Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

ESG+H Initiatives
Promoting sustainable management

Analysis of materialities

With global society facing numerous challenges, SENKO believes contributing to society by working to resolve thosechallenges through business activities is important in order to generate sustained growth.
The SENKO Group will work to provide value that leads to the resolution of social issues through its business activities
by practicing sustainable management so that it can continue to grow and develop alongside society.

The SENKO Group has identified a “Medium-Term Policy of CSR” outlining issues that are important to stakeholders
and which have a significant impact on the Group’s management. As the importance of sustainability grows worldwide,
for example in the form of ESG and the Sustainable Development Goals (SDGs), the Group conducted an analysis of key
issues (materialities) due to the ever-changing nature of megatrends with the potential to impact its businesses.
Specifically, we determined that the Group’s business segments are related to 28 of 77 sectors identified by the
Sustainability Accounting Standards Board (SASB) in its standards. We then looked at the materialities required of thoseManagement structures underpinning sustainable management

28 sectors and identified issues that the Group should address through its businesses, taking into account sales ratios

Corporate Ethics, Compliance, Risk Management, Environmental Promotion, and Social Contribution Promotion

established the following initiative areas (materialities) related to the environment, society, governance, and health.

Committees formed to resolve a variety of social issues undertake a range of activities related to sustainability.
The Sustainability Promotion Council, which is chaired by the president of SENKO Group Holdings Co., Ltd., oversees
these committees.
Corporate Ethics Committee

and business impacts. As a result of a careful examination that included key measures in the Group’s management, wePriority CSR measures, SDG themes, and materialities
Priority CSR measures

Compliance Committee
Sustainability Promotion Council

Risk Management Committee

Chairperson: SENKO Group
Holdings President andRepresentative Director

Environmental Promotion Committee
Social Contribution Promotion Committee

Sustainability Policy
The SENKO Group strives to deliver new value by helping realize a sustainable environment and society, working toachieve sustained growth for the Group, and connecting people and society through its various businesses.

SENKO Group stakeholders and their relationships
The SENKO Group operates its businesses with the goal of earning the trust of all stakeholders.

Shareholders

SENKO Group

Customers

Local communities●Optimal distribution of profits ●Transparent management●Appropriate disclosure of information●Provision of safe, environmentally friendly services●Partnerships ●Appropriate disclosure of information●Traffic safety ●Environmental responsibility●Regional exchanges ●Contributions to society●Appropriate disclosure of information

Government●Legal compliance ●Traffic safety●Environmental responsibility

Employees●Assurance of occupational health and safety●Human resources development●Fair promotion of human resources

Business partners●Partnerships ●Environmental responsibility

Priority
SDG
themesMaterialities and related
initiatives based on the SASB

Corresponding
initiatives

1. Environmental measures(1) Focus on meeting energy-saving targets as a Specified
Corporation.
(2) Make improvements related to "Reduce with energy-saving,”“Recycling rate” and “Green product procurement rate” andcontribute to a recycling-oriented society.
(3) Organize environment-related information of group companies,
and aim to achieve the same environmental targets.
(4) Actively install fixtures with a low environmental impact, suchas LED lighting and low-emission vehicles.
(5) Increase use of alternative energy sources, such as installing
solar panels on new facilities and increasing the number of large
CNG vehicles.
(6) Actively promote modal shift to customers as a way of
implementing green logistics.

2. Safety initiatives(1) Establish a health and safety management system that caters
to the characteristics of group companies.
(2) Utilize big data to centralize various types of safety-related
systems.
(3) Actively install (active safety) technologies to prevent accidents
from occurring.
(4) Create opportunities to share and learn about safety
technologies.

3. Health initiatives(1) Manage the health information of all group employees topromote the importance of staying healthy.
(2) Enhance health management to eliminate accidents caused byhealth problems.
(3) Conduct stress checkups to develop management systems forpreventing mental health problems.
(4) Work with health insurance unions to strengthen healthpromotion activities.

4. Social initiatives(1) Hold traffic safety classes and local clean-up drives tocontribute to the local community.
(2) Organize volunteer activities, such as education support
programs outside Japan.

E
Environment
P33

Environment● Climate change measures● Circular economy

S
SafetySocial/safety/security

P37● Diversity and inclusion● Assurance of safety● Responsible procurement
structures

S
SocialGovernance

P40● Risk management● Compliance● Information disclosure

HealthG
Governance● Infectious diseasemeasures● Management of employees’
physical and mental health

P43

H
HealthFor more about the relationship between SENKO’s businesses
and the SDGs, please see pages 17 and 18.

P47

The SENKO Group will choose key issues (materialities) to address through its business activities while making
reference to the priority CSR measures and materialities. We plan to review key issues on an ongoing basis.

31

SENKO INTEGRATED REPORT 2022

SENKO INTEGRATED REPORT 2022

32

Overview of the SENKO Group

Foundation for Growth

Strategies for Sustained Growth

Data Section

ESG+H Initiatives

E Environment
Initiatives to reduce environmental impacts
Deploying advanced environmental trucks

Environmental targets and results
Introducing recycled plastic pallets

The SENKO Group is deploying advanced environmental
trucks, for example hybrid vehicles (HVs), natural gas vehicles(NGVs), and electric vehicles (EVs), which generate fewer
CO2 and NOx emissions than diesel trucks. During FY2022,
we deployed five light cargo EVs for last-mile use and two
3-ton EV trucks. By leveraging the environmental advantagesof such vehicles, which generate 65% fewer CO2 emissions
than a conventional
light delivery van, andmore than 25% lessthan a diesel truck,
we’re accommodating
customers’ desire for
A 3-ton EV truck and light EV van at SENKO’s
low-carbon transport.
Komaki Branch

The SENKO Group is introducing environmentally friendly
recycled plastic pallets. These pallets are manufactured
using recycled plastic fromused pallets, containers, andother packaging containers.
Pallets that can no longer be
used, for example due todamage, can be recycled
again as part of the Group’scommitment to addressing
environmental problems byusing environmentally
responsible products.
Recycled plastic pallets

The SENKO Group launched its solar power business in FY2014, and it
supplies renewable energy to various power companies. Since FY2021, we’ve
pivoted to in-house use of solar power and worked to transition to non-fossil,
renewable energy for power used at logistics centers on clear days.
In FY2021, SENKO Co., Ltd. installed its first large-scale in-house solar powersystem (with a generating capacity of 1,051 kW) at Gifu Hashima PD Centerand established a model in which surplus power not used by the company isshared with a new power company as its source of power. We continue to makeprogress on the issue of accelerating use of renewable energy at logistics
centers.

vs. FY2021

Up 1,887 kW

Number ofsolar power
installations

The SENKO Group assess energy use and CO2 emissions associated with its business activities and applies the results to its
environmental protection activities. We’re currently implementing a variety of initiatives to reduce environmental impacts
while working to achieve the CO2 reduction target set forth in the five-year Medium-Term Business Plan that started in FY2023,
specifically a 10% reduction from FY2021 levels in CO2 emissions from the land transport business per unit of revenue(expressed as tons of CO2 emissions per million yen of revenue).

Breakdown of the SENKO Group’s CO2 emission sources
INPUT

SENKO Co., Ltd.

OUTPUT

Fuel use*1(kℓ)

Power use

(Tens of thousandsof kWh)Scope 1(t-CO2)

Scope 2(t-CO2)Total(t-CO2)

Ratio(%)

16,5107,465

43,50034,79878,29819

SENKO Line Co., Ltd.

7,989

0

21,4850

21,485

5

SENKO + SENKO Line

24,4997,465

64,98534,79899,78324

Group (excluding above)

103,362

9,107

277,482

43,383

320,86576

127,861

16,572

342,467

78,181

420,648

100

Total

Accelerating private consumption of solar power from panels installed on logistics center rooftops

Power
generation

CO2 reduction initiatives and results*1 Fuel use is calculated in terms of crude oil (kL).

SENKO Group CO2 emissions(■■■ CO2 emissions (t)*2● CO2 emissions (t) per million yen of revenue*3)

SENKO + SENKO Line
1.21

Gifu Hashima PD Center, which began using solar power
in-house in collaboration with a new power company

FIT power-selling
installations: 20

Private-consumption
installations: 4

16,400 kW 3,500 kW

1.15

Group total*5

1.10

1.03

0.99

0.97

94,276

95,336

98,02096,926

98,39099,783

2017

2018

2019

2020

2021

2022 (FY)■ New target companies(8 companies)■ Existing target companies(81 companies)

Per million yen vs. FY2017
CO2 emissions reduction rate

1.01*4

1.01

Target

FY2018 to FY2022
Cumulative five-year results-8.2% -19.8%

420,648
16,416404,232

393,0370.94

0.85
2022*6 (FY)2021

*2 Emissions include Scopes 1 and 2. *3 Revenue is calculated for flagship businesses corresponding Scopes 1 and 2. *4 CO2 emissions per million yen of revenue in the landtransport business. *5 Consisting of 57 logistics companies, including SENKO Co., Ltd.; SENKO Line Co., Ltd.; and SENKO Group Holdings Co., Ltd. along with seven trading andcommerce companies and 25 other companies, for a total of 89 companies. *6 FY2022 trading department revenue prior to application of revenue recognition accounting
standards. The specific unit after the application of revenue recognition accounting standards is 0.94 t-CO2/¥1 million.

FY2022 CO2 reduction targets and results
FY2022 CO2 reduction target

ResultAchievement rate

1,700

1,601

94%

SENKO + SENKO LineOther

SENKO Group solar power generation(t-CO2)

Total

1,700

2,705

159%

3,400

4,306

127%
CO2 reduction

Priority measure

Other

Total

625

1,540

2,165

857

946

1,803

119

219

338

Total

1,601

2,705

4,306

Green logistics CO2 emission reduction benefits from proposed improvements to customers’
logistics systems, including modal shifts, facility consolidation, joint transport andproposalsdeliveries, and use of larger vehicles

766

293

1,059

Continuing initiatives to protect biodiversity
The SENKO Group began an initiative to protect biodiversity in FY2020,
and in FY2022, SENKO Co., Ltd. held environmental tree-planting
programs to plant saplings at the sites of logistics centers and otherfacilities at 10 branches and two group companies. Initiatives to pass on agreen legacy to the next generation serve to improve workplacecommunication while contributing to local communities.
We also joined local environmental conservation groups in participatingin ocean conservation activities targeting Osaka Bay and the Seto Inland
Sea. These activities also helped protect marine biodiversity by creating ahome for ocean-dwelling creatures through the raising of eelgrass, a typeof seaweed.

33

SENKO INTEGRATED REPORT 2022

SENKO Co., Ltd.
+SENKO Line Co., Ltd.

(1) Promoting the transition to energy-saving vehicles

Commemorative photograph taken
during an environmental tree-planting
program

Raising eelgrass

Scope 1

Fuel savings

Scope 2

Power savings

Scope 3

Recycling-based (1) Recycling discarded wood pallets
society(2) Promoting use of recycled tires(2) Promoting the transition to environmentally friendly forklifts(3) Installing other environmentally friendly equipment(1) Switching to a new power company and revising fees(2) Switching to energy-saving equipment (LED, air-conditioning)(3) Utilizing renewable energy from solar power installations

Note: Since the publication of ESG data (FY2022 edition) and the SENKO Group Report (for the 105th fiscal year), we’ve reviewed CO2 reduction activity assessment standards andreexamined results values to take account of benefits such as the transition to power companies with lower CO2 emissions coefficients and private consumption of solar power
generated at group facilities.
SENKO INTEGRATED REPORT 2022

34

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

ESG+H Initiatives

E Environment
TCFD initiatives

Strategy

During FY2023, the Board of Directors acted to increase the Group's medium- and long-term corporate value throughthe implementation of sustainable management by creating a new executive officer position in charge of sustainability
and assigning the deputy manager of the Administrative Department to hold it, and by creating the Sustainability
Promotion Council chaired by the president and representative director and consisting of a membership that includes
outside directors.
The Council convenes twice a year to discuss important matters related to the Group’s environmental (E), social (S),governance (G), and health (H) activities and reports to the Board of Directors concerning its discussions and the resultsof associated activities.
The Sustainability Promotion Department, which is responsible for administering the Sustainability Promotion
Council, facilitates the implementation of operational initiatives by core companies in the Logistics, Trading &Commerce, Living Support, and Business Support businesses along with sustainability coordinators in Business
Promotion Divisions. It reports to the Sustainability Promotion Council.

Category

Transition risks

GovernanceThis fiscal year, we carried out a scenario analysis for the Logistics business to identify risks and opportunities
associated with climate change. We clarified important transition and physical risks and opportunities and studied theirmedium- and long-term effects as well as countermeasures.

Physical risks

Climate change is a global environmental issue, and we consider dealing with it to be a key issue for sustainable
management.
As a result, the SENKO Group is committed to addressing climate change in a serious manner, and we’ve contributed
to the realization of principles related to environmental action, for example by signing the United Nations Global
Compact in October 2020.
In FY2023, we began disclosing information related to climate change in accordance with the recommendations of
the Task Force on Climate-Related Financial Disclosures (TCFD) in a timely and appropriate manner.

Governance structures
Board of Directors

HD President and Representative Director
Outside directors and other HD officers

Sustainability
Promotion Council

Business companies’ presidents
Sustainability
Promotion Department

Officer in Chargeof Sustainability

Responsible personnel atcore business companies
Responsible personnel in
Business Promotion Divisions

Risk management
The Group strives to deliver new value by connecting people and society through its various businesses in line with its basic
policy of helping realize a sustainable environment and society and working to achieve sustained growth for the Group.
In keeping with the above policies related to sustainability, we work to resolve environmental (E), social (S),governance (G), and health (H) issues and consider addressing climate change to be a top-priority issue.
In addition, we’ve created a Risk Management Committee and an Environmental Promotion Committee that report to
the Sustainability Promotion Council. The Risk Management Committee identifies risks that the Group faces now or is
likely to face in the future and develops organizational and appropriate preventive measures and improvement
measures to address those risks. The Risk Management Committee has created a Natural Disaster Risk Subcommittee,
which is working to increase the Group’s resilience by inspecting and reviewing its business continuity plan (BCP) andthrough other initiatives.
In addition to establishing an Environmental Initiative Policy to guide the Group’s efforts to protect the environmentand reduce environmental impacts and spreading awareness of the policy among employees and other workers, theEnvironmental Promotion Committee manages environmental targets in areas including CO2 reductions, renewableenergy use, and waste recycling.

35

SENKO INTEGRATED REPORT 2022

Opportunities

Chairperson:

Anticipated risks and opportunities

Impact on the GroupCountermeasures

Public policy, law, andregulations(Carbon pricing)• Rapid increases in fuel prices• Rising cost burdens• Promotion of transition to environmentallyfriendly vehicles (EVs, HVs, LNGs,
environmentally friendly DSLs, etc.) andtandem tractor-trailers• Promotion of modal shifts• Study of the future introduction of FCVs, LNGs,
and ammonia-fueled ships• Initiatives as a GX League sponsor

Technologies(Delays in renewableenergy and energy-saving
technologies)• Difficulty in achieving GHG
reduction targets• Increases in renewableenergy, every savings, andcarbon credit procurement
costs• Management of the Group’s energy use andenergy-saving measures• Assurance of power from renewable sources

Markets(Changes in the size of thecustomer base)• Selection of lower-carbon
services by customers• Stagnation in market share if
we fail to provide low-carbon
services• Disclosure of CO2 emissions, including Scope 3• Provision of decarbonization choices, forexample through use of environmentallyfriendly vehicles, modal shifts, and logistics
facility consolidation

Acute risks(Extreme weather)• Interruptions in the operation ofroad, rail, marine, and airtransport• Rising cost of continuing
Logistics business operations

Chronic risks(Sea level rise)• Need for measures to prevent
flooding at logistics facilities andreassess siting• Costs associated withactivities such as risk surveys
and relocation of logistics
facilities

Chronic risks(Rising temperatures)• Risk of heat illness• Increased employee attrition• Employee health impacts• Increases in insurance
premiums, hiring costs, etc.

• Development of a safe workplace environment• Promotion of automation and labor-saving
measures

Technologies(Adoption of renewableenergy and energy-saving
technologies)• Transition to renewable energy
sources; increased use ofrenewable energy andenergy-saving technologies, forexample through introduction of
in-house power generation• Stable supply of low-cost,
low-CO2 energy• Revenue from the sale ofpower generated at groupfacilities• Installation of solar power facilities and shift toprivate consumption of generated power• Transition to LED lighting and environmentallyfriendly air-conditioning control• Transition to solar power, wind power, etc.

Technologies(Development of
next-generation
technologies)• Growing adoption of
next-generation logistics
technologies that improve vehicle
loading and operating efficiency,
for example joint logistics service• Reduced logistics costs• Reduced CO2 emissions• Development and introduction of systems thatprovide optimal transport patterns and routes• Promotion of automation and labor-saving
measures through the digital transformation(DX), etc.

Markets(Liquefiedhydrogen/liquefied
ammonia)• Growing demand for transport ofliquefied hydrogen by trucks as
adoption of fuel cell trucks rises• Growing demand for transport ofliquefied ammonia by ships• Increased revenue related tothe transport of liquefiedhydrogen and liquefied
ammonia• Expansion of existing businesses anddevelopment of next-generation energy
transport structures

Markets(Circular economy)• Increased reuse and recycling of
EV batteries, solar panels, andwaste plastic• Increased revenue related tologistics services associatedwith reuse and recycling• Targeting of existing and new customers basedon demand for climate change
countermeasures• Development of logistics platforms

Reputation(Investors’ evaluations)• Praise from investors for properly
disclosing information about how
we deal with climate change risk

• Growth in corporate value;fund procurement at
favorable terms• Deepening of disclosure of information to
stakeholders• Fund procurement through means such as
green bonds• Development of BCPs and staging of
associated training• Purchase of supplies• Collaborative support among facilities• Dispersion of facilities• Provision of alternative transport routes

Indicators and targets
Under the five-year Medium-Term Business Plan that began in FY2023, we’re working to realize sustainable growthof our businesses through environmental initiatives designed to achieve carbon neutrality by undertaking strategic
investments and other measures, with the principal target of reducing CO2 emissions per unit of revenue (in our landtransport business) by 10% from FY2021 levels.
In addition to calculating CO2 emissions both upstream (procurement-related) and downstream (post-shipment) of
our corporate activities (i.e., Scope 3 emissions) in a more fine-grained manner, we plan to calculate Scope 3 emissions
associated with logistics in our customers’ supply chains and to offer advice concerning efficient logistics measures.
SENKO INTEGRATED REPORT 2022

36

Overview of the SENKO Group

Foundation for Growth

Strategies for Sustained Growth

Data Section

ESG+H Initiatives

S Safety
The SENKO Group’s Safety Policy

SafetyPhilosophy

Basic
Approach

Priority
Measures

Building a Foundation for Safety

The SENKO Group will “achieve an eventual goal of zero workplace accidents” basedon the spirit of respect and by prioritizing safety over everything else.
1. We can and must prevent all accidents and disasters.
2. Managers are responsible for the safety of employees.
3. Every employee must believe in "eliminating all accidents.”
4. Safety ensures high quality and high productivity.
○ The SENKO Group deeply recognizes the social mission of the logistics business and promotes efforts that
all employees understand correctly and that contributes to the improvement of safety by ensuring safety inbusiness activities is the basis of our business.
○ The top management will actively lead the field from the bottom to the top to unite and strive to securesafety and improve safety in business activities.
○ The basis of safety is to be strongly conscious of each person working in the SENKO Group to be healthymentally and physically, to practice proper health management.
1. We comply with relevant laws and regulations and fulfill our social responsibilities.
2. We thoroughly carry out risk assessment and reduce all safety risks.
3. We prevent health problems by enhancing health management system and promoting independent health.
4. We actively disclose information on safety and health activities.

Trainer program
We're working to enhance
trainer skills to facilitate more
effective education for passing
on safety technologies andimproving skill levels.
During FY2022, theCertification
program hadof trainers
16 graduates.
Certification
test

Trainertraining
Selection oftrainer candidates

Although both vehicle and occupational accidents fell compared to the previous year, we will formulate andimplement new measures as not all goals were achieved.
FY2021 result

FY2022 target

FY2022 result

Vehicleaccident
frequency rate

0.572

0.28 or less

0.563

Occupational
accident
frequency rate

1.771

1.696

[Priority measures]●Having top management develop safety
and health management structures andvoluntary operational structures●Strengthening collaboration on safety andhealth initiatives within the Group●Encouraging the prevention of accidents
through collaboration among safety-related
systems●Actively introducing active safety
technologies●Creating opportunities for passing on andlearning about safety technologies

Medium-term safety goals (FY2023 to FY2027)
Based on the five-year Medium-Term Business Plan that started in FY2023, we will promote group-wide safety
programs, including using the latest driver assistance technology and other measures.

We aim to reduce
vehicle andoccupational
accidents by 25%
from the FY2022
level.

Vehicle accident
frequency rate
(On-road accidents)

Occupational accident
frequency rate
(Occupational accidents resulting
in at least four lost workdays)

FY2022 result

FY2027 target

0.563

0.422 or less

SENKO INTEGRATED REPORT 2022

In FY2022, we began adopting
cloud technologies in an effort
to realize more advanced safety
and educational management
systems.

[Development of a system for
managing operation of lightcargo vehicles]
By adopting a system for
managing the operation of lightcargo vehicles, we’re working to
improve safety throughenhanced safe driving guidance
and management of driving
hours and fuel costs.

Adoption ofcloud-based
systems
Safetymanagement
systems

1.696

1.272 or less

Certification of trainers[Oversight through simulatedbranch visits]
As part of an effort to improve
compliance, we’re conducting
simulated branch visits todeepen branches’
understanding of laws andregulations.

Principal FY2022 initiatives
Accompanied instruction for all drivers in their
third year
Since drivers with less than three years of experience
are the most likely to cause vehicle accidents, we beganoffering accompanied instruction to all drivers in their
third year as an FY2022 priority initiative. Although theresults remain preliminary, accidents involving drivers
with less than three years of experience have fallen 13%
from the previous year. In FY2023, we’re continuing tooffer accompanied instruction to all drivers in their thirdyear while verifying the effectiveness of the program.

Installation of truck sonar
Although we offer instruction for drivers throughinitiatives like crew certification and local training, justunder 30 percent of all vehicle accidents continue to occur
while vehicles are being backed up. As an urgent measure
to address this problem, we began installing truck sonar
devices that warn the driver when the vehicle isapproaching an obstacle behind it under a three-year planin FY2022. As of March 31, 2022, the devices have been
installed on 553 vehicles, and we will continue to installthem in a systematic manner in FY2023 and beyond.
Sensor installation locations: 2 at top and 4 at bottom(SENKO Co., Ltd. andLogistics Group)(SENKO Co., Ltd. andLogistics Group)*Figures for the Logistics Groups do not include companies acquired during FY2023 or later.

37

Compliance measures

Visualizationof safety
management
indicators

Achievement of safety goals (FY2022)

0.70 or lessUse of ICT

Accompanied instruction

Truck sonar

SENKO INTEGRATED REPORT 2022

38

Overview of the SENKO Group

Strategies for Sustained Growth

ESG+H Initiatives

ESG+H Initiatives

S Safety

S Social

Implementing our safety management system

The SENKO Group’s social activities

We

conduct"Safety

Skillsyear in accordance with legislation,
publishtheprogressof

improvements as improvement
ranking charts which are distributed
to branch managers and presidents
of group companies. We apply the
specific results to management ineach region, and run a PDCA cycle
for resolving issues to ensure safety.

Data Section[Safety Skills Evaluation Operating Cycle]

Evaluations" (internal audits) every
andFoundation for Growth● Implementation ofsafety skills
evaluation system● Assess improvement
activities● Regional branch orgroup company Healthand Safety Committee
checks improvement
progress

Feedback

A

P

Act

Plan

C
Check

D
Do

● Feedback is provided tobranch managers andgroup company presidents
by the regional branch orgroup company Healthand Safety Committee● Set branch index andtarget, and decide on
safety activity plans● Conduct and promote
improvement activities
under the responsibility ofthe safety manager

Approach to human capital
As an enterprise whose businesses contribute to people’s
daily lives, the SENKO Group considers human resources tobe its driving force. In April 2021, we created the positionsof Responsible for Culture & Sports Promotion andResponsible for Health Promotion at our Head Office. We
will continue to promote and support culture and sports
activities so that employees can enjoy physical and mental
health as well as rich and fulfilling lives.

Engaged, motivatedhuman resources with
Internal
problem-solving skills

Strengthening social capital

Human
resourcesdevelopment

SENKO University
Use of Crefeel Koto

Updates to the Standards of Business Conduct

Based on the Standards of Business Conduct of "As a good
corporate citizen, the SENKO Group will be pro-active inparticipating in social activities, and will create a spirituallyaffluent society and contribute to the development of society
and the local community by promoting cultural, arts and sports
activities and independent social contribution activities,” weare coordinating efforts with the local community with the aimof contributing to development of society.

School Farm
Promotion of sports and culture

Health management

Collaboration
with local
External
communities

Principal FY2022 initiatives
Acquiring “Safety Excellence Workplace”
certification

Education for veteran drivers
This fiscal year, we relaunched a coaching program

Principal initiatives

As part of safety programs in line with the safetythat had been halted due to the COVID-19 pandemic.

Use of Crefeel Koto in human resources development

management system, the SENKO Group is aiming toWe’re working to offer systematic ongoing coaching-have

style instruction to reduce accidents by verifying

We opened and continue to operate Crefeel Koto, a
traffic safety and logistics education facility, in an effort
to pass on logistics technologies accumulated through
SENKO’s businesses and to foster the development ofeven more advanced technologies. Crefeel Koto is oneof the largest training facilities focusing on traffic safety
and logistics skills in Japan.
The facility offers a variety of driver training programs
that use its traffic course. In addition, certified trainers
from the facility offer instruction to drivers andoperators throughout Japan in a way that reflects thenature of their jobs.

allworkplacesacquire“Safety

Excellence

Workplace certification*.”
As of the end of March 2022, 100% of all workplaces
have acquired certification (2% increase compared totrainers’ coaching skills and explaining procedures andsystems to safety coordinators while taking steps toprevent infection.

previous year).
* Safety Excellence Workplace certification: Certification acquired from theJapan Trucking Association for workplaces with traffic safety and otherinitiatives that are deemed to meet specific standards.

Structures for managing hazardous goods areas

100% of all SENKO Groupand tours for sales coordinators and logistics sales

workplaces have acquired
certification

We offer safety instruction through regular workshops
offices that handle hazardous goods.
In addition to identifying latent risks with the potential
to have a serious impact on our business and providing

Crefeel Koto
Number of training sessions
Number of participants

70
637

Regional training

335
2,934

Improving traffic safety and manners throughtraffic safety classes for children
We’ve been hosting traffic safety classes for children
since FY2007 in an effort to teach traffic safety knowledge
and thereby safeguard children from traffic accidents.
We’ve also continued to offer on-site instruction atelementary and junior high schools since FY2015.

G-Mark issued by theJapan Trucking
Association

FY2022 result

A meeting of people in charge of hazardous goods areas

39

SENKO INTEGRATED REPORT 2022

SENKO University opened in 2016 as a place where
human resources development could become moreadvanced and more specialized to ensure the more robust
development of the Group’s businesses in the future.
Courses are taught by inside and outside experts who
are well versed in the latest technologies and market
trends, and top management and executives also
participate as instructors to spread knowledge of theGroup’s business principles and philosophy.
The program contributes to strategic development of
human resources with the latest knowledge and skills in
the SENKO Group’s business domains.

FY2022 result

guidance to take corrective action, we’re working toraise managers’ safety awareness and expertise.

SENKO University: Human resources
development to create future trends

Number of participating children: 306

Participating in the United Nations Global Compact
In October 2020, SENKO Group Holdings Co., Ltd.
signed the United Nations Global Compact (UNGC),registering as a participating company.
The UNGC is a voluntary initiative that lets companies
and other organizations exhibit creative leadership toact as good citizens while participating in the creation ofa global framework for realizing sustainable growth. In
this way, we’re working to resolve social problems andcreate new value through our businesses in an effort torealize a sustainable society.
SENKO INTEGRATED REPORT 2022

40

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

ESG+H Initiatives

S Social
Close-up on principal FY2022 initiatives
Registering as an SDGs Partner (Senko School Farm Tottori Co., Ltd.)White Ribbon campaign (AST Corporation)

Senko School Farm Tottori Co., Ltd, which was established as a special subsidiary of the Group in April 2010, is using
a former school in the town of Yurihama, Tottori, to grow hydroponic vegetables in a greenhouse built on the school’s
grounds and to grow mushrooms in renovated classrooms.
Tottori Prefecture has introduced the Tottori SDGs Partner program to allow companies and other organizations
working to achieve the SDGs in the prefecture to
register as partners. The program is designed toallow participants to contribute to the realizationof the SDGs in partnership with the prefecture.
Since Senko School Farm Tottori has promoted
the SDGs through a variety of business activities,
including by providing waste vegetables for use
as cattle feed and waste mushroom beds frommushroom production for use as cattle bedding,the company registered as an SDGs Partner
promoting the SDGs in September 2021.
Going forward, SENKO will continue to work toachieve the SDGs through a variety of businessactivities.

AST Corporation sells and imports products including paper products, daily necessities, foods, and quasi-drugs. The
company donated paper diapers through JOICFP (a domestic and international program dedicated to creating a worldin which women can make their own life choices at all times and in all places by promoting international cooperation in
the fields of population and health) in order to assist mothers and children in areas affected by natural disasters.
Reflecting its understanding of the need to contribute to society not only in the event of natural disasters, but also ina year-round manner, the company launched a “Household Paper Support Group Project” to produce products thatcome with a donation in order to foster activities withbusiness partners and customers. It’s also participating in
activities designed to safeguard the lives and health ofwomen to better understand women and earn theirempathy, including by donating a certain amount fromthe sale of specially planned products to the White
Ribbon campaign through JOICFP.
In addition, JOICFP holds charity runs throughout Japanevery March to mark International Women’s Day. Entry
fees are used to provide support to women in developing
nations, and starting this fiscal year, AST plans toparticipate as a sponsor.

SDGs Partner certificate

SDGs badge*There are still women in the world whose health and lives are threatened byunsafe abortions and childbirth due to an inability to exert control over sexual
conduct and contraception or receive medical care. There are also women wholose access to educational opportunities due to unwanted pregnancy and childmarriage, sacrificing their dreams of self-realization.

Donating supplies (SENKO Co., Ltd.)The White Ribbon is an international symbol mark that communicates the

Food banks collect safe food products that cannot be distributed, for example due to a tear in packaging, excess
inventory, or a printing error, from companies and provide them free of charge to facilities, organizations, andeconomically disadvantaged families that need them. Volunteers working for NPOs and other organizations collect foodproducts and ingredients that have no quality issues but that would be difficult to sell normally from food manufacturers
and provide them free of charge to social welfare
facilities and other recipients, including rice,bread, noodles, fresh foods, snacks, drinks,
seasonings, and instant foods.
The Nobeoka City Social Welfare Council
operates a food bank to provide food support toneedy families and others. Reflecting its support
for this work, SENKO’s Higashikyushu Operations
Center donated about 1,000 (emergency rations)natural disaster items to the council’s Nobeoka
Self-reliance Consultation and Support Center.
Going forward, we will continue to participate
in a variety of community service programs inorder to help realize the SDGs.
Donated supplies

41

SENKO INTEGRATED REPORT 2022

importance of women’s health and rights.

Teaching swimming at elementary schools (Blue Earth Japan Co., Ltd.)Blue Earth Japan Co., Ltd. operates a total of 20 Blue Earth sports clubs and My-Body fitness gyms that are openyear-round 24 hours a day in Yamanashi, Tokyo, Kanagawa, Shizuoka, Nagano, and Gunma Prefectures. The company
also operates sports classes that teach swimming, ballet, karate, dance, and PE as well as Kids Station, an after-school
program that teaches English, calligraphy, and other subjects as part of an effort to help create communities where
people of all ages, from children to senior citizens, can enjoy physical and mental health and where members are left
with energetic smiles and feelings of happiness.
In May 2021, Blue Earth received a contract to teach elementary school swimming from cities, towns, and villages in
Yamanashi Prefecture as part of a program that allows
private-sector use of schools’ swimming pools. Whereas
swimming classes at elementary schools are usuallytaught by school teachers at their school’s pool, thisprogram has Blue Earth Japan swimming coaches provide
instruction at the company's pools. The contract includes
bus transportation between the schools to the company's
facilities, along with other services. Classes, which are
based on the PE Edition of the Elementary School
Learning Guidelines, follow an annual instructional plan.
The program is helping reduce school faculty members’
workload while providing safe, advanced swimming
instruction, and the company plans to expand thecontract area to include other cities, towns, and villages
going forward.
SENKO INTEGRATED REPORT 2022

42

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

ESG+H Initiatives

G Governance
Basic Policy
The SENKO Group is a logistics company involved in highly public work that fosters people’s development andsupports their lives. The SENKO Group makes every effort to ensure that all corporate activities thoroughly comply withlaws, based on the awareness that good corporate governance is the foundation of business, as well as regarding
governance as a high priority for management.

Corporate Governance System
We have adopted the following corporate governance system, one that we consider to be optimal, in order to ensure
management transparency and legal compliance based on the company’s size, lines of business, organizational
structure, and other features.

General Meeting of Shareholders
Appointment/dismissal

Accounting auditors

ReportAppointment/dismissal

Board of Corporate
Auditors

Appointment/dismissal
ReportAudit

Selection/
supervision

DialogAccounting
audit

ReportAssist/reportPresident andRepresentative Director

Audit

Auditing Dept.

ReportReportInternal Controls Committee
Sustainability Promotion Council

ReportInstruct
Audit

Executive Officers

Board of Directors

ReportReportSupervise

Legal counsel

43

Subsidiaries directlysupervised by SENKOGroup Holding Co., Ltd.
Companies affiliatedwith Living
Support/BusinessSupportFurther, to implement sustainable management
throughout the Group (in order to improve thesustainability of its businesses), we havedeveloped a series of sustainable management
structures that encompass the entire Group,
including Corporate Ethics, Compliance, Risk
Management, Environmental Promotion, andSocial Contribution Promotion Committees as well
as a Sustainability Promotion Council, which
oversees the committees, and an Internal Controls
Committee.

Runtec Corporation
SENKO Shoji Co., Ltd.
AST Corporation
Smile Corp.

Report

SENKO
Co., Ltd.

Committees

1

2

To implement the sustainable management of the entire group, the Group has established a Sustainability Promotion Council tooversee the activity policies and plans that guide committees related to compliance with applicable business laws, corporate risk,
corporate ethics, and social contribution activities.
We’ve also established an Internal Controls Committee to increase the sophistication of the Group’s internal control activities andensure their thorough implementation. The committee’s responsibilities include oversight of the evaluation of the development
and administration of the internal control system.

3

Our Board of Corporate Auditors, which meets at least once a month, reports on, discusses, and makes decisions about legally
mandated matters as well as important matters related to audits.

Corporate Ethics Committee
Compliance Committee
Sustainability
Promotion Council

Risk Management Committee

Chairperson:
SENKO Group Holdings
President andRepresentative Director

Environmental Promotion
Committee
Social Contribution
Promotion Committee

Policy on determining compensation for officers
Compensation for officers includes basic compensation, performance-based pay (bonuses), performance-based
stock, and restricted stock compensation. Guided by internal rules, we determine the specific amounts of thecompensation, taking into account factors such as the position of the officer, the performance in the individual fiscal
year, and the level of contribution to performance made by each person.

Officer category

Total amountofcompensation,etc.
(millions ofyen)

Directors(excluding outside directors)

Total amount of each type of compensation, etc. (millions of yen)
Number of
eligible
officers

Basicremuneration

Performancebased bay(bonuses)

Performancebased stockcompensation

Restricted
stockcompensation

161

59

62

26

13

9

Corporate auditors (excluding
outside corporate auditors)

45

34

11

–

–

3

Outside officers

51

36

15

–

–

7

Core companies

The Company’s Board of Directors meets at least once a month and deliberates on issues as required by laws and regulations aswell as important management concerns in addition to being an organization that oversees the execution of business.
Furthermore, so that the Directors, Executive Officers, and key employees execute their duties appropriately and efficiently, theCompany has established the Regulations of the Board of Directors and the Regulations for Administrative Authority to clarify
authority and responsibility. We also verify the status of the implementation of operations and strive to have even moretransparent management.

SENKO INTEGRATED REPORT 2022

5

The Auditing Department performs internal audits at the Company and subsidiaries with the aim of verifying the status of risk
countermeasures, identifying the status of managing operations and of improvements, and ensuring the effectiveness of theoperation management system. As well, the Auditing Department reports its findings to the Representative Director and the
Corporate Auditors.

ReportOperating companies
Advice4

The Company has concluded an audit contract with Grant Thornton Taiyo LLC as the accounting auditor, under the terms of theCompanies Act and the Financial Instruments and Exchange Act, and will receive guidance in relation to accounting. Our audit
staff includes 12 certified public accountants, eight individuals who have passed certified public accountant exams, and another12 employees.

The Financial Services Agency and the Tokyo Stock Exchange began applying a number of major principles that
contribute to the realization of effective corporate governance as the Corporate Governance Code in June 2015. SENKO
has included all elements of the Corporate Governance Code on its website to clarify the Company’s position on working
to enhance corporate governance based on this code.

Compliance-based management
Compliance-based management, which complies with laws and regulations and engages in ethical business activities,
is the base for a company to fulfill its social responsibility and earn the trust of stakeholders.
The SENKO Group has established, based on a thorough understanding of the Group’s social obligations, the Senko
Standards of Business Conduct, which prescribe all items that executives and employees must observe for every aspectof their jobs.
SENKO INTEGRATED REPORT 2022

44

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

ESG+H Initiatives

G Governance
List of directors and corporate auditors

Business risks

Yasuhisa
FukudaNoburoSasakiPresident andRepresentative
Director

Director

HiroshiYoneji

Risks related to the condition of the Group’s businesses, accounting, and other operations that could have a material
impact on the judgment of investors are described below. Forward-looking statements are based on the judgment of
the SENKO Group (the Company, its consolidated subsidiaries, and its equity-method affiliates) as of the last day of the
fiscal year under review (March 31, 2022).

Director

Senior Manager ofBusiness
Development
Department

Managing
Executive Officer
Senior Manager of
Administrative
Department

Akira
Taniguchi

KenjiSugimoto

ToshioTakanashi

Director

Director

Director

Responsible forMarine Logistics

Responsible for
Logistics

Responsible forInternational
Business

YoshikiKanagaHirokoAmeno

YasuyukiSugiuraDirector

Director(Outside)

Director(Outside)

Responsible for
Refrigerated &Frozen Logistics

45

Responsible for
Trading &Commerce

Yoko
Araki

FumikoOkuno

Masanobu
UenakaDirector(Outside)

Director(Outside)

Full-time
Corporate Auditor

Masami
WashidaYasushiMatsutomo

YoshiroOkano

Full-time
Corporate Auditor

Full-time
Corporate Auditor(Outside)Part-time
Corporate Auditor(Outside)

SENKO INTEGRATED REPORT 2022

1

Laws andregulations

The Group provides a wide range of services as part of Logistics, Trading & Commerce, and other businesses. Thesebusinesses must comply with a variety of laws and regulations. Future developments such as the strengthening of laws
or regulations, or the application of new laws or regulations, could impose additional costs as the Group seeks to comply
with them, and the need to make changes to the manner in which it operates its businesses could affect the Group’s
financial position and business performance.

2

Sharp increases
in the price of
crude oilHigher prices for light oil due to a sharp increase in the price of crude oil will push up transportation costs. The
performance of the Group, where truck transportation is the mainstay business, could be affected in the future by pricetrends.

3

Occurrence of aserious accident

In case a serious vehicle or freight accident occurs, the performance of the Group could be affected by a loss in customer
and public confidence, suspension of vehicle use, administrative penalties such as business suspension, etc.

4

Occurrence of adisaster, etc.

The performance of the Group could be affected by a system shutdown due to transportation routes being blocked orelectricity being suspended during a disaster, such as heavy rain, lightning, typhoon, or earthquake, or by a blackout.
Recent natural disasters that have affected the Group’s operations include intense rainfall throughout Japan in August2021 and an earthquake that occurred in Fukushima Prefecture in March 2022 (the Fukushima Prefecture Offshore
Earthquake).

5

IT system failure

The Group leverages IT technology to manage customer freight information and for control systems for warehouses. The
performance of the Group could be affected if these systems are shut down due to a natural disaster, computer virus, orcomputer hacking.

6

Management ofcustomer
information

The Group handles customer information when providing logistics services and has worked hard on information
management through in-house education. However, the Group’s performance could be affected by claims forcompensation for damages if there is an external leak of information or loss of data.

M&A and capitalalliances

When expanding the scale of existing businesses, or entering new business fields, the SENKO Group concludes M&As
and enters into capital alliances, etc., as part of its business strategy. However, initially-expected benefits may fail tomaterialize due to the effects of factors including significant changes in the market environment following theacquisition, legal regulations, or unanticipated increases in costs. In addition, in the event of a problem that went
undetected during preliminary investigations, for example due to the discovery of a contingent liability or un-reviewed
liability, the Group’s financial position could be adversely affected.

8Overseasbusiness growth

To continue growing into the future, the SENKO Group is working to expand its businesses overseas. The Group’sbusiness expansion, performance, and growth outlook could be significantly affected by social disturbances in theregions where it operates. These disturbances could be due to changes in the economic situation, recessions,fluctuations in foreign exchange rates, changes in politics or laws and regulations, natural disasters, or outbreaks ofterrorism, war or disease.

9

Pandemic

A pandemic could affect the Group’s performance due to the impact of temporary closures of business sites orgovernment-imposed lockdowns.

7

Risk Management System
The SENKO Group’s key management issues include ensuring stable earnings and establishing a sound managementbase by managing all risks associated with the execution of operations. The risk management system is described below.

1

To systematically and effectively mitigate the risks that the Group faces, and to take corrective action, we have established the Risk
Management Regulations. Every department that controls risk is also tasked with formulating and distributing regulations, etc., aimed at
reducing risks that affect the entire group and for taking effective action when such risks materialize.

2

When a risk materializes and is expected to cause serious damage, the department controlling this risk and the department in which therisk is expected to arise collaborate on reporting to the Board of Directors.

3

The Auditing Department verifies the status of risk countermeasures, etc., and reports to the Representative Director and the Board of
Corporate Auditors.

Establishing business continuity plans (BCPs)
Every Group location has established a business continuity plan (BCP) in order to swiftly recover logistics in the eventof a disaster. In an emergency, support and recovery activities will be carried out promptly under the direction of thehead office and the manager of the department taking countermeasures on the ground using the BCP. When data
centers are affected by a disaster, a backup data center will restore systems within 30 minutes, even if the server shuts
down to ensure that logistics systems can be maintained.
SENKO INTEGRATED REPORT 2022

46

Overview of the SENKO GroupThe SENKO Group has announced the SENKO Group Health Management Declaration, which positions the promotionof employee health as one of the most important issues facing management; we have been encouraging activities that
promote healthy living for many years.

Approach to health management
programs. When the introduction of COVID-19
countermeasures was required, we established in-housestandards to help us achieve a better balance between
the health of employees and our business activities.

Nursing staff stationed around the country

Principal health management initiatives
Holding health classes and seminars
We offer a variety of seminars designed to improve
employees’ health literacy, including a Mental HealthSeminar, which targets newly appointed managers, anda Women’s Health Seminar, which is dedicated tohelping create an environment in which female
employees can continue to work in ways they findself-affirming.

Promoting physical and mental health throughclub activities
In addition to official teams for judo, golf, kendo,
women’s tennis, and women’s track and field, the Group
has numerous employee clubs that allow workers to have
fun in a collegial atmosphere outside working hours.

DX promotion structures

In implementing its digital transformation (DX) strategy,
the SENKO Group is aiming to advance business and service
reforms in a strategic manner so as to establish acompetitive advantage through the creation of new value. To
that end, the Group is working to address the following four
topics as it creates an overall computerization strategy:(1) Promoting the DX to support business innovation
throughout the Group(2) Using digital data to support the maintenance andstrengthening of business competitiveness and toacquire new customers(3) Creating new businesses with new digital technologies(4) Using digital data to boost productivity
Since launching a DX promotion project in 2021, SENKO
Co., Ltd. has been pursuing the following initiatives:• Promoting operational reforms that utilize digitaltechnologies• Studying data management to centralize internal data
• Designing DX human resources development programs
through SENKO University

SENKO Co., Ltd., which operates the Group’s core Logistics
business, and SENKO Group Holdings Co., Ltd., which
oversees the entire Group’s operations, have created DX
Promotion Departments to strengthen structures that cut
across group companies and departments that are involved
with initiatives.

We’re working to standardize
operations companywide andrealize the reform of ourbusiness platforms through DX
human resources development
and use of digital technologies.
We plan to shape the future
digitally by creating new
business models and working
to increase the sophisticationof our operations throughcompanywide synergies.

AI forecasting

SENKO INTEGRATED REPORT 2022

Promotingthe DX in the
Logistics
business

SENKO
GHD
DX Promotion
Department

Ka O
e m tio n

SE v
i
Un

Using humanresourcesdevelopment
to pursue theDX

Creating new
businessmodelsIncreasing the sophistication ofgroup management
Using group resources effectively

Reformingbusinessplatforms

Creating group synergies
Digital business platforms that connect group operating companies

Digital data
organization

Electronic settlement

AI cargo volume forecasts at SENKO

47

SE
P NK
De rompar

Increasing the Group’s corporate valueStandardizing business processes
Developing platforms for standardized, indirect operations

Group photograph of the tennis club

Developing
digitaltechnologies
into systems

ion
ut
ol

Illustration of SENKO’s DX strategy

Standardizing, and increasing thesophistication of, operations companywide

Women’s Health Seminar

Designing andstandardizing
logistics
operations

N
SE r mto
I n f Sys

We’ve assigned 27 nursing professionals (publichealth nurses and registered nurses) to work in major
areas nationwide, where they collaborate with 103
health promotion coordinators to provide a variety of
support related to employee health. In FY2021, we
appointed an industrial physician to oversee the 78
industrial physicians and nurses, enabling us to develop
more effective Company-wide health policies and

The SENKO Group’s DX PolicyDX
O ion tot en
tm

Health promotion at the SENKO GroupDX promotion at the SENKO Group

N
K
er O
s it
y

The SENKO Group is committed to health management.

LogiS

H Health

The SENKO Group’s new Medium-Term Business Plan
identifies ESG+H (health) management as a key issue.
Having created a health management strategy map thatdetails the connections between health promotion
initiatives
andmanagement
strategies,
we’reundertaking a program of activities in this area.

Data Section

TOPICS

ESG+H Initiatives

Health management strategy map

Foundation for Growth

Strategies for Sustained Growth

In offering contract logistics services tocustomers, we’re working to use machine learning
to forecast warehouse shipping volumes in orderto streamline personnel assignments and reduce
planning coordinator workload.

•More sophisticated logistics•More sophisticated SCM•Streamlined management
Data storage •Collaborative businesses
and analysis

DX initiatives
Using digital technologies Utilizing data
Fostering the development of DX humanresources

Verifying digitaltechnologies
Standardizing
operations
companywide

Human resources education

Electronic expense settlement
We've implemented paperless transactions
using Concur and standardized and reduced
business processes in a way that complies
with Japan’s Act on Book and Record Keeping
through Electronic Methods. We’re working tostrengthen the Group’s governance throughdata analysis and visualization.

Development of DX human resources
We’re working with outside partners to
implement an escort-based DX human resources
development program that includes practicalimplementation and a digital literacy learning
program with an assessment component.

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