of services that address difficulties in society, such as
TA-Q-BIN Collect, a payment on delivery service essential to the spread of online and mail order shopping,
Cool TA-Q-BIN, for delivering fresh produce, and Time Period Delivery, designating a time when a parcel will
be delivered.
In this manner, the Yamato Group, which is set to celebrate its 100th anniversary in 2019, has created anumber of innovative services, including TA-Q-BIN. It can be said that this is the result of the Yamato Group’s
pursuit of creating shared value (CSV) in which the company creates economic and social value at the sametime as resolving customers’ issues.
The Yamato Group is also implementing Project G (Government), which seeks to address social issues
through close partnerships with local governments and organizations as a means to furthering the use of
Yamato Group solutions. The Yamato Group Corporate Social Responsibility Report 2017 explains that up toJune 2017 a total of 1,971 projects have been considered, with 611 of these projects now being implemented
as actual services.
Project G is seeking to build a collaborative social system that utilizes the strengths of all stakeholders
involved, including local governments and organizations, as a means of the Yamato Group CSV. The numberof these projects and services continues to increase with each passing year, as the number of projects as ofJune 2017 was 1971 and services totaled 611, compared with June 2016 when there were 1770 projects and529 services, marking an increase of 201 projects and 82 services, respectively. Employees with a keensense of the issues, through their experience on the frontlines and with customers, are establishingcollaborative mechanisms with various players based on their strong sense of motivation and providing the
Yamato Group’s logistics technology, information technology and financial technology as a platform, which
results in collaborative projects with local governments and organizations. As a result, the Yamato Group ismaking forward progress with solving difficult to address social issues, having a positive impact on society inevery corner of Japan.

- 37 -

! Third-Party Opinion |Project G has focused mainly on initiatives with local governments in regional areas of Japan, but in April
2016, the lifestyle support service was launched with the collaboration of the Yamato Group, Urban
Renaissance Agency and the City of Tama as a project focused on suburban areas. Additionally, in fiscal
2015, through its International Cool TA-Q-BIN service, the Yamato Group is using its robust international
network alongside local governments such as Aomori Prefecture to help connect restaurants outside of Japan
with local Japanese producers, creating a new innovation only possible by the Yamato Group.
Furthermore, in the Yamato Group Corporate Social Responsibility Report 2017, Feature Article 1 examines
the collaborative model involving the combined passenger-cargo operations and its win-win relationshipinvolving local residents, Miyazaki Kotsu and Yamato Transport in Miyazaki Prefecture. The article also
explains how Cool TA-Q-BIN is being promoted since January 2017 as the next step based on experiences
gained thus far. Additionally, Feature Article 2 explores the Yamato Group’s total community support througheco-friendly and smart logistic services provided to Fujisawa Sustainable Smart Town, a smart city with
progressive initiatives taking place throughout the community. The article also explains how the YamatoGroup is working for improving livability by providing on-demand logistics services and promoting activities in
the community. Through these efforts, the Yamato Group is implementing an urban business model thatseeks to solve social issues in urban areas, including rising energy usage from concentrated populations. In
this manner, the Yamato Group presents further challenges it addresses using its platform and based on its
experience working collaboratively with various players. In addition to its existing watch-over support andlifestyle support (shopping support, etc.) for the elderly, combined passenger-cargo operations, disasterreconstruction assistance, tourism support, regional revitalization support, and international development
support, among others, the Yamato Group is carrying out more in-depth efforts to address various social
issues (difficulties), including sustainable frameworks for mountainous regions, collaborative business models
for expanding the possibility of business expansion by regional players, lifestyle support in suburban areas,development of progressive business models, and expansion based on collaborative experiences.
I believe the Yamato Group is well on its way to fulfilling its goal of becoming “a company most loved andtrusted by society” as noted on the cover of the 2017 report. This is because Project G is addressing social
issues through collaboration with various players as a company that forms an important piece of social
infrastructure and thanks to its style of focusing on the contributions of each and every employee, who
maintain direct contacts with society.

<Areas in Need of Future Improvement (Updates and Issues)>■ Update from the Third-Party Opinion for the Yamato Group Corporate Social Responsibility Report2016 and Areas in Need of Future Improvement
I pointed out the following areas in need of future improvement within my third-party opinion for the YamatoGroup Corporate Social Responsibility Report 2016.
(1) Check the themes for CSR improvements and put these continual improvements into practice(2) Define approaches to CSR in tune with overseas expansion(3) Establish a mechanism and share information across the entire value chain that can more clearly verify
how each and every employee, who forms part of the precept “We ‘all’ represent the company,” should
be involved in CSR and CSV(4) Regarding Project G, make it easier for employees to engage in trial and error approaches to issues on
the frontlines(5) Encourage greater mutual learning and interaction in putting Project G into practice nationwide- 38 -

! Third-Party Opinion |(6) Regarding Project G, provide established models to other communities and establish a system forpromoting and encouraging trial and error in each individual location(7) Regarding Project G, establish a system for designing and building mechanisms collaboratively that
address specific systematic issues (evolve into a more collaborative style)(8) Regarding Project G, make it easier to grasp the overall picture of projects being implemented
nationwide(9) Expand Project G using the collective strengths of the Yamato GroupI conducted interviews with relevant parties in August 2017 to monitor the progress of efforts regarding eachof these areas in need of future improvement. Below, I will examine the progress of improvements based onthese interviews and the contents of the Yamato Group Corporate Social Responsibility Report 2017.
(1) Check the themes for CSR improvements and put these continual improvements into practice
The Yamato Group is working to expand its delivery business, grow its non-delivery business and reinforce its
overseas expansion. As a result, the social responsibilities expected of it have grown larger. For this reason,
the Yamato Group clarifies materiality within its CSR initiatives based on a review and understanding of the
impacts of its corporate philosophy and resulting expectations of stakeholders
Given this assumption, I pointed out “every year the Yamato Group is expected to check the themes for CSR
improvements and putting them into practice” as an area in need of future improvement within the third-party
opinion for the Yamato Group Corporate Social Responsibility Report 2016
In the Yamato Group Corporate Social Responsibility Report 2017, new pages were allocated in the highlights
version (booklet) to the three areas of “safety,” “the environment” and “society,” where details of initiatives
were explained clearly and commentary was provided on symbolic practices, as “Initiatives of Note in Fiscal
2016.” Also, in the full online report version (website), a section called “Results of Initiatives in Fiscal 2016”
was established to provide more detailed commentary on the nature of initiatives as well as results andoutcomes. In these sections, outcomes are illustrated using quantitative data as much as possible.
As a result of these improvements, it is now possible to examine the Yamato Group’s themes for CSR
improvements along with responses and results, which is a change I commend.
Based on such improvements, I would like the Yamato Group to establish the habit of implementing the Plan,
Do, Check, Action (PDCA) cycle in advance for themes for CSR improvements. These themes should be set
in advance under a clear basis (in addition to reporting them after the fact in the report) and then openly
shared using the corporate website or other means. Also, where possible, I would like a similar verificationand information sharing to take place for the third-party opinion of the report, too.
(2) Define approaches to CSR in tune with international expansion
The Yamato Group is working to strengthen its overseas expansion. In my third-party opinion for the YamatoGroup Corporate Social Responsibility Report 2016, I pointed out “define approaches to CSR in tune withinternational expansion” as an area in need of future improvement.
In the Yamato Group Corporate Social Responsibility Report 2017, a new page called “The Yamato Group’s
Global CSR Activities” was added in the booklet version. The online edition enables searches and sharing ofoverseas initiatives on the newly established social contribution activity search page. As a result, the Yamato- 39 -

! Third-Party Opinion |Group, which continues to grow globally, now provides information about its CSR activities outside of Japan
based on the local situation on the ground.
In the future, I would like the Yamato Group to determine the situation and work continually to share the latest
information, with the idea of publishing more in-depth information about its global CSR activities on its website
as well as enriching these CSR activities under certain hypotheses.
(3) Establish a mechanism and share information across the entire value chain that can more clearly
verify how each and every employee, who form part of the precept “We ‘all’ represent thecompany,” should be involved in CSR and CSV(4) Regarding Project G, make it easier for employees to engage in trial and error approaches toissues on the frontlines(5) Encourage greater mutual learning and interaction in putting Project G into practice nationwide(6) Regarding Project G, provide established models to other communities and establish a systemfor promoting and encouraging trial and error in each individual location
During the interviews I conducted in August 2017, I was told that meetings to review CSR/CSV are held at
each branch semi-annually. These meetings serve as a venue for participants to share and learn about eachothers’ best practices, too. I also learned that the Yamato Group is aware of the issue that it needs tocommunicate more effectively internally when it comes to CSR. I would like to see the Yamato Group broaden
the way it shares and articulates information. For example, it should use not only the booklet and online
versions of this report, but also highly visible posters in the workplace and other means such as articles in its
company newsletter to explain and familiarize people with how each and every employee, who represent theprecept “We ‘all’ represent the company,” is involved in CSR/CSV so as to lead to detailed actions in the
future.
With Project G taking place nationwide in Japan, it is becoming more important to promote mutual learningand mutual influence. Each individual project under Project G involves various forms of trial and error on thefrontlines, which has led to a steady and continual evolution of efforts. Various forms of assistance are also
being provided to further promote trial and error on the frontlines. In the future, so as to further promotemutual learning inside the Group, I expect these efforts to become more efficient by improving in-housecommunications with regard to issues directly faced during trial and error on the frontlines and sharing thedetails of actions taken to promote and support these efforts.
(7) Regarding Project G, consider a system to support such collaboration to address specific issues(evolve into a more collaborative style)
Project G is a way of promoting the Yamato Group’s philosophy since its origin, which makes its acceleration,
establishment and advancement important.
I believe approaches to Project G can be categorized as follows:
Project G 1.0: Enable elements (platforms) maintained by the company to be provided to society
Project G 2.0: Establish mechanisms for responding to the needs of society
Project G 3.0: Establish collaborative models with various players to create shared value
As indicated in the feature articles section of the report, I believe that the Project G 3.0 model has become themain format across the Yamato Group through its trial and error approach on the frontlines. As a result,mechanisms are being established that create new innovation in society and that advance solutions to social
issues.
Going forward, I expect these level 3.0 projects to be promoted further across Japan to raise the bar higher.
The domain of social issues addressed by Project G, however, requires in some cases a trial and error- 40 -

! Third-Party Opinion |approach through actual practice to elucidate the fundamental essence of issues. These projects also face
the challenge of meeting the needs of social system or social program design and reform. The approach insuch situations should be to facilitate trial and error approaches among Yamato employees on the frontlines
tackling the issue or to advance a more collaborative model to establish a system for designing and building
mechanisms collaboratively that address specific programs.
In the future, I would like Yamato Group to identify and publish issues related to the further promotion andpenetration of Project G as well as the situation of improvements on a fiscal year basis.
(8) Regarding Project G, make it easier to grasp the overall picture of projects being implemented
nationwide
As an area in need of future improvement in the Yamato Group Corporate Social Responsibility Report 2016,
I pointed out that the booklet and website versions provide commentary on the uniqueness of Project G
through the feature article and other sections, indicating its role and value to the Yamato Group. At the sametime, though, it is rather difficult to grasp the situation of the countless projects being implemented acrossJapan. The overall impression of this nationwide Project G is quite appealing, which by itself should lead tonew collaboration.
In the Yamato Group Corporate Social Responsibility Report 2017, the online version included more
introductions of actual practices and updated information, resulting in improved content overall. Additionally,
the Yamato Transport website offers more information on examples of its community solutions and initiatives,
while links are also provided from the online version of the report. This indicates that a number of
improvements have been made over the 2016 report.
(9) Expand Project G using the collective strengths of the Yamato GroupThe Yamato Group engages in the delivery, BIZ-logistics, home convenience, e-business, financial,autoworks, and many other businesses. Several Project G projects are already being implemented thatleverage such collective strengths of the Yamato Group, but efforts should be made moving forward to further
advance such projects and heighten connectivity with its businesses to increase the effectiveness. I expect
the Yamato Group to consider approaches with potential from various perspectives.
■ Areas in Need of Future Improvement from the Yamato Group Corporate Social Responsibility
Report 2017
Society expects more in the way of working style reform at the Yamato Group, given that it is a company that
forms a critical aspect of social infrastructure.
In the Yamato Group Corporate Social Responsibility Report 2017, commentary is provided about working
style reform in the Message from the President section and regular actions being taken, but there is no
dedicated section for the topic. I imagine that there was a limit as to the details that could be provided aboutmeasures and actions being implemented given the timing of the publication, but working style reform is an
important theme that requires attention. Therefore, together with implementing more effective working stylereform, the Yamato Group should in the future provide more information on this topic within its online CSR
report, updating information where possible.

As my third-party opinion, I have pointed out the following areas in need of future improvement. I would likethe Yamato Group to examine these areas in the next fiscal year and beyond.

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! Third-Party Opinion |(1) Further entrench the use of the Plan, Do, Check, Action (PDCA) cycle by establishing themes for CSR
improvement in advance(2) Examine and share the third-party opinion(3) Strive to determine the situation and work continually to share the latest information, with the idea of
publishing more in-depth information about its global CSR activities on its website as well as enrichingthese CSR activities under certain hypotheses.
(4) Carry out internal communication on CSR more effectively. Broaden the way information is shared andarticulated. For example, familiarize people with how each and every employee, who represent theprecept “We ‘all’ represent the company,” is involved in CSR/CSV so as to lead to detailed actions in the
future.
(5) Regarding Project G, so as to further promote mutual learning inside the group, make efforts more
efficient by improving in-house communications with regard to issues directly faced during trial and error
on the frontlines and sharing the details of actions taken to promote and support these efforts.
(6) Identify and publish issues related to the further promotion and penetration of Project G as well as thesituation of improvements on a fiscal year basis(7) Expand Project G using the collective strengths of the Yamato Group(8) Together with implementing more effective working style reform, provide more information on this topic
within its online CSR report

2. CSR Report: Objectivity and Ease of Understanding<Areas of Excellence>
The Yamato Group Corporate Social Responsibility Report has been provided in an abridged highlights
version (booklet) and a full online report version (website) since fiscal 2016. Currently, the booklet version isshortened, with more detailed and exhaustive commentary reserved for the online version, while current
trends and data of note appear in the booklet version.
The format, delivery, and utilization methods of a CSR report needs to be tailored to the viewpoints andstrategies of each individual company.
The booklet version in paper form with comprehensive and exhaustive information has been attractive, but
because many of the Yamato Group’s products and services such as TA-Q-BIN are used by the generalpublic, since fiscal 2016 the booklet version has been reduced in size to focus on and emphasize certain
content, making it easy to distribute and convenient to browse. It is important to modify how information isdelivered based on the perspective of emphasizing stakeholder engagement, and I expect the Yamato Groupto continuously explore its future style and design of reporting based on how the report is actually utilized.
The booklet version for fiscal 2017 focuses on the areas of “safety,” “the environment” and “society” just likethe fiscal 2016 version, but new introductory pages have been created for each section, special emphasis has
been given to “Initiatives of Note in Fiscal 2016” and smaller sub-articles have been added in the “Topics”- 42 -

! Third-Party Opinion |area of these sections. In this manner, innovative changes have been made to focus on particularly
noteworthy initiatives that took place in fiscal 2016.
Additionally, information regarding important initiatives for safety, the environment and society only appearedin the company’s website in fiscal 2016, but this information was presented in the booklet version of the reportin fiscal 2017. This conveys which areas the Yamato Group is focusing CSR efforts on in particular.
The online version uses the Internet to foster communication by making the Yamato Group’s stance toward
CSR and CSR initiatives more easily understood through videos and other formats unique to the Internet.
Links are also provided to previous feature articles to encourage greater understanding. The Yamato Group isalso focusing the attention of stakeholders by offering more detailed content within each year’s featurearticles section.
The online version of the fiscal 2017 report now features search page for social contribution activities. Until
now information has appeared categorized by “safety,” “society” and “the environment,” but the ability tosearch by activity theme, region, and company name now makes it possible to easily view the integrated
details of activities being implemented by the Yamato Group. Going forward, I would like to see the YamatoGroup make changes to the way it collect information so that it can add this information to its website asneeded, given the fact that many initiatives are being implemented on its frontlines.
The special feature articles on the company’s website provide additional content over the booklet version andalso brief articles representing the voices of stakeholders and employees, which indicates efforts were madeto convey more detailed information than before.
Generally, for its CSR report, the Yamato Group has put a system in place for stable communication forenhancing content and improving explainability by combining the report into a booklet and online version. I
expect the Yamato Group to further advance its communication with stakeholders using this platform.

<Areas in Need of Future Improvement>■ Update from the Third-Party Opinion for the Yamato Group Corporate Social Responsibility Report2016 and Areas in Need of Future Improvement
In my third-party opinion for the Yamato Group Yamato Group Corporate Social Responsibility Report 2016, I
pointed out the following as areas in need of future improvement.
(1) Provide relative data and make it easier to detail annual changes in numerical benchmarks and indicate
the direction and challenges based on such(2) Indicate advancements in domains where definitions and quantification of results is difficult(3) Examine relationships with the latest trends in ESG (environment, society, governance) and impact
investments(4) Use the website to provide a greater sense of how the Yamato Group’s CSR is continually in flux(5) Elaborate each year on the improvement themes for approaches to CSR reporting
I conducted interviews with relevant parties in August 2017 to monitor the progress of efforts regarding eachof these areas in need of future improvement. Below, I will examine the progress of improvements based onthese interviews and the contents of the Yamato Group Corporate Social Responsibility Report 2017.

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! Third-Party Opinion |(1) Provide relative data and make it easier to detail annual changes in numerical benchmarks andindicate the direction and challenges based on such(2) Indicate advancements in domains where definitions and quantification of results is difficult
Overall, I commend the fact that explanations use data, but in my third-party opinion for the Yamato Group
Corporate Social Responsibility Report 2016, I pointed out “Provide relative data and make it easier to detailannual changes and indicate the direction and challenges based on such” as an area in need of
improvement. I also noticed a gap in the presence and comprehensiveness of data based on the matter being
discussed. For example, in the field of safety, in most cases the achieved results (outcome and impacts) wereindicated using data, which shows thorough efforts are being made with safety, an important topic of concern
for Yamato Holdings. For the environment and society, too, information is provided quantitatively to every
extent possible and I noticed information about outputs and qualitative explanations. Although there are
domains where definitions and quantification of results is difficult, I pointed out Yamato Holdings needs tosupplement explanations about the benefits provided to society in these cases and to detail annual changes
or gaps so as to indicate advancements (even if qualitative in nature).
In the Yamato Group Corporate Social Responsibility Report 2017, efforts were made particularly on thecompany’s website to present numerical data and disclose information that was identified, which included
providing more information about annual changes and using graphs to explain the overall situation of the
Yamato Group in the fields such as the environment. I would like the Yamato Group to continue identifying
annual changes and providing more detailed numerical benchmarks going forward. However, for somedomains it may be difficult to provide numerical data due to technological and cost reasons, while for otherdomains it may be challenging to define and quantify results. In such cases, I still would like Yamato Holdings
to carefully supplement explanations about the benefits provided to society and to detail annual changes orgaps so as to indicate advancements.
(3) Examine relationships with the latest trends in ESG (environment, society, governance) and
impact investments
I pointed out “Yamato Holdings should also appeal information disclosures and numerical data compliant withthe latest trends in ESG investment and impact investing. Investor relations and CSR, however, have different
aims and goals, so Yamato Holdings will need to closely examine relationships and policies (instead ofcompletely integrating both)” as an area in need of improvement in my third-party opinion for the YamatoGroup Corporate Social Responsibility Report 2016.
In regards to this area, while it has made progress with adding articles and disclosing numerical data, I still
would like to see the Yamato Group continue to examine this area going forward.
(4) Use the website to provide a greater sense of how the Yamato Group’s CSR is continually in flux
Online information can be revised and distributed quite easily. As an area in need of improvement in my thirdparty opinion for the Yamato Group Corporate Social Responsibility Report 2016, I pointed out that “theYamato Holdings already shares information about awards, agreements and events through the CSR News
section. By more strategically sharing the status of CSR implementation and the situation after each event
and agreement, visitors to the website will be able to have a greater sense of how the Yamato Group’s CSR is
continually in flux.”
In the Yamato Group Corporate Social Responsibility Report 2017, the Yamato Group has enabled more
multifaceted sharing of information by establishing a search page for social contribution activities. Goingforward, I would like the Yamato Group to utilize this mechanism to continuously disseminate information.

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! Third-Party Opinion |(5) Elaborate each year on the improvement themes for approaches to CSR reporting
Approaches to CSR reporting can be improved in a sustained manner every year, and therefore, I would like
Yamato Holdings to continue to share more detailed information on its annual improvements and updates
going forward to show what policies are used to make these annual improvements.
■ Areas in Need of Future Improvement from the Yamato Group Corporate Social Responsibility
Report 2017
By indicating its approach and relationship with the Sustainable Development Goals (SDGs), the YamatoGroup could be able to promote collaboration with various other players more easily, including at a global
level. Toward this end, I would like the Yamato Group to consider how it will approach the SDGs.
The Yamato Group should update as necessary its website whenever there is updatable content given its
relationship with the establishment of the medium-term management plan and other matters.
As my third-party opinion, I have pointed out the following as areas in need of future improvement. I lookforward to the Yamato Group examining these areas in next fiscal year and beyond.
(1) Use more numerical benchmarks, ascertain annual changes, and indicate advancements in domains
where definitions and quantification of results is difficult(2) Examine relationships with the latest trends in ESG (environment, society, governance) and impact
investments(3) Use the activity search page to continuously share information and provide a greater sense of how the
Yamato Group’s CSR is continually in flux(4) Elaborate and share each year on the improvement themes for approaches to CSR reporting(5) Indicate approach to and relationship with the Sustainable Development Goals (SDGs)(6) Update as necessary its website whenever there is updatable content given its relationship with theestablishment of the medium-term management plan and other matters.

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! Third-Party Opinion |I would first like to thank Mr. Tamamura for his very valuable
feedback and suggestions regarding the Yamato Group's CSR
activity reporting.
The booklet version of this year’s CSR report focuses on
specific initiatives from fiscal 2016 in the areas of safety, theenvironment, and society, while the online version features the
new addition of a search page for activities to make it easier tosearch through the CSR activities of the group, so as to foster
greater understanding among stakeholders about the YamatoGroup’s CSR activities.
The initiatives introduced in both represent the outcome of
Yamato Group employees’ thinking about what they can do to
make a difference for customers in the communities they serve.
I am honored to hear Mr. Tamamura commend us for making
greater progress in the resolution of various social issues
through these initiatives.
Working style reform represents a top priority of management
because we are committed to our people and providing aworkplace with a sense of motivation and pride. I would like toreport on those initiatives we could not present in this year’s
CSR report using the CSR news section of the Yamato Holdings
website and other means.
Additionally, recent there has been a rallying cry for therealization of sustainability. For example, there is rapidly growing
awareness in Japan, too, about the need to achieve theSustainable Development Goals (SDGs) adopted by the United
Nations in 2015 and to be mindful of ESG investments. The
Yamato Group will actively disclose information in these areas,
effectively summarize disclosed information, and figure out
innovative ways to communicate it to stakeholders in aconsistent manner.
We stand committed to giving back to local communities
collectively as a group of companies, while also emphasizing
our culture and philosophy when it comes to ensuring our
employees have pride in their work and answer the question ofwhat they can do to make a difference for customers in theircommunity.

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Tomoki Otani
Yamato Holdings Co., Ltd.
Senior Executive Officer
Legal Affairs & CSR Strategy

| Policy for Publishing CSR Information |This report is created to deepen our stakeholders' understanding of the Yamato Group's stance and initiatives
regarding corporate social responsibility (CSR).
At present, the Yamato Group is working as one to advance our long-term "DAN-TOTSU Management Plan
2019." This report shows how our employees aim for "DAN-TOTSU" as they work to fulfill our social
responsibilities as a company. In reporting on initiatives concerning Safety, Environment, and Society inparticular, we worked to make the report easy to read and understand through the format of employees'
responses to stakeholders' questions.

Guidelines, etc. referenced
G.R.I. (Global Reporting Initiative), "Sustainability Reporting Guidelines" (G3.1 and G4); Ministry of theEnvironment, "Environmental Reporting Guidelines" (2012 version)

Period covered in report
Fiscal 2016 (April 2016 - March 2017)
Performance data is as of the end of March 2017, unless noted otherwise. (Some information from before thetarget fiscal year and after April 2017 is included in reporting on activities.)

Scope of report
Safety, environmental, social, and economic aspects of the activities of the Yamato Group.

Publication
October 2017 (scheduled next publication: October 2018)

Third-Party Opinion
In order to increase the objectivity and reliability of our CSR reports, we have received a third-party opinion.

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| Participation in the UN Global Compact |In April 2014, the Yamato Group joined the UN Global Compact, a framework in which the UN
and businesses work together to realize sustainable growth.
The Yamato Group supports the 10 principles of the UN Global Compact and by practicing
these principles in its business operations the Yamato Group is contributing to the sustainable
development of society and the fostering of a sound corporate culture in accordance with themedium-term management plan called DAN-TOTSU Three-Year Plan STEP.

1. About the UN Global Compact
The UN Global Compact was first advocated by former UN Secretary-General Kofi Annan at theWorld Economic Forum held in January 1999. As of February 2014, 12,139 businesses in 145
countries are participating in the UN Global Compact. Participating businesses carry out businessactivities that enable sustainable growth in society based on international guidelines on humanrights, labor, environment, and anti-corruption.
For more details, please see the website of the Global Compact Network Japan.

2. About the 10 Principles
The UN Global Compact summarizes shared values formed and approved by the world in the formof 10 principles covering the four areas of human rights, labor, environment, and anti-corruption.

Human Rights
Principle 1: Businesses should support and respect the protection of internationally proclaimed
human rights; andPrinciple 2: make sure that they are not complicit in human rights abuses.

LabourPrinciple 3: Businesses should uphold the freedom of association and the effective recognition of
the right to collective bargaining;
Principle 4: the elimination of all forms of forced and compulsory labour;
Principle 5: the effective abolition of child labour; andPrinciple 6: the elimination of discrimination in respect of employment and occupation.

Environment
Principle 7: Businesses should support a precautionary approach to environmental challenges;
Principle 8: undertake initiatives to promote greater environmental responsibility; andPrinciple 9: encourage the development and diffusion of environmentally friendly technologies.

Anti-corruption
Principle 10: Businesses should work against corruption in all its forms, including extortion andbribery.
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